Parsad

I think one day this is going to be a very big problem that no one is paying attention to. Yes, the average investor who can stay the course and average in over time will do well by index investing. But I think when markets tank, investors tend to show the underlying psychology of leeming behavior. Over time, the stocks in the indices will be overvalued by a considerable amount...we are seeing it already where there are huge undervaluations in stocks that aren't part of the indices. This exclusion, combined with the psychology of markets, will create a problem as institutional and retail investors flee the same stocks in search of liquidity. You will only need one singular moment of panic for this to happen. Cheers!

Congratulations to the Raptors! Can you please control Drake! :) Cheers!

Now is the $2.5B Euro dividend in the deal on top of the $2B Euro dividend being paid out this week? Plus the Comau shares on top of that. Cheers! So it looks like we get our: - $2B Euro (1.46 USD/share) special dividend (from Magnetti deal) this week - plus another $2.5B Euro (approx $1.75 USD) equalization dividend through the merger - plus another $0.18 USD /share dividend in cash or Comau spinoff shares - plus the $3.55 Euro / 5.328 merger exchange or $0.74 USD / FCAU share Renault annual dividend on June 19th! Cheers!

Now is the $2.5B Euro dividend in the deal on top of the $2B Euro dividend being paid out this week? Plus the Comau shares on top of that. Cheers!

I'm in a similar circumstance to Shalab and agree with others that I'm relatively averse to debt...I get a get good night's sleep every night, no matter what Trump, Trudeau or the rest of the world do. I have a mortgage at 3.29% and a car loan at 1.9%...other than that no debt...not credit cards, no line of credit, nothing! And the only reason I have a mortgage and car loan is because of the low interest rates...I have enough in investments, cash, etc to pay the mortgage and car loan off several times over, but am growing it at 12%+ annually. I put everything on my card each month that I can to get the points, and then it is paid off in full every month. The reason...I remember how tough it was in the first few years of Corner Market Capital...I was in debt after a couple of years, burning through what investments I had, and sleeping well each night was tough! Slowly things started to turn...and I decided I never wanted to be in that position again. I still live relatively frugally other than the $21K winning bid on this year's lunch and golf with Wayne Gretzky at Fairfax's AGM, and save more money than I spend each month! Cheers! That must have been an awesome experience. Tangentially related note, one of my better investments over the years has been PSA graded Gretzky RCs. The PSA 9's have gone up nearly 10 fold in the past 5-7 years. Not scalable because of the limited supply, but a nice ROI out of what is basically a hobby. I have one too. Alnesh and I before starting Corner Market Capital, used to collect hockey cards and comic books as kids. We ended up keeping the important ones...I have a PSA 9 graded Gretzky rookie card...although as we got older, we gave that plus the comic books to my brother...who gave them to his son. So my nephew now owns some vintage Spiderman, X-Men comics that are worth several hundred dollars each, plus the Gretzky rookie card. The lunch and round of golf aren't until November or December based on Wayne's schedule. But it should be fun for the 7 of us...he said he's bringing his wife, but I'm hoping he might actually bring his son-in-law Dustin Johnson. Can you imagine...the greatest hockey player of all-time and one of the greats of today's golf! Cheers!

I'm in a similar circumstance to Shalab and agree with others that I'm relatively averse to debt...I get a get good night's sleep every night, no matter what Trump, Trudeau or the rest of the world do. I have a mortgage at 3.29% and a car loan at 1.9%...other than that no debt...not credit cards, no line of credit, nothing! And the only reason I have a mortgage and car loan is because of the low interest rates...I have enough in investments, cash, etc to pay the mortgage and car loan off several times over, but am growing it at 12%+ annually. I put everything on my card each month that I can to get the points, and then it is paid off in full every month. The reason...I remember how tough it was in the first few years of Corner Market Capital...I was in debt after a couple of years, burning through what investments I had, and sleeping well each night was tough! Slowly things started to turn...and I decided I never wanted to be in that position again. I still live relatively frugally other than the $21K winning bid on this year's lunch and golf with Wayne Gretzky at Fairfax's AGM, and save more money than I spend each month! Cheers!

Yes, correct. Really obscure stuff in the past...at this year's meeting, he did say it would be very specific unique arbitrage opportunities. He said that opportunities are much lower today to do this than say 10-20-30 years ago. Cheers! That’s interesting to me for a number of reasons: 1. In the not too distant past I’ve heard him say it might actually be easier now cause information is easier to access. 2. He seems to have switched his stance a little. Before when people asked him to speak on this subject he’d talk about finding super cheap small companies and going long the stock. Now it seems he thinks arbs are more inefficient. 3. I assume that for him to have an opinion in this he must be looking in that area from time to time. I like the idea that Buffett loves this stuff so much that he’s still taking an occasional peak at these tiny obscure situations, even as an old billionaire philanthropist who has no reason to care. By the way, does anybody me have a transcript or audio/video of this? Thanks in advance. 1. Yes, easier information, but definitely not easier. So much competition and the competitors are acting very quickly. In the old days, you read through numerous guides and reports...you didn't run screens, you had to create the data from everything you read. 2. Yes, you are correct. In the past, he would have done 50% annualized with small sums by targetting small companies. He cannot do that now, even with small sums...too much competition. 3. What else is he going to do with his time? :) Plus find a few little gem opportunities for the grandkids accounts! Cheers!

I've followed Buffett for over 20 years now. I thought the same as you when he first mentioned 50% annualized with small sums...and I was there when he said it. But he's been asked this a couple of other times and he's always said yes...50% annualized. And I heard him as clear as a bell say the same thing again this year with a little more detail. And he also said essentially that Charlie was doing better than 50% a year in his early days before the Munger Partnership through his real estate investments and deals. It is a stunning number, but they've both said now on numerous occasions that they could do that pretty easily with very small sums...although harder now than in the past. Cheers!

Dave Bonham, CFO for Fairfax, tragically passed away on the weekend. Our condolences to Dave's family and the Fairfax team! https://www.fairfax.ca/news/press-releases/press-release-details/2019/Executive-Announcements/default.aspx

Yes, correct. Really obscure stuff in the past...at this year's meeting, he did say it would be very specific unique arbitrage opportunities. He said that opportunities are much lower today to do this than say 10-20-30 years ago. Cheers!

He was fairly specific now and in the past. He said if he was managing small sums ($1M), he could achieve 50% annualized returns no problem for a little while. Once it got closer to 1B, things would start to slow down. So he was talking about small investors and only achieving that 50% annualized return for say a decade or slightly more...not over 30-50 years or anything. In the past, he said there were many ways to make the 50%, but today, it would be based on unique arbitrage opportunities and he said he knows of a few ways, but he won't say. That's when Charlie said or you could do what Li Lu did...create and find opportunities to make money. Buffett then turned to Charlie and said, Charlie weren't you doing certain real estate deals in your early days which were generating close to 50%? And Charlie said yes. So, both of them think gifted (1 in 5,000-10,000) investors could do 50% a year with small sums. On this message board, we know of 3-4 people who did that over a decade or so. There are probably another 20 or so who did well over 20%-30% over a decade as well. Cheers!

Rich Handler, CEO of Jefferies (formerly Leucadia), has a timeless list of 100 Things for college grads, but are completely applicable to anyone. Cheers! http://www.jefferies.com/Letters/Pages/1568

CC delinquencies are up, but from everything I've read LOC's, mortgages, etc are being paid on time and are manageable both in the U.S. and Canada. It's certainly worth keeping an eye on, as mortgage renewals come up and rates at some point continue to go higher. I would guess that budgets are strained, but not at a breaking point yet...so you are seeing delinquencies in credit cards increasing rather than secured loans like auto, mortgage or LOC's. You have near full employment with competitive wages available again in both countries, so households are managing inflation, increased rates, etc. It's highly unlikely that the economy will tank going into an election year as well...Trump will do everything he can to get votes and keep the economy running hot. Cheers!

I don't think you are factoring in the coming of the amazing new milkshake machines. ;D Well Elon Musk was already redesigning the propulsion engine, solar panels and autonomous vehicles...what was left? Milkshake machines! :) Cheers!

Just to be clear, I think it is more like 100 closures now, but most of them are not in Indianapolis. A few of them are, but the closures have been in many markets. I think Steak n Shake may have been on borrowed time even a few years ago - it seemed okay coming out of the recession - but according to franchisees it was always a fragile demand. I do think the one smart thing he did though is take out debt not backed by the company. He upstreamed cash, from that debt, and invested it - after a series of investments - putting it into Cracker Barrel. That is now the only channel with value. So if he hadn't done that - he would just be left with Steak n Shake's real estate. Instead, the real estate will be the creditors - but he has all of that other value outside of it. For his own enrichment, that was probably the right call. I know, I know, all the enrichment has gone to him and not shareholders - but I'm just saying he is better off having taken the debt on, upstreaming it and investing it - than he would have been not doing that. Some will say, he is taking advantage of the lenders - and maybe to a certain extent that is true. But on some level, that is what they were signing off on/underwriting - the credit risk related to Steak n Shake's business - and the deterioration of Steak n Shake is what is causing them heartburn - but that is the exact thing they were making a judgment on (along with the value of the real estate). Additionally, Steak n Shake is definitely going under - but the lenders already have perfected security interests in the company's real estate - so I do not believe they will be out most of the $180 million. If he wanted to upstream money and always knew it was a marginal brand he could and should have sold it when he instead saddled it with debt. He wanted to try out the upside through franchising while protecting the downside by taking advantage of those buying the bonds. You could argue its buyer beware, but in all sincerity, its more like anyone dealing with this character in any way beware! I wonder how the guy that sold his trucking insurance company feels right about now. I think he atleast got cash for his company. If there is any good that comes out of this character, it will be eventually exposing all the loopholes for self enrichment from shareholders out into the open. Yup, there was nothing wrong with the business. The biggest problems they had were with franchisees not making enough money because he was pushing volume. If your franchisees aren't making money, they are going to underperform and eventually shut down. He took away regional products and pushed the volume discount meals. He went from thinning the menu to enlarging it...that increases food costs, waste and reduces profitability. When you are paying $20M a year in interest costs, from a business that made $35M a year and then drawing all remaining profitability to the top, your business will deteriorate. And then you forgo advice from the people who got you there and increase expenditures in non-core, experimental areas, you open yourself up to risk, mistakes and failure. I'm the last one that should talk, because we stuck it out too long with Sequant Re, but we did get it right in other areas and there was nothing wrong at all with the Steak'n Shake business...if it had received the focus that it should have, it would be a billion dollar business today. Sardar was on target for that! He knows it and we all know it! Cheers!

Very sad! What a great franchise and I can't believe they shuttered 60 locations...in Indianapolis, their core market! It was running so well several years ago, when they had streamlined the menu, brought in a nominal offering of the $4 deals and franchisees were happy. Then he took out so much debt, did everything to increase volume (but not profitability) and pissed off the franchisees. Really sad...I loved this business! Plundered it and killed what was a pure cash cow! I hope he turns it around for the sake of the franchisees, employees and people who love SNS. Cheers!

One more near the end of the meeting...when asked about why See's never became as big as Mars or Hershey. Again, after an expansive answer by Warren, Charlie responds: "We've failed at growing See's like you've failed at winning the Nobel Prize and immortality! It's just too hard for us!" Cheers!

When asked about building a circle of competence, after a lovely long answer by Buffett, Charlie responds: "There is an advantage in specialization. No one wants a doctor who is half dentist and half proctologist!" Classic! Cheers!

For the "Investment" Board, finding topics are easy, that's why we have the titles exactly the same. Click on "Subject" and it will put everything in "Investments" into numerical first, then alphabetical order...simply go to the ticker by clicking on the page number. Cheers!

You should come to the Fairfax AGM...we had terrific access to David for a couple of days. He's becoming one of the highlights of the week each year now! Cheers!

So I just ignore it, and focus on whether I think 95% and 7% are achievable (probably and probably not, respectively) and whether I'd be happy owning Fairfax at the current price if the ROE was say 10% over the long haul (yes with bells on). Pete I’m really surprise that you think FFH will probably not achieve 7% investment returns. Long term it’s less than a S&P500 index. I’m more septic about 95% CR when the loss from catastrophes are include That's 7% across the whole portfolio, ~70% of which has to be invested in fixed income for regulatory reasons (quite rightly). 7% was very doable when treasuries yielded 5%. Much harder now - the extra work the equities have to do is far greater. As far as I know, they aren't required to have 70% in fixed income for regulatory reasons...where did you get that from? I think they could do 7% no problem long-term, as long as Brian Bradstreet is also there. They will have to find someone as gifted as Brian to join Hamblin-Watsa. I don't think they can rely on the young guys they have there already, because it's not something you just can learn...like picking equities, there is an art to fixed income as well. Brian is one of the best...Francis is damn good...but I don't know how much depth there is at Hamblin-Watsa on the fixed income side. It's a project they need to work on over the next 2-3 years. Find that guy! Cheers!

Feel free to throw me and everyone else under the bus, but you jackasses should probably remove FFH from that list...Prem's given you nearly 35 years of outperformance. Yeah there have been periods where he has under performed...even long stretches...but he's walked the walk and talked the talk better than anyone else other than Buffett. Even Buffett had a tough time the last few years, and he's as close to perfect in the industry as anyone has ever seen! So if your bar is Buffett and only Buffett, then that is a statistical population of one! If your bar is ethical, honest investment company CEO's that you can trust your money with and have a good chance of outperforming for the long-term with interest aligned, it may be nominally higher and Prem would be in that group. Cheers!

No gift cards from Toys'r Us, but they gave out hundreds and hundreds of toys! Beggars can't be choosers! The crowds seems a touch smaller than last year...or they spaced out the booths better, because it was less crowded. The energy of shareholders was very palpable this year and it seemed like my first visit to Berkshire in 2001! Our dinner was amazing again...with Rob Ruffin and Tim McElvaine giving great presentations and then Fairfax putting up two terrific panels with Jeff Stacey moderating. I will be starting a semi-annual podcast called "Pabrai and Chewster!" An hour each time with just Francis and Mohnish going at it, and Francis talking about how great a deal Stonestreet was and then Mohnish talking about how he had Francis pay all of the legal bills! Hilarious! I remember telling shareholders back in 2006 that we may not quite understand how big Fairfax Asia could get...I'm saying it again about Fairfax India and Fairfax Africa! The snowball is starting to roll! Cheers!

Thanks for the clarification. I wouldn't have mentioned this if it is still not signed -- aren't worried about a potential law suit if the deal fell apart ? (from ones who bought the stock the last couple of days) It's not a deal. It's a listing. They have to go through the issues that the listing exchange requires them to do. It's a process, but there should not be an issue listing, just getting all of the documentation in place...you have to constantly update the circular, etc, and it takes time. Cheers!

Hi, the 2019 AGM presentation will be on the site shortly...thanks! Sanjeev