Parsad

I was wondering if someone could help me understand. So, the expense ratio is 5.22%? Does that mean the annual returns are handicapped at 5.22%? I am just wondering because that seems really high for a mutual fund. The fee is presently high because the fund just launched and the assets under management is very low. As more capital comes in, that expense ratio will decrease until it is closer to any other fund. In the meantime, it looks like Francis is eating a portion of the cost for the early investors. Cheers!

Looks like Minkow will get his five years or less...I guess he lucked out! Apparently, the information circular for the charge lists a "Conspirator A" that Minkow worked with. Could it be the other ex-con that funded Minkow's FDI in the past? Enquiring minds want to know! ;D Cheers! http://www.bloomberg.com/news/2011-03-24/barry-minkow-is-charged-by-u-s-prosecutors-with-conspiracy-in-miami.html

More reserving issues at KFS, as well as other expenses. Cheers! http://finance.yahoo.com/news/KINGSWAY-ANNOUNCES-cnw-1533903973.html?x=0&.v=1

Nice answer Dazel! You are absolutely correct. Hamblin-Watsa would hire Tim in an instant. Peter Cundill did! Although it was after considerable badgering. ;D Incidentally, to tell you what this guy is like. He emailed me today and said that all his critics on this board are correct. I told him he was wrong, as most of you are, and time will prove me correct. 'Nuff said...let's revisit this post in three-five years! By the way, I remember alot of people telling me that Mike Pruitt would never close the Hooters deals at Chanticleer. Guess what? Good people are hard to find...good people with strong moral fibre are even more remote. Cheers!

Francis runs only the Chou Funds now. This was done a few years ago, because Fairfax is a large investor in the Chou Funds and he was a vice-president at the company. He remains one of the largest individual shareholders of Fairfax and has a close personal relationship. He's never sold a share since he bought them at $3. I'm sure on occasion they pick his brain and vice-versa, but Francis' sole occupation is running his funds. Cheers!

Also, while many of you sing the praises of Fairfax over the last couple of years, the idea behind the CDS's came from both Brian and Francis. While many have thanked Brian, it was also Francis who was very instrumental in those huge gains. And as Sdev said, if it wasn't for regulatory delays, the Chou Funds would have also bought CDS's. By the time he received approval, the prices had already started to climb. Cheers!

So since inception, his investors have netted about equal to an index of the largest 300 companies in Canada. What is so special about this value investor? Scorpion, I think this is the general "what have you done lately" argument that even value investors love to throw out. So three years ago, he was beating the market handily and three years later he's barely ahead. Now if in another three years, he's handily beating the market again, does that change anything? It's the same thing with Mohnish. Three years ago when he was destroying the market, investors were very keen on everything he was doing. Credit crisis comes and it's now the old "what have you done lately?" Haven't board members here learned anything from what has happened at Fairfax over the last seven years? Do you buy Fairfax at $600 when it is extremely overvalued and expect Prem to hit out of the park, or do you buy Fairfax at $57 when everyone says "what is so special about this value investor?" Cheers!

Soo... anybody care to speculate about which type/company they will buy? I think you guys should throw out quality, researched ideas and debate the pros & cons. Maybe a few of them will pique Fairfax's interest. Cheers!

I'm eagerly looking forward to it! Cheers!

I bring this up because you mention, on the Chou America thread, that Tim will always put his partners ahead of themselves. Did Tim change his fee structure in 2007 or so? His earlier fees look pretty high For example, in 1999, his pre-fee return was 38.5%, but after fees was 29.5. That's almost a 25% cut, and that's pretty consistent throughout all years up until 2007 (when it seems to change to a straight 1% management fee, which is what he describes in this report). Contrast that to the Buffett/Parsad/Pabrai structure of 25% after a high-water mark. Any thoughts? That's incorrect. Tim has always had a 4/10ths of 1% management fee on each fund, and then an incentive fee over a hurdle of 25% for the Trust and 20% for the LP. The hurdle being the average 90-day T-bill rate through the year. That was always the fee structure until termination when both funds merged in 2007 to form the trust. The trust has really three share structures...A, B & F. The management fee and incentive fees differ among them based on the hurdle (12% for the A's, 6% for the B's and 6% for the F's). There is also a high watermark. Cheers!

Half with Tim... who is he? Tim McElvaine...www.mcelvaine.com. Yes, I know I'm going to hear about how there are managers out there with better results than Francis or Tim. I've heard it all before! The one thing I know is that both Tim and Francis will always put their partners ahead of themselves. Unfortunately, if I'm not around, for my family's sake, trust and ethics are more paramount than how much so-called "alpha" someone can generate. They will both beat the markets long-term, and my family's money will be safe. They will be able to sleep at night because Tim and Francis are looking after their capital. And wherever I might be, at least I will know they are in good hands. Cheers!

As a shareholder, it will be interesting to see a bunch of board members make acquisition decisions. Remember, that the head of the board of directors for the next 20+ years isn't someone who just spent a few years assisting on the board of The Gap and Yahoo. It's friggin' Bill Gates! The guys who is like a son to Buffett and just happens to have been the richest guy in the world for the bulk of the last 15 years. I get the feeling that Buffett is trying to make this company "idiot" proof. In other words, the businesses will be so good that it will be tought to screw them up. Yup...exactly! So much money will be consumed by the likes of BNSF, MAE, Clayton, Netjets, etc. that acquisitions will be few and far between, and investment capital will come slower to the future managers. Sokol will watch the operating companies, excluding insurance, and will be given the CEO title. Jain will be made COO of the insurance companies...where he's happiest and is allowed to just continue doing what he is doing. Todd Combs and the other future investment managers will continue to invest capital. Howard Buffett will be the figurehead Chairman. Bill Gates will run the board with the other long-time friends of Berkshire. How can you really screw it up? Cheers!

Good stuff! Interesting, it looks like Tim's had some redemptions in the last year...contrary indicator?! Cheers!

I agree. The circle you run in does indicate something about you. Cheers!

When friends ask me to manage money for them or give them suggestions Chou is the only one I recommend. Sorry Sanj, the amounts are too small for you to bother with the paperwork... No worries Al...I do the same! ;D Even my family knows that if I get hit by a bus tomorrow, hold the Fairfax shares and put the rest of the money...half with Francis and half with Tim...regardless of what happens in the stock market, don't worry and don't sell unless you really need the money. Cheers!

I still think Buffett's job will be split. Jain will head all of the insurance divisions and Sokol would head all non-insurance operating businesses. Whether Sokol or Jain gets the CEO title is moot, as both will be running different divisions. The board would make all the other decisions...investment managers, acquisitions, etc. along with input from Jain & Sokol. Cheers!

Is there any way I can find out if Francis Chou has his own money invested in the fund, and if so, how much he has invested? Is this required to be filed? Has anyone seen it in anywhere? Thanks, In the notes of the Chou Fund's annual report, it is stated that management, directors and officers do invest in the funds from time to time. Dollar amounts aren't given, but I'm quite certain Francis eats his own cooking. Cheers!

What I expected to happen. Cheers!

In general, accountants exclude to an extent company fraud from their "scope". So add all this up, and with a little luck you can screw your shareholders or partners or whatever. This is not correct. All public companies (or companies that issue debt securiies), through the accountant and auditor have to implement SOX controls, including fraud prevention. Not only that, they need to have full disclosure and documentation on their executives, directors and key personnel, as well as documents on their website describing their corporate governance policy, whistle-blowers policy, confidentiality, etc. If those controls are not in place, then the auditor, along with the CEO, CFO, controller and audit committee are fully culpable in the fraud, as they are required to make sure properly designed controls are in place. As I said, it is complacency and lack of due diligence by all parties involved. Cheers!

No, that's what I mean Bronco. Did both Madoff and Parmalat have fake numbers, contacts, etc set up? Like, how does this occur with such expansive forgery and fraud, and no one catches on after so much time and such large sums...not the auditors, not the investors, and definitely not the security regulators and lawyers. It's just unfathomable! Cheers!

Reminds me of Parmalat (I believe) where the company just made up a bank account in either word or excel. I don't understand how that happens? Doesn't the auditor actually contact the institution? Our auditors actually contact Morgan Stanley Smith Barney and request all of the account documents directly. Did they have fake phone numbers that the auditors contacted, or did the auditors not even attempt contact? Just basic due diligence that is absent. Cheers!

Holy smokes! How is that possible with someone managing such a large sum of money? So many people were unaccountable. Nuts! Cheers!

Look what I started! It was just a typo by Jim. He probably meant $348 or $358. Cheers!

Nice little background story on attorney Mary Ann Todd, who handled the Lubrizol deal for Berkshire Hathaway. Cheers! http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202486901816&Dealmaker_of_the_WeekbrMary_Ann_Todd_of_Munger_Tolles__Olson&slreturn=1&hbxlogin=1

Good article on how Goldman paid Berkshire dearly, while they got a pretty terrific deal from taxpayers. Cheers! http://www.businessinsider.com/buffett-tells-country-tarp-gave-over-1-billion-to-goldman-sachs-2011-3