American Lorain announces Dilutive Stock Offering

October 30, 2009

As I stated yesterday, American Lorain has announced that they have sold stock and warrants totaling 5 million shares for $2.40, 1.75 million shares worth of warrants at a price of $3.70 that become exercisable six months after the transaction closes and have a term of 5 years thereafter, and 500 thousand shares worth of […]


I may have to be back in Capstead Mortgage

October 29, 2009

As some of you may recall, I suggested getting out of Capstead Mortgage (CMO) on the grounds that its fat dividend (currently 17%) couldn’t last forever and that, at a price of $14.60 and a book value per share of $11.50,  the price represented well over a year of excess dividends, and the Federal Reserve […]


Bankruptcy for Fairpoint

October 26, 2009

Well, it’s official: Fairpoint has filed for bankruptcy. As Moyer’s Distressed Debt Investing states, the actual filing of a Chapter 11 is never a surprise. Although it may seem curious that its creditors reduced the size of their claim from 2.7 billion to 1 billion, the reality is that the creditors are going to become […]


Chestnuts roasting on an open market (American Lorain)

October 25, 2009
Tags: , ,

I may be in the minority among the financial community and the public, but I do not assign any mystical economic or investing qualities to China or any of the companies in it. There was a similar hysteria in the 80s over Japan, and we all recall how that ended. I find it similarly unlikely […]


Keeping what the market throws away (Key Tronic)

October 18, 2009

Warren Buffett once wrote that in financial analysis, having an IQ above 125 is wasted and that success in investing is largely a matter of temperament. This tells us two things, one, that the world’s greatest investor thinks that dispassionate adherence to investing principles is more important than fancy quantitative models, and two, that Warren […]


Unsuitable for Managers who are not Warren Buffett (CCA Industries)

October 12, 2009

Damodaran on Valuation claims that unnecessary financial assets, such as stocks or bonds or other securities of other corporations, have no effect on a company’s valuation, since the risk-adjusted discounted cash flow they produce is equal to their present value, so there is no incremental benefit to owning them or decremental drawback from getting rid […]


Encounter at Fairpoint (with the bankruptcy lawyers) (Fairpoint, Windstream)

October 4, 2009

Those of you who watch Jim Cramer, of whom Seth Klarman said that he is a symptom of everything that is wrong with the financial world nowadays, will recall that last week he expressed approval of the safety of Windstream’s dividend. He also mentioned Fairpoint Communications (FRP), after qualifying his remarks with the fact that […]