PDH - Premier Diversified Holdings Inc.

[rkbabang]

Please check out Schwab, I don't believe that they have that big of a charge.  I bought mine there.

 

The $50 fee is relatively new at Fidelity within the last year.  I own more than 500k shares and most of them were acquired at Fidelity before they started charging the $50 fee per transaction.

 

[Partner24]

That's a good discussion.

 

When you have to raise cash by equity capital because the business is not independant by itself, than shareholder trust is your oxygen. It make sense to get listed to facilitate trading as long as the cost is reasonable. But depending too much on trust is far from being the ideal situation. Trust can be something very volatile.

 

But I understand that PDH is a very small business with already many different investments that are not cash flow positive. So I understand that, for now, we need to give water and seeds.

 

But there is ultimately no alternative to become a positive free cash flow business. A nice balance sheet with continuous free cash getting in is the ultimate ingredient to independance and health. And many small businesses, both private and public, are able to do that. Just take a look at PDRX as an example. Tiny business, far more liquid assets than liabilities and free cash flow positive.

 

I am slowly, but surely building a position in PDH. Another member of my famility is also doing that. I have the tendency to be very patient. I can and will keep buying shares as long as the plan is to become a healthy and cash independant business and actions point toward that.

 

 

[Jurgis]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

[rkbabang]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

 

That's just weird. I never ran into it before.

[ScottHall]

I threw a fit over a similar fee at another brokerage and they gave me 30 free trades when I threatened to leave.

[BTShine]

I had a similar experience to Scott.  Mine was related to them buying me lots of 50 or 100 shares/day of a stock trading in the pennies.  $50 for the stock and $10 for the trade.  They gave me 20 or 30 free trades to compensate.

[benchmark]

 

There is going to be dilution until the existing businesses can generate enough free cash to cover inherent operating costs or you acquire businesses with enough existing cash flow.  If you aren't adding capital over time, it's likely you will be getting diluted until we reach that point where we are cash flow positive as an entity.  That's the reality of the existing business.  You aren't going to get enough in cost efficiencies to overcome the inherent burn rate...you need growth! 

 

Cheers!

 

Dilution is what worries me. I know it's part of the business. One thing that bothers me is that we keep buying SequentRe shares, and I'm worried that it's chasing that one big fish that is never there (sunken cost).

[benchmark]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

I've been using tdameritrade, and i don't see additional fees.

[shalab]

I think people realize this is the opportunity to invest in the next Watsa that is much younger. Watsa himself invested with Sanjeev. Many people here have invested with Biglari - now we have someone who is ethical, does work for the community and not full of themselves.

 

cheers!

shalab

[ourkid8]

Would you care to elaborate?  - Is Fairfax or Prem a shareholder of PDH? 

 

Watsa himself invested with Sanjeev.

[hillfronter83]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

I've been using tdameritrade, and i don't see additional fees.

 

For US investors, I believe Premier might be considered PFIC (passive foreign investment company), does this concern you? Or you just hold this in your tax exempted account?

[racemize]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

I've been using tdameritrade, and i don't see additional fees.

 

For US investors, I believe Premier might be considered PFIC (passive foreign investment company), does this concern you? Or you just hold this in your tax exempted account?

 

They have operating businesses, so I hope it isn't PFIC or will stop being one soon.

[oddballstocks]

The $50 fee is relatively new at Fidelity within the last year.

 

It is not a new fee. I've bought five-letter-F stocks on Fido with extra $50 fee for ages. They change which stocks it applies to based on who-knows-what. It's possible that they changed it for the whole stock exchange or for this particular stock for whatever reason.

 

I think I've even seen the fee appear and disappear for one stock the same day, which is really weird. I've was motivated enough to call and question their reasoning. They might drop it for your trade if you call them. It's just not worth it usually.

I've been using tdameritrade, and i don't see additional fees.

 

For US investors, I believe Premier might be considered PFIC (passive foreign investment company), does this concern you? Or you just hold this in your tax exempted account?

 

They have operating businesses, so I hope it isn't PFIC or will stop being one soon.

 

Or buy it in an IRA and not worry about it.  But I think the fact that the operations are significant protects them for now.

[tombgrt]

I think people realize this is the opportunity to invest in the next Watsa that is much younger.

 

I think some people, after over 2.5 years, still haven't realized that this is pure hope and nothing more. To be clear, Parsad is a great and talented investor and chances are he does very well.

 

This is what I posted 09/2014:

 

Also I'll say it's rare to get such feedback from management. Sanjeev is candid and lays out his plan. Moreso than from the majority of CEOs out there. This automatically improves the odds because you don't have to discount management or quality of information you receive as an investor. In fact it may warrant a premium IMHO. How many managers out there do you know you can trust?

 

For all you know you are already paying a very rich premium to fair value. What is your investment basis other than "the turnaround will work under good management"? How long will it take before things stabilize? Before they get decent returns on invested capital? This will impact your return tremendously.

 

This stock price explosion is little more than speculation and a result of a 5-year old extreme bull market, exploded board membership and idolization of permanent investment vehicles and great investors. No offense to anyone. After all, speculation can still make you serious money when done right.

 

 

And I still believe it is true. And being honest and thrustworthy and all is nice, but returns are what ultimately matter most. No one is doing this out of charity and neither should you as an investor.

 

I also feel like the risk here was underappreciated by most. Claiming that's how Berkshire etc started back in the day is just cherry picking those few that succeeded. Most fail horribly. Berkshire was in better condition than PDH at start and dilution to stay afloat was not an issue. Yet Buffett said it was his worst mistake. No bonus points for complicated investments etc...

 

Regardless, best of luck to all!

[Spekulatius]

I think people realize this is the opportunity to invest in the next Watsa that is much younger.

 

I think some people, after over 2.5 years, still haven't realized that this is pure hope and nothing more. To be clear, Parsad is a great and talented investor and chances are he does very well.

 

This is what I posted 09/2014:

 

Also I'll say it's rare to get such feedback from management. Sanjeev is candid and lays out his plan. Moreso than from the majority of CEOs out there. This automatically improves the odds because you don't have to discount management or quality of information you receive as an investor. In fact it may warrant a premium IMHO. How many managers out there do you know you can trust?

 

For all you know you are already paying a very rich premium to fair value. What is your investment basis other than "the turnaround will work under good management"? How long will it take before things stabilize? Before they get decent returns on invested capital? This will impact your return tremendously.

 

This stock price explosion is little more than speculation and a result of a 5-year old extreme bull market, exploded board membership and idolization of permanent investment vehicles and great investors. No offense to anyone. After all, speculation can still make you serious money when done right.

 

 

And I still believe it is true. And being honest and thrustworthy and all is nice, but returns are what ultimately matter most. No one is doing this out of charity and neither should you as an investor.

 

I also feel like the risk here was underappreciated by most. Claiming that's how Berkshire etc started back in the day is just cherry picking those few that succeeded. Most fail horribly. Berkshire was in better condition than PDH at start and dilution to stay afloat was not an issue. Yet Buffett said it was his worst mistake. No bonus points for complicated investments etc...

 

Regardless, best of luck to all!

 

+1

 

I think there will be enough time to invest in PDH, when results are improving and competency of the management is clear. I know it is harsh, but based on what I see so far, this is still a turnaround In progress and management isn't proven. Being ethical and having value bent is good, but not enough to be successful running a business. Running a business well is very hard, turning around a business is even harder and has very little to do with being good at investing, imo.

[racemize]

There's also a chance that it just is really highly priced for a long time (assuming it works).  E.g., FRMO trades very high relative to other compounders due to the type of shareholders that are already present here.

[Parsad]

Would you care to elaborate?  - Is Fairfax or Prem a shareholder of PDH? 

 

Watsa himself invested with Sanjeev.

 

Neither.  Fairfax is the largest investor in MPIC Fund I, LP, which is the largest investor in PDH.  Cheers!

[ourkid8]

Based on the deteriorating fundamentals of PDH, we see more similarities than differences.  I do not think you can claim PDH is not SHLD until PDH has actually turned around and is growing. 

 

What I will tell you is that we are not a Sears Holding Company!  Cheers!

[drzola]

Can someone answer this question;  the requirements to be an accredited investor in MPIC LP fund 1 ( US )?

 

 

[rkbabang]

Can someone answer this question;  the requirements to be an accredited investor in MPIC LP fund 1 ( US )?

 

If the answer is the same as an accredited investor in the US then you must have either $1M+ in investable assets or an income of $200K+ for the last 2 years (and expect the same for this year).  I don't know if it being a Canadian fund changes things.

 

[drzola]

Thank You!

 

 

[Spekulatius]

I think one of the issues with those companies (SYTE, PDH) taken over by value investors is that they are really small and generally cash flow negative. When we compare this the Berkshire, in the mid 60's, well Berkshire was already a $50M revenue company back then 50 years ago, which would be like a $500M company now. This means that Berkshire had way less corporate overhead than PDH or SYTE. Berkshire was a crappy business, but it generally wasn't losing money and tax loss carryover and shrinking working capital means that cash could be extracted from the business.

 

Getting in at the ground floor is only a good idea if it takes off. I could well I imagine  buying in, when these companies are 10x their current size. Sure, the stock could just go stratospheric and become overvalued, but then there is the possibility that the business improves and the stock does not.

 

[benchmark]

Can someone answer this question;  the requirements to be an accredited investor in MPIC LP fund 1 ( US )?

 

If the answer is the same as an accredited investor in the US then you must have either $1M+ in investable assets or an income of $200K+ for the last 2 years (and expect the same for this year).  I don't know if it being a Canadian fund changes things.

I assume that becoming an investor in MPIC LP fund mean that you have to file foreign ownership with IRS?

[OracleofCarolina]

Sanjeev,

 

When will you post the annual meeting presentation?

[racemize]

Can someone answer this question;  the requirements to be an accredited investor in MPIC LP fund 1 ( US )?

 

If the answer is the same as an accredited investor in the US then you must have either $1M+ in investable assets or an income of $200K+ for the last 2 years (and expect the same for this year).  I don't know if it being a Canadian fund changes things.

I assume that becoming an investor in MPIC LP fund mean that you have to file foreign ownership with IRS?

 

I think he has a U.S. entity, so it wouldn't be foreign.