Parsad

The whole thing - BH, BCC and operating subs look convoluted even with Biglari stating otherwise. I agree. I also think that there is an inherent conflict of interest in the Lion Fund holding BH, while the parent is a limited partner. Combine that with the distorted view it gives under US GAAP. Also, is the investment as a limited partnership an ACTUAL investment, or is it simply to retain control of a large amount of shares? Will more cash be funnelled into the Lion Fund by BH over time as a limited partner? Will the Lion Fund continue to buy more shares of BH in the open market as an "investment"? Incredible results, look at the free cash flow, astounding. Company still looks undervalued even at these prices because there's nothing to suggest that Biglari is slowing down. Not cheap by any means. It's fairly valued, even with Sardar at the helm. You are paying over 20 times earnings, 10 times free cash and nearly two times book. Add in the fact that intrinsic value per share has now decreased going forward, based on the new compensation package that will kick in. With that package, fair value drops significantly...especially the longer you hold the stock and the better he does! He continues to write very well, and the continued ideas at SNS will help, especially the lower build out costs for franchisees and operating cost containment. No comments on Fremont tender. The compensation discussion was a real cop-out! - He comments that there is no need to change your attitude on compensation simply because you've changed the structure of the entity...but unfortunately there is a real difference...the capital is permanently locked in. - On top of that, you can issue as many shares as the market will bear, so that you have access to more capital. - Fundamentally, he now has a very accessible form of capital to utilize and receive his hedge fund compensation, compared to what would have been achievable at the Lion Fund. At best, he has significantly compressed the time frame needed to achieve the same compensation, since he would not have been able to raise $300-$400M in the Lion Fund so quickly. - Also, no comment that the 82% vote had no bearing on the compensation package, but only on the tax treatment. Cheers!

Still working on the details. I will post an update early next month after everything is arranged. Cheers!

When looking at a lot of Internet companies like Overstock, Amazon, NFLX or TravelZoo, I could not help but wondering where all the optimism came from. To me, many of the growth projections are just too unrealistic and the multiples are outrageous. I would have to disagree with you here on Overstock. Based on price to sales, they are selling at a fraction of what Netflix and Travelzoo are selling at, and about a sixth of what Amazon is selling at. If you get the incremental improvements in net margins that I expect at Overstock.com, then it is selling for a modest price compared to its growth...and immensely cheaper than the competition. I think after the 4th quarter and 1st quarter 2011, you'll get a better picture of Overstock's model. Cheers!

I wouldn't worry. Prem's ultimate goal is to be proven right, not monetary...that's just icing on the cake. If SAC is the target, and the government runs them out of business, I don't think Fairfax will be heartbroken that they didn't get a settlement or award. Cheers!

More links to SAC in the government's investigation, but limited cooperation. Cheers! http://finance.yahoo.com/banking-budgeting/article/111533/new-players-ties-surface-in-trading-probe;_ylt=AvJLB8bymo9sqA4gUTv45Zy7YWsA;_ylu=X3oDMTE1ZnNiNDBwBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawNuZXdwbGF5ZXJzdGk-?mod=bb-budgeting&sec=topStories&pos=3&asset=&ccode=

Sure has missed out on a lot of the gains in the market. Sold out the kids account in June at little over 402, to insulate their account a little from the massive hurricane season forecast . Bought back in today at a little under 399. It's not easy being a FFH convert. I wouldn't worry about it too much. They were wrong for a long time before they were proven right on the credit default swaps and "1 in 50 year storm." In this business, you often are going against the grain and that's the only way to preserve capital over the long-run. I suspected they would be wrong in the short-term, and Prem expected as much from statements he made in the media...there is only so much you can do when governments around the world are doing everything in their power to lower interest rates and spur asset inflation. But Prem looks out 5 to 10 years, not one or two years! They should be able to increase book value at a reasonable rate simply from their dividend/interest income and organic growth in the insurance business. The Lollapalooza effect comes into play when they get a signficant opportunity to invest in undervalued securities. They will face some volatility in the stock price until they can exploit such occasions, and it will be tough for the stock price to outperform the market when people are so optimistic. But the consensus is often wrong longer term, and I don't expect things to get easier as governments run out of ammo. At some point, the system has to cleanse itself and the piper will be paid...be it through a protracted stagnant economy or severe volatility. In general business is improving, but frictional costs to do business will increase and similar costs are going to hit the average consumer. Any inflationary costs will also ultimately be passed down to businesses and then consumers. No easy way out, and that's what Prem expects. Cheers!

Very good article on Buffett and his bridge partner, Sharon Osberg. Cheers! http://magazine.wsj.com/people-ideas/partnership/like-a-marriage-only-more-enduring/

It's paid for by the ads you guys all complain about! ;D Glad it's working faster. Cheers!

I've gotten my internet service provider to move us onto their grid system, so you should see some improved performance in accessing the board. Let me know if your experience has improved over the next couple of days, when compared to the past. I know that sometimes the server was slow for some members. Cheers!

This topic has been moved to Investment Ideas. [iurl]http://cornerofberkshireandfairfax.ca/forum/index.php?topic=3195.0[/iurl]

In regards to ValueCarl and Brkerguy, I can attest that they are diehard "3" shareholders. I know ValueCarl, and I promise you that he has no intention of moving the stock, as much as he would love for it to shoot to the moon. ValueCarl is not an easy pill for some to swallow, but he knows "3" inside out. I think the executives at LVLT would attest to that! ;D That's why I've let them run on the thread. What I will do is move this thread to the "Investment Ideas" board, rather than "General Discussion." Boardmembers would do best to ignore long discussions they may not be interested in, but at the same time, I cannot stop individuals from discussing a company that they are very fond of...unless there is something offensive, at which time I will remove the post or individual. Cheers!

Not sure if it will be quarterly or one time, but Leucadia has announced a 25 cent cash dividend. Cheers! http://finance.yahoo.com/news/Leucadia-National-Corporation-bw-737721987.html?x=0&.v=1

The U.S. Governments direct enforcement crackdown targeting fraud has led to 343 cases! Cheers! http://www.theglobeandmail.com/globe-investor/us-fraud-sweep-nets-343-cases/article1826735/

One important note: If a ticker already exists, please do not start a new thread for a company. All duplicate tickers will be removed and you would have wasted your time posting! I don't want the board inundated with the same ticker symbol. By having one ticker symbol per company, we also form a comprehensive archive or database of posts for that one company. Anyone wanting to research that ticker, only has to look it up once and not do a separate search! All you have to do is click on the "subject" tab and the ticker's will be alphabetical. You can easily see if a specific company already has their ticker on the board. Thanks! Cheers!

Fairfax is acquiring a Malaysian insurer. A few years ago, I said that Fairfax will be the new AIG...global breadth and reach in their insurance operations. With a better culture and risk profile. I can think of very few insurers who now have the network they do, and this thing will grow organically for many years to come! Cheers! http://finance.yahoo.com/news/Fairfax-to-Acquire-Malaysian-iw-3374072940.html?x=0&.v=1

I know that there are alot of people who think Patrick Byrne is crazy, but I'm absolutely flabbergasted that CNBC would publish this article. What exactly are they saying? Why would a news outlet write such puerile opinion? How sleazy and corrupt is CNBC? I hope the Justice Department somehow can subpoena CNBC (I know that they can't, but I can wish) to release emails. Absolutely mind-boggling and every time Buffett goes on there, I lose a tiny bit of respect. I can't even imagine Bloomberg doing this. Nuts! Cheers! http://www.cnbc.com/id/40495261

Al, you are correct! Buffett, Prem, Francis et al, have years of experience and a significant base of knowledge. Oldschoolsting was asking about reading 10-K's and he said he has been doing it for only a year. People were suggesting that there are shortcuts for him, but there aren't. You have 25 years of reading Fairfax Annual Reports, so if you see Fairfax trading at a certain price, there is no need for you to flip through the annual report to decide if it's cheap. For a new investor, it is absolutely imperative to read 10-Q's and 10-K's thoroughly. Over time, they will build up a significant database of knowledge for various companies, that they will be able to access in a second when making investment decisions, but it takes time. I read alot of 10-Q's and 10-K's, in particular for companies that are new (or newer) to me, but naturally I don't have to dig in as deeply for companies I know very well. So for those that have been at this for some time, yes you can be signficantly more efficient in your decision-making, but for newer investors...no shortcuts, otherwise you lose money! But even for experienced investors, digging in through the financials is still very important. Little disclosures such as derivatives, hedges, counterparty risk, legal actions, etc, suddenly show up for businesses you might have thought you know very well and were completely up to date on. Preparation and research never hurt. Cheers!

And in case anyone was still wondering after I described what happens at Hamblin-Watsa. From tomorrow's Globe & Mail, Prem comments: To improve their guesses, the Fairfax team studies hard. “We’re all research analysts,” Mr. Watsa said. “That’s what we consider ourselves.” Amen to that! Cheers!

For those of you wondering why Deepcapture has been relatively quiet the last couple of months, it's because they've been preparing a huge story that will be as comprehensive as the one they did on Dendreon. They comment on it, as well as the recent investigations of insider trading. Cheers! http://www.deepcapture.com/michael-milken-redux-indictments-on-the-horizon-for-sac-capital-and-others-in-its-destructive-hedge-fund-network/

Very good interview on Benzinga with Patrick Byrne. He really lays it into Cohen, Milken, Cramer, etc. Alot of the stuff he said in the past about Cohen, which he was ridiculed for, is coming out in the recent investigations. It will be interesting to see how this all unfolds. Make sure you listen to the podcast, which is at the top of the article. The mic is a bit shaky, but the transcript leaves off alot of stuff, and doesn't really give a good idea of the context of many comments. Cheers! http://www.benzinga.com/life/movers-shakers/10/12/663509/the-naked-truth-patrick-bryne-ceo-of-overstock-com

I would agree! He ranked ahead of Jim Sinegal, CEO of Costco, who is well-known for his leadership. That's pretty impressive! Cheers!

Forbes Magazine has ranked Overstock.com the best retail employer. "Tin-foil hat Byrne", as some of the degenerate hedgies like to call him, was also the top-ranked CEO in retail by the employees! Cheers! http://www.forbes.com/2010/12/02/best-retailer-employers-leadership-sales-leadership.html?partner=yahootix

I find it amazing that WEB doesnt read analyst reports. While I dont rely on them I still find that sometimes there are nuggets of information in them that is sometimes useful. Who says he doesn't read them? He doesn't make any decisions based on them, but he reads them when he's looking for something in particular. I'm sure he does. I know he's read Alice's analyst reports over the years. And he reads the reports of certain analysts he's favored in the past...thus the Korean stock handbook he received from that one analyst. Apart from annual reports and company presentations... does anyone read outside the subject matter? For example trade publications. Does anyone read, for example, other monthly subscriber publications from the 'gurus' out there? I read anything I can get my hands on, thus the reason I don't have alot of time to read books. And if I can get them free...the better! ;D Alnesh subscribes to a bunch of magazines that he never gets around to, so he hands them off to me. I also read all sorts of accounting trades, and mining industry trades, even though we don't invest in commodities. Build a complete base of knowledge...even for industries you don't invest in. That also keeps me from getting bored as well! Cheers!

Very good article on how Prem managed SickKid's endowment through the downturn and upswing. Cheers! http://www.theglobeandmail.com/globe-investor/how-prem-watsa-turned-sickkids-portfolio-around/article1821322/

I would be curious to spend a week in Prem's (or anyone from H-W's) shoes to see his/their process. I've seen what they do, and when I tell you that you need to read financials, you really do! ;D Hamblin-Watsa's analysts tear it up. You should see their desks. They are covered with reports, newspapers, analyst reports, you name it. I remember Wayne Cadawallader's desk, and it was covered with reading material...there was no place to put a cup of coffee! These guys do the grunt work tearing everything apart. If you think you can consistently find good ideas without doing the work, you are fooling yourself. Eventually you will make mistakes that will bring down your batting average unless you put in the work. And guess what...the investment committee all do the same! Whether it's Prem, Brian, Sam, Chandran, etc, you will find stuff on their desk. They are busy in meetings, but they do the grunt work too. It's just that they've done it for such a long-time, they develop a very good base of knowledge. Prem's desk is messy...he's got so much on the go, and he reads alot himself. He's got a ton of papers, books, etc on there every time I've seen it. You should ask MrB exactly how hard the analysts work! They are on the road alot too, visiting various companies. They do the work, and that's why their numbers are so good. You can't have one without the other. There are no shortcuts! Cheers!