Parsad

It's funny, they are panicking like this with a 120 point drop. Wait till they see a 2,000 point drop one day! Cheers!

If you live in the Los Angeles area, Mohnish will be doing a presentation for the FBLA this Friday. I recommend that parents take their teenage children if they can, as it will be tailored to them. Here are the details: On Friday, April 26 at 3:30 PM Mohnish Pabrai is presenting to the FBLA Club (Future Business Leaders of America) at Northwood High School in Irvine, California. Both his daughters go to Northwood – a great school! The presentation is nearly the same as the same one he gave last month to MBA students at Columbia Business School, Harvard Business School and Boston College. He will tailor it for Northwood students. It focuses on the miracle of compounding and finding your passion. He’ll present for about 30 minutes, followed by Q&A. Total time will be about 60-80 minutes. You (and your friends/family) are welcome to attend. It will most likely be held in the Northwood High School’s state-of-the-art Theatre. Please do reply with a count if you plan to attend to naleo@pabraifunds.com The address is 4515 Portola Parkway, Irvine, CA 92620. Cheers!

It's just a parody. I wouldn't read it into it one way or the other. Although Concentrata is pretty damn hot! Cheers!

Details on new film project that was announced: http://www.forbes.com/sites/johngaudiosi/2013/04/23/sony-playstation-franchise-ratchet-and-clank-goes-hollywood-with-3d-feature-film/ Not familiar with the game, but it looks like there is a substantial built-in audience. With lower production costs as the game animation can be translated to CGI easier, it will be interesting to see what the total cost ends up being and then how much in revenue the film eventually generates. Great trailer for the movie by the way! Cheers!

less than 1%! I am sure Ballmer is shaking in his boots! I'd hate to be those boots! Have you seen the "monkey man" video. Must have been 2,000 lbs/square in. of pressure on those soles! ;D Cheers!

Yes, that will do a lot! That's only about a sixth of Ballmer's stake alone. Forget Gates or Paul Allen. Cheers!

That's actually what I did. I had price targets for the other half, but they hit them all in the same day. They just kept going up $1.95, $2.20, $2.50, $2.80, $3.10 and $3.30. I kept selling bits of the remaining half after the initial $1.95 sale. By the end of the day I had hit my price targets and was out. I just had no idea that it would go up another $3 the next day. ;D Cheers!

I did many years ago...about 9-10 years ago. I was buying gold (ounces, coins, rings, etc) when gold was at $350/oz. I sold them all over a couple of years in 2007-2009...unfortunately early at around $800-900/oz. I haven't done it since, as I thought gold was overpriced and speculative. Although what you are doing is no different than value investing, but you are looking for mispricing in coins, etc. Cheers!

Yes, that is the type of company that it could work for. I don't follow BBRY as closely, but understanding what their sales trends have been over the last few months, and the progress of their products would be useful. I suspect this earnings report will surprise, but once the Q10 comes out, I think that will do even better. There is a hard-core group of Blackberry users waiting for the physical keyboard phone. There is no other real product out there like that, as everyone is moving to the touch keyboard. So Blackberry could enjoy a significant short squeeze, not unlike the one we've seen for the last few months. But there has been significant positive market psychology around BBRY for the last few months. Another is Apple...but the liquidity is much higher, while product trends do not look as good right now. But the stock has been so battered (unlike BBRY), that any positive news will send the stock moving higher. The risk here with both becomes the time arbitrage. The next quarter might not be the one to create the short squeeze...it may take one or two more quarters, so you have to evaluate the timing risk. Understand that while fundamental analysis goes into the stock (Apple is cheap, BBRY sales are improving), a significant amount of speculation is occurring here because of the time arbitrage. You may have to even stagger your bets on a couple of maturities, or look for options that seem mispriced relative to risk/reward. We don't make these bets often, and they are usually on businesses we understand really well. It is very likely that we won't attempt on either of these stocks, or on any other stock for several months. Only when the pitch looks relatively fat, our assessment seems more likely, and the upside is huge, would we consider swinging because of the timing risk. Cheers!

I don't do anything fancy like many people. I view options in the same way I view the stock, but I weight the time arbitrage risk against the possible reward from the market mispricing. The only way to do this is to run through the events that could affect the stock by understanding the psychological aspect of investing. What is the impact of the quarterly report being poor, and how much do I lose? What is the impact of the quarterly report being about the same as past years, and what is the possible upside? What if the quarterly report is very good, how would the market reaction be and how much would the stock rise relative to intrinsic value? What is the ratio between loss of capital and the upside? If this report is not good, how much time would the company require to improve performance? Etc, etc. This tends to work best with companies where there is a significant short position and tighter liquidity. Companies that have more than adequate short-term capacity to cover their debt maturities. Also, businesses where you have some aptitude for the industry, how it operates, the business cycles, misinterpretation of data, etc. I think we've made money on about 60% of our option bets over the years...a little less than equities which is around 65-70%. We also tend to bet big on the good ideas...1-2% of the fund...and usually never more than 4-5% of the fund in options. The shorter duration the bet, the less we put in generally. While we would never have more than 4-5% invested in options at cost, an idea can easily grow to be more than that. For example, our options on Steak'n Shake at one point grew to almost 18% of the fund from a 3% position...we kept paring it back and it kept growing...over about a year. This Overstock bet and the Bank of America bet we did a little while ago, both went over 5%, even though we only put 1.5% and 1% of capital into each idea respectively. But I've never made that much money in such a short time span. It's just the way it goes sometimes as the market rationalizes something. Plenty of analysis, but a bit of luck in it too with the time arbitrage! You just try and make good calculated bets. I can't remember where I read it, whether it was Tim telling me, or I read it in Peter Cundill's book, but the one thing Cundill did that was very impressive was that he always found different ways to make money. We're inundated with the culture of value investing a la Buffett...good businesses with competitive advantages...but Buffett over his life has always made money not by sticking to a single philosophy, but by finding irrational and mispriced assets, regardless of anything else. It's why so many say Buffett contradicts himself. It's not double-speak as some like Doug Kass allude to at times, but that Buffett understands his ability to exploit inefficiencies. He also understands that most people cannot do it. It's also the foundation of Ben Graham's philosophy...buy when irrationality and inefficiencies exist and you have some margin of safety. It's why Buffett makes the index swaps bet, or the negative coupon Berkshire bonds, or Blue-chip Stamps which led to everything else. He looks to exploit irrational behavior. Prem does this too but won't admit it...credit default swaps, deflation hedges, RIMM, etc. I think you have very good examples of people on here that can do that as well. Not everyone, but you do have a handful of people who are very good at it. Ericopoly is on one extreme. He found huge inefficiencies he exploited with gigantic amounts of leverage and concentration. It took a great deal of analysis, alot of luck on the time arbitrage, and dinosaur-sized balls! But as you can see from Eric's posts, he spends an inordinate amount of time focusing on risk control and market psychology. He's got both the science and art side of investing going, and he's got the perfect temperament to handle the leverage and concentration. So that is how we view options...the same as equities, but constantly recalculating the time arbitrage risks and how the market might behave. Cheers!

They are busy posting on Apple, since it has become the bigger bargain. Now that some of the previous bulls on Apple are getting annoyed and bearish, I suspect it will have a similar upturn at some point. The market and those investors have come to realize that Apple will not be the company it was under Steve Jobs, and eventually they will also come to the conclusion that perhaps it is still a good company without him. Not great, but good without Jobs! In the meantime, many of them are selling, and I'm happy to buy some. Cheers!

I will let you know! ;D Cheers!

Why do people do what they do? Two stupid young guys killing and maiming so many others. Humanity is capable of such great and wonderous things, as well as such horrific and grotesque acts. If there are others, I hope they get it out of him. Cheers!

Hah! It doesn't have everything, ok! What about rain? You don't have all of the rain we get over here. So stop moaning about how perfect California is and that it has everything. Oh, wait a sec! Cheers!

Baron Rothschild when asked how he makes so much money: "I have found an easy way and I stick to it. I simply cannot help making money. I will tell you my secret if you wish. It is this: I never buy at the bottom and I always sell too soon. Excellent quote! Cheers!

premfan, I am not sure I understand. Could you elaborate on that? Best, Ragu The statement above was a joke :D. Shareholders dont need to rationalize shady behavior just accept it. Just accept that the people you do business with doesnt matter if they promise riches. Just be honest and say you are looking for the next brk/luk and actions dont matter. You did which is great cause most shareholders try to rationalize cognitive dissonance. Investing in biglari holdings above BV where fairfax is trading around BV is madness if you are looking for compounders and the next brk/luk. To make money you need leverage. Many types of leverage: hedge funds, royalty fees, cheap debt, insurance float, and etc Biglari is the master of leveraging his shareholders for personal income gain. The shareholders are his leverage. How does biglari use his shareholders? Easy the blueprint is there. Model Buffet and target market value investors. Biglari holding is his leverage for becoming rich. Yes shareholders will get a little piece of the pie. Beggars cant be choosers. I'm done talking about this topic. Fantastic post! I couldn't agree more. Investors are choosing BH at above book, compared to Fairfax at or below book...crazy! Prem or Sardar? Hands down there is only one rational choice there! Especially when one has the enormous advantage of float and their team has a far superior record to creating shareholder value. You don't even have to consider ethics...just common sense would dictate you pick Fairfax over BH! Cheers!

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price. Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market? Yesterday I bought a small position. I like TPG and Dinaker Singh. Everything he's said so far and done has been dead on. They are working very quickly to fix a business that would not have existed in a couple of years. And they forced Tom's hand to sell the Permian assets and fix the balance sheet. Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing. Cheers! I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP. Not sure about his days at GS, but his fund has returned about 60% between 2006 and 2012. He's a good investor...not spectacular, but good. Cheers!

I can't stand Rush. Congrats nonetheless to a Canadian band! Cheers!

In the last few days, I made one of the greatest trades of my life...perhaps one of the greatest trades on this board ever. Five days ago, I bought Overstock May '13 $12.50 calls. The stock was getting killed because of the markets, I thought they should make at least as much money as they did last year. They killed the earnings instead! I sold my options for five times the money in four days after buying them. Today, the god-damn thing is up nearly another $3.50, and those options are now worth 15 times what I paid...I'm crying right now...really it hurts like a bitch! :-X I had bet reasonably big too...1.5% of the fund in the options! Whhhhhaaaaaaaaaaaaaa! Cheers!

Blackstone pulls bid: http://www.bloomberg.com/news/2013-04-19/blackstone-said-to-pull-out-of-dell-bid-on-plummeting-pc-sales.html Cheers!

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price. Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market? Yesterday I bought a small position. I like TPG and Dinaker Singh. Everything he's said so far and done has been dead on. They are working very quickly to fix a business that would not have existed in a couple of years. And they forced Tom's hand to sell the Permian assets and fix the balance sheet. Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing. Cheers!

So are you saying there is a tangible reason why women 35-60 are turned off by amazon? I'm assuming that almost everything that is offered on Ostk can be bought on amazon. Or if not, amazon seems to be willing to sell anything and everything. I get what you're saying about this board and how it thrives even though there are much bigger boards out there. But I'm having trouble seeing how this applies to retail, particularly Internet retail. What attracts the niche customer to Ostk? and if amzn provides the same goods currently or eventually with cheaper or faster service, why would people stick with Ostk? You tell me? They sell $1.2B of products a year...someone is buying it. Investors often get wrapped up into how a smaller business will survive around other retail giants. They do survive...not always and not all circumstances...but generally they create a niche market that the larger retail giant cannot adequately serve. How do smaller dollar stores survive with Walmart around if this isn't possible in retail? It's possible in any industry if the smaller business is serving a very specific need. This is how Blackberry will end up surviving. How Five Guys or In&Out compete against large chains. It's how See's sells so much chocolate and has a very high ROI. Overstock.com can survive and thrive if they focus on servicing their market, rather than the broader market Amazon serves. Cheers!

Same here, we cancelled cable before Christmas. I really miss hockey but can stream it online sometimes. We use Netflix instead for shows and it's got plenty to watch. Yeah, see that's the problem. I cannot forgo my Canucks games. I watch every single one...whether live or PVR'ed. I watch alot of NFL too and a fair amount of basketball. I also watch all the majors in Tennis usually from when they start. $125 for the full cable package (including the Indian channels and specialty sport channels) each month just to get that stuff is worth it for me! Then add high speed internet...$40...and the landline...$45...taxes...comes to about $235 per month. Sorry, the $285 number was incorrect...it's about $235...still alot in my opinion. Cheers!

Munger is donating some stock to his alma mater! Cheers! http://dealbook.nytimes.com/2013/04/18/munger-pledges-110-million-to-the-university-of-michigan/?partner=yahoofinance

$1.00-1.20 a share in 2013 earnings. Give it a 15 times multiple and you get $15-18 for this year. Adjust that number based on how you think they can grow it...if better than 10% annual growth in revenues, give it a 20 times multiple. If less, give it a lesser multiple. I think if they focus on the direct business, keep costs low as they are doing, they can grow at 10% annually for at least 10-15 years...that's relatively conservative considering the size of the market and how small they still are. But they have to keep the retail aspect fresh year after year...very difficult unless you are the dominant player like Amazon where people go to you regardless. Cheers! Do you still hold your position? We had trimmed the position last time it hit $16 to a 5% position. It's still there and we won't sell any of that stock, as the cost basis is very low and we have a ton of gains. Cheers!