oddballstocks Posted September 1, 2015 Share Posted September 1, 2015 One thing I will say, and this isn't a reflection on you, but really all investors including myself in the past...there is so much that armchair quarterbacks do not know about the underpinnings of the day to day operations of any business, acquisition, etc. Even many boards have no clue about all of the company's inner workings unless they are directly involved with management on a weekly basis. When Buffett says he's a better investor because he's a businessman, and a better businessman because he's an investor, it is absolutely true. A lot of times, shareholders formulate theories from bits and pieces of information or conjecture, when there is much more going on that it is at times indescribable in a couple of paragraphs in a press release or even a page of the MD&A. It would literally take an hour of sitting down and talking to you to explain everything that happened during the tender process...many regulations, securities laws and even actions that are absurd, but we had to deal with. And then play out the various scenarios under that environment, and their various outcomes, to come to the best possible risk/reward result for shareholders. Far more detailed and complex than simply running a discount cash flow statement and buying with a margin of safety. Cheers! Exactly, no outside shareholder of any company really knows what is going on everyday at the companies he is investing in. Creating theories and using conjecture based on bits and pieces is all anyone can ever really do. And if this is true with a small company, can you imagine how much more true it is with a large cap? I invest in Apple and have all kinds of theories about what their strategy is or what is going on, but even the best informed outside shareholder can't possibly know 1% of what is really going on day to day. Every topic on this board is filled with people throwing out their theories, the PDH thread will be no different. It will only be different for you, because you actually do have an understanding of what is going on day to day. I'd imagine that Tim Cook could have a thing or two to say about all the armchair quarterbacking on the Apple board too if he read it. The idea that investors don't know squat is powerful and true. I tend to veer towards the "I don't know anything, so I'll buy statistically cheap companies" myself because I own a business, and I've worked in both large and small companies (one public) and have seen how the sausage is made. At the public company I saw first hand that what the "market" and investor thought and theorized was completely untrue, and many of management's reasons for decisions was sound given all the variables. But without actually working in the company an investor would have trouble understanding. One thing that drives me nuts is the armchair quarterbacking by investors. Many investors, especially large public ones project this persona that they know more than management, and management is stupid. They believe that running a company is some simple task and a few levers like buyback shares, cut costs etc are easy decisions. Yet they aren't, looking in from the outside is maybe equal to trying to officiate an NFL game blindfolded. Parsad is right, and Buffett is right...owning/running/working in a business makes one a better investor. But also being an investor gives one a better perspective on running a business. One last thought on all of this. I'm working through some stuff with a company looking to cut costs. To an investor this is easy they say cut costs, cut the fat etc. But on the inside it's VERY hard. There are millions of variables that need to be weighted. Each decision carries a lot of ramifications that all trickle down. Do you alienate one group of people that are responsible for x, or frustrated another group that's responsible for y? Management is not stupid in most cases. If there were really easy costs to cut in most cases they cut, unless the manager doesn't care about costs at all. I like to describe cost cutting like this. Imagine you're building a custom house. The builder offers you an upgrade on the faucets, from a standard fixture to a nicer fixture, only $300 for the upgrade. On a $400k house that $300 is nothing. Extrapolate that out across many items on the house, standard toilet, or upgrade. Those $200-300 upgrades all add up, then suddenly your $400k house is costing $475k and you're wondering "where did that $75k come from?" The problem is it's not one thing, it's a ton of little things, that when examined individually it's easy to say "yes we want the toilet upgrades" Link to comment Share on other sites More sharing options...
compoundinglife Posted September 1, 2015 Share Posted September 1, 2015 No worries! There's only so much we can put into filings, financial notes, MD&A's, before thinking it's overkill. So what I can clarify, I try to, thus the post. One thing I will say, and this isn't a reflection on you, but really all investors including myself in the past...there is so much that armchair quarterbacks do not know about the underpinnings of the day to day operations of any business, acquisition, etc. Even many boards have no clue about all of the company's inner workings unless they are directly involved with management on a weekly basis. When Buffett says he's a better investor because he's a businessman, and a better businessman because he's an investor, it is absolutely true. A lot of times, shareholders formulate theories from bits and pieces of information or conjecture, when there is much more going on that it is at times indescribable in a couple of paragraphs in a press release or even a page of the MD&A. It would literally take an hour of sitting down and talking to you to explain everything that happened during the tender process...many regulations, securities laws and even actions that are absurd, but we had to deal with. And then play out the various scenarios under that environment, and their various outcomes, to come to the best possible risk/reward result for shareholders. Far more detailed and complex than simply running a discount cash flow statement and buying with a margin of safety. Cheers! I know someone who was a CEO of publicly traded company and he/she had a related story about an activist investor. In this case the investor was urging them to take certain tactical and strategic actions. The company already had a plan underway that basically mirrored the strategic things the investor was asking for but they did not want to publicly disclose their plans/roadmap because they did not want to alert competitors to what they were doing. By the time they were ready/able to communicate their plan/progress etc.. said investor was no longer in stock. From the perspective of the person running the company, the investor was implying the company management did not what they were doing when in fact they were doing exactly what the investor wanted. They just could not communicate it. Reminds of something I say when talking to be people about presidential candidates. If the person running for president has no access to classified information about threats to national security you can basically take anything they say about defense with a grain of salt because they are speaking without all the information and basically armchair quarterbacking. They day they get inaugurated and start getting all the classified data it's a different story. On a side note this person did say that because of the investor they sought out cost cutting measures they had not previously undertaken and were able to impact the bottom line. Basically the activists kept them honest with regards to overhead. So he/she was not entirely negative on the activist situation. Link to comment Share on other sites More sharing options...
intothebreach Posted September 1, 2015 Share Posted September 1, 2015 Looks like the stock has sold off to 0.1294 over the last month (post-Russell). Seems the optics of the deal scared off some holders. Hopefully lessons learned by management. Anyone else have trouble getting executions on this name? I have put in buy orders above the quoted price a couple of times and had no fills. Probably a function of my using a crappy broker (Merrill) but thought I would check.. It looks like roughly 100K Shares (Less than C$20,000) have changed hands over the past three weeks. Not finding sellers to fill buy orders would suggest, at least to a unsophisticated individual like me, that those who own this are not looking to sell at anything close to the most recent trade. I would be one of those owners. I would not spend too much time trying to interpret the current price as there's really little depth on standing orders on both sides. As we can see on the CNSX website (all quotes delayed 15 min.) the fifth bid and ask on each side are apart by almost $0.30 for a stock that has been trading between $0.16 and $0.25. So the current price is most likely an indication of someone unwittingly putting in a market order, and someone else taking advantage with a low bid. Caveat Emptor AND Caveat Venditor! http://www.cnsx.ca/CNSX/Securities/Diversified-Industries/Premier-Diversified-Holdings-Inc.aspx Link to comment Share on other sites More sharing options...
Uccmal Posted September 1, 2015 Share Posted September 1, 2015 To that end the low price trades could have been margin calls last week. Whoever it happened to is not going to come clean on this message board and admit they lost money on a stock they knew was essentially illiquid. If you have ever had to make margin the first stocks you go for are often those that will create the most margin - i.e. stocks that you paid totally in cash for. I have had to do it - 2008. Link to comment Share on other sites More sharing options...
Junto Posted September 3, 2015 Share Posted September 3, 2015 Parsad I wish you would take the emotion out of the responses a little. The facts remain the results are not very good and I understand it is a turnaround but the investment returns leave much to be desired. Very little discussion on Sequant, what is the real story? $1,505,000 to $952,041 (USD) in 7 months? Would be good to get some more detail because that is tough to stomach. Net Losses continue to be excessive compared to revenues. 2015 YTD Revenues of $561,400 with a Net Loss of $993,481 vs 2014 Revenues of $332,727 and Net Loss of $558,220. Just trying to be constructive here as the business fundamentals and investment performance to date have been a struggle. Are you planning to come out with some more support for the actions and how the company intends to get to profitability? Thanks. Link to comment Share on other sites More sharing options...
Parsad Posted September 3, 2015 Share Posted September 3, 2015 Parsad I wish you would take the emotion out of the responses a little. The facts remain the results are not very good and I understand it is a turnaround but the investment returns leave much to be desired. Very little discussion on Sequant, what is the real story? $1,505,000 to $952,041 (USD) in 7 months? Would be good to get some more detail because that is tough to stomach. Net Losses continue to be excessive compared to revenues. 2015 YTD Revenues of $561,400 with a Net Loss of $993,481 vs 2014 Revenues of $332,727 and Net Loss of $558,220. Just trying to be constructive here as the business fundamentals and investment performance to date have been a struggle. Are you planning to come out with some more support for the actions and how the company intends to get to profitability? Thanks. Junto, The emotion is there because it is mind-numbing when people speculate on things without knowing what is happening underneath the hood. Without discussing anything not already in filings, press releases, monthly filings on the CSE, etc, here is what has happened in the last 12 months...and over 90% of it in the last 9 months: - The Burnaby Clinic was completely shut down and behind on all payables by 10 weeks, including employee salaries...that was all taken care of - The company's rent was six months behind with the bailiff picking up the rent check...that was taken care of - The Burnaby Clinic hired a full-time tech as we started again from scratch with a tattered reputation - Completed the Asset Purchase Agreement for the Clinic - We did a huge private placement at zero cost other than legal and filing fees - Huge undertaking of properly documenting the company's operations, corporate governance policies, internal controls, missed regulatory filings, missed financial filings and tax filings - Hired a new auditor - Changed the company from a medical issuer to a holding company/investment issuer - Replaced half the board of directors - Head office hired a company receptionist/admin...we pay about half the salary, the other half is covered by our sub-lease Cystic Fibrosis Canada - Notice how payables are down $700K in the last 9 months...part of that was roughly 7 significant settlements, including one for over $430K in the last quarter that was settled for 43 cents on the dollar; settled with the former CEO; settled with Siemens; dealt with HK tax summons - Complete revamp of how the financials are presented to shareholders, including the MD&A and all disclosures - Push to grow China business, including hiring a highly qualified General Manager and implementing the same controls and policies as head office - We launched Sequant Re from scratch...literally zero - We made a bid for control of Russell Breweries, including significant legal, regulatory and filing costs These are just the major issues...doesn't include many of the more trivial minor issues that still have costs associated with them. So let me ask you Junto, with all of that happening, how much do you think are one-time costs in legal, consulting, professional fees, regulatory filings costs, press release fees, Computershare, Broadridge fees, transitional accounting and audit fees, printing costs, settlements, etc? Any idea? Can you pinpoint that number? Of course not. Not without sitting at my desk or being a fly on the wall in my office. In terms of Sequant Re, it is a complete start-up from scratch. We are essentially building a reinsurer/ILS entity from a standing start. And remember, Bermuda is not cheap! You have to hire staff, pay them adequately, subsidize their housing, set up an office, equipment, software, legal (enormous), statutory and regulatory documents, filings, website, advertising, travel, meetings, etc...the list is endless. We aren't building some half-assed $5M insurance business! Ask yourself how long it would take any of Berkshire's or Fairfax's insurance businesses to have launched from scratch? Sequant will run losses until gross premiums scale to break-even. I don't know if you read Mohnish's latest letter on Dhandho, but Stonetrust had a $4.2M underwriting loss last year. We are trying to build an insurance business from scratch that will do more in premiums than Stonetrust in less than five years for what Stonetrust lost in one year! Stonetrust also is replacing their in-house actuary...showing how tough the insurance business is in terms of recruiting talent. We have two of the best actuaries in the business already in-house in Guy Cloutier and David Lalonde! These guys are working relentlessly to build this out and scale the business. Like Berkshire, Fairfax, Markel, Leucadia or any other holding company type of structure, we have built-in monthly fixed costs at head office...salaries, rent, benefits, corporate costs, accounting, filings, press releases, listing costs, legal, etc. This is fixed at a certain amount, and our operating business net revenues and investment income (gains, dividends, interest) have to cover those costs or preferably surpass them. For a very small company, that is tough to do, but I've always had people count me out. Even long-time friends and partners close to me had doubts about whether we would succeed or not...that was very disheartening and disappointing! Investors should be focused on two things: Is our net operating revenue growing when one-time costs are removed? Is book/value per share increasing over time? As one-time costs dissipate and our operating businesses continue to grow, we expect that to happen. Take a look at our growth in revenues at the Burnaby Clinic. That business has about a 60% gross margin, but 28% net profit margin now at the levels it is running at! It's not even running at 40% of capacity yet! This was doing nothing last year and had a massive burden of payables. It's reputation was a laughingstock! Recently, we were the only clinic in Western Canada selected for an Alzheimer's drug trial. We have about 70-80 different doctors referring to us now with patients from BC, Alberta and Vancouver Island. I would encourage our shareholders to talk to our employees, directors, business operators, and even service providers and ask them where this company is today compared to last year. And where they think it will be five years from now! Personally, the best thing I could have done for myself and Corner Market Capital was to invest in Premier...even though it was never planned to pan out this way in terms of our vehicle. I cannot explain how big an advantage captive capital is, and both our shareholders and Corner Market Capital partners will benefit enormously from that over time! Cheers! Link to comment Share on other sites More sharing options...
Partner24 Posted September 3, 2015 Share Posted September 3, 2015 Sanjeev, I appreciate your candor. You're the kind of CEO that I like and I'm happy to be a shareholder of PDH. Some members of my family are shareholders too and we're the kind of investors who usually keep their shares for a very long period of time. Running a business can be tough and we fully understand that. Keep up the good work and energy. Cheers! Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 3, 2015 Share Posted September 3, 2015 Thanks for the info Sanjeev. Keep up the good work. Link to comment Share on other sites More sharing options...
Libs Posted September 3, 2015 Share Posted September 3, 2015 Thanks for the info Sanjeev. Keep up the good work. +1 Link to comment Share on other sites More sharing options...
rjstc Posted September 3, 2015 Share Posted September 3, 2015 Thanks for the update Sanjeev. Always enjoy. Ron Link to comment Share on other sites More sharing options...
DCG Posted September 3, 2015 Share Posted September 3, 2015 Sanjeev, any plans to update the http://www.pdh-inc.com/ website? Using Go Daddy's free Website Builder tool screams 'unprofessional' to me. If I was a potential client of yours, and saw your website, I might look elsewhere. Link to comment Share on other sites More sharing options...
oddballstocks Posted September 3, 2015 Share Posted September 3, 2015 Sanjeev, any plans to update the http://www.pdh-inc.com/ website? Using Go Daddy's free Website Builder tool screams 'unprofessional' to me. If I was a potential client of yours, and saw your website, I might look elsewhere. I'm sure Burlington Northern had the same thought: "Berkshire Hathaway?? Who are these chumps, it looks like a 16 year old designed this website in 1995, surely they can't be serious.." I would have never noticed unless someone pointed it out. I guess people just notice different things, site seems fine to me. Link to comment Share on other sites More sharing options...
lschmidt Posted September 3, 2015 Share Posted September 3, 2015 As an investor in PDH, I am heartened that excessive funds were not spent on website developers/contractors. Tight control of spending on non-core aspects of the business (like the holding company website) is indicative of fiscal discipline. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted September 3, 2015 Share Posted September 3, 2015 Sanjeev, any plans to update the http://www.pdh-inc.com/ website? Using Go Daddy's free Website Builder tool screams 'unprofessional' to me. If I was a potential client of yours, and saw your website, I might look elsewhere. As a non-tech person who has spent plenty of time on small/microcap public co websites, I dont think this one is bad. Link to comment Share on other sites More sharing options...
DCG Posted September 3, 2015 Share Posted September 3, 2015 I guess..are potential customers visiting the website to consider the company? Companies aren't going to Berkshire's website to decide whether to buy Berkshire products. Maybe they're not for PDH either - I don't know. Just curious. You can have a professional-looking website for a very low budget these days. I work in website design and user experience though, so am coming at this from a different angle. Link to comment Share on other sites More sharing options...
Parsad Posted September 3, 2015 Share Posted September 3, 2015 Sanjeev, any plans to update the http://www.pdh-inc.com/ website? Using Go Daddy's free Website Builder tool screams 'unprofessional' to me. If I was a potential client of yours, and saw your website, I might look elsewhere. No, our website will be relatively cheap...perhaps cheap looking if that's what it looks like! :) The links to the subsidiaries will have their higher quality corporate sites, generally done by 3rd parties. No reason to spend a lot of money at the corporate holding company level. If you come to our office, Cystic Fibrosis has a prominent sign on the wall that can be seen from the elevator. Unless you looked at the building listing on the main level and our floor, you would not know we are even here. The only thing I just did a couple of days ago, is to get our logo etched in frosted glass on our door, and the Clinic logo will be etched on its door...but both are relatively low key. Even if you walk up to the head office outside (see picture attached), you'll see four prominent signs of the tenants in the building...Garda, Monarch House, Dollar Tree...Premier Diagnostic Center! Not Premier Diversified Holdings. I don't care if people can't find us, but I want them to find the Clinic. Many of you may wonder what we are modelling ourselves after...Berkshire, Fairfax, Markel...the model is really Leucadia. We will buy undervalued assets, preferably at distressed prices, and may have to turn them around. We will keep a very low profile, as lean as we can at head office, and we'll be as upfront as we can with you all, without tipping our hands. We won't be a glamour stock, but one that will hopefully make a lot of money for you over time. Sometimes you'll wonder what we are doing, what is wrong with us, or why did we buy that. Always be assured that we are weighing risk and reward, and will make some concentrated bets from time to time. Unlike Berkshire, if the economics of a business change, we may sell. But if we own 51% or better, it makes good money, we will keep it as long as we can. We like tax losses...we have a pile of them...we plan to maximize that asset. So we worry about those things, and we probably won't spend money on a better corporate website. Here are some nicer sites that are worth visiting: www.petscan.ca www.sequantre.com www.russellbeer.com www.fortgarry.com We're working on some more nice sites for our shareholders to visit over the next 6-12 months! :) Cheers! Link to comment Share on other sites More sharing options...
Jurgis Posted September 3, 2015 Share Posted September 3, 2015 It's not big deal, but the website seems to invite potential customers. There is a section "Our Services" with bullet list " Acquisitions Funding Turnarounds Management Execution " And none of these are links. :) I was wondering if I could order execution of some Canadian CoBF members, but apparently I'll have to wait for website update. 8) Good luck! Link to comment Share on other sites More sharing options...
adesigar Posted September 3, 2015 Share Posted September 3, 2015 Has anyone bought shares of PRDGF through a US broker like Ameritrade, Fidelity, etc. Ive been trying to buy shares but no luck. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 3, 2015 Share Posted September 3, 2015 Has anyone bought shares of PRDGF through a US broker like Ameritrade, Fidelity, etc. Ive been trying to buy shares but no luck. I had limited success through Scottrade. Oftentimes would take 2-3 days for an order to fill, but I picked up shares. Link to comment Share on other sites More sharing options...
benchmark Posted September 3, 2015 Share Posted September 3, 2015 Has anyone bought shares of PRDGF through a US broker like Ameritrade, Fidelity, etc. Ive been trying to buy shares but no luck. I have picked up some shares with Ameritrade, but it takes time. Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 4, 2015 Share Posted September 4, 2015 Has anyone bought shares of PRDGF through a US broker like Ameritrade, Fidelity, etc. Ive been trying to buy shares but no luck. I have picked up some shares with Ameritrade, but it takes time. I got some through etrade. Link to comment Share on other sites More sharing options...
PLynchJr Posted September 4, 2015 Share Posted September 4, 2015 I've been able to buy a good sized position through Fidelity. Definitely takes some patience though. I'm talking a few thousand dollars here...a few thousand dollars there. My largest 1 day purchase so far was just under $9,000. Link to comment Share on other sites More sharing options...
rkbabang Posted September 8, 2015 Share Posted September 8, 2015 I've been able to buy a good sized position through Fidelity. Definitely takes some patience though. I'm talking a few thousand dollars here...a few thousand dollars there. My largest 1 day purchase so far was just under $9,000. I've been buying a little at a time through Fidelity as well. I'm up to about 350K shares now. Also about the website. Squarespace is a step up from go daddy and has some pretty nice website building tools included. It is about $100/year so it won't break the bank. When I was selling my home earlier this year I used them to advertize it. The website is still up (http://www.hardyfarmsnh.com/). They have a bunch of templates you can start with, they reconfigure themselves automatically for people viewing with desktop vs mobile devices, and even a free logo design tool, which I used for the chicken hardy farms logo. Just something to consider. Link to comment Share on other sites More sharing options...
DCG Posted September 8, 2015 Share Posted September 8, 2015 I've been able to buy a good sized position through Fidelity. Definitely takes some patience though. I'm talking a few thousand dollars here...a few thousand dollars there. My largest 1 day purchase so far was just under $9,000. I've been buying a little at a time through Fidelity as well. I'm up to about 350K shares now. Are you just betting on Sanjeev or is there something about the business you like? Link to comment Share on other sites More sharing options...
rkbabang Posted September 8, 2015 Share Posted September 8, 2015 I've been able to buy a good sized position through Fidelity. Definitely takes some patience though. I'm talking a few thousand dollars here...a few thousand dollars there. My largest 1 day purchase so far was just under $9,000. I've been buying a little at a time through Fidelity as well. I'm up to about 350K shares now. Are you just betting on Sanjeev or is there something about the business you like? Just betting on Sanjeev at this point. Link to comment Share on other sites More sharing options...
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