Parsad

Well I could write that "my views have nothing to do with parties, political affiliation, etc, etc" like Tim Thomas when he refused to visit the White House. But the fact that I support Buffett's view would give me away pretty quickly...just like Thomas' desire to have dinner with Glenn Beck. If didn't hate Boston already, boy do I have a hate on for Thomas now! ;D If you want my real views...the less tax for everyone, the better! In the mean time, let's make it equitable. Cheers!

I kid, I kid! But they either need to distribute cash or find someone to manage it...about $100B in cash and marketable securities after this quarter. Just a killer quarter! It will be interesting to see how they do from here on out. Cheers! http://www.sec.gov/Archives/edgar/data/320193/000119312512021833/d287503dex991.htm

After the Lubrizol deal, Berkshire's employee count is now over 270,000! Cheers! http://www.bloomberg.com/news/2012-01-24/berkshire-employee-count-climbs-to-about-270-000-with-lubrizol.html?cmpid=yhoo

You know what they say: Those that can, do, and those that can't, teach! Cheers!

I think the prof is nuts! If he listens to the board, then why would the board get rid of him? All I've seen is improvements at the bank since he was handed this piece of crap. They should give him a friggin' medal for saving it! Cheers!

Does Buffett really believe that the rich should pay for the retirement (social Security and Medicare) of the middle class? Yup. And so do I. Not saying that the middle class should not pay their fair share, but the rich are rich because of the system, not because of some intellectual capacity they possess that others don't. How do you equate a teacher working 12 hours a day, five days a week getting paid $50K a year, and a hedge fund manager working the same amount making $1.5M a year? The system is not perfect. As Buffett says, the system will benefit certain people because of the way they are wired. The right wing want to equate equitable taxation with the rich paying for everyone else. Often it gets characterized as paying for those that don't want to work as hard as others. I'm guessing Debbie Bosanek works as hard, if not harder, than Buffett. She's not asking for more pay...she's not even asking for Buffett to pay more in tax...she's just saying that she would like her overall rate to be more comparable to Buffett's...be it short-term or long-term capital gains, ordinary income, or anything else. The combined rate should be equitable. Cheers!

Yeah, combine that with the fact the trainer Beristain got Marquez was the fellow indicted alongside that doctor who supplied Barry Bonds et al with 'roids. Not sure the ethics were all there with the manager and training staff. Marquez himself seems like a very decent guy though. Cheers!

I thought Oddball was funny...this was pretty good too! At first I thought the number was high, and it probably is because it's extrapolated out, but after thinking about it, I realized I had four devices myself...two laptops, smartphone and tablet! So while 50B is more than just a stretch, 20B may be realistic. Cheers!

So that means that in eight years every man woman and child on the planet will have 6.6 devices that require streaming for that stat to hold true. I'm calling BS on that. Let's revise this and consider that in eight years it's unlikely that the entire world population will be out of poverty and will be able to afford 6 $100+ devices with their associated data contracts. So let's say that 50% of the world will be able to afford them, so that means 12 devices per person. This stat shows how meaningless linear projections are. Twelve devices...give me a break, I'd need a murse to carry all that crap... That was pretty awesome! I especially liked the "murse" touch...very funny. Cheers!

The thing is what will people say? How can you make an argument that Bosanek pays "X" amount, which is significantly higher than Romney's 13.9%, and that is ok for the system and people in general. There is no argument that can be made if you are touting a progressive tax system and not a regressive one. Cheers!

Article on Hussman and Krugman. Cheers! http://www.theglobeandmail.com/globe-investor/markets/markets-blog/bears-gone-wild/article2311859/

Russell Jr has some really quick hands. Too bad they're brittle, but yes, he could be a real force with his skills. I'm looking forward to the Nonito Donaire vs Vasquez Jr fight in a couple weeks. Also, Berto vs Ortiz. I ordered the Ortiz-Mayweather fight, and watched all of the 24/7's running up to it. I like Ortiz...incredibly nice kid! But he was way overmatched with Mayweather. The almost suckerpunch by Mayweather wasn't the way I would have liked to see that fight end, but Ortiz was losing all the rounds until that punch anyway. I actually thought the best fight I've seen in the last year was the Pacquaio-Marquez tilt. Alot of people didn't like it, but I thought it was a great technical fight. Marquez is probably one of the best counterpunchers in the last decade. I thought it was a draw or Marquez barely won. I didn't think Pacquaio won that fight. Haven't seen that fight between Corrales and Castillo. Cheers!

As far as Prem sitting on RIMMs board since it is one or FFH's largest investments a board position can not be construed as taking him away from FFH's interest ,more good than bad can flow to FFH and its shareholders because of this IMO. Yeah Ubuy2won, that's what I don't understand. RIMM is a Fairfax position. He's joining the board of an investee company. It's not like he's giving them free advice while neglecting Fairfax. Fairfax's insurance business now runs somewhat independent of Prem, because Andy Barnard oversees all of them. So, Prem can spend more time on the Hamblin-Watsa side working with the team there, on their existing investments and future acquisitions. Would people here rather Prem spend his time twittling his thumbs, or work on finding new acquisitions, investments and maximizing the value of existing positions? Naturally the latter. Cheers!

The CEO's comments strike me as someone who is trying to bring confidence back into the business. With the change in the CEO position and board, I would not be surprised if the board is working on garnering attention for a takeover. There has been plenty of talk regarding a takeover, but nothing materialized. Perhaps, these changes are there to make the market aware that the company is sincere about change and alternatives. Cheers!

The deal with various banks goes to the states now for approval. Cheers! http://blogs.barrons.com/stockstowatchtoday/2012/01/23/big-banks-closing-in-on-25-billion-mortgage-settlement/?mod=yahoobarrons

Vito Maida, who used to work for Hamblin-Watsa and now runs Patient Capital, did an updated online chat for the Globe & Mail. Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/qa-why-a-most-cautious-value-investor-is-on-a-buying-spree/article2308346/

Hi Folks, To be fair, the Ben Graham Centre's conference has a few things our dinner won't. You get to hear David Winters, Mohnish Pabrai, Jeff Stacey, Wayne Peters, and I believe Sir John's grand-daughter Lauren speak. As well, you get a far more detailed conversation with Fairfax's investee CEO's. Cheers!

Moynihan is looking at another $3B in cuts. Cheers! http://www.bloomberg.com/news/2012-01-23/bofa-targets-up-to-3b-in-additional-cuts.html?cmpid=yhoo

I think you guys are way over-reacting on how much of Prem's time this is going to consume. I'd attach about the equivalent of him spending 2-3 hours a month on this. Do you guys know his schedule? He is usually in the office from Tuesday to Thursday, and his schedule is non-stop during that time...he barely has a moment to take a leak. He usually leaves a little early Fridays to go to his cottage on the weekends. He probably has more work to do as chancellor of Waterloo than on the board of RIMM. As for the University of Waterloo. It has arguably the best engineering department in all of Canada, and would rank pretty highly in North America. Waterloo itself is the city that RIMM and Nortel built...a mini-San Jose or Silicon Valley. Tons of startups are there. If RIMM goes under, it will have an impact on Waterloo economically and intellectually. Cheers!

Not sure if he did this for CCTV, or they are using an old clip, but Buffett is singing "I've Been Working on the Railroad" in front of a model train set. Maybe he did a "WEB" video from home. :P Cheers! http://wlchunwan.cntv.cn/nettv/wlchunwan/C32258/classpage/video/20120122/100172.shtml

I think he's just protecting their interest in the company. Also, because Prem is chancellor for the University of Waterloo, if there is anything he can do to help the company, he would probably want to. The high-tech industry in Waterloo pretty much exists because of RIMM, and they have such a huge impact on the area and university. Cheers!

So with Steak & Shake, Fairfax, WFC back in 2008, and your most recent undisclosed acquisition, I'm assuming you had determined in one way shape or form that your investment had a very low probability of permanent impairment, as should all value investors with all investments. IDK anything about Fairfax, but I'm assuming when it was distressed, you were able to readily determine that in a worst case scenario, such as a liquidation, that your investment would be made whole, no? Same with Steak & Shake - worst case scenario, perhaps the real estate, cash, and receivables would cover your investment while any upside from operational improvements would be pure upside. Correct with Fairfax. We thought in the worst case scenario, there was enough margin of safety that we would walk away with most, if not all, of our capital. With Steak'n Shake, they were burning through cash and Sardar had a limited amount of time to raise cash...we bought through call options and then exercised them over the next few months as they had raised cash from a tax refund and things improved on the operations side. With Wells, the bet was that the credit quality of their loans were better than other banks, and we bought at a little over half of book in 2008. This is where I struggle with BAC. The upside case is very obvious - IMO, the downside protection in a worst case scenario is NOT. We can argue all day long whether or not a worst case scenario will actually materialize, but assuming there is a greater than 0% chance of one, where is the downside protection? Asset valuations are stretched to the max, are they not? In a liquidation scenario, how is BAC's "Other Asset" category going to hold up? How are the "trading account" assets going to hold up? How are NPAs going to hold up? At 10x leverage, there is only a small margin for error. Naturally there is some risk. For BAC to go under now at this point, you would need to see another Depression...probably 20% unemployment. If that were to happen, then you better sell your Berkshire shares too, because they would be trading at a third of current prices. Because of the leverage, and the fact that BAC is still working on improving facets of their business and loan portfolio, we don't have a massive position. This is a 5% equity position and another 2.5% in warrants. This is where I am struggling - I can't determine the downside protection. It's not a matter of having the guts to buy something distressed, it's a matter of being able to determine what the downside is. That's where Yacktman's quote comes into play - how do you trust asset valuations that can be created with the stroke of a pen? I hate to "LVLT" this thread, but one could make the argument with LVLT that in a worst case liquidation scenario, the highly valuable "fat pipes" could be auctioned off for at least as much as the current TEV. I can't reliably make that determination with BAC - you can't tear apart its balance sheet and come up with a worst-case liquidation scenario that comes out favorably for equity holders. That's what I'm trying to get a feel for on this thread is how folks here are looking at the worst case scenario - what is the downside protection people are looking at? Simply saying "the Fed will just print" or "WEB bought a preferred stake" aren't valid margins of safety, IMO. There is in fact a scenario out there that another global credit crisis will impair the asset side of BAC's balance sheet and it will be forced to raise expensive equity - so the earning stream stays the same over the long-term, but the share count doubles, rendering the investment very if not permanently impaired. This line of thinking isn't Zero Hedge-derived either - it's being careful to avoid investing in the next WaMu, Fannie, Freddit, Bear, AIG, Merrill Lynch, etc... etc... That is the game! ;D That part of investing is the art. The science portion is the valuation, calculating margin of safety, tearing apart financials, notes and the MD&A. But managing and estimating the risk relative to the science is all art. The intangibles of the business and estimating management also fall into this category. Cheers!

I know that this comment I'm going to make is going to create a mess of this thread, but could it be that Prem and his team see some sort of synergy between RIMM and LVLT? What services or products/services could RIMM sell that would directly benefit them and LVLT? If you control the highway and you control the trucks (perhaps a better analogy would be shipping containers), that is a pretty big monopoly in distribution! Would love to hear ideas and comments. Cheers!

As Donald Yacktman says, banks can create assets with a stroke of a pen. The balance sheet still kills me.... How did everyone here involved in the Fairfax restructuring get comfortable with its balance sheet at the time? Was it more of a trust in Prem given how familiar you all are with him? Or is it just a matter of sucking it up and banking (no pun intended) on the earning power of BAC to allow it to earn its way out of this mess and assuming there are no major skeletons on the balance sheet? They were two very different investments for us. I was already a Fairfax shareholder when they had their problems, so I was completely familiar with the company's history, Prem, insurance, etc. In BAC's case, this was a completely new analysis. We were interested in financial institutions because they had been seriously battered, but I was not comfortable with BAC back in 2008. I was familiar with Wells at that time, and we bought a bunch of shares around $9. That allowed me to continue to explore financials during a period when many were restructuring through TARP, and generally when you have such periods of deleveraging, huge opportunities tend to sprout. BAC didn't garner my interest until 2011, when Brian Moynihan's changes started to become more obvious. He was not only talking the talking, but walking the walk and tearing this sucker apart. The system had become significantly more stable, loan portfolios of better quality, capital was cheap and housing had already gone through a significant correction. Much of the risks that made BAC a risky investment in 2008/2009 had now been significantly reduced, yet the stock was far cheaper than back then relative to earning power. The problem with buying with a margin of safety is that most people, even seasoned value investors, are fearful of making investments exactly when they should...margin of safety is high, but the market sentiment towards the investment treats it as extremely risky. Was BAC more risky in 2008/2009 when it was higher priced, or in August of 2011 when it was of lower price and much of the risk had been reduced? The answer is obvious, but unfortunately investors have a very difficult time wrapping their heads around an obvious concept because they are fearful. Another couple of examples: - Everyone thinks Fairfax is a fantastic investment today. But it really is only a good investment. While the underlying risks to the business are low, the market has valued it at a price that takes into account the lack of that risk. Six years ago, the underlying risks looked significantly higher, but the stock was actually trading at a signficant discount even after accounting for that risk. - We bought Steak'n Shake at a split-adjusted price of $80 when it was distressed, and no one wanted to touch it. We sold it some time ago once things had turned around and Sardar had started to implement his Biglari Holdings strategy. Our average sale price was about $380. Where is the stock price today? $380! And investors think it is a great investment now, while they bypassed distressed investments in financials over the last year. - We've recently acquired about 4% of a business that today is trading at about a tenth of its price from 5 years ago. The business has nothing but cash and we paid less than the cash per share price after all liabilities are paid, yet no one wants to buy this company right now even though it trades at 2/3rds of book. If I told you guys what company it was, you would tell me that there is business and execution risk, even though the business is now break-even and is growing. Five years ago, this was not a good business, even though it traded at a price nearly ten times higher. Today, it is completely liquid, growing and profitable, yet the market values it at ten times lower! So the simple answer is that by the time the average investor (and this is true for professionals, value investors, contrarians, you name it) becomes comfortable with a distressed business, the market would have already started to value it at a signficantly higher price and much of that risk would have dissipated. You are seeing it happen right now with BAC. By the time most investors decide to participate, it will already be at tangible book and it's Tier 1 capital will be over 10%! Well over double where it was four years ago, yet the price would be just a fraction of the 2007 price. This is the general behavior of the investor. Cheers!

Like everyone, I'm waiting for the Pacquiao/Mayweather fight. Would have been the biggest fight in the last 30 years if Pacquaio didn't look a bit vulnerable against Marquez. It will still be big. I'm a Mayweather fan...he's a douche, but a fantastic technical fighter. Amir Khan is a great technical fighter, but he's got a suspect chin. This kid Gary Russell Jr. looks like he may be a serious up and coming contender in featherweight. Boxers move up and down so much now in weight class, that he could be a threat in a couple of weight classes with the skills he has. In regards to Tyson, I remember watching his fight against Michael Spinks live on a big screen with my father like 24-25 years ago or so, and Spinks' knees were shaking in the corner before the fight began. Tyson was terrifying back then, not the shadow of the figure he became years later. He was actually a very good straight ahead fighter, and would walk right at you and duck just before you swung, and come up flying with uppercuts and body blows. That fight lasted like 80 seconds! He was a troubled person, criminal no less, but few fighters have cut such a figure in boxing. He was the size of Joe Frazier, but had the power of a young George Foreman. He was quicker than both in his prime when Gus Da Matto, his adoptive father/trainer, had him focused. Today, he's comic relief in movies, but back then there was no one boxers feared more than Tyson. And it truly was a legitimate fear at the time! Cheers!