giofranchi

That magnificent son of a bi…!! ;D giofranchi Source: http://topics.nytimes.com/top/reference/timestopics/people/v/cornelius_vanderbilt/index.html I thought it was a good line, though, and I eagerly await the day that I can use it. Yes! The author of the biography actually warns the reader that, despite all its popularity, the famous letter might never have been written by Mr. Vanderbilt! Anyway… who really cares?! ;D ;D And by the way: "A mighty - and mighty confident - work... This is state-of-the-art biography." -- The New York Times ;) giofranchi

A review by the Aleph Blog giofranchi book-review-the-art-of-value-investing.pdf

Brookfield - Real Assets Real Returns giofranchi Brookfield_-_Real_Assets_Real_Returns.pdf

Mr. Charles Gave on "An Old Fashioned Deflationary Bust". giofranchi Daily+6.5.13.pdf

May 2013 Monthly Report giofranchi 2013-5-May-Monthly-Report-TPOU.pdf

http://www.marketwatch.com/story/like-berkshire-markel-thrives-on-buy-and-hold-2013-06-05?siteid=yhoof2 giofranchi

Oh I think you're doing yourself a disservice Gio! And don't be so sure I'm I'm your guy here. 'Course, I'll chip in where I can, but I am sure others on this board would put me to shame with their knowledge. Always too humble! :) Cheers! Gio

Thanks! Very kind of you! :) giofranchi

Well, here is one of the reason I love this board: by now I have come to the conclusion that, whenever I want to know something about an investment of mine, there is at least one person I know I must turn to: if I want to know something about Lancashire, twacowfca is undoubtedly the man! If I want to know something about Liberty Media, I always ask dcollon! (Also ItsAValueTrap has done great work on LMCA!). And as far as Brookfield Asset Management is concerned, whenever I want to know something about it, WhoIsWarren is the one I turn to! :) And now I agree with him both on capital gains taxes and on rising interest rates. Just a few words about those articles ‘popping up’: I have read all of them, and I have found them unfounded and unconvincing. I think I understand what BAM is doing, and has been doing for decades with great success! Culture hasn’t changed, goals haven’t changed, competitive advantages haven’t changed. Until something really changes for the worst, I see no reason to part ways with BAM, just because some articles have been published by short sellers. giofranchi

Some highlights from the 2012 SIC. giofranchi BLOG-2013-06-Look-Whos-Talking.pdf

Well, one way BAM creates value for its shareholders follows: In other words, they certainly strive to buy low, but also have no problem to sell, once valuations have recovered and the assets they own are no longer cheap. Then, why not to distribute the proceeds? Of course, it is not a predictable source of cash, and that’s why they warned against the fact they But, when the cash is actually there, why not to use it? giofranchi

If on average they can achieve a 19% ROE and on average they sell at 1.7 x BVPS, it is like holding a bond which yields little more than 11%. If you reinvest the dividends, it is like compounding your capital at 11% annual. This means that you need just a few percentage points of yearly BV growth, to be able to compound capital in between 12% and 15% annual. And, most of all, in a very safe way! If, finally, once in a while you get the chance of averaging down on your entry Price/BVPS level, LRE might turn out to be the surest way to compound capital at 15% annual that I know of. :) giofranchi That's a very good perspective, Giofranchi. Keep in mind that virtually all their earnings are owners earnings with great optionality. If there is a huge event, especially in NOrth Am, like the KRW hurricanes of 2005, they can reinvest capital at much more than their average return after rates spike on cat coverage. In the current market, they can invest a certain amount of capital at high rates as the manager of sidecars. If the price of their shares gets knocked down, they can buy back stock at very high compounding rates for shareholders. Otherwise, their high dividends give shareholders the option to reinvest in LRE or in the event of a market meltdown, to buy shares in other companies at bargain basement prices. :) twacowfca, of course, I do agree completely: that “great optionality” you have referred to, and their constant and watchful willingness to be always opportunistic on behalf of shareholders – whether it is by reinvesting capital at much more than their average return after rates spike, or it is by managing sidecars, or it is by buying back stocks, or it is by distributing dividends, whatever makes more sense and maximizes shareholders’ return – are probably the most reliable predictive attributes for outperformance that could be found in any public company. :) giofranchi

If on average they can achieve a 19% ROE and on average they sell at 1.7 x BVPS, it is like holding a bond which yields little more than 11%. If you reinvest the dividends, it is like compounding your capital at 11% annual. This means that you need just a few percentage points of yearly BV growth, to be able to compound capital in between 12% and 15% annual. And, most of all, in a very safe way! If, finally, once in a while you get the chance of averaging down on your entry Price/BVPS level, LRE might turn out to be the surest way to compound capital at 15% annual that I know of. :) giofranchi

+1 Very good interview! Thanks for posting! :) giofranchi

giofranchi

Of course not! I am the one in the first place to invest, and not to trade! But FIAT is no KO, AMEX, or GEICO. I understand FIAT as a trading opportunity, when its shares are at very depressed price levels. But not as a long term investment. Unfortunately, a reliable 10% ROE each year is not consistent with the history of FIAT. In Italy it is very well known that FIAT would have lost money more often than not throughout its history, if it hadn’t been repeatedly bailed out by the government… I am not saying the future will be the same. On the contrary: it will probably be very much different! But I don’t have any particular insight into the auto business, I have never liked it much, and I have never made the effort to understand it well. Poor history of profitability for the business + lack of knowledge on my part about the industry = I stay away. giofranchi

Impact Of Valeant Pharmaceuticals' Acquisition Of Bausch + Lomb giofranchi impact-of-valeant-pharmaceuticals-acquisition-of-bausch+lomb.pdf

During the financial crisis NAV reached a maximum of $10.02 on 18th June 2008, before decreasing to a minimum of $5.83 on 22nd April 2009 (see files in attachment): a -41.8% loss. So, Mr. Loeb definitely did not perform well during the financial crisis. He was not alone! :) giofranchi 6-20-08-net-asset-values.pdf 4-24-09-net-asset-values.pdf

Great letter by Mr. Vito Maida on the importance of time. Enjoy! giofranchi Patient-Capital-Management-Q1-2013.pdf

IceCap Asset Management May 2013. giofranchi IceCap-Asset-Management-Limited-Global-Markets-2013.5.pdf

Hugh Hendry April 2013. giofranchi Hugh-Hendry-April-2013.pdf

Interview with Mr. Jim Rogers. giofranchi Jim-Rogers-Nobody-Gets-Out-Of-This-Situation-Until-Theres-A-Crisis.pd_____f.pdf

Hi LongTerm, I couldn’t agree more with you! You have just expressed exactly my own view! :) The only difference is that I don’t find macro confusing… I find it… a lot of fun!! ;D I really enjoy reading all the papers that are posted on this thread… I know, I might sound a little bit weird… Yet, I really prefer them to almost any novel out there! ;) But I know I am, paraphrasing Mr. Kyle Bass, a “macro-tourist”, and I never make an investment decision based on “macro predictions”. giofranchi

Hi WhoIsWarren! Just before your quote, Mr. Brindle also said: Do you see a world without insurance? Well, me neither! ;) And, imo, if there is an insurance company that will do fine, that company is Lancashire! Of course, I agree with you that low interest rates could have all sorts of consequences across all sorts of industries. giofranchi

Jarden Corp., DreamWorks Animation, AutoNation Inc.: giofranchi May_2013_Commentary_Long_Product_Lifecycle.pdf