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Non-Tech : Loewen Group -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Lefebvre who wrote (243)	2/11/2000 11:25:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 277

Daniel,...I will not go in the details you have pointed out because: 1- I truly believe this board will be very successful Successful in the sense that I referred to, or in another sense? I suspect the latter, because my definition of them being "successful" does not preclude the common stock going to zero. That's not to say that that would discredit the performance of the board -- I would give them extremely high marks for simply delivering 85-90 cents to the secured creditors (and completely defaulting on their preferred and common stock). But you clearly believe that the board will be so successful that there will be 100% for the secured creditors, 100% for the preferred shareholders, and a decent slug of value for today's common shareholders (you mentioned $4-6). I'm not at all saying that you're wrong (even though I can't see how). I am truly, honestly interested in being convinced that this will be the case. Even if I don't cover my short in time, I'll still make a much bigger amount on my long bond position. Me owning the bonds says that I think this company is not worthless, and that in fact I think there is well in excess of 50 cents on the dollar value to be had for the secured creditors. If the board and management really do a bang-up job, they may be able to deliver in excess of the 70-80 cents of value I originally estimated were in the bonds. Hey, I sincerely hope they're very, very successful here. Me being short the stock is a (foolish?) attempt to further estimate an upper bound of "maximum realizable value". I think (and I may be very, very wrong) that because they so overpaid for so many acquisitions, an extraordinarily large hit to their apparent value will ultimately be seen. Furthermore, given the intermediate level of the capital structure (what, $US375M of preferred?), there might in fact be a reasonably comfortable margin of safety between "bonds getting 100 cents on the dollar" and "common getting 0". 2- All the shares I own now are free because I bought at .40 and took my money out at 1.50 and left my gains in for the long haul. That is one way of looking at it. 3- This morning I have purchased the same amount I once bought and intend to sell these (now that I am more positive on LWN future existence) when they reach 4.00 - 6.00. I can wait. Why do you think they will reach that level? I am serious and sincere in this question. I respect your right to disagree with me, and to be wrong (or to prove me wrong! ;-)... it's just that if you can help show me where I'm wrong, you could save me some money.... If I were you I would cover my shorts SOON. I'm quite willing to, but would really like to be more firmly convinced. If the stock goes to $6.00CDN (from the 80-ish cents it is now), my loss on my short position will represent a loss of about 15% of the size of my initial bond investment. But since this would mean that I'd be making about a 130% profit on my bond position (getting 100 cents for a bond I paid 50 cents for, plus about 18 cents of interest), I'd still be well ahead. You seem quite convinced that the board will do wonderful things. I hope that you are right, and I'd honestly appreciate if you could show me to be wrong -- I'm not emotionally committed to my short position, in fact it would be especially rewarding to turn around and cover my short now, and go long a much bigger amount, and really hit a home run on this. I've spent a fair bit of time and effort analyzing Loewen, it would be nice if I could continue to get a good return from that effort. Best regards, - Daniel