RE: Mar 19, 2008 is the time ... Hippygirl
I agree that the B.V. of $17 and the $65 inv. port. make KFS
a stock with great potential. I am glad that you only bought
an initial position in here and can afford to buy much more.
My main argument is that you are focusing on the wrong technicals and Lancer focuses on the wrong fundamentals.
The technicals say that the RSI is negative, KFS hit a new
low this week and did so on up volume!
Fundamentally I do not think the dividend yield matters
and the P/E is not now 6.8!
I prefer to focus on what Jackson said in the year end
release. .... " industry C/Rs will continue to deteriorate
thru 2008 " .
He goes on to cite the problems of low interest rates, weak
equity markets and potential asset impairments and puts a
positive spin on it by hoping this bad news will lead to
firmer pricing at the end of 2008.
This tells me that C/Rs will still be sucking for most of
2008 and that help will not be coming from improved
investment returns.
I can not stress enough " low interest rates and weak equity
markets" ( note Bernanke's rate reductions this month and
the year to date decline in equities. )
An added caution would be to note that KFS does off balance
sheet transactions ( what is that about? ) and their debt
to capitalization ratio is at 31% up from 22%.
So far KFS has not proved to be too prescient in its stock
buybacks and they certainly do not have the investment
sophistification of say Fairfax.
When the time comes that we can see positive C/Rs and better
investment returns I will buy. For now I remain reluctant.