Parsad

I'm getting quite worried and antsy about this market now. Too much hubris and too much money flowing into everything. Is this 1937? More capital has flowed into stocks last month since February 2000. Manager letters I read...most are batting very high percentages on their ideas...Tilson says he was right on 7 of 8 ideas since he took over the funds. ;D Enjoy the next few months, as I'm concerned about what happens when all this lubrication starts to disappear. Cheers!

They probably couldn't get the votes for the dual class structure. What happens if those that are exhausted of this company decide that they don't want to throw any more money at it, and don't subscribe to their full alottment? I wonder who is going to oversubscribe on all of those warrants, which will probably be available at a discount to book. Maybe he should just take this thing private like Dell! ;D Cheers! I saw this and thought the same thing... That said, everything has a price in which it is cheap. Serious question: would you (or anyone else here) buy BH at a discount to tangible book? Say, $200/share? I would get tempted, though, would like to see it cheaper. I sold all my stock after the employment agreement, and have since discounted further since the licensing of his name... That was wholly ridiculous. I wonder who would be interested in essentially buying 9% of the company at this price. Yes, definitely...I love that burger chain! Also, it would be cheaper to run a proxy against him. ;D Perhaps, that is what is happening and it's why we are seeing some of these things come into play...licensing, cancellation of the dual-class, rights offering. Maybe there is a disgruntled shareholder out there who has had enough. Cheers!

Thanks Oldye! Cheers!

They probably couldn't get the votes for the dual class structure. What happens if those that are exhausted of this company decide that they don't want to throw any more money at it, and don't subscribe to their full alottment? I wonder who is going to oversubscribe on all of those warrants, which will probably be available at a discount to book. Maybe he should just take this thing private like Dell! ;D Cheers!

boilermaker75 does it make sense to sell out and buy April calls @14 for the possible 1$ upside ? if the deal fails, we dont lose much. if the management sweetens the deal a bit, we get a piece of it I don't sit around hoping for something, like a better deal out of Michael Dell. Similarly I would not buy APPL calls and hope the price goes up before expiration. I would write INTC March 21 puts and make almost 2% in 39 days. If I get put to I don't mind owning INTC at $20.60. I like either outcome. I actually did that, but I bought the March $14 calls. We had sold most of our stock as it went up to $13.70, because I had this gut feeling they were going to rip off shareholders. We did great, but alot of shareholders won't. Once I had sold most of the shares, last Friday I bought the calls...small amount...but I figured "heads I lose a little, tails I win 2-4 times the investment". I suspected the initial offer would be below $14, but that as the stock traded near the $13.65 mark near Friday's close, I thought they would come back with an offer around $14.50-14.75...slight premium to the market close. I still don't understand why everyone is quoting the 25% above the price around when the rumors began, since what does that have to do with anything? They aren't using a 30-day trading average or market close premiums...it's a God-awful shitty deal, but they know they've got most of the votes to get it through. The board should be sued...you would think their twins work for some burger restaurant in Texas! Cheers!

The sole heir to the In & Out restaurant chain will gain 50% control soon. There is talk of her selling, of Buffett's interest in the business, and it seems a plausible scenario where she could escape the limelight and politics of ownership. I think Prem should make a run for it! ;D Cheers! http://www.bloomberg.com/news/2013-02-04/youngest-american-woman-billionaire-found-with-in-n-out.html

Escape From Planet Earth LA Premiere: http://www.justjared.com/photo-gallery/2803259/jessica-alba-hugh-jackman-escape-from-planet-earth-los-angeles-premiere-05/ Tim emailed me from the premiere and said the movie is great! I'm sure he gets to hobknob with Hugh Jackman and Jessica Alba tonight...lucky! Cheers!

Nothing. With the spin-off, if the market believes that the wine business is of worth, it may reduce the trading price of LUK once the spin off occurs...meaning you will be further behind on the exercise price of your options if they are presently under water. Cheers! hmm, this is not always true. often times the current option will become an option on the combined entity. I believe this was the case with SHLD when the did the OSH spinoff. But each case is different. Best to check with your broker. You could be right Bargainman. May be best to contact Leucadia IR. Cheers!

Having spent 15 years in the Seattle area, I'm if somebody gave me a waterfront mansion in Seattle for free, I still wouldn't want to live there again -- well, I'd use it as a summer home only (nice in August/September). I don't find Seattle or Vancouver dreary. I like the four seasons...and you get that here, and I would suppose in London as well. The rain keeps the streets spotless, the grass and trees green, and plenty of snow on the local ski hills during winter. You haughty, toty California guys don't know what you are missing...even though you lived here for 15 years! ;D Cheers! I joke that Seattle doesn't have four seasons either. They have: Spring Fall and Winter Hey c'mon...July and August are pretty close to what most people would call summer...but that's about it. Cheers!

Nothing. With the spin-off, if the market believes that the wine business is of worth, it may reduce the trading price of LUK once the spin off occurs...meaning you will be further behind on the exercise price of your options if they are presently under water. Cheers!

Having spent 15 years in the Seattle area, I'm if somebody gave me a waterfront mansion in Seattle for free, I still wouldn't want to live there again -- well, I'd use it as a summer home only (nice in August/September). I don't find Seattle or Vancouver dreary. I like the four seasons...and you get that here, and I would suppose in London as well. The rain keeps the streets spotless, the grass and trees green, and plenty of snow on the local ski hills during winter. You haughty, toty California guys don't know what you are missing...even though you lived here for 15 years! ;D Cheers!

Hi! Have you checked our "Books" board. There's probably a couple of books in there that cover or relate to what you are looking for. Cheers!

Yeah, I wouldn't mind that. As long as it is used. I don't want one job post in there over two years! ;D Cheers!

With all financials, there is some risk as rates rise, because longer term liabilities are usually offset with longer term assets. As rates rise, the value of the longer term, low-rate asset decreases while the liability remains the same...thus Eric's comment about the equity decreasing and a higher ROE. At some point, rates stabilize and the new business at higher rates will be positive for the financial institution...banks, insurance, etc. I don't know enough about AIG's entire book to tell you what would happen, but from everything I've seen of Benmosche, he seems to be relatively risk averse and is a shrewd operator. But if you have very high interest rates or elevated rates over a period of time like the 80's, it can be quite detrimental for insurers. That also happens the other way too as rates drop and yields drop. AIG survived that so I suspect they won't have much difficulty surviving rates moving the other way. Cheers!

Hi Hawks, Yes, we have not sold a share. If it goes down more, we will be buying. Cheers!

Good to hear from you Moore! That explains the infrequent posts now. No worries! We are also building up cash...40% plus now...and we continue to whittle down investments that have gone up considerably. We had sold about a third of our BAC warrants. We still have all the equity and most of the warrants...higher interest rates will actually be beneficial to banks long-term, even though short-term stock volatility may arise. We are in BAC and WFC for the long-term. I expect the annual dividend at BAC to be about 20% of our equity cost within three years. Surprisingly, I remain little concerned with the United States, but continue to worry about Europe and Asia...I don't think the numbers are real. We aren't finding any real bargains right now, and are digging around in the very small-cap and micro-cap area. Cheers!

Interesting Bloomberg article on Robert Kuok and his empire. Cheers! http://www.bloomberg.com/news/2013-01-31/billionaire-kuok-says-his-empire-can-last-generations-.html

Hi Net-net, The problem is then you start to get too much clutter with different boards. Special situations don't come around that often, so the board would be sparingly used. You also can't track a specific stock and keep a historical record for that stock like we do in the "Investment Ideas" section...whether it is a long-term investment or shorter-term special situation. Cheers!

At this point, I don't think the hedge fund route would provide him any more comfort than running the mutual fund. A 2-year lockup would not have made a whole lot of difference to him, but it probably would have saved some fools from selling out before the rebound. I suspect he is going the permanent capital route, and it very well may be through St. Joe. Cheers! Oh goodness, that would be awful if he turned his back on the mf.... I really hope he doesn't even if people do want to pay him more... But the way he said that did seem worrisome... I don't think it's about being paid more...but the fact that he's susceptible to his investors pulling their money completely out every time the world faces a crisis. We aren't even out of this one yet, and there is every possibility it could get worse...I don't think he wants to put himself at risk again...both within the fund and mentally. Berkowitz has enough money where his entire family, including his children and grandchildren will never have to work. It's not about money. Cheers!

Review the video beginning at 26.30 minutes (and listen to section 28.40 min) "We have a few things we are thinking about. It is possible..." it's interesting he looks away and come back with a little smile. heh In the video, he also says that he had a standard mutual fund but people want to pay him more. I really hope he's not gonna leave the little guy behind and manage hedge funds (around 29:25). :( At this point, I don't think the hedge fund route would provide him any more comfort than running the mutual fund. A 2-year lockup would not have made a whole lot of difference to him, but it probably would have saved some fools from selling out before the rebound. I suspect he is going the permanent capital route, and it very well may be through St. Joe. Cheers!

Now we move OT. Some reasons I don’t like PowerPoint. Instructors go too fast. Students are too passive. The more senses you use, including touch as in taking notes, the better you remember. (Yes you can hand out copies of your slides with lots of blanks the students have to fill in, but that is no where as good as taking complete notes. Maybe filling in the blanks keeps them awake, maybe not.) I have had students thank me for not using PowerPoint. http://www.huffingtonpost.ca/mitch-joel/powerpoint-tips_b_1092486.html I like writing on a chalkboard, but I got away from that and went to the acetate overhead. The chalkboard is nicer in that there is more space to write on. There are several reasons I switched. Writing on a chalkboard you are always blocking some of the board. My class size is usually about 60 students. The chalkboard is not as visible in such a room as an overhead projection. Writing on a chalkboard I have my back to the class, writing on the acetate overhead projector I am facing the class. There are advantages to not turning your back on a class, :) . I can tell from their faces whether they are lost, bored, or getting it. It is much more interactive when I face the students, they tend to more readily ask questions. Your are right, acetate overhead projectors are disappearing and I am having trouble getting them some semesters--why I envision the ipad as a potential replacement for me. So even though I use an acetate overhead projector instead of a chalkboard, I still think of my teaching style as chalk and talk. Cheers! Within the next 5-10 years, alot of those chalkboards will be replaced by touch screens or interactive projectors, and you'll feel like you are still using a chalkboard, except it will have color, no gritty chalk, and definitely none of those dusty chalk brushes! ;D Although I used to love smashing them together as a child and watching the huge puff of chalk dust float into the air. Cheers!

Hi Bill, I agree with you, but Buffett tends to agree with huge pay packages at times too. I was quite disappointed with the huge payout the CEO of Gillette received when they sold to Proctor & Gamble, but he was perfectly happy at the time. I think Handler's pay is what the market would pay him. My opinion would be that if he owns so much, then his salary and bonus should be lower, but the business industry in general does not feel that way. Buffett, Prem, Patrick Byrne, etc aren't that common. Cheers!

That's even worse! Your basic costs to keep a room cleaned, linens changed, new plastic cups, fresh little soaps and shampoos, etc will run you a minimum of $15-20/night even with a crappy hotel in a rural area. The margins totally suck and you are still running at only half occupancy. The only way to make this work well is the Patel way! The whole damned family needs to work long hours and not take a real salary.... Since you want to work 2 days per month, you are a far cry from a Patel! (but there's no shame in that either). SJ You would also have to sell your home or rent it out, and move your family into one of the rooms at the hotel. ;D But it works! Cheers!

Can there be an issue with a margin of safety being too wide? No. Margin of safety is just the difference between market price and your estimate of intrinsic value. Whether that difference is ever minimized is up to the management and shareholders. It goes one of three ways: 1) Management makes poor decisions and intrinsic value comes down closer to market price. 2) The price stays stagnant as poor decisions slowly marginalize intrinisic value...stock stays stagnant. 3) Management, either on their own or through activism (shareholder, outside party), make the right decisions and the market eventually values the business closer to intrinsic value...be it through growth or liquidiation. Cheers!

Yes, I think he feels beholden and responsible for the capital he currently manages for existing partners. He'll continue to operate the fund for them. And I think you'll now see more things happening within St. Joe or some vehicle of that nature. Cheers!