TS.b as a safe haven? Hi All,
With the considerable turmoil in the markets, perhaps TS.b represents a more prudent investment than most would give it credit. Why would a rational person suggest that given the lunacy that pervades the organization and the structural forces that are working against the industry? Here are my thoughts:
1. At a current annual yield of 12.8%, this represents an incredible return on investment;
2. The lowest dividend level the Voting Trust will allow is $.075, which at today’s stock price would yield a generous 9.6%;
3. You might be concerned the share price could fall further, but the value of the underlying assets puts a floor on the share price. Right now, the market cap is equal to the cash on hand. That is an absurd valuation;
4. Fairfax represents a backstop as they will protect their investment by buying the company when either the Voting Trust capitulates or the B shares get converted into A shares. The Voting Trust knows their days are numbered and will do a deal to keep their polo ponies for another season;
5. At some point, buying out the 30 million shares not owned by either the Voting Trust or Fairfax will make sense to someone and this will protect the unwashed masses;
6. The company is not saddled with any debt, holds assets of value to a number of investors and with competent leadership could yield significant returns for strategic investors.
I will continue to buy at current prices and wait somewhat patiently for the universe to unfold.
MW