Rabbitisrich

The investing ideas section doesn't seem to be a recommendation page like Value Investors Club or SumZero. For example, the LVLT thread starts with a reference to a recent price drop and a query about board opinions. Board members have different motivations, but this board seems more useful as a source of ideas and aggregate of opinions rather than as a research reference.

Who knows why retail investors short SHLD, but it makes managers look like more of a genius if they "prove" big fish to be wrong.

Indeed. In my opinion, the BAC story also shoots down the theory that you must focus on the less followed names -- particularly, those stocks that operate in countries that are secular economic growth stories -- to make outstanding returns. My opinion is that this is a myth that RIAs or hedge fund managers perpetuate because that's their niche in the market. When you get a punch card opportunity like BAC, one of the most followed stocks on the planet, you damn well better take it if you are confident in your analysis and can summon up the intestinal fortitude. Unless you're an RIA, of course. Less followed stocks don't typically have loud contrarians who show up on CNBC whenever the stock dips. You have to say that those contrarians are wrong exactly at the time when they are making money and you are losing it. It's easier to tell your clients that the stock is being dragged down by market + liquidity premium.

Thanks JSArbitrage. Also, Bond Girl on self-evident.org provides some of the best coverage of that affair: https://self-evident.org/?p=935 Check out the reference to "rival firm's purportedly successful tactics..." in the first link of the second paragraph. Goldman Sachs had a standing "consulting" arrangement with a local broker-dealer named Blount Parrish.

If he wanted to puncture the image of GS always going for the jugular, then he should have provided some examples of GS turning down money for ethical reasons. Otherwise, you have a guy who squandered a Stanford education and a Rhodes scholarship on an investment banking career asserting that Goldman's "moral fiber" had changed since 2000. Isn't this the same institution that structured a lending arrangement with Greece to disguise the country's debt status, thus allowing it entry into the EU? This is the same company that regularly bribed county officials and influential citizens according to private JPM emails released through the Jefferson County suit.

It looks like C could pass by adjusting their capital plans.

Ok, thanks for the clarification.

I don't need to sell anything because I already sold some AIZ at $41, BBCN at $10, WIBC at $4, MHK at $63, all of RLI at $66, and some MTB under $82. Is there a hall of fame for horrible timing?

Did WFC release payout information?

DCG, how is the reading experience over 1 hour? Is it a kindle substitute, or do you still get bleary eyed over time?

If you believe that society should be arranged so that the greatest beneficiaries pay more, then why would you subsidize the non-payers, thereby increasing their relative influence? Christie's position requires that Buffett prove his commitment through impairment.

From the 4Q conference call (Seeking Alpha): John Molbeck Well, I will let Chris talk about the property CAT, but on the liability, the original pricing, the price that we get has been slightly moving up. So that is attractive. We continue to be supported by our panel of reinsurers as we have for the last decade, and they pretty much participate in everything that we do. We haven’t seen a reduction in ceding commissions as far as HCC is concerned, or we haven’t seen terms and conditions that have materially changed in the renewal process. I understand that is not true for everybody, but that is where HCC is. Chris Williams In regard to the reinsurance account that we’re writing on the property treaty side, we have elected not to increase our aggregate exposure. On the business that we are writing, we are seeing a 10% to 15% rate increase.

Maybe DTV. Good capital management, operating results, modest valuation, and advantages in certain markets absent unexpected major infrastructure investments.

Parsad, I'm looking at the risk factor on S-16 of the BAC A prospectus: The number of shares of our common stock underlying the warrants and the exercise price of the warrants are subject to adjustment in certain circumstances. To the extent any such adjustment or failure to adjust results in an increase in your proportionate interest in our assets or our earnings and profits, you will be deemed to have received for U.S. federal income tax purposes a taxable dividend to the extent deemed paid out of our earnings and profits without the receipt of any cash. The paragraph appears again on S-36/37. The A Warrants (I've only checked this prospectus) increases warrant holder share in the event of a dividend. It reduces the strike price, then adjusts the warrant shares by the ratio of the old strike to the new strike.

I haven't seen that provision. What language refers to a warrant adjustment? Hmm, I must be reading this wrong, but the BAC A warrant seems to adjust not only the strike price down, following a dividend, but also the warrant shares up in proportion to the ratio of the pre-div strike to the post-div. This is in contrast to PlanMaestro's AIG hint, which not only does not protect against share issuance and divs below a 12 month hurdle, but also adjust warrant shares down. My eyes are wonked out. It looks excessively favorable to warrant holders. EDIT: The AIG warrant seems to also have an upward adjustment to shares issuable.

Has anyone confirmed with their accountant that common stock adjustment of the warrants results in a taxable gain on the year of adjustment?

How would you measure values? For example, you might survey heirs with "Is [intelligence; perseverance] a virtue and receive positive answers. However, those are opinions from a naive group that hasn't tasted the hopelessness of paying 90%+ of manual labor income into living expenses. It's also easy to follow "good values" when all your peers have high expectations, and your parents have advanced degrees, and your role models are intellectual (perhaps this supports your point). Actually, I don't disagree anecdotally, but would add the conditional that many wealthy kids have good values GIVEN their circumstances. Who knows how those values would hold up if their wealth evaporated in jr. high.

Ha, no worries. I have my political pet peeves and my posting history surely has examples of writing off the cuff.

In this case, he produced 400% of gain, or over 14% after fees. Another 12 years and he will be a 2400%!

Liberty, no. Ben Graham wrote that page. I like the book but it's more useful to a new investor. An experienced investor in need of a refresher would probably benefit from The Checklist Manifesto by Atul Gawande.

You're tossing off a lot of red herrings SouthernYankee. This thread isn't about partisan attacks so there is no need to impose a false parity between repub and dem largess. Nor is this thread really about largess or sources of income. It's about moral hazard, and the lessons you endow on future generations. I'm not in agreement with much of this thread because I've seen a variety of stories amongst wealthy to ultra-wealthy children. In my high school, the most vulgar kids were a brother and sister whose father owned a luxury auto dealership. They were not ultra-wealthy, but they certainly valued materialism and relative wealth. A large, unearned endowment may hint at lax parenting, but it doesn't prove anything.

Very interesting story, thanks for sharing. He must have pretty solid sources of capital to survive the 1/3 drop in 2005. How many ~5 year old firms get through that period?

Thanks for the link. The article is a good summary of Buffett's maneuverings, but it finds evidence of "crony capitalism" as if the summary proved the case. Any accusation of crony capitalism should, at least, provide a method for distinguishing self-interest from national interest. In this case, there should have been an argument that Buffett's proposals were NOT in the nation's interest. Instead, the author writes: The bootlegger’s interest does not necessarily mean the Baptist’s ideas are wrong. The Treasury Department considered Buffett’s proposal, but with Paulson leaving at the end of President George W. Bush’s term, it would fall to the incoming secretary, Tim Geithner, to act on it. Geithner tweaked the plan and announced the Public-Private Investment Program in March 2009. It was largely seen as a boon to banks, especially large banks with a lot of bad debt. The author also claims a parallel between David Sokol and Lubrizol and Buffett and the Public-Private Investment Fund. But Sokol misrepresented his position to the investment bank and to Berkshire, whereas Buffett did not. Or, as the author explains: After the bailout bill passed, Warren Buffett sat down and wrote Treasury Secretary Paulson a four-page letter proposing a larger solution to the financial crisis: a quasi-private fund backed by the U.S. government that would buy bad loans and other rapidly sinking investments. He proposed that for every $10 billion put up by the private sector, the federal government would kick in $40 billion. As Paulson put it in his memoir, “I knew, of course, that as an investor in financial institutions, including Wells Fargo and Goldman Sachs, Warren had a vested interest in the idea.” The descriptive aspect of the article is good, but the argument can be summed as anyone who benefits from a public policy should never support such a policy.

That was interesting, especially when you could have synthesized something similar to Buffett's investment during the subsequent price collapse. Of course, if BAC fully works out, then in a few years you will hear complaints about Buffett's "guaranteed investments".

(Dollars In thousands, except per share info) Dec 31, 2011 Well Capitalized Regulatory Requirements Total Excess Above Well Capitalized Requirements Tier 1 Leverage Capital Ratio 13.86 % 5.00 % $ 235,961 Tier 1 Risk-Based Capital Ratio 19.59 % 6.00 % 255,993 Total Risk-Based Capital Ratio 20.89 % 10.00 % 205,212 Tangible Common Equity To Tangible Assets 8.95 % N/A N/A Tangible Common Equity Per Common Share $ 3.37 N/A N/A Yeesh.