Wilbur Ross

Wilbur Ross

Postby winston » Tue Apr 27, 2010 9:16 pm

It's always so funny to hear about people from outside an industry, talk about how attractive a certain industry is. They cant even smell the risk and are normally being taken to the cleaners. And when they lose money, they will say that it's a long term investment :P

===================================

The Next Fortune for Vulture Investors Is Here By Tom Dyson
Tuesday, April 27, 2010

They call Wilbur Ross the master of distressed investing…

Ross has a knack for making huge investments in bombed-out, hopeless industries, just as they are about to gush profit.

Take his steel investment. It's 2002 and the economy has collapsed. Enron, WorldCom, and the demise of the new economy are stealing the spotlight. But the real casualties are America's "old economy" companies like steel, textiles, and manufacturing. China is eating their lunches… and entire American towns are turning into rusting wastelands.

Ross spends $325 million on a portfolio of left-for-dead steel assets. A few weeks later, President Bush enacts a 30% tariff on imported steel. Then the economy booms, and the world starts guzzling down steel.

In 2005, Mittal Steel, the largest steel company in the world, pays $4.5 billion for Wilbur Ross' steel assets. Ross scores a gain of 1,285% in three years.

After steel, Ross makes another fortune in textiles… and then pulls off the same stunt in the coal business. His company, International Coal Group, is now the fifth-largest coal company in the nation.

Fortune Magazine just interviewed Wilbur Ross… "Where do you think the biggest opportunities are right now?" the interviewer asked.

"There are deep value opportunities in insurance stocks," Ross responded.

Ross said exposure to the real estate crash has hurt the insurance industry. But the highest-quality companies are going to emerge stronger, with less competition. He said these companies used to trade at 1.5 or 2.0 times book value. Now, they trade at three-quarters book.

I found this chart from a presentation given at the recent Merrill Lynch Insurance Conference. It shows how cheap the insurance industry is right now… and confirms Ross' thesis.

So what's the catalyst that turns the insurance business around and brings the profits gushing back?

Paradoxically, the industry needs a catastrophe…

Right now, there are too many insurance companies, with too much money, chasing too few opportunities. Some insurance companies are being so aggressive with their bidding, they're making it impossible for the handful of conservative, sensible insurance companies to operate.

A catastrophe, like a natural disaster or another financial crisis, would generate huge losses for the most aggressive players and force them out of the business, clearing the way for the conservative players to take over the market. Prices on insurance contracts would rise due to the reduced supply of insurance companies offering bids. The conservative companies would generate enormous profits.

My advice is, if you want to invest in cheap insurance stocks, make sure you buy only the highest quality, most conservative, risk-adverse companies. They're easy to spot. They have huge cash balances, and the number of insurance contracts they hold would have fallen for each of the past three years.


Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: Wilbur Ross

Postby winston » Wed Aug 10, 2011 7:43 am

Why contrarian legend Wilbur Ross is buying now

Billionaire investor Wilbur Ross said he is buying assets as the global market declines are being driven by fear rather than economic reality.

There are plenty of assets one can buy today in emerging markets including China and India as well as Japan and Ireland which will prove attractive over the next several years, Ross, who leads WL Ross & Co., told Bloomberg Television. He's backing companies in the marine petroleum transport and gas industries in the U.S.

Ross joins Templeton Asset Management's Mark Mobius and Marc Faber, publisher of the Gloom, Boom & Doom report, who said they see opportunities in oversold markets. The MSCI World (MXWO) Index has declined almost 7 percent since Aug. 4, the day before Standard & Poor's downgraded the U.S.'s long-term sovereign debt rating that added to investor pessimism.

"Has the world really gotten 10, 12, 15 percent worse in the last 48 hours? I don't think so," Ross said. "Buying stocks at today's prices over a couple of years' time period will prove to be a uniquely rewarding experience."

S&P's downgrade was "the right call" and "very courageous," Harvard University economist Kenneth Rogoff said in a separate Bloomberg TV interview today. Other rating companies are likely to follow suit in due time, Rogoff said.

WL Ross specializes in reorganizing distressed companies. Ross, 73, founded the New York-based company in 2000 after overseeing the bankruptcy practice at Rothschild Inc.

'Pecking Away'

The firm has been looking at the companies it holds and that are available for trading, Ross said.

"We bought some on Friday, we bought some more today; we will probably buy more when New York opens again tomorrow," he said, speaking from Los Angeles, in the interview that was aired in Asia today. "We've been pecking away as things decline."

Mobius, executive chairman of Templeton's emerging markets group, said on Aug. 5 that equities in developing markets looked more attractive amid the turmoil in global markets. Faber told Bloomberg TV yesterday that the stock markets were "incredibly oversold" and were "quite likely to bottom out today or tomorrow and begin to rally."

The MSCI Asia-Pacific Index dropped 4 percent as of 1:11 p.m. Tokyo time today.

"Forced involuntary selling" by investors who face margin calls from banks after the value of the stocks they held declined sharply has contributed to market losses, Ross said.

There's "a good probability" that the U.S. Federal Reserve will institute another round of quantitative easing policies to stimulate the economy as oil prices have fallen and unemployment remains high, Ross said.

Single-B-rated junk bonds performed worse than stocks yesterday and may do so today, Ross said. The risk-averse phenomenon usually indicates investors are getting close to "the point of capitulation" and things can get back to being more normal after that, he said.

Ross said he likes Ireland as the investment community has misclassified the country, which doesn't need structural reform and only needs to repay the debt incurred during its banking crisis.

China's property market is not headed for a crash akin to the U.S. because of a shortage for housing, low loan-to-value ratio and families' willingness to step in to help repay mortgages, he said. A bigger test for the government will be its ability to contain rising food costs, which account for a large percentage of household budgets in the low-per-capita-income economy, he added.


Source: Bloomberg
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: Wilbur Ross

Postby winston » Wed Oct 24, 2012 7:19 am

Billionaire investor Ross could be targeting the contrarian trade of the year

Wilbur Ross, the billionaire who's taken stakes in distressed U.S. and European lenders, said he's interested in Spanish banking assets , as the country takes steps to resolve bad loans stemming from its real-estate bubble.

Ross's WL Ross & Co., which holds about 10 percent of Bank of Ireland Plc. (BKIR) and teamed up with Richard Branson to buy part of Northern Rock Plc, is in talks "almost every week" with representatives of the large Spanish banks, he said in an interview in Abu Dhabi, without naming potential targets.

He has taken stakes in institutions such as Oregon's Cascade Bancorp (CACB), New Jersey's Sun Bancorp, and union-owned Amalgamated Bank in New York, all of which required financial aid after writing down bad real estate loans.

Source: Bloomberg
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am


Return to Market Gurus

Who is online

Users browsing this forum: No registered users and 3 guests

cron