Bharper

Ashford Hospitality Trust Remains on Stable Ground

Correction on the above comment, what I said is inaccurate.

Ashford Hospitality Trust Remains on Stable Ground

The credit facility has required coverage ratios and they could be forced to pay it down by around $100 million assuming the extended stay note is totally worthless.

Deferred Revenue: Like Dancing with Death

True. But the stock is still worth $15 a share.

Goodyear Ignores Raw Materials Pricing

There is typically a lag between when raw materials flows are purchased and when they flow through their cost of goods sold for GT. In GT's 4Q earnings announcement, they stated that raw material costs would peak in 1Q. This largely explains their 1Q results versus analyst estimates for 2Q (loss of $0.13)

Debt-to-Equity Ratio as Fishing Lure

Uh....yeah, in an improving macro environment levered companies do better, just as they got crushed when the economy was deteriorating. This isn't a profound revelation, it's what happens during cycles. Avis fell from $30 in mid 2007 to under a dollar. They have over $6 billion in annual revenue, so they could in fact make it and yes could be a 20 bagger. But of course such plays are very risky.

Five Cash-Rich Companies Worth a Look

BBSI is another staffing firm, I believe they are selling around $10 and have $5.50/shr in cash

Lessons from Benjamin Graham, Part 1

On Mar 04 06:01 PM User 369371 wrote:

> You are confusing the value of Berkshire as a conglomerate with the
> equity portion of the company. Buffet has been one of the best businessmen
> ever and as a result the book value of Bewrkshire has increased tremendously
> (so far). However, his EQUITY PORTFOLIO has been flat after 40 years
> of investing whereas SP500 has been up 8-fold since the mid-70s.
> Mr Buffet would have done much better in the equity part of his portfolio
> if he had just bought the SP500 instead of trying to outsmart the
> market.

Your statement that he would have done better buying the S&P is wildly inaccurate. For the first decade or so of operations, Berkshire did little else but buy equities, compounding book significantly over that period. And he has done a lot of selling over time, more recently he sold H&R Block at a huge profit, PetroChina, and others. This isn't reflected in the current cost basis of the portfolio. And his gross dollar value by cost has grown as Berkshire has grown, so the "breakeven" level of the equities portfolio has no resemblance to long-term performance.

Lessons from Benjamin Graham, Part 1

On Mar 04 06:01 PM User 369371 wrote:

> You are confusing the value of Berkshire as a conglomerate with the
> equity portion of the company. Buffet has been one of the best businessmen
> ever and as a result the book value of Bewrkshire has increased tremendously
> (so far). However, his EQUITY PORTFOLIO has been flat after 40 years
> of investing whereas SP500 has been up 8-fold since the mid-70s.
> Mr Buffet would have done much better in the equity part of his portfolio
> if he had just bought the SP500 instead of trying to outsmart the
> market.

Completely false, his portfolio is at cost because he engages in sales, overwhelmingly at profits, but mostly because in dollar terms he has added to berkshire's equity holdings over time, thus increasing its gross cost basis. The overwhelming majority of equity investors portfolios are now at unrealized losses simply due to the fact that nearly anything bought in the past 10 years is down in price since then.

2 Market Beating Value Stocks: Gentiva Health Svcs, Fresh Del Monte Produce

FDP's ROE is higher largely because they are based in the Caymans and thus pay very little income taxes. That said, the stock is cheap at less than book and under seven times normalized earnings of around $3.25/shr.

Barron's Rags on Jos A. Bank

This is typical of Barrons: the stock moves as a result of the article for three days, and then months later you realize the publication is a contrarian indictator. JOSB up 26% since this article came out, S&P 500 down 33%.

The AIG Bailout: Advice from Buffett, Munger and Grantham

This was in Berkshire's 2002 Annual report...it was part of Buffett's thoughts on "financial weapons of mass destruction". It describes to a T what happened to AIG:

"Another problem about derivatives is that they can exacerbate trouble that a corporation has run into for completely unrelated reasons. This pile-on effect occurs because many derivatives contracts require that a
company suffering a credit downgrade immediately supply collateral to counterparties. Imagine, then, that a company is downgraded because of general adversity and that its derivatives instantly kick in with their
requirement, imposing an unexpected and enormous demand for cash collateral on the company. The need to meet this demand can then throw the company into a liquidity crisis that may, in some cases, trigger still more downgrades. It all becomes a spiral that can lead to a corporate meltdown."

Fannie and Freddie: 80% Dilution

The treasury is going to make a killing on this. Borrowing at the risk free rate and buying nearly riskless securities at nice spreads. Ultra low risk preferred paying 10%, financed with borrowings at under 4%. 80% of both co's at likely zero cost, co's will probably have earning power of $2 a share each in a couple of years after the dilution. The warrants are the kicker-probably will be worth over $100 billion collectively in a few years.

Bill Ackman's Plan to Save Fannie and Freddie

This is very preliminary and early...FNM/FRE's liabilities are covered by the highest quality asset mix of any financial institution in the country. At this point the backstop is just that; a backstop, over time this thing will likely correct itself as the financial panic fades

Fannie & Freddie: Myth vs. Reality

The FRE and FNM preferred are senior to the common and there is significant upside under the scenarios of 1) massive common dilution to raise capital or 2) big recovery of the common as the current situation is related to market fear and panic. In the case of a government bailout, the preferred could be worthless.

Record Spreads on Fannie Mae

Shedlock most of what is said on Wall Street is rendered silly within months or weeks. Bear Stearns collapsed because they were reliant on fickle funding in an irrational market. In time we'll see that the well capitalized JP Morgan, who is a fortress in terms of capital, got a terrific deal. You're parroting the collective fear of the market...this is the equivalent of a crazed mob. The voices of the rational and truthful are inaudible amidst the panicked.