giofranchi

Speaking about Mr. Soros, I must admit that most probably I am the one who doesn’t get it… ;D Still, I think Eurobonds could be the third way to solve our problems… which won’t work! Eurobonds mean that the Germans must accept to share all the liabilities, without retaining control over the assets… would you ever accept something like that? It would be like starting a business with a partner of yours: you put up all the capital, and he controls all operations?! Would you ever do that? Even if you trust him very much? I wouldn’t. Because it doesn’t make any economic sense. Again, either you we a “White House” in Berlin, or every nation will get back to its currency. Nothing else makes economic sense to me. But… I am no George Soros, so I must be surely missing something here! :( giofranchi

Thank you very much, Parsad! Very insightful and helpful answers, as always! :) giofranchi

I have heard this kind of objection to OAK future returns too. Yet the evidence is that OAK returned much more on the capital it raised during distressful times than during good times. Imo, both if a low interests world lasts a long time, and if interests start creeping up, capital will leave other insurance companies and flow into Fairfax. Because both those environments are extremely distressful for standard insurance companies, while Fairfax has shown to be a much more skillful and opportunistic allocator of capital. If Fairfax achieves a 7.5% annual return on its portfolio going forward, it will compound BVPS at 15% annual. A 7.5% annual return is 20% lower than its historic average. How is it going to achieve that? Well, if I knew exactly, I would be running my own Fairfax, right?! ;D Any way, I can try a guess: of course, not lots of treasuries… instead, distressed debt special situations, a much larger percentage of the portfolio allocated to equities (as soon as this market finally comes down!), and acquisitions of entire businesses a la Berkshire, or a la Markel Ventures. Acquisitions of entire businesses would be almost a completely new source of growth for Fairfax! Last, but not least, if you heed Mr. Barnard’s words, and you factor in the fact Fairfax is striving to achieve “underwriting excellence”, the annual return from investments needed to compound BVPS at 15% annual in the future could be even less than 7.5%. :) giofranchi

Yes! As I have said prices in Italy, and I guess also in Spain, and maybe even in Greece, are still way too high to be truly competitive! And the cause is simply that we do not have a currency that makes economic sense. :( giofranchi

txitxo, that’s exactly why they cannot afford the Euro. They would be much more competitive with a currency that truly makes economic sense for Spain. The same applies to Italy and others. Keynes was right, and again we won’t solve our problems until either we get to a United States of Europe, with a political, banking, and fiscal union, instead of only a monetary union, or Italy, Spain, and others get back to their currencies. I don’t see a third way to solve our problems. In Italy I keep hearing politicians talk about many things, yet no one speaks about the real problem: Italy has been losing in competitiveness on Germany and northern Europe in general for 12 years now, the gap is getting wider and wider, and prices in Italy are still way too high. And yet, no one even tries to tackle this most crucial issue! giofranchi

Tommm50, could you please elaborate a bit more on this one? I believe that insurance, reinsurance, and even investing require the same skill set. --Steven Markel, 2008 Thank you, giofranchi

Find in attachment the HDGE ETF Market Commentary for April 2013. giofranchi HDGE_PMCommentary_0420131.pdf

Thank you for posting this, racemize! :) giofranchi

Well, you certainly cannot say that ragu lacks the conviction of his ideas!! ;D ;D As far as I am concerned, I tend to just stick to the process. Because I don’t believe in devils as much as I don’t believe in angels. Good businessmen just understand that to create truly lasting wealth the only way is to make their business grow and thrive. Cheating all your life simply is the riskiest of policies!! And, believe me, in Italy we are the masters of cheating… yet, I do not personally know of a single case that at the end wasn’t reached by disappointment and failure… So, in my experience the only ones who go on cheating are those forced to do so, because they lack a good process. Mr. Biglari is clearly not the case. On the contrary, I like how he conducts his business very much. And to those who go on repeating he uses a lot of leverage, I go on answering that I disagree: he just concentrates BH capital on a few ideas he understands very well, like any entrepreneur does! Ok, he will never be a widely diversified trader, but to be a widely diversified trader is not the only way to financial success… like many great entrepreneurs have shown throughout history. Moreover, as BH grows, also the number of businesses it controls will. That way automatically increasing diversification. ;) giofranchi

The long history of long (10-years US treasuries) yields. giofranchi

Not easy to do! But, imo, a very good job! :) Thank you, giofranchi

Just GREAT!! Thank you WhoIsWarren! :) giofranchi

Thank you! Very interesting. Imo, especially point n.9 (the second one! ;D) is good news! :) giofranchi

It makes sense to me! Still, Mr. Barnard has just started overseeing all insurance operations, so I hope he will bring some pleasant surprises in the future and FFH will deliver even better results! :) giofranchi

Thank you Sportgamma, I will have to think about it much more carefully! :) giofranchi

Ah! Now I understand. Thank you! giofranchi

Why Has The Price Of Sirius XM Stagnated? http://seekingalpha.com/article/1360311-why-has-the-price-of-sirius-xm-stagnated?source=email_rt_article_title giofranchi

A Visual History Of Asset Bubbles. giofranchi

GrizzlyRock, I think wescobrk is right. Shares held by BH shareholders plus the Lion Fund are 1,433,716. Why do you choose, instead, to use 1,333,990? Thank you, giofranchi

Sportgamma, I am asking just because on the one hand I would really love to expand my circle of competence and to come to know another business that I could reckon a very good and reliable long-term investment, on the other hand, though, I have pretty high standards and don’t want to lower them… ::) Thank you, giofranchi

Well, he admitted they made a mistake in a 0.76% of NAV investment? Easy enough, right? Anyway, a 38% return is really impressive! Congratulations! But discount to NAV surely must be narrowing now. Isn’t it? So, what are you going to do? Will you let your capital compound in Exor, or will you cash in your very satisfying profits and look somewhere else? In other words, do you see Exor as a long-term investment, or just as a very successful trading opportunity, whose thesis is playing out exactly the way you expected? giofranchi

Sportgamma, did you really enjoy the letter? To tell the truth, I didn’t. I enjoy a letter when I find some ideas I hadn’t already thought of, when I can learn something (both Mr. Buffett and Mr. Watsa never fail! And they are not alone!). This, I think, is a good reason to partner with someone: if he is a true master at what he does and, therefore, can teach me a lot about those topics! Instead, if what he says and writes is shallow and has no depth, I leave disappointed and look somewhere else. My idea of Exor hasn’t really changed: it might be an excellent trading opportunity. But I wouldn’t invest in Exor for the long-term. They have 76% of their GAV, which is 91.5% of their NAV, invested in 4 businesses they will probably never sell. Vice versa, I would treat them all as trading opportunities, when they sell far below IV, to sell them as soon as they approach IV. It automatically follows that I think about Exor the same way! Finally, the section GROSS DEBT is the reason why a very cheap and very safe source of leverage, like float, is the gift that keeps on giving! And Exor simply cannot benefit from it. PS This is not to say that I wouldn’t like to be in Mr. Elkann shoes… ;D Unfortunately, I must admit I have not written that letter!! :( giofranchi

You really did that?! WOW!! The fact this wonderful board is attended by such outstanding investors (the Superinvestors of the Corner of Berkshire and Fairfax!) is really a unique learning experience for the rest of us! :) giofranchi

Thank you original mungerville, wonderful post!! :) giofranchi

I agree, but I don't hold it against the book. Most of the important things in investing are really obvious ("simple, but hard to do", as Munger would say), so after a while, it seems like everything I read is kind of redundant. But I still feel like I get value out of it because it reinforces what I already know and keeps me on the right path (at least, I hope). It's a bit like Free Capital. Another book of profiles that I quite enjoyed, but if you're looking for lots of non-obvious investing concepts, probably not the place to look. I disagree with nothing you said. I did enjoy the book and think people will get something out of it and enjoy it. I just don't think it's a "best" book. Agreed that it's like Free Capital. All these books of profiles are similar. Nothing wrong with that. I did think that the chapter on Buffett was gratuitous and after some pretty good profiles seemed to be thrown together at the last minute to attach his name to it. Hi Kraven, Hi Liberty! I am not sure I would call the lessons in “Outsiders” obvious… From the chapter about Dick Smith: The theme of decentralization is common to all the profiles in the book. Yet decentralization requires trust. To give autonomy, you must first trust someone. We have talked about trust before, and we know it is not easy, and it is a risk not everybody is willing to run. So, I wouldn’t call it obvious… :) And again: Also a way of investing this much concentrated on just a few big, no… huge!, ideas in 4 decades is something almost nobody is comfortable with. So, I wouldn’t call it obvious… :) Finally: Also the willingness to hold large amount of cash is a practice many investors on the board reckon to be a mistake, instead of a virtue. So, I wouldn’t call it obvious… :) If by "obvious" we mean something everybody might agree with. giofranchi