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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (9578)	1/9/2000 1:39:00 AM
From: Wright Sullivan	Respond to of 78752

I'll take another look at CTO. I recall Lau's posts on it. TPL is just looking too cheap, but not necessarily better than other land plays. Mindful of Paul Senior's wise counsel ("buy a basket of these things", in different parts of the country), I am keeping my TPL stake small. I didn't delve far into CTO because I already own Florida real estate plays (JOE & FLA). Most of the other land plays have at least some hope of turning into a development. TRC is one hour North of LA on Interstate 5. JOE owns 30 miles of Florida gulf coast. TPL owns...grazing land! But I was reminded of your comment about buying crap at half the going rate for crap. I think we're there with TPL.

To: James Clarke who wrote (9578)	1/9/2000 12:01:00 PM
From: LauA	Read Replies (1) \| Respond to of 78752

$82 an acre seems really really really cheap no matter where the land is. I disagree with that rule of thumb. Take a look at PICO. They are the current owner of Nevada Land & Resource, which owns ~1.4 million acres of northern Nevada along the I-80 from Reno to Salt Lake. This land came from one of those railroad land grants to Central Pacific RR (one of the 'golden spike') players and looks like a checkerboard along the Humboldt River valley. It was the site of an 1870's land rush when sodbusters from Omaha and St. Louis didn't realize that the river was running only because it was the one decade in the Millenium that it would rain in Northern Nevada. This checkerboard got passed among railroads until Santa Fe sold it to a public water company in 1994/5 as a predicate to its merger with Burlington Northern. The sale price was $32/acre. It included water rights, microwave and fiber optic cable stations, lots of freeway interchanges, and far-as-the-eye-can-see chaparral. The river runs east to west, and ends in a wet-year lake that really is a sink hole. It crosses the Carlin Trend, abuts major gold mining districts, and includes large geothermal fields. To date, I would credit Santa Fe as the winner in this transaction despite the fact that PICO, the current owner, is flogging it as an undervalued asset, carried on the books at $36/acre. Remember, land has carrying costs - taxes, insurance, etc. Renting range land to ranchers who require X # acres per steer, just isn't a very profitable business. One Burns Brothers Truck Stop, at one interchange, gives a higher total return, than the entire property. I'd rather own a piece of Burns Brothers, but the Burns Brothers don't want me. Lau

To: James Clarke who wrote (9578)	1/9/2000 12:34:00 PM
From: cfimx	Read Replies (2) \| Respond to of 78752

James, I'd like to chime in on this one. Buffet is doing a lot of "work outs" in his personal account. CTO was part of the Baker Fentress distribution and he may or may not have flipped it. But it is a lesson for all of us. Not only is he NOT buying ebay or Yahoo, he isn't even interested in Wells Fargo or Chubb, which on the face of it, SEEM cheap. He wants certainty more than EVER. He is looking for dollar bills selling for seventy five or eighty cents that have a 98% chance of giving him that dollar bill in a year or eigteen months. Like you and your net nets?