biaggio

Ditto. Ditto In hindsight we(I) should have sold when OAK sold. At the time it appeared cheap. I should have figured that OAK would not have sold at $18 if it was worth much more...but I didn't. The current bid looks too low, but I am biased. I would be interested in what you guys feel may happen here.

Thanks KC I am very mindful of my increasing bias and rationalization re bundling http://www.cbc.ca/news/business/mortgage-lenders-bundled-debt-1.3930774 According to this article its common practice except big 6 don't do it but it is not illegal. OFSI etc aware. These loans are not insured by CMHC also found this article http://business.financialpost.com/commodities/energy/exclusive-canadas-financial-watchdog-warns-lenders-against-bundled-loans/wcm/6b5a6093-a795-425b-98a6-326816a3a077 which expresses regulators more concern for the practice. Thus far delinquencies are low but can change instantly and dramatically when the tide goes out, especially if they are doing stupid stuff Agree that dealing with company owned by CEO's daughter seems shady. I am aware of Recharge---> I thought it was a smart move selling "work outs", potentially non performing loans to non related company/lawfirm. For those not familiar here is a summary of Allied Capital https://www.fool.com/investing/general/2015/03/26/allied-capital-5-years-after-its-downfall.aspx Its seems unlikely (but possible) that company is hiding stuff with all the various regulators having gone thru there books, loans etc repeatedly over the last 2 years Here is the company's version http://www.newswire.ca/news-releases/home-capital-statement-on-relationship-with-brookstreet-mic-inc-596083121.html No doubt this idea has fleas on it and hence the low valuation. Certainly a non consensus idea. This sucker should promptly go down 50% now that I have written the last 2 posts.

I was shocked that BRK involved in this. Everybody talks about crappy underwriting. Does anyone have any evidence of crappy underwriting? I know that its written all over twitter etc (I have been getting an education) but where is the actual documentation The company has been under intensive scrutiny by OFSI, OSC,perhaps CMHC etc according to the folks negative on the company and yet there is no announcements or reports from these government agencies that the delinquincies are false and that the reserves need to be higher. I am confused (as usual). Is the gov't allow going to perpetuate a fraud, maybe to try rip off WEB Why would the new seasoned successful financial guys on the board (and even Solloway) even be involved in obvious fraudulent operation? They are not doing it for the money they are all rich already. Why would they risk their reputation? Is there any chance that we are all wrong re underwriting, reserves etc and the folks at BRK know what they are doing. If I was WEB there is no way I would get involved in such as small deal with limited upside, size wise, if there was any chance it would go to zero. That would be embarrassing in my opinion. I believe there is real value in the collateral ---I think if a HCG client defaulted on their mortgage payment in UCCAL's or Sharper's neighbourhood--I am sure they would be interested in buying at 60 cents on the dollar (LTV is 60% on their uninsured portfolio) This might be the opposite of the Valient investment in that you have all these famous hedge funds shorting, all kinds of negative hype etc who are wrong on this company, like ACkman etc were wrong on VFX. The big difference is the type of assets involved being sold-- mostly I admit overpriced Toronto residential homes vs overpriced crappy drugs In regards to the security fraud--Old management did screw up---their controls were not perfect---I understand even big banks get burned from time to time--but its not like that tried to cover it up--they reported it immediately to OFSi and CMHC, and they sought outside counsel on whether it should be publicly disclosed. Its my understanding that they made a judgement that it was not material and were advised by outside law firm that they did not have to disclose. In my obviously they were worried about what the shorts would do with the info...we know what happens later, LOL... then they fire their CEO and I don't know what they were thinking here and maybe there is something sinister here...there were certainly a lot of mistakes from top management and board--but they have all been replaced. I think they settled with OSC, including the class action suit (though both have to be approved a bit later) for virtually nothing but had to admit wrong doing which hurts but they had little choice as they had lost public confidence and probably would not be able to cut deal with WEB otherwise re the bad HOOP loan--it will be paid off by mortgages coming due in the next 6 weeks and there is the expectation that they will not need to use BRK's loan--just pay the stand by fee of 1%. The BRK backstop and common investment is expected to fix their deposit problem--you can follow the progress daily as they have an announcement daily on there liquidity. Fully diluted I agree with the noted blog above of tangible BV of $17 Why can't it sell for 2 x BV in 3 years. Even if housing market crashes with prices dropping 40% (which it means we could have bigger problems) they could still be ok It may earn 7% ROE this year but I think they could earn 15% ROE next year. My understanding that their clients will pay higher interest rates as there is often not a lot of alternative lenders. I am surprised that smart guys on this board are not more positive with all the new developments and an opportunity to participate in a WEB sponsored company. HCG may not be a platform to take over CIBC (LOL) as written in the blog above, but with BRK money, HCG might be a more aggressive competitor for the big Canadian banks---maybe thats what the govt wants as it would be good for the consumer. Full disclosure--I owned this POS (small position) before the whole debacle/run on deposits and really wanted to sell out of my positon but it was fairly small position and I decided to do the opposite of what my intuition was telling me to see what would happen. I doubled up on the shares when the dividend was eliminated. This was easier to do with a <5% position... I would have never guessed that BRK would be involved. Cohodes is a smart guy I am sure/smarter then me for sure, I have learned a whole lot from listening to his interviews Have been wrong on this one. Have been wrong a lot. Story/thesis is different it seems. I am surprised that folks here are not changing their opinions as the facts seem to have changed.

http://business.financialpost.com/investing/investing-pro/will-prem-watsas-650-million-bet-pay-off-if-it-does-fairfax-makes-109-billion "Will Prem Watsa’s $650-million bet pay off? If it does, Fairfax makes $109 BILLION"

http://online.barrons.com/articles/senvest-partners-buyers-on-bad-news-1422074408?mod=rss_barrons_this_week_magazine&mod=WSJ_Stocks_MIDDLEbarrons Senvest Partners: Buyers On Bad News Canadian hedge fund Senvest Partners has notched top performance by picking up out-of-favor stocks including a Greek oil company.

http://www.bnn.ca/Video/player.aspx?vid=536379 Home Capital's outlook after BoC Rate decision

I am no expert. Used to own it. Your short has worked out for you so far. I thought these guys loaned money to folks like Ericopoly. High asset, net worth, but poor income (or there is something else wrong with their application, but they have lots of collateral) so none of the usual banks will loan to them. As a result they can charge an extra 1-2% + leverage=ROE >20%. From what I gather this is a very favourite short idea for US investors over the years but it has not worked out for them in the past. Maybe it will this time. Its still highly regard by respected investors like Jason Doneville at Doneville Kent for the cloners out there. I was thinking of starting a position. That said, Ben I think you continue to do well in your short position.

From their last quarterly report The main covenant in the senior notes is the senior debt to EBITDA threshold of 3:1. Is this right? LTD= $2192million less $355=$1.837b my ebitda calculation is ~$1.1B at $65 per barrel (in Canadian $)

http://video.cnbc.com/gallery/?video=3000341008 Mark Fisher: Canadian energy on sale

http://dundeecorp.com/pdf/2014-07-18-Sale-of-Securities.pdf "TORONTO, July 18, 2014 — Dundee Corporation (TSX: DC.A) (“Dundee” or the “Corporation”) announced today that it has sold 4,469,000 units of DREAM Office Real Estate Investment Trust and 8,600,000 units of DREAM Global Real Estate Investment Trust, for total gross proceeds of $207,000,000, which will be added to the Corporation’s working capital. "

My 8% position has taken a beating here. To add to my possible confirmation bias: http://www.cnbc.com/id/102233663 http://www.bnn.ca/Video/player.aspx?vid=506243 Appreciate all the posts here. Very therapeutic. Keep posting.

Are there any Canadians holding this within their RRSP? Should this security not qualify under the Canada-U.S. tax treaty exempting withholding tax on its dividend? (Withholding tax is deducted from OAK dividends in my TD RRSP account.)

Don t get what he is talking about. He says that GM is selling for $28 or $29b?? With free cash flow expected of $6B. This made me have a look Today sells for $31.31 per share x ~1.7million shares plus $60B+ in debt. Cash of ~ $30B That works out to EV ~ $82 B vs FCF ~ $6b. --->7% FCF yield. Looks fairly valued,no? Although impressive list of investors including WEB and Tepper to clone...My calculation above may be wrong.

kevin4u2, thanks for the info. I am looking at this area because of the recent depressed pricing. I get the feeling that I should probably be avoiding this. So basically we should look at 2 basic things when looking at reserve reports: - Proven reserves - Capex spent vs how much 1P reserves are added--to see that they are spending money intelligently. One should pretty much ignore, or take it with a grain of salt everything else which requires various predictions/estimates. Looking at LTS, they have ~ 79 m barrels of proven producing oil with a F+D cost ~ $31 per barrel= $2.4b --> would others like CPG be willing to pay this instead of doing their own F&D (CPG historic F&D cost ~$24 ...but that was the past) vs LTS current EV=$2.3 b. All the other land , probable barrels are free options. At $4 per share, LTS is a better bargain then at $9 if oil prices cooperate. I can t see it going to zero. (It could be my blindness). If oil prices continue to be depressed or decrease more, they could cut the dividend to zero, cut their capital spending, and cut their operating costs...yes the share price would suffer. Who knows what oil prices will do. They might be up to $100 again. Its possible that prices will stay around $80...I would expect LTS and other companies to adjust to this if they want to survive. Just speculating. Again I appreciate all the healthy skeptism. kevin 4u2, ItsAValueTrap, is there a price or valuation where these types of properties would be considered for your portfolio.