Liberty

I recently had a very interesting discussion with a knowledgeable person in the industry, and the impression that I came away with is that Chad is very good at the financial side of thing and pretty tireless when it comes to finding deals, structuring them, switching assets to higher value uses, etc.. but that his pulp industry experience was slim (I'm sure he's learned a lot in the past few years, though), so he had to rely heavily on his advisors for that side of things. It would seem that Peter Vinall maybe was the one who "led Chad down the garden path" and convinced him that ramp up would be quicker than it actually turned out to be, and probably didn't keep enough margin of safety in the time-table for delays and problems (even excellent pulp companies have all kinds of delays and costs overruns when building or ramping up mills), etc. Hopefully now with Pelletier in and another new board director who has decades of pulp industry experience, the operations will improve and the forecasts will also become more conservative. Chad still deserves a good part of blame, the buck stops with him, but I still see value, the problems appear surmountable, and it seems that actions are being taken to rectify the course... We'll see how it turns out. As I said often, I'm disappointed with how things turned out, but I expect FTP to be worth multiples of $8/share within a couple years.

Holding only berkshire isn't the same kind of concentration as holding only Coke, though. Berkshire is basically a mini diversified fund in itself, and it's self-adjusting in that WEB (and now Todd and Ted) will move money in whatever place is most promising at the time. So they were not that concentrated, IMO.

Thanks, good to keep in the archives!

They changed it. Chad was on there earlier this morning when I checked. Must've been a mistake.

Got a email from Ink research (who does CanadianInsider.com) to let me know that they've launched: http://insidertracking.com/ Seems like a useful thing to keep an eye on.

For some reason your link didn't work for me. There's a short preview here: http://www.bloomberg.com/video/branson-link-led-musk-to-boeing-on-batteries-0b8pE3JaTJqGSdnOZPdXRg.html Can't find the whole thing, though.

Thanks for posting, Steady. Glad to see you here! :)

Thanks for posting. Interesting part at the end about how the treatments available for his type of cancer have improved since he was diagnosed. His last scan was clean, no "activity" detected. saying he'd like to stay on after 2014 if he has the energy and is feeling well and the board wants him to.

http://www.businessinsider.com/moodys-strips-the-uk-of-its-aaa-rating-2013-2 http://www.bloomberg.com/news/2013-02-22/u-k-loses-top-aaa-rating-from-moody-s-as-growth-outlook-weakens.html

http://www.bloomberg.com/news/2013-02-22/fattened-margins-seen-shrinking-40-at-banks-mortgages.html

food for thought from a VIC writeup: http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/87387 Note: I'm posting it because I find it interesting, not necessarily because I agree with it. Saw this on VIC while browsing recent stuff. Personally have no idea where iron ore prices are going, though I'd expect that over time they will go up with inflation and the developing work building out (though there can be all kinds of swings in the short term).

What I'd really like to know now is, what's the fastest that FTP could transition to specialty DP and how expensive would that transition be (would it require much new equipment? Is it just going through a certification process with buyers to assure them that you have the quality and consistency?)? And how much of the competition also has the potential to switch to specialty? Thurso and LSQ, from what I can tell, seem to be in a sweet spot of equipment type and wood supply to do very high alpha and very consistent DP. How rare are those attributes? Chad mentioned - I think it was at the St-Andrews conference - that early batches from Thurso had some of the highest alpha in the world, and that was before they were able to tweak their processes. Now there are a lot of assumption in what I'm about to say, but let me know if it sounds correct to you: IF the main factor for specialty DP is cellulose purity, as measured by alpha among other things, and IF few other DP producers have alpha as high as Thurso (and as LSQ is supposed to be able to produce), and IF alpha levels are highly dependent on the quality of wood supply (something that is almost impossible to change -- it's not like upgrading equipment), this could mean that few other DP producers would be able to make the jump to specialty. In fact, if it was easy to do, it probably wouldn't be called "specialty" :) I think that when Chad looked at all potential conversion targets when he was looking for plants, being able to do specialty DP was a criteria. I think he mentioned that out of all the plants he looked at around the world, only 6 met his criteria, and he got 2 of those (though that's not counting plants that are being built from scratch, but they might still have wood supply issues). Ok, so that's a lot of IFs, so feel free to poke holes in the above.

The Raymond James report was not the only one. On Feb 19, CIBC's analyst also posted a short report that rates FTP as "sector outperform" (though without a target price), and seems to agree with a lot of what has been said here. There's an estimate on Thurso's ramp up: "we are expecting to see an 80% operating rate in Q4/12 and something between 80% and 85% for Q1/13. With the leadership of Mr. Pelletier, we now have even more confidence that FTP will see Thurso progress on a positive path and we expect by Q4/13 the mill will see sustained operating rates of 95% or better." Overall, they seem pretty positive on Pelletier. On the Chinese probe: "We believe this investigation will ultimately prove to be little more than a paper chasing exercise. Ultimately, due to lack of adequate fiber supplies, Chinese pulp mills (whether dissolving mills or kraft paper pulp mills) are high-cost producers – primarily due to fiber costs that are 2x-3x that of North American or South American producers. As well the Chinese viscose staple fiber manufacturing sector is a far more important sector to China (in terms of capital invested and jobs created) than the dissolving wood pulp manufacturing sector. Thus a trade action, such as import duties on dissolving pulp from North America or South America, would do more harm than good to Chinese industry. The time frame for the investigation period on this action is anywhere from 12-18 months. So while this issue could be outstanding for a period of time, we ultimately do not expect it to amount to much."

Not the whole thing yet, but some pieces of the bloomberg interview: http://www.bloomberg.com/video/benmosche-aig-to-emerge-a-strong-global-company-DrXWAy0WQK6bc6Y_ehIXBw.html http://www.bloomberg.com/video/benmosche-i-m-making-10-5m-per-year-on-average-0wPOtYyWRyeHS~VulHYwgA.html http://www.bloomberg.com/news/2013-02-22/benmosche-says-aig-to-build-non-u-s-life-after-asset-sales-1-.html

btw, anyone else caught the reference to Elon Musk (I think( in episode 12 of House of Cards? Raymond Tusk, the billionaire who's never held public office 8) update: Well, now that I'm farther along in the episode, I realize that the character is nothing like Musk. Either the reference is just in the name + billionaire, or it's accidental and I read too much into it. Oh well. It turns out that the character they created is closer in some ways to Buffett (house, office, age...).

http://www.slate.com/blogs/moneybox/2013/02/21/house_of_cards_netflix_subscribers_say_the_series_will_make_them_less_likely.html " According to a survey by Cowen and Co. released last week, 86 percent of Netflix subscribers said having the access to watch House of Cards makes them less likely to cancel their subscriptions." Not sure what "less likely" actually means in the real world, or if any of that will mean much for netflix in the end, but in any case, I'm enjoying the series and looking forward to Amazon and others financing high-quality TV. The real winner is the viewer!

I'm thinking maybe Marks didn't write this one. There are two names on top, and near the end it mentions Marks as if the person writing isn't him.

That doesn't make sense to me. They are insurers who write contracts on these catastrophic events. But now after it happened and hit their earnings, they adjust it as if it didn't happen? Fairfax does the same thing, iirc. It does provide some data on what a year/quarter without worse-than-usual disaster might look like (ie. if you want to compare two 'normal' years to see if they've improved operations or whatever, rather than try to compare a 'normal' year with 2005 or whatever). What really matters is actual results, of course, this is just one more data point that can either be used to elucidate some things or be misused to distort reality... IMHO, FWIW.

The company has mentioned numerous times that it wants to return extra capital to shareholders via buybacks and dividends once it gets permission from its regulators. They are expected to get permission relatively soon.

Thank you! :)

You know, I still believe that EBIX is legit and the shorts are wrong and doing some massive market manipulation. But days like this make me glad I sold my EBIX to buy BAC and AIG warrants (that was a tough choice). I think time will prove EBIX right, but it certainly feels good to have a bit less drama in my portfolio... And who knows, maybe I'll get to re-buy a stake at some point for a lower price than what I had.

My bad, I haven't been there in quite a while and should've refreshed my memory before posting.

History repeats itself...

My guess is it is, otherwise why post it?

But without the story (that scares others), would it be that undervalued? :)