Parsad

As I have said in the past, I think that this is a great way to compensate executives. Previously, I just disagreed with the 4%. I would be happier with 8% and no cap, though. To me, the idea of capping what Biglari can make is completely absurd; If he triples book value by some great investment decisions in a single year, I don't see how this is only worth $10 million. I agree. I would have been happier to see a 10% hurdle and no cap. Regardless, I don't see why having extra board members is really necessary. Adding, rather than replacing board members would increase the amount of money that the company pays out. Furthermore, it seems that investors going crazy about the compensation package did the job that was necessary, and got the necessary changes made- looking back, we probably should have all bought shares in light of the freak out that market had in regards to the company. I had no intention of adding directors from my comments. I would want to replace two of the boardmembers with existing large shareholders. They failed at their job, and if I was a shareholder, I would have no need or desire to pay the existing boardmembers for their services. A couple of them need to go! Remember, the guy never claimed to be Buffett. This argument doesn't wash with me. Do we get the management we deserve, or do we earn the management we deserve? I think it's a little of both. Not only should executives be their own compliance and ethics officer, shareholders have to be demanding of them to act in such a manner. Shouldn't all executives, as well as all of us, aim for lofty objectives? Or is "just ok" good enough these days? Cheers!

The compensation plan now has a hurdle of 6% and is capped at $10M. Thanks to Shane for informing me of the filing! There is also clarification by Sardar on how the compensation plan would operate. http://www.sec.gov/Archives/edgar/data/93859/000092189510001420/def14a07428_11052010.htm I think if Sardar wants to make up with shareholders, he should probably add two large ones to the board. I think somebody from Oakstreet Capital and maybe Gabelli. The existing board did not do their job adequately and actually did harm to the company, it's reputation and shareholders. This compensation plan was not thought out properly, nor instituted in a shareholder-friendly manner. The other concern that shareholders may have is if this plan is accepted, can the company amend it five years from now and make it insanely lucrative once again? Or is the compensation plan permanently capped at $10M? Cheers!

Interesting story on former TDAmeritrade CEO, Joe Moglia, who is now a volunteer assistant coach for the Cornhuskers. He still plays bridge with Buffett and Gates. A neat story on doing what you love. Cheers! http://sportsillustrated.cnn.com/2010/writers/jon_wertheim/09/28/nebraska.asst/index.html?xid=cnnbin&hpt=Sbin

Yup! He stole it from Buffett and we stole it from Mohnish. ;D Cheers!

Hi Carl, You are correct…Cowie’s example is a generalization. Buffett’s original partnership, identical to ours, had a 6% hurdle that he had to surpass before achieving any incentive fee. Buffett also did not have any management fee. So if Buffett did well, he was paid well…if he did average, he got less than average compensation for the industry…and if he did poorly, he did not get paid at all. His incentives were aligned with his partners. Buffett within his partnership did better than any other investment manager at the time. He did not reap a 1% or 2% fee while sitting on his butt. The comparison to Berkshire Hathaway is also silly. One is a partnership structure, while the other is a corporation. The partners could pull their capital at any time on Buffett within the partnership, whereas the shareholders can never do that. It is a huge advantage! I can’t wait to see Smith’s fund, expenses and returns. For some reason, I expect it to be overwhelmingly unsatisfactory. Cheers!

Article on the Federal Reserve Bank. Cheers! http://finance.yahoo.com/banking-budgeting/article/110863/for-uncle-same-the-fed-prints-and-mints-money;_ylt=AlkUymF3oOtICAGzuY1uyVO7YWsA;_ylu=X3oDMTE1aXEyZTduBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawM3MGJpbGxpb25zdXI-?mod=bb-budgeting&sec=topStories&pos=3&asset=&ccode=

No, but it is by invitation. Cheers!

Terrific notes Alex! It was a terrific weekend in Chicago. I had a great time once again, especially meeting all the boardmembers before the AGM, including Alex. Mohnish was in fine form once again. The Q&A was really good this year, as you can tell by Alex's transcript. There were some very funny moments. One in particular where Mohnish was answering a question on new ideas or industries and said "It always seems to be that the mistress looks better than the wife...because it looks new...but that is not true." An older lady in front of me gave a stern look to her helpless husband who had not done anything. I met Sir John Templeton's grand niece at the AGM, and we briefly discussed Prem and Fairfax. There was some very good discussion by Mohnish on Japan as well. During the weekend, our whole family visited a Steak'n Shake. The food was good. The chicken patty in their chicken burgers is now as good as the steakburger. I still don't like the skinny fries, but they do have a fan base. The shakes were terrific as are their specialty burgers! The salads look pretty good. The prices are still amazing at Steak'n Shake, and the place was really busy for the whole hour and a half we were there. It is a fantastic franchise! If you are in Chicago, enjoy the deep dish pizza at Giordanos. The Macy's in Chicago is bigger than the one in Manhattan, and is the second largest department store in the world after Harrods. It was my Mom's birthday, so we took her and my aunt to "The Drake Hotel" for afternoon tea...well worth the money! Chicago is a beautiful city! I always really enjoy my visit and will go back often. Cheers!

Here are some photographs of Buffett in China. Cheers! http://www.cnbc.com/id/39399261

Zerohedge has a summary of the various speakers at the Ira Sohn Conference. Cheers! http://www.zerohedge.com/article/ira-sohn-research-conference-summary

Good article on Buffett, Berkshire and the S&P derivatives contracts. Cheers! http://www.theglobeandmail.com/report-on-business/rob-magazine/has-warren-buffett-gone-bonkers/article1719266/

The TSX requires the gross number of shares outstanding, including treasury shares held by Fairfax, in the press release. For the purposes of the financials, they take out the treasury shares they hold. Cheers!

Looks terrific! Excellent blend of style and nostalgia. Cheers!

Mary Schapiro says that the SEC may impose regulations on high-frequency trading firms. I believe they will have to reduce the number of monitors on every desk to 8 from the average of 16! ;D Everyone remember that Adam Sender picture with like 20 monitors around him. Cheers! http://www.bloomberg.com/news/2010-09-22/schapiro-says-sec-will-weigh-restrictions-on-high-frequency-trading-firms.html http://dealbreaker.com/_old/images/thumbs/adamsenderbloombergsmall.jpg

To Prem and everyone at Fairfax Financial, Happy 25th Anniversary! We look forward to another 25 years. All the best, Sanjeev Parsad & Alnesh Mohan Corner Market Capital Corporation Anyone who wants to post a message to Prem, please feel free to do so as a reply to this thread. Cheers!

Did you guys make any money by investing with him? Yes, but I also made more money from Fairfax and believe it or not, Overstock.com. Prem takes a $600K salary and Patrick Byrne takes none. The one thing I've always said about Sardar and still do, is that he is smart and extremely hard-working. That still doesn't make his compensation plan ok, or how it was instituted. Cheers!

Yup. 6155 North River Road. I think the pub is called "Allies American Grille & Bar". The bar area looks out into a seating/lobby area of the hotel. Cheers!

Why? Because the state in addition to stakes of those two's, "Great Inflationists' Empire," and what they would lose-still a present tense risk factor counter to other opinions here-would be far greater than this "common man" whom their world of capitalists sometimes exhibits little respect towards. No Carl, because the average citizen wasn't about to take down the entire banking system. You had counterparty liabilities that extended like a spider-web from one institution to another. If an Irish bank goes down, it takes down maybe two other large banks, plus perhaps an insurance company, which in turn would take down another large bank in England, and another one in Spain. If you had AIG go down, it would have made Lehman Bros look like a picnic. We would not have faced another depression...it would have been far worse! The interconnectivity and leverage was unprecedented, primarily due to derivatives. The bailouts didn't save just the fat-cat bankers, it saved everyone from going down. Buffett gave the heart attack patient analogy, but a better one would be the Titanic. Complaining about who gets to sit on a lifeboat and who gets a life preserver is a stupid thing to do when you've got 30 minutes to evacuate the ship. I think that is what Munger was trying to say. The bailouts saved as many people as possible, whereas a handout would have saved only a portion of the population, and only temporarily as the system collapsed over the following decade or two. Cheers!

I know that there are some CPA's on this board, with some good experience and a hankering for a lunch with Buffett. Berkshire is looking for an accountant to work at the head office! Cheers! http://careerlink.com/job/view/7065/000001

Faulty logic. Should one not care about the disadvantaged kids in the suburbs because of the starving children in Africa? Not punish robberies until every murderer is jailed? Not cure people with the flu until the ones with brain tumours have been tended to? And no one should report on the crimes of any other dictators than Stalin and Hitler. Of course, she is going to write about Buffett and Berkshire; it's her area of expertise. Likewise the general practicioner prescribes antibiotics and the surgeon performs surgery. I understand what you are saying Alwaysinvert, but sometimes people do things just because it's in their self-interest and they don't give a damn about what is ethical or not. The general practioner who prescribed Michael Jackson. The surgeon who removes organs for the black market. The former analyst who writes on a subject because that will give him/her the highest speaking engagement fees and notoriety. Glenn Beck! ;D Cheers!

Incidentally, MAJC has just announced that it signed a definitive agreement to be acquired by Bayside Capital for $0.45/share. http://finance.yahoo.com/news/Majestic-Capital-to-Be-bw-3472550300.html?x=0&.v=1 That now crystallizes Rick_v's average $0.75/share cost with a 40% loss! But hey, that's 100% academic. Cheers!

Article on insurance company capital requirements. Cheers! http://www.bloomberg.com/news/2010-09-21/u-s-insurers-may-see-higher-capital-requirements-regulators-group-says.html?cmpid=yhoo

Why don't we meet in that same pub/bar in the hotel just before 2pm. Does that work for everyone? Cheers!

Generally, I think most people give either too much or too little value to themselves. This can manifest itself in various ways, at various times..."I think I'm worth more than that"..."She doesn't work as hard as me"..."If I was in charge, I would run this thing properly"..."Boy I suck"..."Geez, I need to lose some weight!" Sometimes it can take the form of a tantrum, frustration, ego, fear, insecurity or yes, even greed. I don't think of people's behaviors in terms of "how did they fool us". Rather I choose to view it as "what prompted them to behave in such a way?" Your question should be "Why did Sardar do what he did?" And the revelation to everyone involved, including Sardar, is simply "Was it worth it?" Cheers!

He's been his douchy self on Entourage. Hopefully Turtle crosses Cuban. ;D Cheers!