Rabbitisrich

Terrific, thanks.

Thanks for the link Ericopoly. Kawikaho, ugh, I should have read the article first.

I tried the Wells Fargo brokerage, but cancelled the service due to slower fill times. More than once, Fidelity and TD Ameritrade accounts filled an order below my limit price, while WF failed to execute the order at all!

Rabitt no restrictions at all on foreign ownership of real estate and if you insist on buying in Vancouver I will sell you mine Can I get a quote on bona fide Canadian ice, too? I went house hunting in Vancouver a couple of years ago and I couldn't believe the prices then. However, I loved the city, and I wouldn't mind paying a bit.

Thanks for the summary Packer16.

The temptations that Tiger tackles tops those that typically trouble. I can't imagine cheating on my girlfriend, but I also can't imagine Miranda Kerr whispering her room number into my ear. About Canada, can non-citizens purchase a home? I'd like to buy a house in Vancouver or Montreal and rent it out for 9 month periods.

I learned to be satisfied with high returns achieved through analysis, and to forgo potentially higher returns brought about by market timing.

NetNet, I love quotes of that sort. Value investing is an opportunistic sport, and we make money not only when everyone overestimates themselves but also when they overestimate each other and over reach. We should support Alice Schroeder and her value adding misinformation project.

Maybe, but I haven't seen a big increase in unrated securities, nor have I seen a major company quote their Egan-Jones rating. In addition, despite the scoffing at the big three ratings, many lenders still include provisions for changes in ratings from the "major" ratings agencies. You and Seth Klarman may prove correct in the future, but it's difficult for me to imagine that a high speed financial world (like the one we have, for now) will demand truly rigorous, issue-by-issue analysis. There's only so much trust to go around, and only so many gurus. For everyone else, it's just a lot easier to tell your clients that all your assets are highly rated.

Good points, Ericopoly. The members of this board trust that Watsa and Co. will generate alpha from the float. Unfortunately, that's a story that takes more time to digest than underwriting strength simply because good investors produce more volatility than good underwriters.

Kingsway then tried to ditch Lincoln General by "donating" the shares to a collection of non-profits. Of course, they neglected to pbtain the permission of their regulators.

Doesn't this mean AIG owned the Davis fund, not the Davis fund owned AIG? The Venture fund owned AIG. The global fund held $65B in assets as of July 31, so it's hard to imagine that Chris Davis personally dug through the 10-K notes. Plus, he probably knew Hank Greenberg personally, and he couldn't imagine that such a capable man could F up with a capital F. Another good investor, Wally Weitz, fell under a similar trap through long association with Angelo Mozilo. It happens to the best.

Even the productivity gains may be the result of short-term accounting froth. Businessweek has an interesting article about temporary bumps in gdp due to the deferral of R&D: http://www.businessweek.com/magazine/content/09_45/b4154034724383.htm Measuring intangible investments such as business R&D and worker training isn't easy—which is one reason why government statisticians haven't yet done it. But including such expenditures could make a big difference in the way companies, investors, and others understand the economy. Let's do a back-of-the-envelope calculation. In the four quarters ended last June, business spending on tangible investments—equipment and structures—as reported by the BEA dropped by about 20%. If intangible investments had dropped at the same rate, it might have knocked an additional 1.5 percentage points off the -3.8% GDP growth rate. If intangibles fell by only 15%, that might have taken 1 percentage points off GDP growth. (These calculations require making heroic assumptions about price changes and other difficult-to-observe figures, so they should be treated as very rough estimates.)

While the GAO did credit the SEC with producing statements that were "fairly stated in all material respects," it flagged "six significant deficiencies" for FY 2008 and 2009. The six areas are: • information security; • financial reporting process; • fund balance with Treasury; • registrant deposits; • budgetary resources; • risk assessment and monitoring progress. Those deficiencies don't seem to allow for a "fairly stated in all material respects" opinion.

I read an opinion that banks are driving the yields down in an effort to window dress their 10-Ks.

Watsa, the negative working capital market doesn't require growth due to the manufacture as ordered business model. Dell might make mistakes, but their business model shouldn't produce huge cost of goods sold to payables mismatches. On the other hand, doesn't it appear as if Dell is trying to grow their business through conventional strategies like design, business services, etc? This Businessweek article, http://www.businessweek.com/magazine/content/09_43/b4152036025436.htm, suggests that Dell's market cap already reflects the low cost moat.

UncommonProfits, does your data for historical delinquencies cover all delinquencies and foreclosures started? The 6.25% figure from TransUnion only covers 60 days and over. Loss severity might distinguish the current period delinquency rate. http://www.housingwire.com/2009/08/24/cure-rates-plunge-among-prime-rmbs-fitch-says/

Parsad, the story of how aspartame came to be approved by the FDA is somewhat sketchy. However, it's such a widely used product that, even if it found to be harmful, there might not be asbestos-level consequences for Coke. It'll be interesting to see whether any industry gets taken down by the Bisphenol-A controversy.

I'm one of the few on this board who really liked The Snowball. I wouldn't have been attracted to a book that focused on Warren's "methodology"--which I suspect is like Jeet Kune Do's "techniques"--because most of his investment career is a matter of public record. If I didn't know anything about the author, I would have guessed that a female friend of Warren's wrote the book. Especially when talking about Susie Buffett, there is a kind of merciless judgement that I associate with one woman evaluating another.

I don't know about envy, because many of the people complaining about Buffett on this thread have recently outperformed the Berkshire stock. Buffett will occasionally do things that may seem hypocritical until you realise that he is perfectly okay with telling you what you should do, and then acting as your counterparty if you don't do it. Case in point: Fannie Mae recently tried to sell tax credits at less than 80 cents on the dollar. Berkshire would have bid on those incredibly stupidly priced assets. Ethical? That's ambiguous. But it's not hypocritical for a rational businessman.

If anything, you might be giving Warren too much respect in that you are holding his advice as parable. Keep in mind that he often speaks in layman's terms, which takes away from precision. Then you have to look through misunderstandings perpetuated by lazy reporting. The WMD statement involves both problems. Buffett indulged in some hyperbole to emphasize the danger of derivatives for a broad audience. But he also explained the specific features of derivatives that he viewed as harmful. The media latched onto the hyperbole and never delved into the technical aspects of his argument, much to society's pity. I've also heard Buffett characterized as a hypocrite for his support of taxes despite a consistent emphasis on tax efficiency. Rather than hypocrisy, I view it as a compromise similar to his willingness to purchase tobacco company preferreds. Where do you draw the line between being an exploiter of ignorance versus being prepared for opportunity? My feeling is that he fulfills his moral obligation by speaking out on issues, and that he should be free to take advantage of the rules as they stand.

I agree with the tone of the last few posters. The risk of Berkshire attracting "Mad Money" types will decrease with the company's CAGR. Going forward, Berkshire will probably beat the pants of the S&P in risk adjusted terms, with more modest nominal results. That alone should chase away many speculators.

http://news.cnet.com/8301-1001_3-10390830-92.html "In pure dollar terms, Dell was far and away the leader in receiving Intel's largess," the complaint alleges. "For example, over the four-year period from February 2002 to January 2007, it received approximately $6 billion in 'rebates.'" "In 2006, Dell received approximately $1.9 billion in rebates from Dell, and in two quarterly periods of that year, rebate payments exceeded reported net income. From February to April of 2006, rebates ($805 million) amounted to 104 percent of net income ($776 million). The following 3 months, between May and July of 2006, the proportion was even higher, 116 percent ($554 million of rebates and $480 million in net income)."

Kawikaho, do you mean that you only liked the BNI investment? Y has most of their holdings, in dollar terms, in energy companies.

While Berkshire has trimmed positions in the past in order to maintain a basic level of liquidity, it seems like he's sold enough at this point that this is a pull-out. I don't think that the moat relied upon trust and reliability. Moody's, S&P, and Fitch provided communication assistance; users could attach a rating to a security as a shorthand for relative performance. I don't think you will find many pension fund managers who actually believed that the ratings agencies provided thorough due diligence. It's kind of like the FICO score. No one in finance thinks it replaces analysis, but it provides a standardized shorthand for less rigorously formed notions of quality. A bull market can stimulate activity to the point that the users only use the shorthand because they drank the kool-aid or they planned on passing the buck. I'm curious to see what will happen with the ratings system. Moody's might not survive, but it doesn't mean that it's replacement will be any better.