Parsad

LOL. What ever happened to the woman in the big hat who used to invite board members to call her so she could show them a really sweet place where they could deposit their assets? I like to mix it up! ;D Currently it seems as though the Groupons, Living Socials and Wagjag.com's are dominating. Cheers!

Well said Partner! I couldn't agree more. I hope that's the type of culture we've tried to develop here. Cheers!

Don't get me wrong Myth. For the most part, the accounting system does its job. But there is plenty of room for error and opportunity for unscrupulous people. I rely on those numbers too when looking at companies, but that's where we all have to really dig in and look where we could get screwed, and then create a margin of safety for those possibilities. Cheers!

Quick question? Why are you auditing the financials. Auditors are paid adequately (though not enough) to do that. Why not let them worry about the ticking and tieing and focus on the analysis? I've caught alot of stuff over the years that the auditors have missed on various companies. One of the main problems is that you've got CA, CPA students conducting the audit with a senior audit manager monitoring them. Alot of times the senior manager assumes that the consolidation review that the student has done is correct, but unless the manager does the same review, they won't know for sure. The CFO is assuming that the Controller, who does the bulk of the consolidation work and creates the continuity schedules did it correct. The CFO reviews the work and makes valuation adjustments on fair value items and puts together the Notes and MD&A, making sure that the Controller has maintained all internals controls during the accounting and consolidation process. The CA student reviews the work of the Controller and CFO. The senior manager reviews the work of the student and overall financials. Then it goes to Partner Review who is trusting that the senior manager and student did the proper due diligence. That's alot of room for error...thus you get regular restatements by companies. Cheers!

I like Pittsburgh.. YES Pittsburgh.. they really love their hockey and gave me mad respect when i was their with my Leafs Jersey on. I was told if i wore it in Philly I would have eggs on it. Smazz, if you had eggs on your Leaf's jersey in Philly, would it mean they were rude...or they just have taste! ;D Cheers!

Actually Philly is one of my favorite cities in North America. I stayed there for a few days a few years back, and had a great time. I was just amazed by the history. Coming from the West Coat, where most of the cities have relatively less established histories, it was very fascinating. No offense to New York, but I really like Chicago and Philly better. Chicago...I could live there no problem. Just a fantastic city! Cheers!

I'm just having fun with this BTW but a little controversy wouldn't be such a bad thing. You Philly guys are such muck-rakers! ;D By the way, the board only works because of everyone's inquisitiveness and participation. I purposely chose not to allow ratings on this board, because I think all participants, at any given point of time, have worthy comments that they can share. Cheers!

According to the webcast, they expect a 5% hit to revenues during the penalty period...anywhere from 2 weeks to 6 weeks probably. The prime broker case is set for December 5, 2011 against Goldman Sachs, Merrill Lynch and Bank of America. Cheers!

The CEO of JOE has resigned and Berkowitz has won. Also, I guess Einhorn has lost! Cheers! http://www.bloomberg.com/news/2011-02-28/st-joe-ceo-to-leave-as-fairholme-s-berkowitz-succeeds-in-board-shake-up.html?cmpid=yhoo

I think net income came in lighter due to retailers dropping prices towards the end of the 4th Q. Patrick had said in an interview that they chose not to participate in that and their sales would come in lighter, but they were more profitable on a percentage basis. I don't think the Google issue will be too bad. It was a slap on the wrist by Google, punishment short-term and over time their rating will go up again. Probably nowhere near the top, but also nowhere near where they've dropped to. They'll just have to make sure their search engine optimization is from other sources, rather than some of the ones they were using. Cheers!

If BNSF earned $2.5B in 2010 and Buffett expects to invest $2B in capex in excess of depreciation in 2011, BNSF will only contribute $.5B in actual free cash flow for 2011 (plus any increase in net income)? Am I missing something? Will the capex earn a decent return or is this the price to continue to operate? Alice Schroeder had a very good article on her blog...there's always a first time...in which she discusses how regulated businesses generally have a guaranteed return on capital due to their rates being regulated. So much of this capital at MAE and BNSF over time will be consumed, rather than drifting into the hands of future investment managers, and Berkshire will receive a reasonable return on that capital reinvestment over time. Nothing fantastic, but a reasonable, assured rate over the long-term. Cheers!

Indeed, it was Greenwald, the author of "Graham, Buffett and Beyond" that said "Buffett has lost his mind". May be he will have the courage to come forward and apologise. Well, I think Greenwald was just overly excited over the deal...in a negative way. As I said then, we won't know exactly how good this deal was for some time. Most of us felt Netjets was a good deal, and it really wasn't. It has potential now under Sokol's watch, but that is ten years later. BNSF was a $44B deal, for a company that earned $2.5B in 2010. That's a decent price for such a business with its competitive advantages, but that's not a great price. And that's part of the problem...the great deals will now be few and far between. Berkshire shareholders will have to be satisfied with above average returns. As long as they don't fool themselves, that is perfectly fine and better than the respective indices. But it won't be anywhere near what Berkshire did in the recent past, and definitely nowhere near the heady days of Berkshire's history. It's just not possible mathematically any longer. Cheers!

A steady dividend might unravel a great deal of Buffett's efforts to attract business oriented shareholders. Possibly. I would think that Michael Jordan is still a pretty decent player at his age...making up for his physical deficiencies by his understanding of the game. The same analogy is probably true of Buffett...he's aged, but he's better intellectually at what he does. Now how does Jordan's intellect make up for his physical deficiencies if I ask him to play with a 50 lb. medicine ball, while Kobe Bryant plays with a normal basketball? Heck, how does Jordan compete with that medicine ball even against Chris Bosh? Buffett is now playing with one heavy medicine ball! Let's examinine the final 10-year period that Buffett uses in his letter this year...2000-2010. In 2000, Berkshire had total assets of $136B and equity of $62B. There were plenty of public companies that were larger than Berkshire in 2000 by equity...27 American companies to be exact. In 2010, Berkshire had total assets of $372B and equity of $163B. Only 6 U.S. public companies had more in assets at the end of 2009, and only 3 U.S. companies had more in equity! Berkshire has to look abroad now, because there is no choice. Buffett now has to also seek out more large private companies globally as well. A dividend now isn't just a realistic business option for Berkshire, but is more and more looking like a very rational solution. It would also aid the charitable institutions that Berkshire has endowed with its shares. Those foundations are required to distribute 5% of their assets that are in Berkshire stock. If a 5% dividend were paid by those shares, it is likely that the Bill & Melinda Gates Foundation et al, would not have to sell those shares. Berkshire would still retain the rest of their earnings and would be able to grow intrinsic value without harming any of its subsidiary businesses or its credit rating. Again, I'm not suggesting that they necessarily pay a consistent annual dividend...only that they should now consider paying one based on each year's performance and retained earnings. It would also alleviate the pressure on the future CEO and investment managers, because they will not be able to allocate that capital as well as Buffett. It would be very unlikely, as he is the best there has ever been and large sums are an anchor for him now too. Cheers!

Personally, I totally get Buffett and I'm of the opinion that perhaps it is time for Berkshire to start paying a small dividend. The reason being the obvious...the company is really enormous now, and to move the needle is going to take one gigantic move each time. The Berkshire acquisition letter states they are interested in businesses that earn $75M pre-tax. That won't do anything now. A $75M pre-tax acquisition is something Marmon would look at. That's too small for MAE and GenRe now already, let alone Berkshire in its entirety. I'm not saying pay a consistent dividend each year, but Berkshire should look to do what Fairfax has done, and pay a dividend based on the last year's performance and increase in intrinsic value, and the amount of cash in the holding company. Some years that will be big, and some years it will be small. But setting this precedent now, will make it easier for any future CEO to continue the process without any real shareholder revolt. Just like hiring Todd Combs now, rather than leaving it to the board to decide after Warren and Charlie are gone. Cheers!

I think this is the first year in many, where he's given a fairly concise view of Berkshire's intrinsic value. A terrific letter that discusses the business more than anything else. Cheers!

For all of you guys who held onto the 14% debentures that BH issued from the Western Sizzlin acquisition, BH will be buying them back on March 30th at par value plus accrued interest. You will get $1,035 for every $1,000 of face value. Cheers! http://www.prnewswire.com/news-releases/biglari-holdings-inc-news-release-116682134.html

I take back by critique Treasure. Perhaps, adding him is the best thing Citi could have done. Although I still have a hard time with anyone who makes predictions out to 2050. Cheers!

Yes, I think this is will only lead to good things. Both are high profile value investors, who do alot of community work. Both love to teach. I think there will be a void left after Buffett passes at some point, and these guys along with others including Klarman et al, will help fill those enormous shoes. Cheers!

The chief economist at Citigroup has made some startling predictions by the year 2050! Unfortunately, he didn't see Citi's own future between 2005 and 2009. These guys always crack me up. Cheers! http://www.cnbc.com/id/41775174

I'm sure there are other surprises in store! Maybe Mohnish will be an addition to Hamblin-Watsa in the future? I think that has great potential for all parties. Cheers!

Prem is now on the Advisory Committee for Dakshana! What next? Are these two going to show up with court-side seats at a Laker's game together! ;D Cheers! http://www.dakshana.org/about_us/profile.asp?Type=Advisory Board&ID=61

The same thing happened to JC Penny as well. Cheers!

Berkshire's Letter and Annual Report will be out at 8am EST this Saturday. Should be terrific! Cheers! http://finance.yahoo.com/news/Berkshire-Hathaway-Inc-News-bw-3005051648.html?x=0&.v=1

I cant quite resist, this. What is with all the macro-economic stuff on this board again. You're so right Al! Just last week I made fun of some board members and all of the macro-talk. You set us straight! Now what's the over/under on Fairfax's market price at December 31, 2011? ;D Cheers!

I agree Partner. We're not betting on it in any way, but we just can't see any other outcome going forward for a few years either. Cheers!