TeddyLampert

https://dl.dropboxusercontent.com/u/65789707/ADW%20Capital%20Management%20Fiat_Ferrari%20Investment.pdf

"NOW, BASED ON THE FOREGOING, AND GOOD CAUSE APPEARING, it is hereby ORDERED under the provisions of California Financial Code section 50326, that Ocwen Loan Servicing, LLC forfeit and pay a penalty of $1,700.00 to the Commissioner, no later than ten (10) days from the date of this Order" Ocwen got dinged a total of $1,700 for failing to reply in a timely matter to a DBO complaint, which it eventually replied to a few weeks later. Why is this relevant?

Kingstown's objection seems pretty standard for deals of this sort: they believe the acquirer is purchasing the target for a steal, and they are angling for a higher price. It does not appear they are objecting on the grounds that the merger will jeoparodize the OCN servicing arrangement per se (in which Kingstown has an economic interest). Regarding OCN, it seems like Kingstown is putting a stake in the ground by saying that HLSS is better off using OCN's servicing (bolded), whether the merger goes through or not. This could just be Kingstown's strategy to reach a compromise with NRZ: 'continue using OCN and we'll drop our activism' Item 4. Purpose of Transaction. The Reporting Persons oppose the announced transaction between New Residential Investment Corp. (“NRZ”), Hexagon Merger Sub, Ltd. and the Issuer pursuant to that certain Agreement and Plan of Merger, dated February 22, 2015 (the “Merger Agreement”). The Reporting Persons do not believe a transaction at GAAP book value adequately compensates the Issuer’s shareholders for the value of its assets, which have historically traded between 1.2x - 1.3x book value according to the Issuer’s September 2014 Investor Presentation. The Reporting Persons further note the overly conservative nature of the assumptions underlying the Issuer’s book value, including (i) an assumed weighted average prepayment rate of 18% versus the actual 10.3% for the nine months ending September 30, 2014, (ii) an assumed weighted average delinquency rate of 25% versus actual non-performing residential assets of 18.5% of UPB as of September 30, 2014, (iii) an assumed weighted average discount rate of 19% versus a 10% discount rate used by NRZ to value its own MSR assets, and (iv) the exclusion of any value from deferred servicing fees, which were $470M at year-end 2013. The Reporting Persons believe that adjusting these assumptions to reflect recently observed rates and the discounted value of deferred servicing fees, among other factors, could add more than $7 per share of additional value above the stated book value. Notwithstanding a higher offer from NRZ or others, the Reporting Persons believe the most value-enhancing strategies for the Issuer are continuing its servicing relationship with Ocwen Financial Corporation, completing refinancing initiatives recently highlighted by management and executing the Issuer’s growth initiatives as its financing and operations normalize in due course.

Back to SNMX, I don't own this, but I have followed it on VIC precisely because it's garnered so much enthusiasm (both excitement and skepticism). The author in his/her latest entry said it best. SNMX is a "show me" story, which the street will punish if there's short term negative news flow. I have learned from experience to be wary of show me stories. Their write ups tend to sound more "promotional" (i.e. heavy on rosy assumptions supporting a mouth-watering upside price target). POST is a good example of this, as is SHOS.

It wasn't cuyler who wrote up SNMX. It was EBML. I think what you are concluding here that long VIC write ups or highly rated ones tend to be promotional or lacking in a concise thesis is a bit of a generalization and I disagree with it. Aren't all VIC write ups (or SA or Sumzero) promotional in some sense? Likely the author has a position, which the write up is promoting. In the best case, the write up actually serves as a value-unlocking catalyst.

They are charging you $.05 per canceled ADR??

Yes, I did write that (got me!). Then Chad asked his question at the AR (paraphrase: why would someone want to shop on the SHLD site, versus another online site, and what can SHLD do differently that other retailers can't), which is essentially asking what is SHLD's competitive advantage as a retailer. Ever since Eddie wrote what he did, my ears were fine tuned to what his answer might be. If I may extend my geography metaphor: His answer was a bit like Oakland; there was no "there" there.

I grew up in California, but I may as well be from Missouri because it's the show-me state. With SHLD, my attitude is "show me the money, Eddie". Picking apart the chairman's statements is a lot like reading tea leaves. We read into them what we want. This reminds me of when the CFO blogged and pointed at the real estate and said there's a lot of value there, which we're not going to quantify for you, hint hint, wink wink. Too clever by half. "We have options... to crystallize" is different from saying "we are taking options to crystallize". Notice the difference? It's subtle but big. I started on this thread focused on the numbers and fundamentals (and I really respect guys like Chad who are objectively focused on analysis and not speculation), but then I realized that sometimes you have to return to things that are even more basic than that. How sincere and forthright is management? I don't confuse Eddie's past success and wealth as an affirmative answer to this question. How competitive will the new business be with Amazon, even IF the transformation can be pulled off? That question alone would fill up another 600+ pages.

Yadayada, What is the discount to the IPO price for SoftBank (assuming no "pop")?

I've seen even the most sophisticated funds sometimes make that error of switching RMB and HKD, so nothing to be ashamed of! The discussion so far has given me some possible insight into why this opportunity exists. Among investors, there's still that tendency to dismiss out of hand Chinese companies ("just a chinese company...that is bleeding sales"). The VIC write up does a pretty decent job illustrating that the whole situation, including the opco, isn't fairly valued. I would use the sum-of-the-parts model there and play around with it because it is pretty clearly laid out. For example, one thing they did was adjust for the partial sale of China Dongxiang's stake and then some dilution following the IPO. This is a special situation where a quick back of the envelope doesn't really cut it and probably contributes to why the opportunity exists. As for the taxes, the WSJ also spun it as a throwaway "risk" without really doing any quantifying. It's probably worth doing digging into this rather than dismiss out of hand, because it smells like a red herring. I asked a friend whose family runs a public company in Hong Kong, and he says that HK listed companies might be liable for a 16.5% tax on investment gains, but he doesn't know the situation with China Dongxiang specifically and notes that it is a Cayman corporation, and the fund is also likely to be structured to minimize taxes. In other words, worse case scenario, 16.5% of the gains is leaked at the HK corporate level. Even without running a model, my mental math suggests there's still a big NAV discount

Yadayada, What is the discount to the IPO price (assuming no "pop") for SoftBank?

Hey all, as it turns out, there's a VIC article posted today about China Dongxiang. It's a special situation investment that allows you to buy Alibaba at a big discount to its IPO price. Looks really interesting and very timely.

This is what I am planning to do as well. Thanks for alerting us to this idea.

Whoa! This 8-K is a big update and a positive signpost to the TFSL thesis. Surprised not to have seen this posted here yet, so I have included it below. This latest repurchase program represents around 14% of shares outstanding. The stock is still unbelievably cheap on a P/B basis. Buying back shares at these valuations is ridiculously accretive to shareholders. Rarely do I come across the proverbial "value hiding in plain sight" situation, but fortunately for us the case due to the complicated mutual ownership structure. It is really great to see that management is living up to their word and aggressively following through on shareholder friendly capital allocation. It's one thing to hear about it on a conference call, but it's another thing to it actually happening. I strongly recommend listening to the latest conference call. It's a management team that "gets it" ------------------------------------------------------------------------------------------------------------------------------- https://www.bamsec.com/filing/138166814000069?cik=1381668 TFS Financial Corporation Announces Sixth Stock Repurchase Program (Cleveland, OH - September 9, 2014) - TFS Financial Corporation (NASDAQ: TFSL) (the “Company”), the holding company for Third Federal Savings and Loan Association of Cleveland (the “Association”), today announced that the Board of Directors of the Company approved the Company’s sixth stock repurchase program, which authorizes the purchase of up to 10,000,000 shares of the Company’s outstanding common stock. The Company’s fifth repurchase program, which authorized the repurchase of 5,000,000 shares and began April 9, 2014, is expected to be completed soon. Currently over 4,700,000 shares have been repurchased under that plan at an average cost of $13.58 per share. “This stock repurchase program is the latest step in our three-dimensional approach to adding value for our shareholders,” said Third Federal Chairman and CEO Marc A. Stefanski. “Now that we are paying a dividend, buying back our stock, and growing our company, we have great momentum as we head into our new fiscal year.”

I'll be eager to hear what WEB has to say on the aforementioned subject. Part of WEB's appeal to the masses is his folksy insistence you don't need to be too bright to be a successful investor. "Anything over a 160 IQ is a waste..." WEB often says in some way or the other. I'm probably not the only one who has experienced cognitive dissonance when hearing this. There are many times when Buffett has referred to Munger as super-smart and vice versa. There are numerous times when others, such as Meryl Witmer (just as an example off the top of my head) will say that Buffett is wicked smart and smarter than you have even assumed. Schroeder will give examples of Buffett multiplying license plates mentally for fun. I just don't buy it when these two guys, who I have enormous respect for, make these preposterous claims that you just need average intelligence to pull off what they did. Let's just call a spade a spade. A lot MORE value (in terms of making us better investors) could be gained by everyone here trying to debunk WEB/CM myths rather than add to their mystery and mythology. Just my humble opinion. I want to learn from the best (which is what they represent), but I also want the truth.