Spekulatius

While I do think that Sadar is a hard to quantify negative for BH, I learned enough in this thread to buy a few shares at least for a trade, because I do think it is too cheap based on it's asset and the fact that Maxim has a decent chance of working out OK, even though Mr Market's reaction currently implies otherwise.

Lazy thinking? BH has underperformed over 1 year, 2 years and 5 years versus the SPY as far as I can tell.

CFO leaving is worse than the CEO leaving, especially considering the controversy around CBI's accounting. We don't know if there is a fire behind the smoke, but the market has started to discount it somewhat.

That's probably all one needs to know about RYAM right now. In addition, I would avoid this stock because the leverage at 4.5x EBITDA is simply way too high for such a cyclical business

Ahahah!! You want to fire Federer just because he has become a billionaire at 33 swinging a tennis racket?! ;D Your answer might be: Biglari is no Federer. Then I ask you again what I have asked some posts ago: show me the track record of a stock market investment professional which is better than Biglari’s since 2000. Until now no one has answered. ;) Cheers, Gio If Federer is not good at playing Tennis any more, he won't win and will stop earning the big bucks at some point ( advertising and promotion income will peter out over time, price money will dry out immediately). He won't even be able to play on the important tournaments any more, if he does not qualify. If Sadir stops to perform well, his current arrangement guarantees that he stays in charge of BH and he will continue to earn big bucks. Then shareholders will have one hell of a problem because he has entrenched himself so hard into BH, that he will be nearly impossible to get rid of.

+1 cant find much. Looking at what I can find with google search very asset rich company. Have nightmares though of holding it for years/decades with value never being monetized. Here is an older annual report. https://www.amstock.com/proxyservices/Files/AR16728.pdf I have concerns about fraud and companies imploding because changing business environment, but never about a company/stock just sitting there and doing nothing. If company is doing nothing, I just sell the stock at a somewhat opportune time and move on. Other than opportunity cost, I should not have lost money. No investment is worth having nightmares about it. If I were to have nightmares about and investment, it's a sure sign that I own either too much of it, or the stock is not suitable for my situation. Better to sell down the position or sell it out entirely and get the sound sleep back.

No it wasn't me. However, it is clear that the value of the ranch exceeds the book value by far. I also think that based on the rent income (roughly 2.1M$), the value of the RE exceeds the book value of ~16M$ as well. If and when the value is realized remains a big question, but I think as long as the assets are well managed and appreciate in value, the stock price should just appreciate likewise, plus there is a chance of a huge payoff, if the company decides to monetize some assets.

Spek, do you still hold QUCT? Yes, and I added a chunk at 1080$ a few days ago. They only publish number since a year and that is it. Last years profit was down, because the costs in the trust business were growing faster than revenues, supposedly a result of a branch expansion. QUCT bought a decent chunk of commercial RE last year for 8M$ (~160M$/ share), but I don't think that this increase GAAP earnings although it my improve intrinsic value over time. They still should have a decent amount of net cash even after this investment. OK, this is probably a value trap, but I don't think I will lose money on that one. I estimate the asset value at least twice the current market value and maybe more, if they indeed would find a buyer for their ranch (I don't think they are looking to sell the ranch actually at this point). Overall, the assets are getting more valuable, the trust business throws of cash and the insiders as far as I know don't rob the company, so I think this illiquid, but safe.

QUCT, obscure company that runs a trust business, owns a huge ranch in central CA, commercial RE and a bunch of cash and bonds. Trades on appointment only. The folks running it are the same folks that own and run FMBL, a southern CA business bank.

+1 Even for entertainment purposes, please use new jokes than the mustache ones. I am bored. Right, unfortunately things like "Sears holds sale, no one comes" or "Kmart closes store, residents weren't even aware it was open" just don't have the same ring to them. Oddball, the entertainment value of this thread has gone way up, as SHLD stock has gone down.

Sometimes, the obvious choice is the correct one. As somebody in these boards states in his Sig:"Not every haystack has a needle."

Do you really need to do business with a Megabank if you have a multi-billion$ balance sheet? You can basically run your own treasury department, issue commercial paper (assuming the company has investment grade credit), do your own cash management. You may need help placing bonds, but you don't need your cash managment running through a bank - at this size, I think they can do it themselves.

I have never counted the NOLs either. I went through the most recent 10Q looking for a quantification but didn't find it. Its probably buried in the 10 k somewhere. 10-K page 255 (I d/l the report from the investor relations part of the website) provides both the DTA and the Net DTA post valuation allowance. I'm using the Net DTA just to be conservative: US NOLs 3.06 bn UK NOLs 7.42 bn Other Non-US NOLs 0.12 bn US States NOLs 1.01 bn General Business credits 4.03 bn Foreign Tax Credits 5.38 bn Total 21.02 bn FTCs begin expiring in 2017; NOLs - some in 2027, some never (in the UK) Valuation allowance is around 1.6 bn So, if BAC's theoretical tax rate is 35% and we assume 19 bn profit, each year you get almost 7 bn of NOLs you can use to shield, which would mean finishing them off in 3 years if BAC could completely avoid taxes. Assuming it takes six beginning in 2014 (i.e. 3.5 bn) and still disregarding the valuation allowance, the PV of the NOLs at the 10.7% cost of capital Eric calculated is roughly 15 bn USD, or about 1.42 USD/share. Of course this is before the NOLs they will get for the DOJ settlement, but we'll have to wait for the numbers on that to figure our what the NOLs will be worth. What are the NOL in the UK worth? Do they actually have enough earnings to make 7B$ in the Uk in the foreseeable future? How did they loose 7B$ there to begin with?

That's the banks problem, not the regulators problem. The banks have enough capital, if they don't distribute it to shareholders.

Most consumer goods (Cellphones, game consoles) are build by several contract manufacturers to diversify supply chain risk and keep a lid on costs. I don't think there is a moat there - there are probably 5 that can compete with FLEX but there are also several regional ones (in China) that can build millions of units. Good capital discipline is necessary for this stock to work. I kind of doubt the FCF yield, because there is a lot of Capex necessary.

I think the bureaucrats might go after the mortgage servicers after they are done with the banks. I am mot sure that this will blow over quickly. What I like about WD is that with commercial mortgages, we have don't have the populist angle that exists with residential mortgages.

I look at asset quality and asset quality trends first. i won't buy anything with a high Texas ratio. Typically a 40% Texas ratio is my limit. I look for a combination of low PE and low price/tangible book ratio. I look at pot. Vulnerable assets like construction loans, how assets held up during the great recession and generally I like to see the potential to earn at least a 1 % ROA, without risky endeavors. I think nowadays, one should look at the duration of their loan and securities portfolio as well (interest rate risk).

The NOV of MSR depends on the cost of servicing them, I assume. If the cost to service them goes up, because of new regulations, then the NPV of MSR's will be lower. My play on mortgage originators and servicers is WD, a commercial mortgage originator and servicer and owner operator company, Commercial MSR have prepayment penalties, so interest rate risk is lower. WD's MSR are worth about the current market cap, so you kind of get the origination business for free. I am not sure how good of a business mortgage origination (commercial or residential) is however, The ROE is probably in the 10-15% range and the business depends on well greased financial markets, due to dependence on wholesale funding ; otherwise, things get ugly rather quickly.

So far Icahn's back of the envelope investing beats Ackman's 300 page long nonsense. I am the only one that thinks that Ackman's prowess is overrated by the investment community? I think he is a gambler by nature mipore than an investor - big gains like GGP and others, but also epic failures like TGT, his first Gotham fund, BKS, JCP and most likely now HLF.

It's one if the cheapest aerospace manufacturers/suppliers in the US stock market currently, if the earnings forecast from management comes through. This is not a sure thing, because they disappointed in 2013. I think the issues are fixable and if management isn't able to fix it, somebody else will do it for them.

RFP trades @16.5$ or 6.5x EBITDA/EV, which is not even taking into account the pension deficit. With the pension it trades in excess of 10x EBITDA/EV. This for a business that needs a lot of Capex to keep operating. Clearly at current valuations, you need much much better results going forward to make this work.

That gets interesting when the smaller banks, which have loan/deposits of ~1 may come under pressure. They may end up in a situation where they have too many loans versus a shrinking deposit base. Of course this doesn't matter for the big banks which have loans << deposits. Not many small banks have loan/Deposit ratios of one. Most have the same problem than larger banks, too many deposits, not enough loan demand, although I noticed that this year loan demand for some small banks has been surprisingly strong (my largest bank holding FMBL has shown strong loan growth recently for example). BAC on the other side, hasn't been growing interest income and loans by leap and bounds recently.

I don't think there is a reason to add book value to AUM. Book value could be intangibles, which aren't really worth anything in liquidation. One could add excess cash after subtracting debt or other excess assets to the %of AUM but that is about it.

ALLY, NN.AS and TGI

I think it is a big mistake spending almost a million $ in SODI trying to go activist and then not even going to the annual shareholder meeting. I think the shareholder meeting is the best opportunity to get your voice heard, meet the other shareholders and possibly get something done. Note that I never have been an activist myself, so I am by no means an expert in these kind of situations, but that is how I see it.