Rabbitisrich

Haha, I've had similar conversations about this recently, and I've seen people on twitter and message boards making similar points. I don't put too much stock in originality. The only originality I respect from a secondary market player is that conviction is developed through independent and unbiased analysis. Tilson's portfolio similarities to "gurus" with much larger AUMs raises the suspicion that he may need authoritative validation before placing large bets. Who knows? If he simply cherry-picked bets from his buddies and other respected managers, then some weighted average of their returns represents an appropriate benchmark.

Thanks for sharing your experience Dwy000. Do risk managers get involved with swap construction language? A large part of negative sentiment could be allayed if every master agreement required the approval of a respected risk manager. Also, Citi reports that the majority of their CDS contracts are "bilateral". Is it fair to infer that these contracts are subject to netting arrangements following a default event?

That about sizes it up. Everyone else is buying long bonds today. The usual collective insanity has set in. That hefty 2.8% yield on the 30 year. Can you imagine locking in your returns for a theoretical 25+ yrs at 2.8% - say 2 % after tax. You can get bigger dividends from dozens of stocks from companies that are cash rich. And TIPS are still offering negative yields. The market is betting on disinflation/deflation and inflation shocks. I also see a lot of people arguing for a "total return" perspective on bonds, which seems like a fancy way of describing greater fool expectations.

I visited Sydney and Melbourne last year, and the cost of living was much higher than I expected! On the other hand, the food is wonderful, people are great, and every random coffee shop is like the best coffee shops in Los Angeles. I also love the "hotels" with no guests and a lot of beer. Amazing quality of life.

HHC enterpise value is too tempting. Reducing cash pile now.

There is even evidence that China has started its slowdown (Rio Tinto, Alpha Natural, manufacturing) and Chanos probably has a good point that China's growth is overstated due to deferred or disguised loan losses. Something similar happened with Japan in the 80s and 90s, which explains why the japanese people improved household income and consumption during the collapse of real estate and equity pricing. Michael Pettis has a good article on the subject: http://mpettis.com/2011/09/big-in-japan/

I even feel the same way when I see people saying "That isn't value investing. This is value investing." At a certain point, it doesn't matter if you call it a hill or a mountain, just give me the topography.

Alison Frankel at Thomson Reuters is a good source for updates on investor/trustee suits: http://newsandinsight.thomsonreuters.com/Legal/OnTheCase/

Typically the reps and warranties language allows for putbacks if the originator's mistakes/lies qualify as material and adverse. Sullivan is probably referring to the difficulty of separating impairment due to misrepresentations from non-covered factors. There is also a fraud issue that may be separately raised.

I'm surprised that Tilson's long term results are so poor. His presentations are generally thoughtful and he surrounds himself with very smart people. His current porfolio seems undervalued. Is anyone familiar enough with his portfolio moves to explain his results?

That seems unlikely. Weschler supports Planned Parenthood and has donated to democratic and republican candidates. Conservative/liberal categories are broad past the point of usefulness, but he doesn't appear to have an intellectually servile political mindset.

I started following Massey today because of the same letter. Even before looking at his returns, it's obvious that he is a smart and studious investor. Mohawk is undervalued because of purchase accounting and a focus on revenues vs. operating profit, which understates the international operations. Some analysis seems to excessively reduce future margins in Unilin and Dal-Tile. Mark Lorberbaum has been selling fairly aggressively in August and September, and investors should expect volatile operating profits due to the large contribution of european operations. It's probably best viewed as an asset/distribution play, where the cash flows will take some time to realize. Of course, that same logic impaired smart investors like Meryl Witmer, who recommended the stock in $70s due to an overly optimistic outlook on housing (thinking that existing home sales would jump above the million mark by 2009).

Those guys seemed a bit hasty, or perhaps Lewis simply didn't portray them in a flattering light. Michael Burry was the only character who seemed to think matters through before acting, and he was the only guy who demanded mark-to-market collateralization for the CDSs. Where is the line for hast, I want some of that stuff. I mean making a few hundred million while starting out of a garage with 100k has to show some sort of competence inmo. I found them fascinating and really liked the ways they thought about things. Being young and inexperienced makes anyone look hasty. They didn't take care of counterparty risk, and, according to Lewis, they didn't understand the contractual details of their bets. Burry also seemed to be the only character to justify the timing of his bets. Given the severity of the market dips, and all the second and third chances it provided to investors, I'm skeptical of any young investors who made a ton of money with a limited track record. In March of 2009, you could have invested in Gymboree or DineEquity and enjoyed a 7-bagger in each case. But focusing on the return ignores the that one bet was much smarter than the other. Short track records might not expose the difference.

Has Sprott elaborated on his short thesis?

Those guys seemed a bit hasty, or perhaps Lewis simply didn't portray them in a flattering light. Michael Burry was the only character who seemed to think matters through before acting, and he was the only guy who demanded mark-to-market collateralization for the CDSs.

I've seen Tilson make calculation errors or use slightly outdated information, but his presentations are useful and thoughtful. He didn't flip flop on his Netflix short so much as he updated his thesis to include momentum. If you put out a solid thesis, one that many people seemed to agree with, and the stock price runs over it, then you have to delever the trade. It's not the same as information trading.

Whamond resigned a couple of weeks ago, which is not a great sign for 3Q earnings. The COO position is a teaching/testing ground for internally promoted executives, and Whamond's resignation mighy signal poor performance.

Thanks for the links. Whoa, these videos are long. Are they worth the time, or mostly generalizations?

The Fortune/WSJ articles on the sale of MSRs raise more questions than they answer.

My guess is that the protection of Berkshire's negotiating makes up for the loss of the TRH opportunity. It is an advantage for Berkshire dealmakers to be able to reference decades of behavior when saying, "This is our final offer."

Didn't you write that you expected the deal to dissolve in anticipation of renewed bidding from AWH and VR? Did Berkshire's departure change your thesis?

Speaking from my own experience and those in my circle, college seemed like such a foregone conclusion that high school became extended childhood before the jr. adulthood of college. Grades and SAT scores aside, college could become much more productive if children are trained to aggressively search for their interests and talents at a young age.

The presentations and 10-Q from 2Q cover European CDS and asset exposure. You have to trust their netting arrangement. I think I read somewhere that most of their CDS written involve bilateral contracts, but I don't know if that implies some protection in the event of counterparty default.

Japanese banks also had some issues with provisioning and asset composition. We'll have to see whether U.S. real estate moderates but the Case-Shiller 20 city index has been flattish since '09 and commercial real-estated backed delinquencies are declining. The Moodys/REAL indices show moderation in office and apartments. Here are a couple of papers with useful appendices: www.nber.org/2004japanconf/hamao.pdf www.imf.org/external/pubs/ft/wp/2000/wp0007.pdf The second link is a good review of Japan in the 90s from a banking perspective.

It's a bit of a misleading article as Comscore adjusted their rankings to tease out contextual searches. Using the non-explicit core search figures, Google dipped below 64% last year.