$4.2 billion equity none of which is from the tax asset ($17.50/share)
$1.50 diluted earnings per share.
" not exactly a huge vote of confidence"
According to this logic, they lost confidence a very long time ago, around 20 years ago to be exact, when they owned 40%+ of Leucadia and today about 20%.
During that period of lost confidence, shareholders made FAR more money than owning the index. I can't begin to explain how illogical obsessing on this selling activity is, but to each their own...
Reading this board is great entertainment to watch gamblers and speculators trying to squeeze a gain out of LUK in the near term, for entertainment value you can't beat it.
PS. You are being rather facetious when you talk of 20-30 years. LUK has done quite a bit better over shorter periods of time - why 5-10 years would prove this point. It has outperformed the S&P by 20% over 5 years and 230% over 10 years. But I notice you tend to exaggerate so be careful because that's the kind of temperament long term investors are going to use against you to take your shares when you get fed up and sell.
I agree with all of your assertions.
But from a practical standpoint, despite all of this, the stock price continues to go nowhere- well actually it continues to go down. Given all you point out, the owners decided to sell some of their holdings anyway- not exactly a huge vote of confidence. Despite the Dow and S & P making new yearly highs day after day, this stock continues to drift lower with a nearly constant flow of sizable orders on the ask. Given your assertions, this makes no sense at all, unless of course that all of us bulls here believe that we are the only people out there that can spot value. I don't for a minute believe that.
What does this mean? As somebody pointed out earlier, has LUK lost its luster? In all the years I've held this stock, I have never seen action like this for such an extended period. It just reported on a very good quarter, yet it just looks like it keeps trading into weaker and weaker hands. As I write this, the Dow is up another 60 points, and LUK is down 18 cents, with a 4,200 share order on the ask.
Was the cliffdive from $55 to $10 the thing that scared off the formerly faithful, and they ain't going to return anytime soon? Somebody with a pretty big position wants out of this thing in a big way. The opportunity costs of holding what has really become a dog in this market has got to have some fund managers pushing the sell button. I know, if you have a 20 to 30 year horizon on this company, then who cares? But my response is: if you really have a 20 to 30 year horizon on this company, then what are you even looking at these threads for?
Added a small portion to my existing holding today at 22.50.
1. Investing in LUK requires faith in C&S.
2. The past/history have proved that they are better stockpicker than most of the guys out there.
3. Looking back very few of their investments have been permanently impaired.
4. Indirect inflation/commodity/currency play.
5. Lot of people waiting on the side lines, for a correction. Even if there is a dip, it won't last long.
6. Better to look two to three years down the road.
7. Economy is slowly recovering, even warren buffet is putting his money into economic senstive stocks, BNI.
8. Most stock valuation parameters are calculated at depressed level right now.
9. Lot of negativity on LUK, depressing the price.
10. I think the valuation on LUK is conservative.
Finally, as a margin investor I have to consider what is within my universe.
Totally understand, your thinking now. I have never used margin, but if I were I would do it the same way good luck.
"Emmm, how about buying companies way below book that have a good % of there share price in cash or even trading below there cash, with no debt and still earning some nice change"
I have long ago discarded this strategy (for myself anyway).
A lot of cash means they are not investing, you want some cash, not alot. Likewise, selling at 1/2 book doesn't say much about what kind of gains you should expect. I've long ago decided that just looking at ratios is important but an insufficient criteria for good investment.
Secondly, my personal goals are not maximum return. Sure, if I wanted to stomach more volatility and less liquidity I could sit on some microcaps but level of certainty of an outcome is sometimes more important than biggest % return. People give the argument 10% of your portfolio should be small cap, but to me this is kinda silly, you either have say 33 to 50% small cap or none, 10% on a large portfolio say holding 50% Berkshire stock is not going to make any major difference at all.
Finally, as a margin investor I have to consider what is within my universe. With say LUK or Berkshire (only recently) min margin is 30% - even if it never gets there. This pretty much limits things to at least $1 billion market cap, and more effectively $5 billion or greater. Even LUK is on the line.
Besterman you are a smart, guy but very stubborn.
Emmm, how about buying companies way below book that have a good % of there share price in cash or even trading below there cash, with no debt and still earning some nice change. I recommend this board take a look @ the smaller companies that are under looked, that is where to make the money. I liked LUK this year, bit I owned very little because I believe there was more value elsewhere, I made a lot off there holdings this year JEF and ACF which I know longer hold. I think there smaller guys are better plays @ this point CSWC and IAAC. Fortescue and there mines are going to be what moves LUK in the short term as I believe JEF and ACF are Fairley priced @ the current moment. LUK is cheap, but it seems it is lossing its colt like Berkshire, maybe they will not comand a higher book value like in the past and trade like they did before they were well known. I dunno, but I plan on increasing my holdings slowley as it becomes harder to find value elswhere. LUK might be dead money for a little while longer.
That's why an investor hopes to get 15% per year with LUK and only say 7% with Clorox. Nobody has claimed that LUK isn't doing some higher risk, more volatile things but how else to get those kinds of returns?
You guys seem really annoyed with LUK and C&S.
Investing with LUK has some aspect of a "black box", where you need to have faith in
the management. They have a reputation of being fantastic capital allocators.
If you don't have that conviction that they operate in the shareholders best interest, why don't you dump it?
yeah do you?
So do you know Wayne Swan? what if BHP effectively lobbies him to cut off Pilbara?
I don't know, but neither do you. My point is, this is not the same as analyzing Clorox for example.