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  • U.S. auto sales expected to set a record in November [View news story]
    VW sales up? I have my doubts...
    Nov 24, 2015. 09:15 PM | 1 Like Like |Link to Comment
  • A Compelling Return In The Wind Up Of Legumex Walker Shares [View article]
    There are a couple more risks to be aware of. I've honestly never seen a situation like this where management has had to cut distributions twice and is hedging for a 3rd or 4th cut as well. Not a lot of faith in management, which, as you say, is one of the reasons for the high discount.

    From the Oct 26 press release:

    The revised estimated Distribution range of $1.69 to $1.98 per share assumes the Company will not be required to pay $1.2 million in respect of severance obligations for PCC nor that the Company will be required to pay to Scoular an amount of US$1.5 million in respect of the sale of the Canola Current Assets by Scoular in connection with the termination of the PCC Processing Agreement.

    And from today's (Nov 9) press release:

    Readers are cautioned that there is risk that the amount of working capital or payment in respect thereof pursuant to the Sale Transaction will be less than as at September 30, 2015 or otherwise less than expected, resulting in the transaction value being less than anticipated, and a risk that the amount available for distribution to shareholders will be less than expected as a result of unforeseen liabilities.
    Nov 9, 2015. 06:44 PM | Likes Like |Link to Comment
  • Expedia +4.4%, HomeAway +22.5% after announcing deal; more details [View news story]
    How is it at all reasonable that airbnb is worth $25 billion, 6 times AWAY's $3.9 billion when away has more revenue, is profitable and has more properties listed?
    Nov 4, 2015. 10:09 PM | 2 Likes Like |Link to Comment
  • Valuing IBM By Comparison To Its Competitors [View article]
    IBM CEO Ginni Rometty was on CNBC today (you can google it). Very sharp and did a good job of explaining how they are putting profits ahead of revenues.

    I worked at Oracle and competed against IBM and their big strength was their deep customer relationships and their services / consulting group - they could take on a customer project and fully deliver unlike pretty much all other IT vendors. Plus they had deep industry knowledge in the big IT spending industries like banking and were providing thought leadership.

    I personally own CGI Group (GIB) as I think they can grow faster as IBM is so large, but I do like the IT service providers who are tightly linked to customers like both GIB and IBM are.
    Nov 3, 2015. 10:00 PM | 6 Likes Like |Link to Comment
  • My Banking Value Portfolio [View article]
    Have you looked at ING? They are right around tangible book, but have already completed their turnaround, are over-capitalized, and are committed to returning cash to shareholders through a good dividend. It's had a good move up already, but should be able to get over $20 as people see the dividend stream.
    Oct 18, 2015. 01:48 PM | Likes Like |Link to Comment
  • A Chilean Wine Producer You Missed Despite Its Size [View article]
    If you look at their latest SEC filing

    they document how the withholding tax works and come up with an effective withholding tax rate of 16.12%
    Sep 14, 2015. 08:39 PM | 1 Like Like |Link to Comment
  • A Chilean Wine Producer You Missed Despite Its Size [View article]
    Here is the actual agreement if anyone wants to dig into it:
    Sep 14, 2015. 08:14 PM | Likes Like |Link to Comment
  • A Chilean Wine Producer You Missed Despite Its Size [View article]
    Many countries have tax treaties with Chile at lower tax rates, For example, dividends to Canadians are taxed at a 15%.

    "Please note that Chile has signed DTTs with Austria, South Africa, and the United States that are not yet in force."
    Sep 14, 2015. 08:12 PM | Likes Like |Link to Comment
  • The Bear Is Alive! [View article]
    The reason many foreign markets look so poor is because you are using US$ ETF's and to the actual markets and the US$ has been so strong. When you look at markets in local currencies, many are at all time highs. Here is Germany for example:{"range":"max","allow...

    Well above previous lows. So, while the US investor in these countries is seeing poor returns, local investors are actually doing quite well.
    Aug 5, 2015. 01:31 PM | 4 Likes Like |Link to Comment
  • Puerto Rican Sell-Off Brings Forward Tremendous Opportunity For Assured Guaranty [View article]
    On the balance sheet, the Net Loss Expense and LAE Reserve is now $787 million with a Net Reserve (after taking out Salvage and Subrogation Recoverable) of $582 million. This is already a liability on this balance sheet and out of shareholder equity, so payment out of here will not hit the earnings or book value. They do not break this out, so we don't know how much of this is for Puerto Rico, but say "U.S. Public Finance Economic Loss Development: The net par outstanding for U.S. public finance obligations rated BIG by the Company was $7.9 billion as of March 31, 2015 compared with $7.9 billion as of December 31, 2014. The Company projects that its total net expected loss across its troubled U.S. public finance credits as of March 31, 2015 will be $310 million, compared with $303 million as of December 31, 2014. Economic loss development in First Quarter 2015 was approximately $9 million, which was primarily attributable to certain Puerto Rico exposures. "

    I would think most of this $310 million is for Puerto Rico as all the other big trouble spots have been taken care of, but, as said above, they can't for business reasons.

    The "Net Expected Loss to be Paid" was $1,154 million and the "Net Expected Loss to be Expensed" was $315 million, with this loss spread out over many years with a max loss of $25 million in a single year.
    Jul 1, 2015. 11:29 AM | 1 Like Like |Link to Comment
  • The View From Punch Bowl Mountain [View article]
    Thanks for the article Tom - well written!

    I read your comment on shorting bonds and it certainly is tempting to do so, but it has been tempting several times in the last few years and been wrong. At some point it will be and this may be it, but so hard to know. Warren Buffet was on TV a couple of months ago saying he'd do it if he could a way to do so inscale in a safe manner. Better just to avoid stocks which will be hurt by rising rates and buy those which will benefit.
    Jun 25, 2015. 09:40 AM | 1 Like Like |Link to Comment
  • It'll Take More Than A New CEO To Fix Deutsche Bank [View article]
    I also am pretty sure Greece leaving the Euro won't have a major inpact on DB. This has been discussed and analyzed to death, so is pretty fully in the market at this time.

    Plus, the real reason Greece is having to leave is because it should not have gotten in in the first place. The remaining countries in the Euro want to stay in (actually so does Greece!) and see the benefits from doing so.
    Jun 8, 2015. 09:33 PM | 2 Likes Like |Link to Comment
  • Has The Market Forgotten About SORL Auto Parts? [View article]
    I have a small, long position and I'm pretty certain SORL is a legit company, but you re definitely taking a higher level of risk with China. A dividend would help show legitimacy and improve the valuation, but management wants to save cash for growth.
    May 22, 2015. 07:32 AM | 1 Like Like |Link to Comment
  • Taking A Position In MetLife [View instapost]
    My favourite life insurer is NWLI.

    Very conservatively run, strong balance sheet (one of the ratings agencies said it would be AAA, except that it is too small). They don't use derivatives, but do use stock market call options to fund their variable annuities and do a good job of matching these as shown by their consistent profitability.

    They have similar margins to TMK, but a lower ROE (7%) probably because they have no debt.

    The downside to NWLI is dual class share structure, controlling shareholder, but he is interested in the long term growth of the company, no debt which hurts in these markets, and no interest in pushing the stock price up via a share repurchase which they could easily afford and would be very accretive.

    It has had a puillback recently as they are being sued by Brazil for selling insurance illegally in Brazil, but I think is a buying opportunity. I think the worst that would happen is they sell less business in Brazil, which would hurt, but not be a catastrophe for the company.

    From their latest SEC filing:

    On October 26, 2011 the Brazilian Superintendence of Private Insurance (“SUSEP”) attempted to serve the Company with a subpoena regarding an administrative proceeding initiated by SUSEP in which it alleged that the Company was operating as an insurance company in Brazil without due authorization. The Company had been informed that SUSEP was attempting to impose a penal fine of approximately $6.0 billion on the Company. SUSEP unsuccessfully attempted to serve the Company with notice regarding this matter. The Company does not transact business in Brazil and has no officers, employees, property, or assets in Brazil. The Company believes that SUSEP has no jurisdiction over the Company, that SUSEP's attempts at service of process were invalid, and that any penal fine would be unenforceable. For the reasons described above, the Company does not believe that this matter meets the definition of a material pending legal proceeding as such term is defined in Item 103 of Regulation S-K but has included the foregoing description solely due to the purported amount of the fine sought at that time.

    Although there can be no assurances, at the present time, the Company does not anticipate that the ultimate liability arising from such other potential, pending, or threatened legal actions will have a material adverse effect on the financial condition or operating results of the Company.

    Separately, the Company has recently become aware that the Brazilian authorities have commenced an investigation into possible violations of Brazilian criminal law in connection with the issuance of the Company's insurance policies to Brazilian residents, and in assistance of such investigation a Commissioner appointed by the U.S. District Court for the Western District of Texas has issued a subpoena upon the Company to provide information relating to such possible violations. Because the Company has only recently become aware of this investigation, no conclusion can be drawn at this time as to its outcome or how such outcome may impact the Company's business, results of operations or financial condition. The Company plans to cooperate with the relevant governmental authorities in regard to this matter.
    May 18, 2015. 08:08 AM | Likes Like |Link to Comment
  • Taking A Position In MetLife [View instapost]
    Hi Tom,

    Seems like the Fed's are scrambling to justify calling MET a SIFI, looking at their GIC exposure, etc. and their case is probablypretty weak. Nice to see Kandarian pushing back and hopefully they get to reasonable solution.

    MET has been basing for a couple years now and I think MET and all the lifeco's are finally getting ready to break upwards and get revalued by the market in a more rational manner as interest rates actually do rise. But I am playing this through smaller companies, which are cheaper, but also don't have options.
    May 15, 2015. 09:31 PM | Likes Like |Link to Comment