Spekulatius

You hear about those trades only if they work out.

My guess is that the higher level thinking of Mr Pearson boils down to "Bet it on black". When it 's all said and done , all the Protagonists ( Ackman, Pearson ) in this drama will look like bad gamblers.

And even if he's out there just to screw all other shareholders, here's a few things to consider: 1. With a take under, that would cost at least another 300-500 million dollar of cash at today's price. How is he going to fund that alone? If he is looking for a partner, what is there for him to transfer control from all current shareholders to a major capital partner? Assuming an extreme phony with only self interest in mind? All the lawsuits that comes after would be enough of a headache for him. How about damages in reputation? 2. How about all other board members who are required to own shares and the other current partners in TLF? It comes back to the question I posted here last year: Assuming Biglari is a smart and greedy corporate Villan, what is the worst thing that he could do to harm existing shareholders without harming himself? A. Corporate jets and Maxim models expensed with BH money? Let's say thats 10MM a year? B. A take under? I dont think he can pull out that much cash on the side. C. Milking the company with the BH/TLF structure? He's already doing it and it's already clearly explained, thats 25% above 6% gain. D. Accounting fraud? That's possible but I have yet to see any signs of it. BH reporting style is making things look worse than it is if anything. All the answers I've seen so far was a black-and-white judgement of his character, and but whether his seemingly shareholder-unfriendly press and action would lead to shareholder losses - that's yet to be determined. I am only certain of its asset value, and it's worth a lot more than the market value. A dark villain worth his salt sure will find new ways to screw his shareholders in addition to the means that are already implemented ;D

I still think that CHK will file eventually. GM stock made a parabolic move as well in 11/2008 before they filed. I think these moves are caused by momentum investors piling into these stocks.

Tell that the owners of Deutsche Bank Stock. Also BAC wasn't selling higher not a long time ago and has not as many issues.

Just my opinion, but I would not consider Ackman to be a value investor - he is a gambler, imo. The stuff he buys has no downside protection, he is looking for huge lottery wins.

I don't get that JEF should have a higher multiple than GS. JEF made ~$90M last year on $3.6B in tangible book, so that is. 2.5% return on equity. That's a bad year, but I am not sure that this year is better. Not a business worth a 1x multiple. Other business are impaired too - the energy investment National Beef, and then we have the added cost of running a holding company on top of that. I think it is probably trading 30% below the SOP, but that is no better than GS really and with GS, I get a higher return on equity, dividend, stock buyback etc.

I like FLR better They have a history of converting earnings into cash and their balance sheet is bulletproof, den after acquiring substantial new business (Storck) and share buybacks.

A few gems from the transcript: "the retail losses, is, in our opinion, voluntary" "Sears has a vast real estate empire" "A considerable portion of the past cash burn is voluntary" "much of what Sears’ management has written has proven true" He trails the SP500 on a 1,3,5,10 year trailing basis. I guess his investors don't mind paying up for good storytelling.

Sense of urgency? It's too late for that, Sears is done for.

I don't think this business model makes sense to me. How can have Landmark have a lower cost of capital than a real estate company or REIT, that takes in a commercial mortgage. Also, the business model to carve out the lease payment sounds like something that caters to yield hungry investors and we know how that ends typically.

Besides the substantial debt load, OI has a significant asbestos liability. They have averaged an out $150M in cash expense/ year, but this year had to put in $225M in the fund for future expenses. This is an ongoing expense that substantially lowers OI FCF and needs to be considered. If one considers a $200M in annual asbestos expense, OI is not cheap at all.

they are buying stock. not too much, but I expect them to ramp that up. I think we'll see some kind of action with HRG in the next year or so...what exactly, i don't know. Once F,G&L deal closes, that will be a net cash entity with almost all value in SPB. LUK has done so terribly that I can't imagine they'll just sit there with that big liquid monetizable holdco that has no real reason to exist. my main problem with the comp plan is that Handler makes a ton of money pulling relatively easy levers. the "tangible deployable book" figure is pretty low. think about the returns on tangible deployable book Berkadia generates ((40% (78/190)) or NB will generate if the cycle turns (X/$45MM). Homefed's market value is worth more than tangible book today. in the end, it doesn't make me change my thinking on the investment, but it's a bit annoying that management gets credit for impairments of mistakes past. it's like not having a high watermark (like TFG). Whether handler makes $0 or $30MM really doesn't matter to me though. we are almost at a valuation and duration of underperformance that a simple, activist proposal involving simplification/partial liquidation/re-cap would probably be entertained by shareholders. loyalty has its limits. I think it would be better to buy back the bonds. That's an almost 9% guaranteed return on investment for 20+ years. Hard to beat if you have excess cash in the balance sheet.

I still own shares. I sold a few at around $120 and bought back some at ~$85. It remains to be seen if the value will ever be realized. We did have the changes in the trust, which were a positive, but I agree that a different management is needed to get more value from the existing business. At least the results are stable and not deteriorating, so I continue to hold.

5% yield seems awfully low for taking some credit risk. I am not really interested in any preferred unless it is yielding 10% or at least something close to that number.

So fellow COBF'ers who are decently invested in BAC, what do you think of this? I frankly fail the test. I have no idea how shrewd the banksters at BAC are. Moynihan gets the reputation of being a straightforward, button-up new england lawyer tasked with streamlining the bank. But thats about as far as I know. The daily Journal has a 30% position in BAC. Berkshire has significant exposure to BAC as well.. My guess is Munger and Buffet are comfortable with how shrewd management is.. Not to be so blunt, but so what? Pabrai was comfortable with Horsehead. Pabrai is not Munger and Buffett

The problem with the Yelp business model I that the ads not really doing much. The best advertising for Yelp is A large number of positive reviews and those are free (if the product is good) the ads are not that relevant. I am not sure about extortion, that would seem like it would get Yelp into trouble very quickly. I have found Yelp reviews mostly to be spot on and relevant if there is a large enough sample size.

My opinion exactly. BAC is a fairly straightforward value proposition, while OFG is hard. We know that there should be haircuts to OFG tangible book value, but we don't know how significant they should be. I think BAC does not need haircuts to their tangible book and they are building tangible book relatively quickly through earnings and tax deferrals. There is no reason to make investing more difficult than it needs to be.

The breakup is not going to solve AIG operational problems. They do have these kitchen sinks regarding reserves every few years.This has long standing history with AIG and one of the reason why it's right fully valued below book. That said, I did add to my shares today at $50.7. I read through the conference call and compared to previous ones there seems to be alot more attention being paid to cleaning up the policies, attempt to price policies better, and it seems they are going to run off legacy polices as a separate group. This will help give a better idea if the new policies are being prices better ex legacy. I agree that AIG is rightly priced below book but honestly that is the best thing for a company that is going to buy back nearly 1/3 of their market cap over the next 2 years at current prices. Unless management is running the company into the ground that is going to create value and the div yield is a respectable 2.5% now. If a break up isn't the best strategy I still think having John Paulson and Carl Ichan on the board is going to get things improving for shareholders. I hold the warrants so I still can give managment/Ichan/Paulson 5 years to get things in order. 5 years from now 50% of the shares outstanding could have been bought back. Hopefully with changes occurring now AIG will deserve to trade at full book value before warrant expiration. AIG doesn't generate $25B in earnings to finance such a huge buyback, they will have to shrink the company substantially, which would reduce AIG's earnings power. I don't think it is a realistic plan and it probably won't get past the regulators. I recommend that investors in AIG read the articles about AIG in the Aleph Blog first, the author knows insurance and he is holy critical of the new capital return plan. Icahn in my opinion does not have an edge in insurance and probably does not understand the business well. That said, I still think that AIG is cheap, but it's not S cheap as the current numbers (book value ) imply, as I think there are further reserve revisions likely over time. AIG for me is a slow motion recovery/reversal to the mean play, not an "unlock huge value" play.

We know if the new policies are priced correctly in ten years when it is clear that the reserves taken for future claims are sufficient. I personally don't trust AIG reserve policy, until they have at least shown 5 years of positive reserve releases, without a kitchen sink year. Many insurance companies that are well run (PRE, Y, MKL and others ) show that it can be done. Reported earnings are of far less import ace that consistent growth in book value for insurance companies, because reported earnings can be so easily manipulated. It will take years until Mr. Market trusts AIG book keeping enough to value AIG stock above book, regardless of what Icahn can come up with, imo.

The breakup is not going to solve AIG operational problems. They do have these kitchen sinks regarding reserves every few years.This has long standing history with AIG and one of the reason why it's right fully valued below book. That said, I did add to my shares today at $50.7.

I bought some WPZ yesterday at $13 and change. This MLP has become very cheap, and it seems that they can go without accessing the equity markets for a year. Biggest concern is that CHK may renegotiate contract once in bankruptcy (I regard this. Pretty much inevitable). I also think that a CHK bankruptcy may trigger a WPZ debt downgrade to junk. FWIW, a distribution cut similar to KMI may actually be a positive, but would absolutely hammer WMB, the GP. I am not concerned about the WMB/ETE merger failing at all, it should be positive for WPZ.

If you like Sears Real estate, just buy SRG like WEB did. This isn't really that hard.

I think the software or brain of the future self driving car will be a main differentiator. It is expected that you get to your destination in one piece, but it also is expected that you get there in an efficient manner, without spilling you coffee or maybe even in a sporty manor, if the driver wishes.