Parsad

Not debt...preferreds. No immediate obligation to retire them like debt. Buying back the preferreds is capital return, as they could have simply chosen to pay the interest on them. No, I plan on spending it. I'm going to buy Kraven a chocolate bar...a "100 Grand" bar...I promised him a good return on capital! ;D Cheers!

I think Ericopoly should buy the whole board a beer when BAC goes over $20 early next year! Then we can take turns getting a ride in his Netjets plane...he can just get them to taxi us around the runway. ;D Cheers!

I win the bet Kraven...$10.5B! Where's my dollar...it's worth $1.02 Canadian...I can get alot for that extra 2 cents. ;D Cheers!

Cheers! http://www.cnbc.com/id/100554413

Chinese Firms Look to Tap Booming U.S. Natural Gas Market: http://www.cnbc.com/id/100553863 Cheers!

Reminder Folks! Get your tickets purchased for the "Ben Graham 2013 Value Investing Conference" and "Fairfax Financial 8th Annual Shareholder's Dinner". Details are below and tickets are going! Cheers! Wednesday April 10, 2013 Ben Graham Centre's 2013 Value Investing Conference Fairmont Royal York Ballroom Tentatively: 8am-5pm Host: Dr. George Athanassakos, Ben Graham Chair at the Richard Ivey School of Business The value investor panel will include Francis Chou, Tim McElvaine, Robert Robotti and Tom Russo. The morning speaker will be Gary Shilling and the luncheon speaker will be Jeremy Grantham. Complete details for George's event, including conference ticket and registration information, can be found at: http://www.bengrahaminvesting.ca/Outreach/2013_Conference.htm Fairfax Financial 8th Annual Shareholder's Dinner Fairmont Royal York Ballroom 6:30pm-11:00pm Host: Sanjeev Parsad, Founder of "Corner of Berkshire & Fairfax" website 6:30pm - Meet & Greet 7:00pm - Speakers & Dinner 8:30pm - Presentation Guests (from you know where!) We will of course have our usual raffle and silent auction. A wonderful dinner is on the menu, and a cash bar will be open again. Tickets are $150 (including dinner), or $75 (no dinner, water & beverages will be available). Get your tickets soon, as we are going to be running low. Just go to the "Corner of Berkshire & Fairfax" homepage (www.cornerofberkshireandfairfax.ca), and click on the ticket purchase box on the right hand side. All profits from ticket sales, auctions, and raffle will be donated to the "Crohn's & Colitis Foundation of Canada", in memory of Prem Watsa's executive assistant, JoAnn Butler.

I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers! Very unlikely Fairfax is selling. They may have supported Tom Ward, but they made the investment because they thought the assets were undervalued. Cheers!

I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers!

The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying. You are totally correct. I've been following SD for a couple of years now, ever since Tom started coming to our dinners with Prem. But I have never felt comfortable with the balance sheet. It wasn't until the Permian asset sale, where they had $2.6B coming in to pay off the debt maturing in the next couple of years, that I finally decided to take a serious look. Once TPG started getting serious with the proxy fight, and the stock was tanking, I decided to buy. I didn't want Tom blowing that money on $1.2B plus in capital expenditures for 2013. I saw their latest presentation, and I'm thinking, why the hell would you spend more than you can afford in capex? And there was talk of even going into the line of credit if necessary...WTF! If there is a buyout, what is the possible price ? I would say $8-$9 I think they could get $9-10 with the right buyer who wants those assets. With TPG in charge, lots of cash on the books, and total accountability on spending, they can wait for the right buyer. Cheers!

I've replied in the strategies section. I hope this works, otherwise you are going to be posting that over and over! ;D We'll try it for a couple of days. If it doesn't work, I'll get rid of that board and move everything back here. Thanks Eric!

The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. It's okay. The next 3 months is going to be a mess in SD, we are going to have four BODs investigate the CEO, no COO. CEO knows that he will likely to be kicked soon. My bet is this will play out the same as CHK, only more nasty, Tom will resign without full 100million package and BODs will found no wrong doing. Let's see if TPG can get rid of the GOM assets and monetize the infrastructure at a good price, simplify the capital structure and lower their cost by year end. I suspect the board will be looking for buyers concurrent to their investigation...thus no COO...why pay him? TPG doesn't plan on blowing all the cash exploring the properties. The company will probably be sold, or an offer will be tendered, before the investigation is completed. Cheers!

You might be right Myth. I think TPG's plan is most likely to sell the assets for a premium. If they can't because of market forces, they will continue to operate the business. And yes, you are correct. SD's size means it is far more likely to be taken out. Cheers!

The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. how about Tom get booted and replaced with a credible CEO right away Tom has value as CEO. The sale of the Permian assets show that by itself. But sometimes executives need to be accountable to someone other than themselves and a co-opted board. Just take a look at a well-known burger restaurant CEO we all know and love! No doubt that burger CEO is talented, but he does not know what restraint is and a CEO's ethics can be blurred by the shadow their ego casts. Presently, there is a CEO and he reports to the board. If the board feels they need to change that CEO, they will find someone suitable. But thank God there is finally some strict oversight! Cheers!

The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. It will take a bit of time. As the board goes to work, clarity will appear in their plans and Tom's fate will be decided. After that, at least these guys will be working hard to make sure the company's value increases and they'll be accountable on operating costs. Cheers!

Sanj, The security and the strategy are intertwined. I don't think you can (or should) really separate the two. FWIW, one of the best threads in the past couple of months has been TWA's thread on BRK LEAPs. If you didn't understand BRK and the buyback policy, there'd be no way you'd ever touch the LEAPs. Just my perspective. SJ I received a couple of complaints that the thread is just too onerous to sift through now, so I thought that was the only real way to keep it directly relevant to BAC, while strategies could be discussed in a separate board. Try it, see if you like it...if not, we'll go back to the way it was. Cheers!

For the last week, as boardmembers have found out Ericopoly's returns over the last ten years, there have been hundreds of questions asked of him. I thought you guys can post on here regarding specific strategies for investments...be it BAC options, leverage, etc. I think with his results, he deserves his own thread. Cheers!

Hey Folks, This thread on BAC is drifting more and more into investment strategies. I'm going to start another board entitled "Strategies", and in there I will start another thread for you guys to continue this conversation. I want to keep the BAC thread related to BAC news, events, etc. So if you don't mind, please carry this discussion over on that board. Cheers and thanks!

The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers!

Thanks! It's right up there as one of our largest holdings. I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now. And at least they won't be blowing through $1.2B in capital expenditures next year. I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him. Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion. Cheers! Prasad, would you mind disclosing how much of your total portfolio is in SD? I have around 10%. I think the current outcome is the best. SD does need transition periods to make it operate in a better way. I think TPG is probably giving up the rights to sue TW for his related party transactions in order to get this settlement outcome. Almost 12%. I like the outcome too. The new board can implement some controls and conduct due diligence, while Tom remains at the company. You know that SD is now not going to be able to blow through all of that $2.6B in cash they received for the Permian assets, and anything that happens going forward will increase shareholder value...be it development of remaining properties and assets, sale of properties and assets, and there will be strict expenditure controls...bye, bye private jets! Cheers!

Thanks! It's right up there as one of our largest holdings. I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now. And at least they won't be blowing through $1.2B in capital expenditures next year. I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him. Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion. Cheers!

Wonder how much this guy lost shorting Herbalife...thus the lawsuit! Cheers! http://finance.yahoo.com/news/herbalife-short-seller-sues-banks-182110359.html

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying. Buying into temporary disorder is potentially interesting, but buying into perpetual chaos? Not sure this is the best idea! SJ They'll fix things eventually. People generally do when push comes to shove. After all of the outrage, politics and protest, things eventually go back to some sort of normality. Cheers!

Just seems to an outsider, that Greece has a much more of a systemic problem and Ireland more of a bubble problem. Definitely. But Greeks will continue to run businesses, borrow, save and everything else that people do day to day at financial institutions. There is downside risk, but the upside is that they may end up owning a chunk of the largest and best capitalized bank in Greece, just like they own the only non-government owned bank in Ireland. Invest when things are most pessimistic...Fairfax is great at that! Cheers!

Hi Cardboard, You should probably consider the saying "Better the devil you know, than the devil you don't know." Fairfax was into SD big...they probably think Tom Ward can increase shareholder value. Doesn't mean they agree with the compensation or other conflicts of interest. Maybe they don't think firing Ward at over a hundred million, and then bringing in an unknown in the oil industry with TPG is the way to improve things. They may pull a SEAM & Lou Simpson like at CHK, and create change internally without a complete change in the board and management. Prem's never gone into a business with the intent of replacing management. He looks to lead, improve their behavior, not displace them. Only if it is completely untenable and change cannot occur is when he would push forward with anything else. You should probably hear him out before deciding on why he has his stance. I don't like the compensation, excesses, and conflicts of interest...it's almost farcical the sheer gaudiness of it all. Change is needed, but whether that comes from inside or outside is a personal choice for shareholders. Cheers!

No different than their investment in Bank of Ireland. Cheers!