Parsad

This analysis is excellent -- consistent with assertions (but obviously much more expansive) I made in debate with some on this board over 1 year ago. For those of you who get turned off by his reference to a "long wave cycle," ignore the terminology and understand the dynamics. One can argue about whether the economy operates as precisely as he suggests (although Dalio admits he has simplified the analysis) but the dynamics he explains are very real. Investors who fail to understand the analysis are "like a one-legged man in an ass-kicking contest" (to borrow a favorite from the real Munger). There are no dynamics behind the "long wave cycle". It's just nonsense. You can fit any argument into almost any set of statistics. For example, when you made the original argument around September 1, 2010, the S&P500 was at 1,100. It then rose to well over 1,300, before correcting back to slightly above where it was. You can make two arguments here from one set of statistics...either you were wrong, and the market rose to 1,300, or you were right and it corrected to where it was. What is the correct answer? Neither, because the market does not make sense in the short-term and none of us are buying the market. Based Berkowitz public comments, I'm inclined to believe he is/was ignorant of the realities presented in this analysis. He'll never make as much money as he originally anticipated in BAC, with returns relative to alternative common stock opportunities not so good. Although at $6, maybe BAC is a great investment -- I personally don't know either way but I'm still cautious about investing in banks that are still heavily levered, even if "only" 10:1. And the only way Berkowitz will make meaningful money in his BAC investment is if the Fed induces significant inflation through money printing but even then the returns in real terms will be paltry relative to the alternatives. Buffett, on the other hand, stands to do quite well under almost any scenario except complete armageddon. I asked Mohnish what he thought of Buffett's investment and if Buffett was simply making a preferred bet like GE or GS. He said, no definitely this time Buffett is making a bet on BAC stock. He's protected through the preferreds, but the warrants aren't simply a kicker this time, but were integral to the investment. Why? Because with GE and GS he was getting interest comparable to quality equity investments he could make. With BAC, he's tied that capital up now at a 6% return for 10 years. The opportunity cost of this investment indicates that he is making a bet on BAC recovering, but he is protected on the downside if he is wrong. On a positive note -- good to see preseason hockey games have begun. Will be tougher for the Canucks to get out of the West this year -- biggest team specific question mark is how much of a role Schneider will be asked to play? Will be interesting to see if the Kings take a big step forward this year -- lots of talent. About the only thing we'll agree on. Although Canucks will win the cup! Cheers!

As far as Mcelvaine goes, best I can tell is that after taxes, he has done a disservice to his investors. Thankfully for him, he gets to keep all those nice fees along the way though. He seems like a nice enough guy...but after 14 years or so and you are underperforming the S&P/TSX Total Return (his chosen index) after taxes (and more volatility)...that is atrocious. So is Fairfax stock, but I don't see anyone on here selling their Fairfax shares or saying the same thing about Prem. It's a process. People have bad years, even several bad years. Look at Berkowitz or Bill Miller. Mohnish was hammered through late 2007 and 2008. But you make bets on managers because you think they have the right skills and discipline, and more importantly the correct temperament and ethics. The guys at Anson have three full years under their belt. How can you know anything at all about them, even remotely, yet you have managers who have nearly two decades under their belt, and investors are questioning their abilities. It's the ridiculousness of this that makes my mouth drop. Peter Cundill, who has one of the best 30 plus year records in the last 100 years, hand picked Tim as his CIO. The man that Buffett said is the type of investor he wanted for Berkshire, is the one who groomed Tim. The problem isn't the managers, but the short-term view many investors take. I would have no problem putting my money with Tim and betting on him for the next 20-30 years. In fact, my family knows that if something happens to me, put half the money with Tim and the other half with Francis. Cheers!

You must have clicked on the "plus/minus" sign on the side of the "General Category" bar. Look to your right, there is probably a "plus" sign that says "Unread Posts". Click on that and you'll see the sub-categories (BRK, FFH, General Discussion, etc). Click on one of those and you get the subject list for that sub-category. Cheers!

Well, to put it as plainly as possible, and perhaps it's a compliment, but he's a media whore. He markets the hell out of his name, brand and funds. So, is that a reason to dislike him...no. More distasteful than anything else. But I've heard from others, and my own personal experience, is that he's not the most amiable personality to new people he meets. Perhaps, because he meets so many, or perhaps because those people are less desireable if there is no economic incentive or something else to engage him. I don't know. There isn't another investment manager in the "value" community that I know of who has such a polarizing effect on people - The Sarah Palin or Maury Povich of investment managers? What do they say...if they ain't talking about you, then you're either dead or irrelevant. Cheers!

Sorry Alertmepip, what is the problem? I don't understand from the post. Cheers!

Why does he go on that show? Just so stupid. Cheers!

Just a bunch of his major holdings got hammered...Grupo Prisa, Resource America, Citigroup, General Growth, Iridium warrants, Winn-Dixie, Seagate, JC Penny, British Petroleum, Delias, Sears Holding, CIT Group, Howard Hughes, etc. Cheers!

Own. But all the eggs were in one basket, so you cannot compare the end result to the fund result, where the consequences, risk mitigation, limitations, etc are completely different. And that was my point to Moore, that you cannot look at results in a vacuum. So called "alpha" only cares about the final number, not how it was derived or the risk involved. Cheers!

I think when you get guys like Grantham saying things like that, it simply means they are as confused as everyone else about what they see. It's been a tough five years for investors, and maybe even a tough twelve years, and so people are rightly puzzled. Again, this just goes back to Ben Graham. Nothing that he taught would have been fundamentally different in either that five year or twelve year period. It would have worked for both, just like the last 75 years. Cheers!

I would like to see them increase it by 25% a year for the next few years. I would much rather see a large, consistent quarterly dividend, rather than a special dividend. I would also like to see share buyback like they've been doing over the last few years, as long as they are buying them back cheap. Other than that, some of the things they are trying are very appealing to me. I think Windows 8 may be a bit of a game changer, and the recent slew of patent acquisitions and deals with cellphone makers looks to be promising. Growth in their gaming business, along with the acquisition of Skype create some interesting synergies in what Microsoft's service offerings will be going forward. They won't dominate Google or Apple, but it seems as though Ballmer is giving Microsoft some longevity and the ability to steal market share from the non-Googles and Apples. Cheers!

Hi Ross, Great find! Thanks! I'll talk to Paul at Watermelon Webworks and see what we have to do from our end. It looks pretty good. Cheers!

Once I hear the word "alpha", I know I'm dealing with an ass, so I usually realize that there is no point arguing. My own investment in my company is up 4,000% over the last five years, so does that mean I'm suddenly a better investor than Buffett and provide more "alpha" than anyone else on the planet? Whatever Tilson is, and I've never liked the guy, he doesn't hide behind an anonymous blog username, posting on here and talking about how he knows so many guys who provide more "alpha." On the weekend, somebody asked Mohnish a question about "alpha", and he said "I've never bothered to learn much about the Greek alphabet". Say what you want about Tilson, McElvaine or whoever else. It doesn't matter at all. They live their life and run their businesses. They are in the public domain and accept any and all criticism. That's more than I can say about you Moore. How someone can compare the results of message board users, who aren't held in check by the same restrictions as fund managers, audit standards, redemption risk, frictional costs, etc and say that it is the same thing, just shows how little you know about comparative analysis. But hey, you know the guys with the most "alpha". Cheers!

Microsoft is increasing their quarterly dividend by 25%. Cheers! http://finance.yahoo.com/news/Microsoft-Announces-25-prnews-3511207044.html?x=0&.v=1

I know there are a number of boardmembers who play poker, and probably at Full Tilt Poker...ponzi scheme folks! Cheers! http://money.cnn.com/2011/09/20/news/companies/poker_ponzi/index.htm?source=cnn_bin&hpt=hp_bn5

How much leverage? How much concentration? How much in derivatives? How much insider information? Annualized or cumulative numbers by themselves tell you nothing about skill. Cheers!

Moore, did you even read about these guys. They are distressed debt guys, not equity managers. Cheers!

I'm talking about funds that are directly comparable to a specific index. Don't compare China or emerging market funds, or China-heavy, resource-heavy funds to the S&P500. If you do an apples to apples comparison...North American equity funds when compared to S&P500 Total Return, the numbers are about 0.5% of total managers beat by 3% annualized over ten years plus. There are plenty of "superstars" these days, and when you actually rip apart their portfolio...they aren't so super. Cheers!

I had dinner with Mohnish the night before the AGM. Just us and mutual friends. I did ask him one question that I thought I would share with the board. The question was, would he ever consider working for Berkshire or Fairfax? His answer: "Before I started Pabrai Funds, I sent a letter to Buffett, asking if I could work for him. He turned me down. That was the one place I really wanted to work, but it didn't happen. So if the call ever came, it would be like a call to arms and it would be my duty to serve. But other than Berkshire, I would probably not work anywhere else." Cheers!

I have a lot more respect for Mohnish than T2. If Mohnish had the contacts T2 had he would be managing 4-5 Billion (if he so desired). Tilson is a nice guy hes kind of like the guy at the gym that can tell you about all the exercises, the best way to do them, the history all that, but can't even bench press 100 pounds. This is incorrect. Only 0.5% of fund managers beat the index by 3% or more long-term (10 years plus), so out of 10,000 fund managers, you only get 50 that can do that. Of that 50, I would guess less than a third can beat the index by 5% annualized...so now you are down to about 16. Of that, a third can beat the index by 8%...so you are now roughly at 5. And of that, I would guess that 2-3 can beat the index by 10% annualized. Is it any wonder Tilson isn't in that group? But he is in that group of 50. I would actually say Mohnish's profile is as high as Tilsons now. If Mohnish wanted to, he could easily raise $3-4B, but he doesn't want to. He has a long waiting list even though the fund is not open. And if and when he gets the opportunity to put capital to work in a big, big way, he is going to open the doors and let them flood in, but many at that point may not be able to. He's happy doing what he is doing, and he likes his fund at the size it's at. Parsad is Munger an LP @ Pabrai Funds? Not that I know of, but if he was, Mohnish would not tell anyone outside of his family and staff. Cheers!

Why didn't you say hi? There were a bunch of board members there. Cheers!

Short, but interesting article. Cheers! http://games.yahoo.com/blogs/plugged-in/online-gamers-crack-aids-enzyme-puzzle-161920724.html

You're not alone. From the comments I've heard from people over the last couple of years, it seems as though Munger may have wanted to as well, based on those who attended a couple of his annual meetings. Cheers!

I'm the last guy who would defend Tilson, and he does ride a lot of coat-tails, but Mohnish had a very interesting comment this weekend at his AGM that everyone here should take a page from...especially all of those (guilty myself at times) of leveling criticism. Someone asked him what he thought about Gurufocus stalking his 13-F's, and he said that "I've always said I'm a shameless clone. So if they copy me, the more power to them. I think that's perfectly ok." Tilson may have his faults, but his results at T2 are good over the last 12 years or so. His partner Glenn Tongue is actually a really nice guy, and also does much of the research and analysis there, so he also deserves as much credit for running that portfolio. They've already said that this is their "annus horrible" so they aren't hiding behind any excuses. It's how people rebound from adversity that really makes the mark of a good investor or person. Prem had plenty of criticism thrown his way for a few years after TIG and C&F, as did Mohnish when he had his bad 18 months. Critics should probably give Tilson & Tongue a chance to prove themselves. Cheers!

[amazonsearch]The Great Crash of 1929[/amazonsearch] Superb book! I recently re-read it and you could easily substitute financial institutions, hedge fund managers and politicans from the last few years. One of the best books I've read on the psychology behind booms and busts, and how virtually every cycle is similiar outside of duration and depth. Cheers!

However, despite all the gloom, if I see a cheap stock I'm buying. Also, we are entering the stage now of trading existing holdings for better value or similar value, but higher quality. I find that very tough to do, but it has always been very rewarding. Yup. I agree. Finally, we have to ask ourselves what it felt like for a Japanese portfolio manager, investing in domestic stocks, over the last decade. Maybe something like this? For more than 10 years? Phew, that will wear me out. Frankly, I'm loving this. I'm completely at home in an environment when people are panicking...as long as I'm not the one panicking! ;D But the first five years of my fund has been an extraordinary learning experience. Not one year was similar to another...even 2011 is completely different than 2008. And the volatile years were incredibly volatile, which was something to watch in awe actually. Very interesting times indeed! Cheers!