RE:RE:RE:Why Fairfax will prevailThanks Mediawatcher
We appreciate you providing this information, but I find it interesting that TD Bank has forcasted that the dividend will be dropped. It could be that they are not aware of this information.
With 120mm in market cap & 50mm in cash and having recently sold off from $1.90 to $1.51 over the last month, I am perplexed why we see little buying volume at these levels. I think it has to do with the belief that most people like to buy when a stock is at high levels and to sell when it is at low levels. Or it could be that many are completely tapped out.
Let's take a quick look at the risk and reward of the stock at these levels, using a very basic analysis.
Let's assume on a worst case basis, the stock drops by 50% to 75 cents, or approximately 60mm in market cap (keeping in mind there is 50mm in cash) and let's give it a 50% probability. On the other hand, many of us believe on a best case scenario the stock could increase to $6.00 if it goes private. Therefore, the probability weighted return is $3.25 for over a 100% increase.
I am using this example to highlight that there is relatively little downside price risk in the stock and excellent POTENTIAL for it to increase in price, to between $3.00-$6.00.
It also could be that people have given up on the stock and "throwing in the towel", which is yet another reason why I believe one should be buying, which I have been doing for the past year or so.
See you at the Annual meeting!