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2013 Year-End Reflections
Posted by: arurao7 (IP Logged)
Date: December 31, 2013 12:28PM

Great article! I really liked your analysis on JCP.What do you think about real-estate though? In ackman's presentation, the value was close to $11 billion. The goldman sachs loan is about 2 billion, but it was interpreted as if the real-estate is now suddenly worth only $2 billion. Don't you think they could put their real-estate as collateral further, in case they are faced with a liquidity crunch? Worst case, it means that we have wait longer for JCP shares to rise again. All JCP has to do is first get back to the old JCP for the stock to reflect reasonable valuations. I haven't seen much analysis on JCP real-estate.. what is put up as collateral and what is not. Thanks.



Guru Discussed: Bill Ackman: Current Portfolio, Stock Picks
Warren Buffett: Current Portfolio, Stock Picks
Stocks Discussed: JCP,
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2013 Year-End Reflections
Posted by: 20punches (IP Logged)
Date: December 31, 2013 03:58PM

Arurao7: Thanks for the nice words. In terms of the real estate portfolio, I don't think it's worth $11 billion for sure but Ackman's probably done a great deal of due diligence to come up with his $11 billion replacement cost. For me personally, I've pegged the real estate value to the third party appraisal of a little over 4 billion and over half of that 4 billion is put up as collateral. This is certainly good news for bond holders but the equity holder suffers from less downside protection. I also think the liquidity crunch wasn't as bad as the media portrayed and Mike Ullman did the equity raise to appease the noises from analysts and naysayers. With the debt issuance and equity dilution, it's unlikely that they will face a liquidity crunch anytime soon. I also don't think JC Penney is going to go out of business as some analysts predict. Even Warren Buffett said he is not worried about JC Penney's survival. We will see how things go in 2014. I'm expecting a so so Q1 and gradual margin improvement since Q2. 



Guru Discussed: Bill Ackman: Current Portfolio, Stock Picks
Warren Buffett: Current Portfolio, Stock Picks
Stocks Discussed: JCP,
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2013 Year-End Reflections
Posted by: The Science of Hitting (IP Logged)
Date: January 4, 2014 03:30PM

Vgm - By the way, here's a quote from the 2001 shareholder meeting: "The businesses we own aren't for sale at any price. It's my natural inclination. If I owned 100% of Berkshire, I wouldn't dream of trading businesses around so that I could die with an estate that was 5% bigger than it might have been. Since I don't own 100% of Berkshire, I want shareholders to be aware of this. This loyalty helps us buy businesses, but there is a cost as well."




Guru Discussed: Bill Ackman: Current Portfolio, Stock Picks
Warren Buffett: Current Portfolio, Stock Picks
Stocks Discussed: JCP,
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