giofranchi

Well, this is classic Charles Munger! ;) Gio

Welcome back! And thank you! :) Gio

Well, on page 4 of Q4 2013 Investor Presentation you can read: And Mr. Brindle’s long term track record is even better. Therefore, you are estimating future performance, if not based on last year results, at least based on the last three years when a soft market developed. You say: It is not my hope... It is just that, to be honest, I don't know! Instead, what I do know is I like to keep company with great entrepreneurs. Through thick and thin. Because I am sure results will be satisfactory enough. And, if I get the chance to average down in the future, I will seize it! ;) Gio

Valeant Targets Corporate ‘Fat’ in Push for Big Leagues http://www.bloomberg.com/news/2014-03-20/valeant-targets-corporate-fat-in-push-for-big-leagues.html Gio

Like I have told you before, I think you are judging LRE future potential on the basis of a 1 year results. Instead of its long term track record. If you look at Mr. Brindle’s track record at the Lloyds, it was very good on average, but it certainly was lumpy! When will the lean years materialize? When will the good years instead? Who knows? You might argue we are in for some lean years, because of the soft market… I answer I don’t know the insurance market that well to be confident in such a prediction. But, of course, if you can buy LRE at 1.3xBVPS in the future, well then good for you! What I can tell you is that I don’t invest in high quality companies that way. Instead, I establish a meaningful position, though not a full position, at a “fair price”, and then I average down as the price goes from fair to great. Until I reach what I consider to be a full position. Be sure at 1.3xBVPS we both will be buying! ;) Gio

;D ;D ;) Gio

Yesterday I bought more LRE. Gio

The Geico of truckers insurance. Best, Ragu I like this. It took a while, but in the end Mr. Biglari succeeded in purchasing an insurance company. And one that seems to have a long track-record of underwriting profitably. I would like to point this out: Mr. Watsa in his latest letter has written: Therefore: insurance + fast food franchising. Now, BH is in the insurance business. Therefore: fast food franchising + insurance. ;) Gio

Gio

Thanks for sharing! :) Gio

I take this as the best compliment I have received in years!! It is really flattering!! ;D Thank you very much! ;) Gio

I will answer this one! ;D Today FFH’s equity is $7.2 billion. If it compounds at 15% for the next 10 years, its equity will become $28.8 billion. If it compounds at 15% for the next 20 years, its equity will become $115.2 billion. At that point, if it sells for 1.4 x BV, its capitalization will be 1.4 x 115.2 = $161.3 billion. Little more than half what BRK is selling for today. Besides, at that time I guess there will be many trillion dollar companies (markets will be much larger)… Therefore, no, I don’t think size will be a serious obstacle to compound at 15% annual going forward. :) Gio

Just the same for me in Italy. Let’s hope things don’t change! ;) Gio

Hi Marc, Yes, I am in Milan, Italy. Anyway, I would be shocked if in the US you had to pay higher taxes on LRE’s special dividends than we pay in Italy! :o Better ask twacowfca… He surely knows the tax regimen for US based holders of LRE stock very well! ;) Gio

No, I clearly don't think so. Please, read the Seeking Alpha article I posted a few days ago: it does a good job at explaining why LRE is misunderstood and unloved at the moment. :) Gio

First of all I don’t get double taxed… Being LRE so much tax efficient, I almost don’t get taxed at all! Second: because I want something that keeps providing me continuously with new cash. As I have often said in this thread, I view LRE as a strategic investment: I don’t want to ever lack assets that replenish my “cash reserve” with consistency and predictability. I am willing to pay up for them. It simply makes doing business so much easier! Therefore, the only thing I am willing to swap LRE for is another cash distributing machine, as much tax-efficient as LRE, and which is selling for a lower multiple than LRE. As I have always said, if anyone knows such a machine, please let me know! ;) Gio PS I don't think I am really paying up for LRE: on a forward basis LRE is selling for just 7 times earnings...

MM, just look at the graph on page 9 of the letter you have attached to your post. A similar graph of value creation for LRE would be the exact opposite: blue would be gray and gray would be blue! ;) Gio

Very short term bonds 84% (average duration 1 year, book yield 1.4%), cash 16%. Total Capital at 31 December 2013 was $1.792 billion, comprising shareholders’ equity of $1.460 billion and $332 million of long-term debt. Total investments (cash included) were $2.419 billion, of which $403 million in cash. Gio

Dazel, from the seeking alpha article: If apocalypse is truly unleashed, I guess we will have worst worries to deal with than return OF capital… ;D ;D And any high catastrophe loss year almost does not look like a true risk… but something Lancashire would welcome instead! ;) Gio

Ok, this is not the right place… therefore, I will leave it at that! Anyway, Mr. Brindle’s track record is longer than Altius… Just don’t dismiss Lancashire because it is an insurance company… It has very little in common with the insurance companies we know and usually deal with! Beginning with the fact it uses almost no leverage! The Cathedral acquisition has been badly misunderstood… The low special dividend for 2013 has been badly misunderstood… As soon as people realize Lancashire’s true earning power with Cathedral and Kinesis, they will start buying like crazy… If you have not already done so, please read the article I have referred to: it might be a little too optimistic on Cathedral, but does a great job describing the new Lancashire, its earnings potential, and its risk profile. Now I stop. ;) Cheers, Gio

That would be an home run! ;) But, even if Cathedral earns just $50 million, its acquisition by Lancashire has been a masterstroke of Mr. Brindle's. Gio

Just purchased more LRE. :) Gio

Dazel, you should also add Lancashire to the list. Please, read the latest seekingalpha article on Lancashire (that I posted yesterday on the Lancashire thread). ;) Cheers, Gio

Liberty Media Undervalued http://seekingalpha.com/article/2084513-liberty-media-undervalued?isDirectRoadblock=false&source=email_rt_article_readmore&uprof=25 Gio

Thank you, Dazel! Very useful. :) Gio