Parsad

Just wanted to see how many members are attending the Pabrai Funds AGM in Chicago Saturday? Didn't get much of a response to meet before hand, so checking to see if there is any demand for a pre-AGM meet. Cheers!

An appeals court has decided that the insider trading case against Mark Cuban is valid. Cheers! http://finance.yahoo.com/news/Court-revives-Mark-Cuban-rb-2662144347.html;_ylt=Ai.7M6PJXfVnEaKbfS8qOGK7YWsA;_ylu=X3oDMTE1ZnUwcW1iBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawNjb3VydHJldml2ZXM-?x=0&sec=topStories&pos=5&asset=&ccode=

I have spoken to Alice Schroeder in the past and she has some valid points. Munger and Buffett aren't perfect and its good to see someone chip away at their godly pedestal and their biased view and present alternates wether you agree with them or not, additional light shed can be either considered or discarded. I have no problem with this, but when they are your meal ticket, it's kind of hypocritical to chastise them. Kind of like the hooker blaming the john for the world's ills! And no, I'm not saying that Schroder is a hooker or Buffett is a john, but there is a reciprocal relationship where neither should be more self-righteous than the other. Kind of like the papparazzi and celebrities...I have no sympathy for either, since its a symbiotic relationship. Buffett made his bed and Schroeder took advantage. Neither should be flinging mud now. The truth is that Schroeder is the only one doing so...in public at least. Cheers!

I think Schroeder constantly writes about Buffett & Munger because there is a large, built-in audience. She's gained some notoriety, has written a couple of books on the subject, and was given more free reign than any other author. While she's not entirely incorrect regarding Munger's comments about banks and the common man, I think she's also taking it a bit out of context. Munger wasn't saying that the banks deserved the bailout and the common man didn't. Only that the damage to the landscape was limited by bailing out the banks, rather than the other way around. Due to the amount of leverage involved, $1T in bailouts to the banks probably prevented the planet from a domino-like chain reaction and $10T in counterparty losses...in other words, complete insolvency of the banking system. Schroeder unfortunately does not recognize this. Cheers!

When Francis ran his investment club before he started the Chou Funds, I believe he averaged something crazy around 50% a year from 1981 to 1985. He started the fund with $51K in 1981, and it was $1.7M in 1986 when it converted to the Chou Funds. Obviously there was new capital coming into there as well, but from what I remember, his returns were out of this world. Cheers!

Personally, I think the credit rating agencies have it completely wrong...nothing new there! ;D Fairfax should be rated AA. They are over-reserved, leverage has been reduced significantly, they have a ton of cash on hand, their portfolio is hedged and generating alot of income, runoff is no longer an issue, and their recoverables have shrunk in half relative to equity. So I ask you how they can still have virtually the same rating as five years ago? Go figure! Cheers!

Buffett made nowhere close to 50% annualized in his partnership days. His gross return was about 31% annualized and his net return to partners was about 24.6% annualized over the 12 years from 1957-1968. I think Buffett was talking in terms of the 70 year old Buffett. Do I think the 70-year old Buffett could do 50% per year...yes! But the younger Buffett could not according to his partnership returns. Cheers!

Hi Folks, Just to make clear that kicking Rick_v out was not a knee jerk reaction. This guy had personal messaged me on several occasions. Once, when he disagreed with a few posters and wanted to know more about how much money people on the board managed. He messaged me again and asked how much I manage...I told him we were a small fund...which he subsequently used to insult me (not that I was really insulted). Finally, he kept bugging me and trying to coerce me into buying stock in MAJC. I explained that insurance is a tough business if you don't know what types of contracts have been written. That MAJC was in a precarious position, and it was not our type of company. He then kept goading me and trying to get me to participate, that his average cost was $0.75...I guess he hasn't made "big money" on this one and neglected to brag about it. That he would put up the capital and CMC would act as the activist investor. I politely refused and then finally ignored his private messages. We have 800 members, and naturally there are going to be a handful of jackasses. I try and weed them out, but Rick_v's actual posts were pretty good, so I chose to ignore the private messages. But in this thread it became clear that he could be a very disruptive personality, and I don't want that element on here. There are some posters that I may have got into it with in the past, but I certainly welcomed back with open arms...Ericopoly for one...and his presence on the board is very much valued. But Rick_v's, sorry...I don't have time for it. While we welcome investors and their ideas at CMC and the MPIC Funds, I don't need someone telling me how great an idea is and how much money I could make on it over and over through private messages, and what I would be missing out on. If Rick_v had the capital and the aptitude, why the hell would he need my help? Two and two don't equal four here, and Rick_v is gone because his story is full of crap and he was behaving like a spoiled, petulant brat. Cheers!

Parsad with all due respect, I don't need you to "save me some pain" as its quite clear I manage way more AUM than you and I have been in the game longer as well. Yes, that is why you private messaged me a while ago to ask me how much money other posters on the board manage when you disagreed with them. At the time, I told you that some people manage lots of money and some manage smaller sums. That you would not know if someone held one share of Fairfax or thousands. Frankly, I couldn't give a rat's ass how much money you manage. There are alot of assholes who manage alot of money and do a shitty job. What you are misconstruing is an attempt to refocus young investor's minds in seeking alpha (which means out performance btw) as opposed to buying and holding the cult stocks which goes against the very principles of value investing. Like I really didn't know what "alpha" meant. It's probably the most overused, overhyped word in the financial industry lexicon these days. Usually used by guys who don't know what they are doing. I manage a family fund which exceeds $100M in permanent capital, comprised mostly of my family's net worth. I have built this fund over two decades from single millions by focusing on out of favor companies trading at a deep discount to intrinsic value. Usually means inherited wealth. As someone posted, over twenty years your compound return is far less than what you were suggesting. I guess this also has to do with what type of an individual you are as well. If you are a leader you naturally gravitate towards generating your own investment ideas. Otherwise you just follow others... Buffet, Prem and all your other idols are all leaders. I think this is somewhat of a wake up call to some of you. Its reminiscent of the Li Lu lecture at Columbia when he couldn't believe the students had all this data and knowledge but couldn't damn put it all together. I think the members on this board have generated more original ideas than any other board I've visited in the last decade. The funny thing is, many of the managers you invest in, and the people you say are leaders, read this board! So I'm guessing we do have something pertinent to say once in a while and the boardmembers here have something to contribute. After seeing Coc's second post I have decided to no longer post on this board. Coc I am 100% certain you are an academic. No worries...your membership has been cancelled and somehow the other boardmembers will survive. I do not have the time or patience to sit here and massage egos. And frankly if Coc, or anyone else for that matter, is or isn't an academic, I don't care...I hope to just try and learn something from him and everyone else on here. You would have done yourself a favor by engaging him, rather than insulting him. Cheers!

Yes, but book value per share is up probably around 7-7.5%, and that excludes about 2.7% for the dividend as well...so somewhere around +10% for the year. Cheers!

Hi Coc, I don't disagree. My point, which is similar to what Rick was trying to say, is that generally with small sums of money, you have a greater probability of better long-term results by investing in small, less-followed companies. The operative word being "less-followed", not "small". It's just that the majority of stocks with little analyst coverage are small stocks. As well, if you can combine that with a large enough position where you may be able to influence management to enact shareholder-friendly initiatives, the results can be substantial. But to do well, you do not have to do that. There are plenty of unliked, disparaged, large companies, that from time to time will be very attractively priced. The opportunities just won't be quite as plentiful. Cheers!

And when I say significant alpha I am not even talking about 20-30% per year, I am talking about finding the 10 baggers, the 5 baggers, the 20 baggers. The ones that can be found with a lot of work, permanent capital, and patience. Please don't be offended, but I've heard this many times before. Hardly any of those managers who said this in the past, are doing a few percentage points better than the index without leverage, if that! They got hit by something called the "Great Credit Crunch of 2008." Many of these managers had spectacular results over a relatively short period of time...some of it was skill and some of it was dumb luck. Many of them don't run funds anymore, or their results have been stagnant for years. Some are even private investors and they've flaunted such braggadocio. I've heard it all before...I've done 20%, 40%, 80%...the big money is in China stocks...the big money is in tech...the big money is in commodities...been there, seen it! The best one was ten years ago, when Alnesh (my investment partner, cousin and best friend) told me "not to come crying to him when he's wiping his ass with $100 bills" after he was about to invest in 360 Networks and I didn't want to invest with him...that's why he does the accounting folks! He shortly thereafter became a Buffett disciple as well! ;D But I'm sure there were alot of people putting up great numbers before the "Tech Wreck" who were never heard from again. I've found that in this industry, many people talk a big game, but very few actually follow through...Buffett disciples or not. Primarily this is because they slip off the foundation of their investment process, but usually it's because they truly don't have the full psychological temperament to do well long-term. Notice, how some 3000+ hedge funds perished during 2008 & 2009. Smart people doing stupid things - pure and simple! All searching for the elusive "alpha" (whatever the hell that is) through 2007 and into 2008. Suddenly those stupendous results look like sh*t because you didn't protect on the downside. Take a look at Mark Sellers...amazing results for a while and then he found Contango...sure let's go 90% in when oil is over $100 per barrel! Sorry if this sounds a bit harsh, but I'm trying to save you some pain. Focus on your investment process and don't worry about convincing the rest of the world on how right you are. You are correct...investors with small sums not only can find quality ideas on a regular basis, but should focus on very small, less followed companies. You are 100% correct here, regardless of what anyone says. I can tell you even Prem and Buffett would both agree with you here. But the business of running a fund isn't just about great results, it's also about durability. The greatest thing about Buffett isn't his numbers, but his durability, regardless of the economic environment! Cheers!

Rick, I agree with certain aspects of your argument, and I agree with certain aspects of coc's...but please stop using the word "alpha!" I feel like slapping someone! ;D Cheers!

No go for Pershing. I think that was the right decision. Cheers! http://www.bloomberg.com/news/2010-09-16/stuyvesant-town-judge-rules-ackman-group-can-t-foreclose-on-rental-complex.html

BYD has acquired an 18% stake in the largest lithium miner in China. Cheers! http://www.reuters.com/article/idUSTOE68G00420100917

Yeah, I was laughing when I saw you ask the question and you said you're not actually a law student at Michigan. Then Charlie cracked his joke. It didn't look it was a full house either. Frankly, that may have been one of the greatest discussions I've ever seen or heard by Charlie, so I think you were very fortunate to have attended. Wish I was there too! Cheers!

Easy, easy Carl! I think what Charlie was saying is that generally, great nations usually become satiated and self-satisfied, thus become usurped by those hungrier than them. If the US doesn't want to get its fiscal house in order and compete, it will be decided for them...and that's got nothing to do with Charlie. Cheers!

No Fairfax in MPIC Fund I, LP presently. 10% Fairfax in MPIC Canadian LP...we keep a portion in Canadian investments, and I can't find much better than Fairfax in Canada. 5% Fairfax in personal and corporate portfolios. Nothing wrong with owning Fairfax and investors will do great long-term...just other things often are cheaper. The thing is we've always been in and out. Our job in all of our portfolios is to exploit market inefficiencies, so we don't fall in love with anything...we average in as they get cheap, and we average out as they get more expensive...doesn't matter if it's Fairfax, Berkshire or any other holding. ITEX would be a different ball of wax, as it is an active holding. Cheers!

Isn't Bronte's blog...John Hempton? He would know a thing or two about fraud. Cheers!

http://www.canadiancapitalist.com/buffetts-bet-against-hedge-funds/ Cheers!

Steak'n Shake's new prototype store will be opening in Rome, Georgia. It looks like Sardar will be on site to open the store. From the article, the design looks quite striking...I like it. Would like to see pictures of the interior though. Cheers! http://romenews-tribune.com/view/full_story/9527963/article-Steak-%E2%80%98n-Shake-official-coming-for-Rome-store%E2%80%99s-grand-opening-on-Sept--22?instance=home_Most_popular

Can anyone even think of anybody else on earth who is similar to Charlie? No one like Charlie, but for those that have attended our annual Fairfax dinners, most would agree that Sam Mitchell is alway fun to listen to and probably livens up the conversations at Hamblin-Watsa! Cheers!

The European Union's draft on regulation of short-selling will require disclosure on short positions greater than 0.2% of the shares outstanding and public disclosure for positions greater than 0.5%. Also, much tighter rules on naked shorts. Too bad the SEC isn't as sophisticated. Cheers! http://www.bloomberg.com/news/2010-09-15/naked-short-sellers-derivatives-traders-face-european-union-restrictions.html

Yup, definitely Vegas! Shadow inventory to still affect many states: http://www.bloomberg.com/news/2010-09-15/u-s-home-prices-face-three-year-drop-as-inventory-surge-looms.html Cheers!

Well, I guess no more condos for the price of a corolla! You'll have to look to Vegas for those deals. Cheers! http://money.cnn.com/2010/09/15/real_estate/california_home_price_rebound/index.htm?source=cnn_bin&hpt=Sbin