Grenville

Happy Birthday, and many more to come!

BML-H - Merrill Lynch Preferred that is now a Bank of America Preferred Current Price = 14.4 Par: 25 Call Date: 11/28/09 Semiannual interest: Libor + 0.65% with a floor of 3% Current yield @ 14.4 ~ 5.2% Typical trade price YTD ~ 17 Return to typical trade price YTD ~ 22% Return to par ~ 74% There's a whole host of preferreds to choose from but the floating rates are trading at the largest discount due to the lower interest payment. The upside is that there are trading at huge discounts to par. Another similar floating rate pref BML-G

Great article on Moynihan. Seems like the right guy for the job.

Junto, Thanks for the response! Very helpful.

Hi Junto, Can you recommend a good book that goes through bank accounting? I want to understand how things move through the statements especially things like provisions, charge-offs and non accrual loans.

Junto, Thanks for the additional details and color!

It would be wishful thinking were it not for the fact that TRH's CEO issued a statement before agreeing to negotiate with BRK that he thinks it is likely, but not guaranteed, that BRK will substantially raise their offer. Also, I don't think the Davis family would have urged BRK to make an offer if BRK had been unwilling to pay more than 74% of book. How do you know that the Davis family specifically approached Berkshire? I know they filed a 13F seeking to look for other strategic buyers. I haven't found any news reports specifically mentioning Berkshire. Thanks. That was merely a logical assumption. Sorry for the overstatement. No direct knowledge beyond public statements. Thanks for the followup clarification!

Just sent you a PM -Grenville

Junto, You should also check out the VIC writeup on NYB by grumpy922. He highlights plenty of alarming stats. It provides some interesting points that deserve checking. Let me know if you have trouble finding it. -grenville

Hi Junto, Thanks for the writeup and the link to the interview. I had come across NYB before when reading an interview of Irving Kahn and his son. They are big investors in the bank. I do think they have a unique model as described in the interview. I did a quick 10 year DCF analysis of the bank earnings with a 7x earnings terminal value. I assumed 5% decline in earnings over the next five years followed by 0% earnings growth for years 6 to 10. I assume a 7% discount rate and I'm using an estimated earnings for 2011 of 450mln. (2x 1H 2011 earns) My valuation: 10yr DCF: 2.7bln Terminal : 1.3bln Tangible book: 2.8bln Total value: 6.8bln shares out: 437mln Conservative per share value: 15.56 current discount: ~20% 60% of value buy point: 9.33

It would be wishful thinking were it not for the fact that TRH's CEO issued a statement before agreeing to negotiate with BRK that he thinks it is likely, but not guaranteed, that BRK will substantially raise their offer. Also, I don't think the Davis family would have urged BRK to make an offer if BRK had been unwilling to pay more than 74% of book. How do you know that the Davis family specifically approached Berkshire? I know they filed a 13F seeking to look for other strategic buyers. I haven't found any news reports specifically mentioning Berkshire. Thanks.

Berkshiremystery, Great reporting, much appreciated! It helps to get a better feel for the brand and the history of William Ashley. Looks like a nice acquisition.

Very cool!

twacowfca, Thanks for all the discussion regarding TRH. I spent the weekend researching the company and it looks like a pretty decent operation trading at a decent discount to book. If Berkshire is truly interested then they'll have to put a higher bid in. TRH has most of their assets in bonds and very little goodwill. Thanks, grenville

Not to be nit picky, but just keep in mind that as Buffett does more acquisitions goodwill becomes a larger portion of book value than in the past.

Santayana, Good point. The price action on both the 10 year and the 1 to 3 year look worrisome.

Looks interesting, just saw this article: http://www.rte.ie/news/2011/0725/boi.html Private investors to put up to €1.1bn into BoI Additional detail: http://www.irishtimes.com/newspaper/finance/2011/0726/1224301383971.html

This is the first time they have bought common shares (400,000 at 10.7 ORH). Pref A 6% 100 mln ~ 8 mln shares @ 12.41 Pref B 6.5% 32. 5mln ~3 mln shares @ 10.7 totals about ~20% before the new equity raise

Dcollon, I don't know who posted on the board, but I do know that Prem recommended the book at his recent talk at the Ivey School of Business. I haven't read it, but I will push it up toward the top of the stack.

Nice article on Crum & Forster http://www.propertycasualty360.com/2011/06/17/contrarian-style-still-in-place-at-rebranded-crum

I'd like to start a thread that tracks Fairfax Financial's charitable donations. It's always interesting to see how the company continues to "to do good by doing well." "OdysseyRe donated $10 million to Stamford Hospital to be used toward a $575 million upgrade, which city planners hope will serve as a magnet for further development in the city’s west end. ... The OdysseyRe gift will support the creation of a new emergency department that will double the number and size of exam rooms. Stamford Hospital also is planning multiple medical buildings equipped with surgical suites, inpatient rooms and other space." http://westfaironline.com/2011/13619-stamford-hospital-launches-drive/

Thanks for posting!

Could it just mean they need a higher coupon to get the other bond holders to tender their debt? Any thoughts on the fact that they are moving the debt to the holding company level instead of at the subs?

Another more liquid way to bet on deflation is zero coupon bonds. Jeast posted an ETF from PIMCO, again I haven't looked into what exactly it holds but here's the ticker: zroz Nice bond site, I like the history of trades they have. Thanks!

Thank you for the responses. I'll have to look into the indenture and read all the details. I'll post any thoughts after I examine...I'm busy for the next month, but I've been wanting to buy some bonds and this might be a good opportunity.