Abduction and murder of a women from this Vornado property. Case was just settled w/ VNO as a defendant. Horror story in Washington Post today: http://www.washingtonpost.com/blogs/the-state-of-nova/post/the-springfield-mall-abduction-and-death-of-bobbie-bosworth-the-rest-of-the-story-part-1/2012/06/07/gJQAqVx0KV_blog.html?hpid=z3
The fund sinks like a rock year in & year out. Impeccable timing - the new manager M. Fine jumped headfirst into European stocks early 2012 (a Greek cement maker is a top holding- Jesus!). No surprise, this pos has become even more disasterous.
Terrible results for the past decade, absurdly high expenses raked off the top by management and confused addled direction.
I regret I sold as late as I have. As a suffering shareholder no relieved of this dog, run as fast as you can away!
Er, Sequoia Cap is a completely different outfit than this Sequoia, a mutual fund & investment advisory service. Totally opposite philosophies, completely different personnel and two separate track records.
Yup, sweet stuff. Always thought that Gary Martin would step up and divest some of the long time holdings to kick back cash to we small fry shareholders.
I realize P&C insurers are in a different game, but you should go to the MKL Board and read the notes of Tom Gaynor & Co's meeting in Omaha during the BRK a.m. Posted 5/13. MKL and Y share similar characteristics - family run, conservative, lots of cash, savvy allocators etc.
While your analysis on the firm's site is intriguing, candidly, Ron, I am not a fan of life insurers. The business has dreadful characteristics: ease of entry encourages tough competition & products sold are not differentiated in any meaningful way. Plus, NWLI has put great emphasis on its annuity sales effort but many low cost reputable competitors are casting a big shadow. Vanguard is a perfect example of a new entrant gobbling up sizeable market share at very low cost.
Life insurance is a commodity-like biz. Only very low cost, high volume carriers that are financially sound would seem to have a decent chance to survive and prosper.
As for NWLI, the SEC filings evidence a dramatic decline in US underwriting (down 33%) while growth is being realized with high income customers abroad - 86% in Latin Am mostly in Brazil. Why would not those customers be low hanging fruit for competitors, esp those based in Brazil?
The US economy is worsening, the public is pressed (and being cajoled into cutting back its cost of living). Life insurance premiums are often perceived as an "extra" that is all too easily allowed to lapse (but not the HBO bill!). I am not optimistic NWLI can staunch the ongoing bleeding domestically. With an eroding economy, significant annuity competition and policy limits that are steadily dropping each year, can NWLI rely on high income customers in Brazil as the way to stabilize downward trajectory in their US sales efforts?
Each year, there are lower policy face values in the US. That means, in turn, a reduction in premium payments.
Finally, I don't get what the company is doing with its cash. Dividend is anemic, there are no major acquisitions in the pipeline and share buy backs do not appear to be on the horizon. Perhaps mgmt awaits an opportunity to deploy that cash but the history here is one of caution and restraint.
NWLI, in my opinion, could offer hidden value or...could be a value trap.
BTW, are what are you listening to these days? My Morning Jacket?
Appreciate your thoughts on the VNO AM. Roth is not one who is known for a lack of ego or pomposity. The co is challenged with that huge Cesar Pelli structure in NYC that Roth feels will be a lasting testament to his prowess. Still, the co has a ton of cash and Mike F. is a very bright & savvy r.e. investor.
Speaking of a ton of cash, that's NWLI. I see you had several nice comments from posters over there, taking your sniffing around as a vote of confidence in the stock. As a rule, I am not crazy about life insurers. Why NWLI over, say, Y?
Good discussion and interesting questions.
I would suggest caution when making assumptions about the portfolio companies. Read the annual reports to see how conservative the accounting has been relative to possible fair market value.
Ron's illuminating client letter posted late last week. Money quote:
"We are concentrating on companies that provide a service or manufacture a product that, we think, will be able to withstand an economic slowdown. We have often mentioned the fact that we do not believe it is possible to time the market, and our research is based on finding companies that we think will appreciate
in value over time. Our research is dependent on the expectation that over the long-term, the share price will reflect a true value of the company, however, we cannot know how long that will take."
Sounds like CSWC portfolio businesses!
Have you read the Annual Report? Lost one, added two, net gain of one body.
One more suit to manage the portfolio companies, to analyze the deal flow, to oversee the attendant cash flowing back to HQ with the Lifemark sale and dividends from portfolio companies.
I agree with your larger point that G&A jumped. Specifically, Salaries indeed went up noticeably along with stock option expense. Still CSWC is pretty good deal. We pay $2.8 mill salaries to manage $500 mill in assets.
And the NAV is 20%+ more than the share price.
As my Italian teacher would say, "non fretta, calme!" Still looks exceptionally good from my perspective.
An excellent choice is the Park Hyatt at Water Tower Square. Great location, superb facilities and its modest size compares far more favorably to the warehouse Hyatts and Marriotts. I was also unimpressed with the Drake.
Thank you Ron.
You mean to say your pet chincilla is not worth lavishing attention, effort and IDEXX lab reports?
I note that Steve Roth's ego and usual charming brashness are subdued these days! Bright guy and Fascetelli is also very savvy.
Ron - if you do attend the Sequoia meeting tomm at the St. Regis and/or Steve Roth's self-congratulatory love fest in Saddle River, please consider sharing key tidbits here.
I realize, in past years, you respected the wishes of Goldfarb et al not to publicize the discussion. That said, whatever you are comfortable sharing would be welcome.
BTW, Ian Cummins & Joe Steinberg @ Leucadia and Marty Whitman @ 3rd Ave continue to hold their CSWC positions. I attended the LUK meeting on Monday but not much value bubbled up (puns intended).
Yes, agreed, the press release is silent on use of the proceeds.
My personal sense (assumption?) is that management will make a handsome distribution to shareholders after the Lifemark deal closes. Only my sixth sense operating here.
I think its time they do so and I believe management may share that view. We shall soon see.
Philbert is named after (appropriately) the nut.
Your family has me beat by a long shot. I began buying CSWC in 1985 when twenty bucks or so per share meant twenty bucks!
I applaud Gary Martin for the Lifemark sale and his plans to have a relatively handsome distribution to we shareholders. I agree today is a far better environment to deploy capital. Still, its sad Bill Thomas is not with us to help guide those decisions.
Sure beats hanging on to those old telecom stocks gathering dust in the CSWC broom closet.
Thank you for that most excellent recap.
You likely recall that Bill Thomas sang songs of woe about the cemetary holding and planned to devote considerable time and personal attention on the business and its faltering marketing efforts.
The underlying real estate in So Cal was likely a key component in BT's assessment of the longer term potential of the company.