LC

I am thinking along the same lines: exiting a majority of my BAC-WSA position around tangible book and retaining my stake in the commons. Is this your thinking as well or do you think the warrants are still a good investment past TBV?

Wow, very harsh words. Makes me really wonder WTF went on behind the scenes. Buffett has been behind-the-back vindictive before so I wouldn't be surprised if he did something that crossed the line for Sokol Could be. Or vice-versa. Buffett has always said that "you lose a shred of reputation for the firm...and I will be ruthless!" He cut Alice Schroeder out of the circle pretty quick over the book. If you piss him off or damage his/Berkshire's reputation, you are gone. While the SEC didn't find anything to charge Sokol with, I think everyone here thought it was unethical when the information came out. Cheers! Interesting information...where would you suggest one begin looking to find similar stories about Buffett's behind-the-scenes decisions? It is obvious that he painstakingly grooms his public image, but in private he is a different beast.

Hey there, welcome to the board! While I have your attention, I'd love to draw on your experience in the container industry: What's your take on the container market? How deep/liquid is it? From an operations perspective, how efficient is it? Are buyers entrenched in certain purchasing habits or do they change frequently? How easily can sellers unload excess inventory? Do you think there is there room for consolidation in terms of marketplace structure? Do you envision electronic platforms as being successful in this market?

I'm kicking myself for not picking up some HIG warrants 6 months ago. At the time I thought Hartford's future was a bit too uncertain.

My point is that while a child may be gifted in certain tasks (math, writing, etc.) there may be other aspects which he is less gifted in (i.e. relationship building, social skills, teamwork etc.). There are quite a few academically gifted but socially awkward teenagers out there, at least there was when I was in middle/high school.

I don't know his history, but Pabrai funds has been around since '99 and currently has 6 disclosed positions. No idea if he always held such a concentrated portfolio, but that may be a good place to start looking.

Fair point. Although I think in terms of the grand scheme of things, the "answers" will win out as people realize they must either adapt or be made irrelevant. Societies can fend off innovation for only so long.

I disagree. Keeping the "gifted" kids together with the rest of the class not only keeps them grounded and teaches them patience, it allows them to develop other skills such as relationship building, teaching other students, and communication skills.

Up about 17% for the year. INTCs drop caused the largest loss, BAC WS-A caused the largest gains. Hopefully next year I can learn from the wisdom of my fellow board members and not repeat the same mistakes I made, while compounding on the opportunities presented!

Look at what happened to Copper River. Hedging often swaps one set of risks with another set of risks. You are still exposed to risk. Copper River was hedged... their fund still shut down and lost money even when they should have done really well in 08/09. LTCM is an extreme example of hedged strategies not working. IIRC copper river's portfolio did extremely well...after GS took them over. :-[

Are you buying at these levels? If no, why not?

You're showing your youth. A gentlemanly investor always discusses cash flows before investigating assets on the balance sheet :)

Welcome to America, where the shit breaks down, the insurance doesn't cover it, and the word "customer" really means "growing annuity!"

Margins are high because they control manufacturing and IP. And because they are selling to non-profits and government health organizations. They moved operations from London to Malay/India and switched to a different material which also improved margins. Their gross margins are high because (and this may sound weird) their net margins are low. Why? Because they also spend $$ on education for their product. I believe this is part of "the deal" they have with these NGOs/non-profits and adds to the stickiness of their customers. FHCO pays for education of the product, which reduces their margins but adds to the mission of these NGOs: namely, to prevent unwanted pregnancies/HIV&AIDS and empower women's sexuality in second/third-world countries. In this respect FHCO operates as the capitalist extension of these non-profits/NGOs. This situation does lend itself to competition: I mention in my original post, their main competitor is the Cupid, which only months ago received W.H.O. approval. They do not have the long-term relationships formed with customers (NGOs etc) that FHCO has. And I have a hunch, as they are also produced in India, that the same manufacturer produces their product. I have no evidence of that, however. At any rate, the name of the game is selling to world health organizations, and Cupid doesn't have the relationships nor capacity that FHCO does. Cupid's margins are lower: http://www.bseindia.com/stock-share-price/cupid-ltd/cupid/530843/ As seen in the above link, Cupid's Op Margin is 13.5% and Net margins are 8.25%.

Yes, I believe he sold as his latest 13F does not list it.

FHCO is a company I've been invested in for about 9 months now, I originally discovered them with finviz's screener as displaying excellent margins and low/no debt. Business Operations Summary Female Health Company manufactures and sells the Female Condom (FC2). FC2 is a cost-effective update to FC1, the first female condom. FC2 is the only product under a woman's control approved by the F.D.A. to prevent HIV/AIDS and pregnancy. Internationally, until recently FC2 was the only product approved for the same reasons by the W.H.O. (World Health Organization) and approved for purchase by U.N. agencies. Recently a competitor's product, the Cupid was also approved by the W.H.O. Three customers account for 85% of sales: 1. UNFPA (United Nations Population Fund) 2. USAID (United States Agency for International Development - via John Snow Inc.) 3. Sekunjalo Investments Corp. (a South African firm) FHCO manufactures the FC2 at its facility in both Malaysia and in India. They have recently expanded production to meet demand through funding from operating cash flows. FC2's main competitor, the Cupid, is also manufactured in India for export in 12 countries. By contrast, the FC2 is available in 138 countries worldwide. I believe customers are relatively sticky as relationships with government agencies take years to develop and FHCO is the leader in their field. Financial Summary -Originally debt-financed, FHCO has been debt-free since 2003. -They have substantial deferred tax-assets. This quarter management has reduced their deferred tax valuation allowance, increasing these deferred tax assets, as they believe there is a >50% likelihood of future income to offset past tax losses. -Management owns approx. 25% of shares, Bares Capital is the only large insitutional holder with an aprox. ~15% stake. -Margins have been as follows: Gross Margin 5 yr average of 52% Operating Margin 5 yr average of 20% Net Margin 5 yr average of 29% (increase over Op Margin due to tax assets) -Pays a dividend which was recently increased to $0.06/share Trades at aprox 13x earnings, just had a record quarter/year with record earnings & income, I think the deferred tax allowance adjustment signals management thinks earnings will continue to be strong, however the market doesn't seem to be pricing any of this in. In fact the stock has fallen after releasing their most recent earnings. Edgar link here: http://www.sec.gov/cgi-bin/browse-edgar?company=&match=&CIK=fhco&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany

My father married an assertive strong-willed woman and I did the same. They are both Amazon women. I will never be free. I have money but I have no real decision making power. +1 Hah, to quote Wash from Firefly, "Have you ever been with a warrior woman?"

Yes! And from a more practical perspective, it is brilliant: Take health/life insurance: you receive constant premiums over the course of the insured person's life, and then a payout occurs when a major health issue (or death) happens. Now, you match those cash inflows by reinvesting in that person: namely, by selling them the power/heat/water during the course of their life!

Ohhh, so it was all just to give you the opportunity to get in? Well good, now that you have made your purchase it is free to increase again. I think he was saying that his purchase caused the price fell, i.e. everything he touches turns to....coal? I think every investor has felt this way at some point! Just a little self-deprecating humor :)

I'm new here, and young to boot. I feel this way just about daily while reading this board. It's a great community. Which is why, Eric, that when you say you are headed to the sidelines (clipping dividends from high quality, low risk stocks) after the next wave of wealth, I don't believe you! :) There is a lot of truth in the old cliche: "It is the journey, not the destination." I see it time and again including my personal experience. When I first started working I dreamed of making six figures annually and felt that a after a few years at that level I could walk away and live on easy street. Two years later I had reached that goal at the age of 27. I took me about a week to get accustom to my new "wealth" and realize there was more, much more, if I wanted to stay the course. I ended up working for another 20 years. And my income went up exponentially with over the years. By any objective measure I could have walked away anytime, but I couldn't break away from opportunity. It was just too exciting and fun. I stopped working for others five years ago at 47. I thought I would play lots of golf, travel on Netjets, and spend lots of time relaxing poolside in my new mansion as that is all easily in my budget. What actually happened? I live in a modest home, travel coach, and spend my time reading financial reports. I commit more energy to wealth creation now than ever before but enjoy every minute of it. It's just too fun and to walk away would be a setback to my level of life satisfaction. Right now you see it as a stressful rollercoaster and you want to get off, and sit on the sidelines in the shade. But as time passes you will remember the thrill and forget the anxiety which makes it very hard to stay away from a significant allocation of assets to the next "inevitable". I hope BAC rallies like crazy, and that you at least have a chance to prove me wrong, but until then I'm betting against because I believe wealth doesn't change our fundamental approach to life. onyx1, I am very impressed by what you have just written! It is just amazing how many fabulously accomplished people can be met on this wonderful board!! :) giofranchi

I work in midtown...it's a pretty disgusting thought that this type of behaviour goes on where I eat lunch. My personal thoughts are that these types of seedy characters are usually overcompensating for a lack of skill by resorting to illegal trading.

Example here: http://www.footnoted.com/disclosure-developments/was-yahoo-blindsighted-by-mexico/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Footnotedorg+%28footnoted.com%29&utm_content=Google+Reader Can anyone shed any light as to how this can be? My first reaction is, "Oh, maybe it has to do with an obscure filing rule about international operations/lawsuits" but my gut tells me that is simple being optimistic. I recent read Einhorn's book, and even Allied Capital would disclose it's legal issues in their filings (although usually in a totally different section - i.e. not the "Legal" section). I was hoping some of the more seasoned investors here had any idea of how Yahoo can simple not disclose the potential for such a large lawsuit.

I just want to add: nobody gains anything by degrading the level of discussion. Not you, your opponent, not those watching from the sideline. It's just a poor showing!

If anyone is interested on the principles-based approach (PBA) to reserve calculations: http://www.actuary.org/content/principle-based-approach-pba-project

COBAF? corner of berkshire and fairfax. -I think there could be some great long-term value of FB. Don't understand what's wrong with discussing it here. If you think it's overvalued, you can discus it here as a short. It seemed undervalued when it was sub $20/sh, but I (along with presumably many other investors) thought it was too much of a crapshoot. Lesson learned: when everyone has a preconceived notion of a certain business but isn't spilling out facts to back it up, it can be a profitable endeavor to re-evaluate that notion.