Ulrich

I bought NWLI and ANAT too. (the mindset is the same) Farmers is a bank, the other two are mostly life insurance companies. All three are overcapitalized. Like thepupil said, the low profitability comes from the crazy high capital ratios. Farmers and Merchant seems do know of the discount. They buy back stock. Because of the low trading volume these buybacks are limited. But it makes the downside very limited too :) I bought ANAT at 70 Dollars not long ago and NWLI at 190. I think these stocks have a very good risk/reward in times of such heavy discounts to tangible book. Even a rerating to something like 60Percent tangible book value is a double. Plus these companies add tangible book value and are profitable year after year.

Company is at 74% Book. Check Very safe , strong capital buffer. Check Good geographic area. They re operating in one of the richest neigbourhoods worldwide. Check And they are buying back stock at these valuations. check I think this stock has an easy upside of 40 percent + x. This stock is an long term no brainer and very, very safe.

There is a big Gap in Oil Stocks between Europe and the US. Take ENI S.p.a. . An Oil Major, that is more focused on E&P. Not so strong in Downstream like Exxon or Shell. But it trades for under 5 times EV/EVITDA and with higher Oilprices this year the valuation is very attractive. It has low leverage , good growth in Production and i think over 7 million in proofed Barrels. Cons: Reserves often in more unstable countries (Lybia for example), controlled by the Italian state. Dividendtax in Italy. But ist not a state piggy bank. It has a long history paying dividends. And it created a lot of value since it s IPO in the 90s. But really with that kind of reserves and in an financial strong position that would be worth much more on an US Exchange.

A good and interesting Bank is Chesapeake Bank (Chesapeake Financial Shares). It earned a return on equity north of 10 % last quarter. With a leverage ratio of 5,6 to 1. The bank is interesting because they have a mix of 50/50 between interest income and non-intererst income. They do wealth management and merchant card in a relative big way for their size (market cap 121mio $ ). Looks like a small bank with a great future. It s still trading for under 1,5* tangible book value and i m pretty sure they will do double digit returns on equity in the future. The CEO owns a big chunck of stock and i think Chesapeake has a very good line of non interest income businesses to make it successful in the long term. The Bank is pretty old but build a pretty good local franchise over the last few years.

I thought about the Russian Energy Sector often. But i pass. Great resources, low cost providers... but in the end it s an state controlle companyin a country full of corruption and an all mighty state. You will get of the profits what the state wants you to get. I go with the american and european oil and gas companies in this downturn.

Had a nice runup after full year earnings to now over 3 euro. But still trading at 6 times earnings. Bought end of last year between 1,88 and 1,97. So already a nice return. There is not much not to like. They make a near to 20 percent RoE pre-Tax. Big Insider-Ownership. There Car-Insurance Business makes great returns. With the momentum of the last few years it would trade at minium 1.5 times book value, if it would sit Germany oder France. The risk is of course the greece domicile. But the bond portfolio invest in bonds from the stronger European countries, because the average rating of their assets is higher investment grade and Greece itself has a junk credit rating. I think this company is the much safer way to play Greece Financials than the big Greece Banks.

i don t understand why many people see wal-mart as sick. I understand that wal-mart is the biggest US retailer. The problem is more that Wal-mart has not the growth opportunities in the USA anymore , because it s already in nearly every attractive market. So is the revenue growth not much bound to the inflation rate? Is it not naive to think a retailer as big as wal-mart can grow in the US much more than inflation? Inflation in the western world is weak the last years and so it sounds not unhealthy for the biggest retailers to have moderate revenue growth. But now back to Sears....

I have a question to the long term holders. Why do you think that anybody would pay the book value in the far future for this business? The machines and property of the company give u a very low return on equity,so why would someone pay the stated book value with this low return? I like to invest in insurers or banks with stable.balance sheets because investment grade bonds etc. Are worth book in a liquidation case.but I see not that an other party would pay really the stated book value for hanover foods machines and propert with this low returns. The low returns could be a moat(same maybe with universal corp),because the low returns on new machines let no new players entry the market.but is it not mor reasonable to value hanover with price earnings,price cashflow and dividends as participation of the minor shareholders?

Cornflakes Kellogg / Cereal Partners Worldwide JV (General Mills, Nestle) Board Games ( Hasbro / Mattel / here in Germany Ravensburger). A "u have to have board game" has to be known by many people so that u can play it with little start up time at a party or family meeting. Monopoly, risk etc have an enormous moat.

Hello, i have to say "i don t understand what this whole scandal is about". These scandals about Wells Fargo take place in every bank around the globe and i know of a lot of German Banks that harmed their customers much much worser. Wells fargo makes over half their income of interest income. The rest comes from different sources, the fees are only a small part of Wells Fargo's income. I think this is in the end not a big thing and if the world don t goes into a great economic downturn or Deutsche Bank goes bankrupt this year... no one will remember this in two years. Wells Fargo has very little derivative exposure, good loans ( i checked again) and moderate leverage and is growing nicely in loans and deposits and pays a good dividend. I think the whole thing is greatly overdone!

I think in traditional life and annuities scale is not really a big factor. Even a smaller Insurer like Kansas City Life hat 100 000s of customers. The Insurer can only ( or the most of it s assets) invest in investment-grade bonds or very conservative morgages... The better return of equity of the real big insurers often comes from a little bit less conservatism ( look at National Western for example or American National) or that the insurer has additional businesses like asset management etc. On the other side small insurers can have a fantastic small franchise. Look at National Western ( nearly 43 million dollars in profit on 130 million Dollars of premiums in their internation life operations). The pro point for the big insurer could be that A) people think the big insurer is safer! (That s a point for many people. Of course it s heavy regulated. But i know people who chose Allianz over smaller competitors because of the brand (i m German) b) the big insurer has much more troops going from door to door. On the other side in times of low interest rates the small fixed costs of the little insurers could be little plus. My pro point for smaller insurers is A) the balance sheets is often easier to understand (less trading assets...). b) The smaller insurers often operates in only one currency and one market (laws for life insurance is different from country to country). So a Met Life / Allianz etc. is harder to understand.

391$ per non-voting stock. Really becomes deep value at 52% of tangible book. Does someone know it there are other bigger stockholders than the sinnots, i only see one fund invested. But the stock is just too thinly traded in my eyes. I tried a write up for myself (sorry for my english): http://www.valueblog.de/archive/4779

There was an contract with Microsoft for the Xbox film division to produce Winterworld. The IDW Ceo (the comic division) is very good. He build the business from scratch. The problem is everything in the entertainment space is "groundbreaking", "award-winning". I m sceptical without numbers for new projects and deals. I think i must dig deeper again. For me it was just an deep value play which become more to fair value.

Had the company in my portfolio under it s old name "CTM media holding". Bought in the 40s and sold last year with an 400 to 500% gain. Have not looked into the business for the last quarters. --- I think the brochure business has a moat. The problem is" will brochures become lesser and lesser relevant". It s a moat business , but hard to say if their mix with digital terminals and paper brochures will work in the end or if technology disrupts it. --- The comicbook business is a business with scale :) The problem is the overall market is relative small. I think the biggest part of the comic business are big IPs from major companies. Star Trek, Transformers, My Little Pony (they sold over a million copies of issue 1), GI Joe... The problem is a) will they be able to attract enough good IPs in the future ; b) will the popularity of My Little Pony last. This is the problem with these IPs, they are very cyclical in their popularity. The same goes for things like board games and so on. I think they were the lucky to be a small independent publisher. Disney owns Marvel and Warner owns DC, so the other big IP Owners go with one of the small Publishers. --- The business was very cheap two or three years ago. But i sold because i don t want to own a business like that at a high valueation, because i think the entertaiment part is to dependent on factors it can not control. As i see most of their sales come from IPs of other (much bigger )companies.

is your point that public cloud will be the higher margin business or just better business or that hybrid cloud will be too small to scale and make money?