Fri, Aug 22, 2014, 7:18 AM EDT - U.S. Markets open in 2 hrs 12 mins

Recent

% | $
Quotes you view appear here for quick access.

Bank of America Corporation Message Board

bjspokanimal 7 posts  |  Last Activity: Apr 1, 2014 4:46 PM Member since: Feb 11, 2002
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • bjspokanimal bjspokanimal Apr 1, 2014 4:46 PM Flag

    Doesn't matter. You didn't, so it's a moot point.

  • Reply to

    ACAS Has Addressed Possibility of Re-Org Before

    by bjspokanimal Mar 31, 2014 10:56 AM
    bjspokanimal bjspokanimal Apr 1, 2014 4:45 PM Flag

    In another thread, someone was querying as to whether or not ACAS would re-instate the buybacks once any "corporate restructuring" is completed.

    That probably depends on: 1) the nature of the restructuring and... 2) the resulting price-to-NAV following any restructuring.

    Still, the logic of doing buybacks in lieu of dividends remains following any restructuring, given that the stock continues to trade at a sizable discount, and the capital loss and operating loss carryovers remain in place.

    Spok

  • Let's begin with the ongoing reality that a dividend makes no sense, given the current makeup of this company. ACAS dropped it's RIC designation and became a C-corp for a very good reason, so that it could use it's earnings to avoid paying a dividend, as a RIC is required to do, and buy back stock for 70 to 75 cents on the dollar (depending on whether you include internal discounts to NAV along with those pertaining to ACAS itself).

    As long as the company has plenty of capital loss and operating loss carryovers to avoid paying taxes as a C-corp, reverting to RIC status only adds unnecessary limitations on the company.

    From my own perspective, I believe that only a minority of this company's discount to NAV is applicable to the lack of a dividend. There are plenty more investors in this company who understand the logic of management's decision to add more value to the company via buybacks than it ever could with divvy's, than there are investors so hellbent on getting a dividend that they would ignore value.

    The company, today, is citing a new probe to "evaluate it's corporate structure" as the reason for suspending the share buybacks. In layman's terms, this means a re-organization of some kind. The company has discussed the possibility of doing this in previous, quarterly conference calls, and the concensus was that it was most likely to occur this year. Personally, it was my hope that I'd be able to pick up a final traunche of stock in ACAS below $14 before such an announcement. It looks like I'll just have to be happy with the 90% of targeted stock that I've already purchased.

    My view? A spin-off is likely, or less likely, but highly possible, is an offer to purchase ACAS by another private equity firm. This far below NAV, it's attractive to suitors, and there are plenty of BDC's buying into Europe currently, making ACAS's European investment arm quite attractive.

    Spokanimal

  • I first noticed that industry-wide, the dayrates for mid-water floaters were hitting multi-year record highs early last fall. So, it came as no surprise to me that Transocean attributed it's higher, overall dayrates in the 4th quarter to those being provided by it's mid-water rigs.

    Given Transocean's sizable inventory of mid-water rigs, this was a significant development.

    The reason for the increased popularity of mid-water rigs had everything to do with the very high dayrates being paid for ultra-deepwater rigs as 2013 began. Announcements of contracts having dayrates exceeding $600k/day were becoming common for 6th-generation drillships, and the exploration companies were looking to curb some costs.

    So, as 2013 progressed, anybody with a deep-water prospect that was shallow enough to employ a mid-water rig and incentivized to substitute the cheaper rig, and use the ultra-deeps only where necessary.

    If the current, outsized number of high-spec rigs without contracts persists, look for the popularity of mid-water floaters to begin subsiding if dayrates for those high-spec rigs begin to wane, but for the time being, Transocean's inventory of older, mid-water floaters hasn't actually been the drag that most analysts Say they would be when they opine about RIG's older-aged fleet.

    Spok

  • bjspokanimal bjspokanimal Feb 26, 2014 5:17 PM Flag

    There is a major brokerage analyst out there with a sell rating on ACAS (not zacks). I'm wondering what HIS rationale is.

    Hopefully, ACAS performs better this year than the horrid year they had in 2013. I'm particularly concerned that they are not executing with their owned, portfolio companies.

  • bjspokanimal bjspokanimal Feb 24, 2014 6:04 PM Flag

    I see that this yahoo board substituted #$%$ for Mr. Montier's use of the word "krook" (substitute a c for the initial k).

    Just wanted to point out that Montier wasn't inclined toward expletives.

    S

  • A poster by the name of awallejr brought to mind 2 truisms that were authored by a couple of history's most famous investors:

    Montier's "Hindsight Bias":

    When we reflect on the past, we imagine that we knew what was going to happen when we didn't. I would say: "You didn't know it all along, you just think you did". This allows us to imagine, for example, that we knew the tech boom of the late "90s was a bubble and that everyone who suggested otherwise was a idiot or #$%$. It also makes us over-confident about our ability to predict what will happen next.

    Buffett's "Outcome Bias":

    We tend to evaluate decisions based on outcomes instead of probabilities. Thus, we congratulate ourselves for stupid choices that happen to turn out well and vow never again to make smart choices that happen to turn out badly. Thus, our errors get reinforced, and our wise decisions rejected.

    Spokanimal footnote:

    I would add that much of what causes in-experienced investors to succumb to Buffetts' "outcome bias" is the confusion of "beta" for "alpha". Over time, most of a stock's movement is explained by it's "beta" relationship with the market as a whole, with a much smaller proportion of it due to "alpha". Thus, oftentimes, the market will push a mediocre stock higher, but the in-experienced investor will mistakenly attribute the performance to the unique attributes of the company.

    S.

BAC
16.16-0.01(-0.06%)Aug 21 4:03 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.