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

To: Paul Senior who wrote (41099)	1/19/2011 6:00:10 AM
From: Madharry	Respond to of 78666

I share your concerns about nly. I remember listening to some really old professional investor on tv explaining why countrywide was such a great bargain it was selling in the high 30s at the time. I took a long look at the company and all i could see was huge leverage so I passed. if someone could assure me that they were protected in in increasing yield environment I could easily be convinced on NLY. I checked my records and I have only owned ibm since sept. 2010 and goog since august 2010, though it seems a lot longer since together they are over 10% of my portfolio. they have both done well for me- well exceeding 16% on an annual basis, and i purchased both in the taxable account with the idea of holding rather than trading. mpw is also in that category, though its long term by now, and i need some yield in the portfolio. Seems like i have done much better with these small E&Ps taking other peoples advice on these threads rather that trying to ferret anything out on my own. I put a small amount into ren.ws an ed a. recommendation and that is a double for me now. he also suggested vnr which turned out really well, so I will check out your suggestions for sure. My stake in ttt is large, but i am reluctant to sell as i am sure there wll be a spinoff of the chinese assets down the road and perhaps the trading operation too, if they are intent on making this into a royalty company. I will definitely be holding on to the rest of the khd shares.

To: Paul Senior who wrote (41099)	1/19/2011 10:02:19 AM
From: E_K_S	1 Recommendation Read Replies (1) \| Respond to of 78666

Hi Paul What's you long term exit strategy for the oil stocks you have been accumulating? Specifically those that are of the small cap variety, do not pay any type of dividend and/or are hard to determine their fair value. One of the determinants to calculate fair value is the price of oil and NG. With oil approaching $100/barrel I see limited up side to the commodity w/o affecting overall world demand. NG is another case as IMO it is a reversion to the mean play and could rise another 50% just to get to it's long term historical avg price. Valuation for many of these small cap E&P companies is difficult and can be influenced by company specific events. Several of the big winners are the result of profitable lease holds located in rich oil/NG areas, getting large JV partners to help finance & develop wells, building up proven reserves and/or gathering operations so sustainable income streams can be produced, low historical interest rates needed to finance E&P operations and generally high Oil & NG prices. Even with the best due diligence there are still valuation surprises. For example Samson Oil & Gas Limited (SSN) retained a 3.8% overriding royalty interest for the Niobrara acreage they sold to Chesapeake. So not only did this sale provide immediate liquidity to develop the oily section of their Niobrara holdings, but it also provides cash flow from operations as Chesapeake pays a royalty to Samson. Therefore, I guess my exit strategy on these will be based on (1) holding period one to three years, (2) price of Oil & NG compared to avg historical prices (peel off shares when prices are high), (3) the successful development of proven reserves and (4) minimal debt leverage when compared to net income and free flow cash. FWIW, many of the new lease holds terms now contain a royalty over ride for the term of the lease. Many of these specific terms are not disclosed in the SEC filings. You have to ask the companies if they have any (on their large sales and/or purchases). It's a nice surprise when you find out that they retained these interests. It makes it easier to hold these companies that have these hidden assets vs the others that continue to spend money and accumulate debt drilling dry holes. EKS

To: Paul Senior who wrote (41099)	1/19/2011 1:33:26 PM
From: Madharry	Read Replies (1) \| Respond to of 78666

as opposed to what companies are projecting on these small e&p names do you have any idea as to what acerage is selling for in these areas? i wouild much rather like to assess risk return based on the market value of the acerage that they own.

To: Paul Senior who wrote (41099)	11/14/2011 9:00:07 AM
From: E_K_S	Read Replies (1) \| Respond to of 78666

Buffett builds $10.7 billion stake in IBM finance.yahoo.com From the article:"...Warren Buffett said his Berkshire Hathaway Inc has accumulated a 5.5 percent stake in IBM, the billionaire investor's biggest bet in the technology field he has historically shunned. Buffett, in a CNBC interview on Monday, said he had bought about 64 million shares of IBM at a cost of $10.7 billion. Berkshire started buying the shares in March, with a goal of building a $10 billion position, he said....". ------------------------------------------- That's a pretty big bet for someone who typically never invests in technology companies. EKS