Parsad

MrB, thank you as always for getting the info for everyone. Cheers!

No, I'm sure some journalist who used to write all these negative articles about Prem and Fairfax, will one day write a book about how brilliant he is and that he is really the heir to Buffett's mantle in insurance and leadership. Maybe Fabrice Taylor or Peter Eavis will write it! ;D I still remember the first time I met Ajit Jain in Omaha at the Berkshire AGM around 2004, and I mentioned that I was a Fairfax shareholder. We were talking about how he and Prem went to different IIT campuses, and how they met through the insurance industry, when a Wall Street suit standing nearby with a group said, "Oh yeah, Fairfax...isn't he in trouble!" Ajit barked back at the guy..."Is he IN trouble, or is he OUT of trouble!" The guy shut up. It was an awfully tough time for Prem and everyone at Fairfax. They know how many loyal shareholders stood behind them and supported them. That's why they always support our Fairfax dinner. He's always polite to everyone, even the guys who said he was a bum, but he knows...he knows who said what, and who trusted him. That's why he listens to all of you guys when you have a question. That's what a great leader does, and one who treats all his shareholders the same way he would want to be treated. Cheers!

No, the restatements were legitimate, but the media and hedge funds blew it out of proportion. They were mostly related to treatment of currency translation between subsidiaries. There was a lot of negative articles back then about the use of reinsurance as well. Many of these hedgies, Chanos being one and ICP another, accused Fairfax of using reinsurance to hide losses. But they never did. They legitimately used reinsurance to protect the company...for example, the $1.2B coverage with Swiss Re against the TIG acquisition. It was all on the up and up, but the hedgies (again, such as Chanos), Herb Greenberg, Peter Eavis (the man who wrote over 60 articles on Fairfax in a year, and then subsequently ran a tax-sheltered church), Fabrice Taylor (the man who bankrupted "Frank" magazine in less than a year...talk about laying an egg), and many others, made it look like Prem and Fairfax were cooking the books. Fairfax was only guilty of making a couple of bad acquisitions, being too leveraged and the company was too complex for most analysts and investors to fully grasp. Since then, they've turned around the acquisitions, simplified the company structure, backstopped their runoff business, strengthened their balance sheet enormously, reduced leverage dramatically, and protected shareholders from a 1 in 50 year storm. Now all they have to do is hammer these bastards in court! Cheers!

The medal of freedom is also going to Dubya's father, and former president, George H.W. Bush. Cheers! http://www.bloomberg.com/news/2010-11-17/buffett-to-receive-presidential-medal-of-freedom-highest-civilian-honor.html?cmpid=yhoo

Yeah, I guess the optics of that look funny. Cheers!

On a different note - It seems Obama is granting Warrent the medal of freedom - whatever that means. Would anyone here deny that Buffett sets the standard against which all other executives should be judged...both economically and ethically? He's donating the enormous pool of capital he's accumulated over his lifetime to charity. He spends considerable personal time with business students. He's encouraged other wealthy individuals to commit to donating their wealth. Many of the millionaires and billionaires he's created, have given back enormously to their community. He's inspired hundreds, if not thousands, of professional money managers who have accumulated wealth and given back. I think he's a worthy recipient...not just from what he's done, but as a role model for any good citizen. Cheers!

I don't get Buffett's rationale for the op-ed. The policymakers don't need more praise; they need more advice from a wise man. I also agree with that. Rather than him write these pieces or show up on CNBC every month, I would rather he take a more aggressive and poignant position where he forces government to listen to him before intervention is necessary. It would have been nice if someone had actually listened to him on derivatives years ago, and created a central clearing house for them, as well as put the kibosh on the more intricate structural products that were subsequently created. It would have been nice if regulators had listened to Munger years ago, and forced banks to focus solely on lending and deposits. Cheers!

Bernanke, along with Greenspan, led to the mess in the first place, so I'm not sure about the accolades Bernanke gets, but Paulson, Geithner and Bair all did a great job. Taxpayers not only will get their money back from TARP, but it looks like eventually the money for the auto companies and AIG will also be repaid. Steps taken to reform financial institutions, stabilize the banking system, enforce new SEC regulations, refinance the FDIC with injections from the banks...all are positive steps. Were there mistakes? Of course. But this isn't a perfect world and things were moving so damn fast at that time. Buffett is right, and I think he's been 100% correct through this whole debacle. He was dead on years ago when he wrote about derivatives. He was right about Fannie Mae and Freddie Mac. He was right about the credit markets seizing. He was also correct on the effects of the trade deficit. If his reputation is fading, I would hate to see whose reputation is rising! Cheers!

Netjets will offering direct financing for commercial clients. Cheers! http://www.bloomberg.com/news/2010-11-17/buffett-s-berkshire-to-make-loans-for-luxury-jet-customers.html?cmpid=yhoo

I'm sure the last year and a half has resulted in Chanos retracing his historical returns from shorting! Oh, but then again, he's providing negative correlation to the indices for his institutional clients in return for those fat fees he charges. Cheers!

Ha, ha Bronco, very funny! Pittsburgh and Washington will kick your butt in the playoffs. And we'll play one of them in the finals. 40 years and no cup! This is our year baby...Vancouver all the way. Cheers!

Yup, that is notional value of out of the money puts. The actual dollar amount is nowhere near that amount. Cheers!

That can't be right! Must be a typo. Cheers!

Well, actually a few more changes than I might have mentioned! ;D Cheers! http://uk.reuters.com/article/idUKN1527533220101115

Not alot of changes. Did add a little more WFC. Cheers! http://www.sec.gov/Archives/edgar/data/1067983/000095012310105654/v57789ce13fvhr.txt

No, he filed last quarter, so I suspect he sold his position. Now he can come to the Fairfax AGM! ;D Cheers!

I do sometimes wonder, with Bill Gates as Director of BRK, why they don't take this sort of action more seriously. Surely Gates gets value investing and allocation of capital to durable businesses after being so close to Buffett.. why not apply this model to MSFT? I really don't know. I wish all these guys on CNBC, Charlie Rose, etc would ask that question when they interview them together. If the Gates Foundation's goal is to provide the most amount of money to future programs for the next 30 years, then would it not make sense to put that capital to work in businesses that will be around for the next 30 years? That goal would not be contrary to the interests of Microsoft shareholders. The present bang for the buck may be a bit less, but the long-term bang would be considerably more by moving excess operating capital to non-technology related businesses with durable competitive advantages. Cheers!

I can't recall is it BV/share, BV or ROE they target at 15%? It's 15% ROE they've specifically mentioned, but I think the assumption is 15% growth in book value per share for all the shareholders. Assuming Fairfax manages risks adequately, and writes about 100% combined ratio, all they have to do is get 6% on that $22B and hit their target. That's a far cry from what Longleaf has to do. If I had to bet one way or the other, I don't think Longleaf will do 13-17% (mid-teens) long-term going forward on the size of asset base they are managing. Cheers!

Todd Combs sold off his positions in BlackRock and Leucadia National. Cheers! http://www.thestreet.com/_yahoo/story/10921045/1/buffett-protg-dumps-blackrock-leucadia.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

I don't buy Apple products because they're cool. I buy them because they simply work better; I can get my stuff done quicker, more reliably, and more easily. The hardware is easier to deal with. Mac OS X being UNIX under the hood is also a bonus for me. Cool is just a small bonus after all that; if I could run OSX trivially and legally on non-apple hardware, I would. I think there are two separate "cult-like" groups that buy Apple products: One group buys them because they DO truly work better than Microsoft products, as well as most of the competition. The other buys it because the products are cooler, more stylish and make people's lives better. I have to say, my two previous phones that operated with Windows and Office mobile, sucked compared to my iPhone. When it first came out, I thought that the competition would catch up to the easy to use interface, and that cheaper competing products would become available. I was wrong! Over five years later and the competition still can't get the same feel, so about six months ago I finally relented and bought an iPhone. It's fantastic! Head and shoulders above the competition still. Syncing, updates...so easy. And guess what...it hasn't crashed, nor have I had to reboot or do a hard reset. Finally something that works without ever crashing! Cheers!

Ballmer should have just beat Buffett and acquired BNSF! ;D Really, their excess cash flows need to be put into other businesses. They will make some further inroads with Kinect, cloud computing, their phone, and continued updates of Windows, but for all intents and purposes, they should be looking at other, more durable businesses. Businesses where they sustain their economic advantage, rather than come late to the party in areas where it will cost a fortune to take market share away. Cheers!

Parsad, I've been a Markel shareholder for 18 years and have personally met the Markel's. When you say they have the expertise, who specifically are you thinking has this? Thanks if you can reply. Forget Steve, Tony, and Tom...they built it and they can run it fantastic themselves. But take a look at the promotions they've made over the last few years. Listen to the conference call and hear the terrific people they've brought on board. Their team is smaller than Fairfax's or Berkshire's, but they are talented and it seems as though they've been given the opportunity to learn about all aspects of Markel, not just any specific area. I'm surprised by the depth of knowledge of everyone on their team. Cheers!

When was the last time they did anything impressive enough to trade at ANY premium to book value? I would carefully watch what they do with Markel Ventures. It is getting bigger, and they will put more capital into acquiring private businesses for a long time to come. People ask about companies that do what Buffett does...well here is one that has, and they continue to evolve the process. They have the expertise, investment acumen and operational skills to pull it off. They also have the correct fundamentals in all of their actions. The large premiums to book weren't appropriate in the past based solely on the insurance business, but it will be warranted over time as more quality, private businesses come under the fold. Cheers!

That's kind of a crock! Fairfax has only $3.5B in equities and $22B in investments. Assume that their equity portfolio falls 50%...ignoring the fact that it is hedged...the investment portfolio would still be at over $20B! - Now if the markets are down 50%, do you think going forward Fairfax's risk profile is better or worse? - Do you think that going forward they would be able to recover that $1.75B in equity losses? Surpass it handsomely? - Would the drop in equity from $8.9B to 7.2B indicate that their claims paying ability going forward would be better or worse, if they could now deploy more capital into a depressed market? - Would they have difficulty refinancing their debt with $1.25B in cash in the holding company? The ratings agencies are simply awful at their job. I think many boardmembers would have a higher probability of rating the credit worthiness of most businesses better than the analysts. The reason being is that the ratings agencies are very much like other analysts...they look backwards not forwards...they rate based on parallel levels of capitalization, instead of looking at the underlying capital composition and risk profile. During the credit crisis, we invested in a fair amount of corporate debt. We did not even remotely consider what the credit rating agencies had graded the debt. We made our own estimation of the credit quality, risk and commensurate return. On average, we made a 40%+ annualized return and batted 100%! All the companies we invested in had zero financing risk for the ensuing 12 months, as they had ample cash or credit lines on hand to refinance. Yet, they had various ratings given by the rating agencies, and many, many higher rated companies went under. Go figure! Cheers!

% increase in S&P = 0.042% increase in GDP 1.47*(10^13)*(0.042%)*(1/100%)= 6.17*(10^9); 6.17 B ________________________________________________ The math is correct Actually, it's not correct, but neither were we earlier. $14,700,000,000,000 * 0.00042 = $6,174,000,000...but you have to multiply that by ten to get the change in GDP with a 10% move. Thus the correct number for change in GDP in the first year would be $61,740,000,000. Cheers!