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Dan Braem's  Instablog

Dan Braem is an independent financial consultant performing services for several Fortune 100 companies. Prior to his consulting work, Dan has worked for a large pharmaceutical company as well as several CPA firms. Dan received a B.S. in Accounting with a second major in Finance from the... More
My blog:
Daniel Braem - Investing Ideas
My book:
Building the Next Berkshire Hathaway
  • Berkshire Hathaway and Burlington Nortern - Miscellaneous Thoughts.
    During the past year, I have written a book titled “Building the Next Berkshire Hathaway”. On page 12, I note that it will be interesting to see the direction that Berkshire Hathaway is headed. My prediction was that it will increase its holdings in both railroads and utilities. Check one of those off the list.
     
    I believe it is clear that Berkshire, if excess capital is available, will try to expand its utility operations. Please note the failed attempt to take over Constellation Energy. These stable cash generators (railroads, natural gas pipelines, utilities) are the future of Berkshire Hathaway. However, it may take some time before another big deal is made.
    More »
    Tags: BRK.A, BRK.B, BNI, Buffett BNI Berkshire Hathaway
    Nov 06 03:09 pm | Link | Comment!
  • CNA - Value Investment
    Instead of focusing on Warren Buffett and Burlington Northern today - I am making a Buffett-like bet. 

    I have written about CNA in the past - recommending a trade involving selling put options with a $7.50 strike.  It was the biggest risk-reward trade I could find at the time.  Turned out to be a good trade.

    I am revisiting CNA.  CNA is a P&C insurance company, and is 90% owned by Loews Corp (NYSE: L).  As noted in the CNA 3rd quarter conference call, book value per share is $35.  The stock trades (as I write this) for around $21.

    The current stock price is significant discount to book value.  Why?

    1) CNA wrote off a lot of investments during the financial crisis.  Maybe investors were scared off.

    2) Not many people know about the company.  Like I mentioned, CNA is 90% owned by Loews.

    To address the first point, CNA has been strengthening its investment portfolio, investing in higher grade fixed-investments.  In addition, the turn in the markets has benefited CNA significantly.

    The second point is actually another reason to buy CNA.  Because CNA is owned by Loews, CNA can receive financing in tough markets.  As an example, CNA issued $1.25B in preferred stock to Loews to strengthen its balance sheet during the financial crisis.

    The discount to book value is so substantial, it is hard for me to pass on this opportunity.  Even though I am shareholder of Loews, I am buying CNA today (11/3/2009).

    Position - long Loews, CNA
    Tags: L, CNA, CNA Insurance, Loews, Buffett
    Nov 03 12:13 pm | Link | Comment!
  • AT&T - playing the options
    It is very tough to find stocks that you can invest in over a long period of time. Quite frankly, as we have witnessed, most companies are so poorly run that the companies don’t deserve long-term shareholders. However, I believe there are some businesses that are attractive on a long-term basis at the right price.
     
    One of those businesses is wireless services. Specifically, I am looking at AT&T. Currently, the company trades for around $26 per share, giving AT&T a 150+ billion market cap. Most noticeably, AT&T sports a 6% yield at current prices.
    More »
    Aug 26 09:34 am | Link | Comment!
  • Dr. Pepper Snapple and Other Stuff
    I am running a mock portfolio @ http://danielbraem.blogspot.com/ - interestingly enough, it is very challenging in this market where everything goes up without a pullback.  As a value investor, every day the market goes up, there is subsequently less value! 

    I am getting called out of a Doctor Pepper Snapple position today - I bought this thing at $17 and change and it has really moved.  It looks like somebody big is accumulating this stock.  I haven't wrote about this company on this website, but I did include it in my book "Building the Next Berkshire Hathaway".  This company is doing all the right things - most importantly, paying off debt.

    Enjoy the weekend.

    Tags: DPS
    Aug 21 12:25 pm | Link | Comment!
  • Blog Site - Creating a mock portfolio
    I am switching my blog to a mock portfolio site.  It seems many people write about a lot of ideas, but there is no accountability.

    I would like to create this site so there is some accountability to any recommendations I make.  The blog is found at the following site:

    http://danielbraem.blogspot.com/

    Aug 17 03:46 pm | Link | Comment!
  • Enough with the Buffett critics

    There always seems to be critics of Warren Buffett, including a recent piece on Seeking Alpha titled “Buffett’s Betrayal”, written by Rolfe Winkler.  To all the critics, I say enough is enough.

     

    Some of the critics suggest that Buffett’s support for the bank bailouts was for selfish reasons.  To expand, the critics suggest that since Berkshire Hathaway has large stakes in Wells Fargo, American Express, and U.S. Bancorp (among others), he was merely concerned with his own self-preservation.

    More »
    Aug 13 12:53 pm | Link | 1 Comment
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StockTalks

  • I did some hedging at 2PM-shorting SPY/ long SKF. I feel like catalysts banks are over for now - more potential ST negatives than positives
    May 22, 2009
  • You only need 2 or 3 good ideas to make money. Some websites discuss 500 stocks. It is better to provide 10 - 20 good ideas.
    Apr 08, 2009
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  1. Enough with the Buffett critics (1 Comment)
Posts by Themes
Aspen Holdings, Buffett, Buffett BNI Berkshire Hathaway, CNA Insurance, cna loews , Loews
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