Parsad

Ok, I get what you are saying. But how is AAPL (or SD) classic Ben Graham? If anything, it's classic Buffett, buying future growth in CF. No? AAPL is trading for less than 7 times earnings after cash...doesn't matter whether those earnings grow or not in the next 7 years. I get my money back. If they grow, that's icing on the cake. The assumption is that AAPL is not a quality business at a fair price, but a business that is in tough competition, selling at a cheap price. SD is trading below what the assets are worth in the open market...barring the recent firesale by CHK. If you sold off their properties piece by piece, the market value is less than the sum of the parts plus the cash on hand now. Again, not a good business...just the assets are selling cheap. How much was it overvalued? I'm pretty sure that no one can be very exact on this. So I'd say at least 20% above a raw estimate of IV? Making IV $520 6 months ago? You started buying at $450? Does this imply that you think IV has grown a lot of these 6 months? Because I dont see you buying something at 85-90% of IV. When it was trading for $650, it was at a P/E of about 15 on current earnings after cash. Not necessarily overvalued, but definitely fairly valued. It went down to $450, and was trading at 8 times current earnings after cash...as I said then, it wasn't dirt cheap, but cheap...so we started nibbling. As it goes down, obviously the value goes up...we took a little bigger bite. Cheers!

Dimon never inherited Countrywide Financial...and it's a good thing too, because it probably would have taken down JPM. Moynihan has orchaestrated probably the largest financial turnaround in American history. He may not have Dimon's abilities, but he saved Bank of America by keeping it simple. Anyway you want to slice it, BAC is better capitalized than any other large bank, and has put away legacy issues that would have bankrupted many other institutions. It's leaner, meaner and more efficient. It will be worth alot more money in 2019, and I bet it is worth more than AIG six years from now. Have there been mistakes? Of course. But don't forget JPM's $6B trading boondoggle or AIG's $300B in bailouts. These were perilous times, and I have to say all three CEO's did a very good job leading their companies through this mess. Cheers!

They could do that, but that wouldn't be retiring shares. They would just be investments. To retire the shares, the capital has to be repatriated. But yes, that is an option. If they believe their shares are the best use of capital, then they can just buy shares through their offshore entities. Cash would just continue to accumulate in those entities though, as dividends would just be paid to them. Cheers! This came from someone where I asked the question on Twitter... Looks like they can't buy their own shares without a repatriation (which, honestly, makes sense from a policy perspective). http://www.irs.gov/irb/2007-25_IRB/ar11.html However, there has been raised a scenario where the company could borrow against their foreign cash in the US, and then buy shares with that money... That ruling is based on two foreign subs reorganizing their stakes in another company...but between themselves. I don't think there is anything to stop the offshore subs from actually just buying stock in Apple. Not unlike what Mustang and Lion Fund were doing by buying Steak'n Shake stock while they were subs within Steak'n Shake. Regardless, I'm sure Apple's attorneys are looking for any options possible. Cheers!

They could do that, but that wouldn't be retiring shares. They would just be investments. To retire the shares, the capital has to be repatriated. But yes, that is an option. If they believe their shares are the best use of capital, then they can just buy shares through their offshore entities. Cash would just continue to accumulate in those entities though, as dividends would just be paid to them. Cheers! What if they don't pay dividends to those specific shares? Are they legally allowed to do something like that? Or, those shares can be part of a DRIP. They would have to issue another class. Einhorn's preferred plan is also a good one. Have the entities buy perpetual preferreds, and then you bring the cash over here, while paying interest back to the entities...which could always be deferred. Cheers!

And that's with Apple making more money than ever and it has a better balance sheet than virtually any other company in the world of its size. It was overvalued when it was trading at $650 a share, and now the pendulum has swung the other way. Cheers!

They could do that, but that wouldn't be retiring shares. They would just be investments. To retire the shares, the capital has to be repatriated. But yes, that is an option. If they believe their shares are the best use of capital, then they can just buy shares through their offshore entities. Cash would just continue to accumulate in those entities though, as dividends would just be paid to them. Cheers! Thanks for the clarification. As a hypothetical: What happens if AAPL would buy up every single share of stock, but do so in offshore accounts? Maybe not every share, but a very large number of them... Say, oh, 1/2? It seems that if the offshore entity owned the bulk of the stock that would get into really weird accounting. If Apple entities end up owning a signicant amount of the company's own stock, I suspect that certain tax jurisdiction and domicile issues for the parent company would come to the fore. In other words, Apple could become a company completely domiciled outside of the United States. That isn't necessarily a problem, as most of their manufacturing is offshore, they are global, and they could still remain listed on U.S. exchanges as an ADR. Maybe our securities law boardmembers could clarify. Cheers!

They could do that, but that wouldn't be retiring shares. They would just be investments. To retire the shares, the capital has to be repatriated. But yes, that is an option. If they believe their shares are the best use of capital, then they can just buy shares through their offshore entities. Cash would just continue to accumulate in those entities though, as dividends would just be paid to them. Cheers!

Sad, but that guy was a moron who took inordinate amounts of risk. Why is it so damn hard for us to raise capital, when an idiot like that has no problem? We've batted about 70% on our ideas over time and held an average of 35% cash. We've outperformed 99% of our peers over the last six years with no leverage, no debt, no shorting, and less correlation to the market than the industry. For our size, our fund's expenses are extremely low and getting lower each year. We are only compensated when we achieve a 6% annual hurdle with a high watermark. Our fund is at all-time highs as I speak, and we've got a ton of liquidity. We write no articles or books, don't do interviews, and the only place we say anything is on this board. We are so far from the common industry hedge fund manager or private equity firm, yet I can barely get someone to give our fund a sniff, and this asshole raises so much money and does so much damage to his investors! Cheers! It's the power of marketing, Parsad. If you look closely, Buffet is a brilliant marketer. Haven't studied Prem as much, but I'm willing to bet he is too. Think about the Buffet, Watsa brand. I agree. Buffett is a superb marketer, and one of the best in the hedge fund industry is actually Mohnish. Prem actually kept a very low profile for many, many years...just slowly went about his business. It wasn't until their run in with the shorts in 2003, where he had to raise his public profile and start doing conference calls, so that shareholders started to get accurate information. Cheers!

Parsad, how do you get comfortable with some many sectors? You rely heavily on sentiment but do you never fear being wrong on a fundamental basis? SD and AAPL are great examples because a lot is based on assumptions. You can more easily account for very bad scenario's with companies like BAC and still find that you have a MoS imo? We don't get comfortable with sectors, as much as specific businesses. For example, we owned WFC and BAC, but we never touched C or JPM. We also don't really invest like Buffett or Munger. We're really old-school, Ben Graham type of investors...margin of safety, net-nets, liquidation value, arbitrage, distressed debt, activist/catalysts. We even partake in a bit of short-term speculation through call options from time to time. We don't fall in love with any stock, even though my posts may sound like it at times. No stock is permanent in our holdings, unless it is one we have some control over, and so far there aren't any we control...one day though. A stock is purchased below intrinsic value (we average in until it hits bottom) and we sell as it gets closer to intrinsic value (average out). When most other people are asleep or playing with their kids, I'm reading, researching or just thinking about our holdings and what could happen to those businesses...I also read almost every post on this board every day of the week. Vacation is having dinner with a friend or family member while I'm at a Pabrai Funds meeting or Fairfax meeting. So over time the circle just gets bigger! We'll only bet on businesses we are comfortable with, no matter who else is buying, selling, or calling us a fool. Cheers!

Sad, but that guy was a moron who took inordinate amounts of risk. Why is it so damn hard for us to raise capital, when an idiot like that has no problem? We've batted about 70% on our ideas over time and held an average of 35% cash. We've outperformed 99% of our peers over the last six years with no leverage, no debt, no shorting, and less correlation to the market than the industry. For our size, our fund's expenses are extremely low and getting lower each year. We are only compensated when we achieve a 6% annual hurdle with a high watermark. Our fund is at all-time highs as I speak, and we've got a ton of liquidity. We write no articles or books, don't do interviews, and the only place we say anything is on this board. We are so far from the common industry hedge fund manager or private equity firm, yet I can barely get someone to give our fund a sniff, and this asshole raises so much money and does so much damage to his investors! Cheers!

1) Tough. But you may be able to find him at different places where they will sit and sign some autographs. Keep your ears open while you are there, and probably keep a copy of it in your laptop bag or in your car. 2) Get to the Centurylink Center early. But you will still get a seat if you are there by 7am. Even if you aren't in the main forum, there are seating areas outside in various places that have video feed. 3) Yes, in Toronto two weeks earlier! ;D I only go every three years, so I haven't organized anything. There are so many Berkshire events, that there really isn't much time or space for a CofB&F meet. But you will run into boardmembers and readers, and you can hang with them, go for a bite, etc. You will make alot of friends while you are there. 4) Yes. Yellow BRK'ers are the guys wearing the big, yellow ten gallon cowboy hats. Alex, who has posted above, is organizing it. You'll have some fun, meet people to probably hang out with over the weekend, and certainly will run into some CofB&F boardmembers there. It was started, I guess, about 14-15 years ago. Buffett used to come to the party before and hang around for a while. Not any more, as Berkshire weekend is just so huge and busy now. Cheers!

Don't we all! ;D I'd like it at $200/share! Cheers!

I love it! When sentiment is like this on a value message board, and something is starting to get cheaper and cheaper, it's just completely irrational. I hope it keeps sinking, because I'll keep buying more and more. No one wanted to buy BAC on here at the bottom. I think I can count on one hand all of the people who bought at $5.50 or less. Apple isn't that cheap, but it is getting cheaper...it has none of the legacy issues that BAC had, no debt, robust cash flows, a cult following and a ton of cash to buy back stock with no restrictions on capital allocation...it should never get as cheap as BAC did and probably won't. Cheers!

No news. Their credit rating was actually upgraded. I think some people are just taking profits after the deal closed. Cheers!

You have to continue to average in. Look at Prem and RIMM. If Prem didn't average in, RIMM would have been a bust. And if you believe your own analysis, your bets have to get bigger each time you buy as the price drops. You cannot predict the bottom, and when people say "wait till there is support", my eyes start rolling...sorry! ::) Cheers!

No, that is my number. They could be asking for more or less, but I think that is around the number they will pay out this year based on their capitalization. If it was solely based on capitalization, they could pay out twice as much, but they still have some legacy issues, so I think that will weigh into any Fed decision. As those legacy issues go down, they will pay out more and more. Cheers!

I don't know anyone who can time the bottom...not Prem, not Buffett, not Mohnish. If the discount to intrinsic value gets bigger and bigger, then your average purchase should get bigger and bigger as the price drops. It's the same thing that any intelligent investor would have done in 2008/2009. When the spring releases, the return will be far greater than the initial price you started buying at. We do that with all of our stocks. We just did that with Apple this morning again! Cheers!

Discount to intrinsic value is not everything IMO. What? Not only is it everything, it is the only thing that makes rational sense as an investor. Anything outside of discount to intrinsic value or liquidation value is speculation. Cheers!

Prices have risen dramatically and are above 30 times the average annual income. They have no real alternative to invest their new found money, so it goes into real estate. But it only goes there as long as prices are flat or rising. As soon as prices start to drop, you will see money stop flowing...it's a self-fullfilling cycle...always ends in a bust whether it is in 3 years or 10 years. The developers are already extremely overleveraged and have shut down so many developments. I think China is the greatest real estate bubble in history! Cheers!

Whatever way you want to slice it. I said that they would return $7B of capital some time ago...dividends and buybacks. I don't see them doing any less, and I don't see the government stopping them from doing it. It's BAC's time! Cheers! I am trying to figure out what I will do with that dollar I expect to win. You can buy a slurpee, or a bacon cheeseburger at McDonald's, or a small bag of potato chips or let it ride till our next bet...double or nothing! ;D Cheers!

Whatever way you want to slice it. I said that they would return $7B of capital some time ago...dividends and buybacks. I don't see them doing any less, and I don't see the government stopping them from doing it. It's BAC's time! Cheers!

Hey Sanjeev, Is the reservation for Saturday or Sunday night ? Sunday. Buffett shows up at Piccolos on Sunday around 7:30-8:30pm. He's usually at Gorat's on Sunday around 6-6:30pm, but Gorat's is broken up into three rooms, so you don't know where you will be seated. Piccolos is really one big massive room for the most part, so it's likely you will get to see him. Cheers!

Incidentally, if you are booking for dinner at Gorat's or Piccolos during Berkshire weekend, Piccolos is taking reservations now, whereas Gorat's only starts taking them from April 1st. I've got my table booked at Piccolos already! Cheers!

Hi Mike, yes. The $150 covers the Shareholder's Dinner on the 10th, which is at the Fairmont Royal York...same as the Ben Graham Conference...same ballroom actually, just starts at 6:30pm. The Fairfax AGM and MPIC AGM on the 11th are open to everyone. You do have to register for the Fairfax AGM in Roy Thomson Hall's lobby. They basically just want your name and signature. They do not require a brokerage statement, or anything like that. There is a small cocktail party outside the auditorium at Roy Thomson Hall after the Fairfax AGM and Q&A...that usually ends around 1pm-1:15pm. Then our AGM starts in the Pickering/Green Rooms (just follow the concourse to the stairs) around 1:30pm...we start once it fills up, as we do get stragglers from the Fairfax AGM. We will also have food and beverages for everyone. Cheers!

Yay! Now go make money Handler! ;D Cheers!