Parsad

What a fine coincidence that we've been hacked twice in a week! We've never had such a problem in a year and a half, and now suddenly twice in a week. What are the odds of that? ;D Being a Fairfax shareholder, I'm not one who bows down to coincidence in such cases. Anyway, I've finally got it up and running today. I apologize for the site being down, but hey it's just a coincidence! Cheers!

I didn't really buy into his argument, and explained to him that I would have to reserve judgement until I see full disclosure in the financials on the incentive allocation and any adjustments. I'm not sure they've really 100% thought through this whole process...especially the accounting side. I would suggest that investors pay very close attention to the incentive allocation disclosure and ask as many questions as they want at the special AGM. I don't want to comment too much on exactly what he said, as the discussion was over half an hour and I don't want to print his comments out of context. It's best if shareholders hear it directly from the horse's mouth, rather than the context I might communicate to you. I think this is a very sensitive issue for shareholders and you should get the information clear and direct from him. Cheers!

I spoke to Sardar for about half an hour today at Andy Kilpatrick's party in Omaha. We discussed the compensation agreement. There will be a special AGM for the agreement where shareholders will be able to ask questions. I think all investors should make up their own mind on their ownership as information becomes available. I didn't hear anything that would change my opinion significantly, but he explained that there would be adjustments made before the incentive allocation is calculated for share issuances, buybacks, etc. Our investing philsophy is we make investment decisions based on the financial statements alone. If management's conduct is favorable, then that is the icing on the cake. But if management's behavior is unfavorable, then that can have a material impact on how we feel about an investment. In this case, there are some winds starting to blow in the wrong direction. Cheers!

To criticize the compensation structure as proposed is to criticize pretty much all hedge fund compensation structures, including the Buffett Partnership and any funds modeled after that partnership. Not an unreasonable criticism if we're talking about matching up compensation with societal value. But is this really any different than the way that the Pabrai Funds or other hedge funds are structured? Yes. - He didn't raise the capital. - He can use the shares to raise unlimited amounts of capital going forward. - The corporation covers all of his expenses including office, travel, food & entertainment, etc. - He will never have redemptions. - His incentive allocation is based on growth of book value and not open to the whims of market volatility, thus he gets paid year in and year out as long as SNS is running as it is. Cheers!

Whether anyone likes it or not, this move is ABSOLUTELY, SOLELY to prevent anyone from ever taking this company away from him. He will pour 30% or more of his incentive allocation into the stock, and increase his ownership dramatically over the next couple of decades. In fact, he could go buy Burger King with stock...increase book by $1B, and he would take home almost $250M! Now if it were an increase in book value per share, then I would have less of a problem. But as far as I can see from the SEC filing, the incentive allocation is based on 25% of company book, not book value per share. Cheers!

I think that 5% hurdle will be much tougher than many think it to be right now. That hurdle is a piece of cake, as he can use overvalued shares to buy up anything he wants as long as it increases book value. Shareholders are going to give Sardar the best birthday gift ever! Cheers!

Sanjeev...what are your initial thoughts? my initial thought is I want a higher hurdle rate and a low % to Sardar.. We were the only investors to write a letter to the board on the name change...yet he got 90% approval. I don't like this one iota, but I'm sure it will pass again, as there are too many people on the wagon now. We will liquidate most of our holdings over time. I will also be merging the Steak'n Shake message board into the General Discussion board. I dont expect Biglari to work for free and would like him to measure his compensation by per share increase in value - as is the case with others such as MPIC funds, Pabrai funds etc. The only problem with this argument is that Steak'n Shake throws off about $15M in free cash flow and $6M in net earnings every quarter. Book will grow without doing anything at all, as earnings are the equivalent of an 8% dividend yield. Hedge fund managers don't have that luxury. Finally, the most important difference between BH and say MPIC or Pabrai Funds is that Sardar has access to a permanent base of capital...there will never be a redemption. Hedge funds operate on the assumption that their partners will redeem capital at some point and most institute a multi-year lock-up. In our case, we don't even have that luxury as we have no lock-up! Cheers!

Here is the math: 1) Take the example of an increase in book value of $40 million on a $400 million base. That means book value went up 10%. For his incentive, Sardar would get .25*(10%-5%) = 1.25%. 1.25% of $40 million is $500,000. You've got the math wrong! Book goes up 10%...$40M. His hurdle is 5%...$20M. He gets 25% of the difference...$5M! Cheers!

BH is trying to buy roughly 1.5M shares of AAP in exchange for SNS shares. Cheers! http://finance.yahoo.com/news/Biglari-Holdings-Inc-prnews-3985358287.html?x=0&.v=1

Prem discussed underwriting in detail during the AGM. He said that their combined ratios will appear to be very high, but that is because they are contracting their book of business dramatically at the moment, while expenses are not going to contract as fast. You cannot reduce customer service to existing clients, even though you are decreasing underwriting because of poor premium rates. When premium rates harden, you will see the momentum in Fairfax's underwriting. The market will miss this because they will be preoccupied with the higher CR's right now. Wait till you see what these guys do in a hard market! Cheers!

Another article on the upcoming AGM weekend. Cheers! http://finance.yahoo.com/news/At-Buffett-gala-all-that-rb-1167539222.html?x=0&.v=1

Article from Morningstar on the BRK AGM. Cheers! http://news.morningstar.com/articlenet/article.aspx?id=334684

Hi Folks, Please use this thread if you want to post various meeting places, events, etc for the weekend. Here is a link to Berkshire's visitor's guide which is very useful for anyone attending the AGM: http://www.berkshirehathaway.com/meet01/VisGuide2010.pdf Alnesh and I will be at most events and we look forward to meeting anyone attending. I'll be the fellow with the blue "MPIC Funds" baseball cap on. For those coming out the first time, enjoy the experience...the Mecca of Capitalism! Cheers!

Like all institutions, it looks like Berkshire will also be required to put up collateral for derivatives contracts. Cheers! http://www.cnbc.com/id/36778375

About time some newspaper wrote about it. Cheers!

Does Canadian/US securities law-reg FD etc. not require them to make a filing/disclose the 2010 presentation at the same time as or before the annual meeting so that all shareholders can see it? The law applies only if there is material information that wasn't previously available. Nothing discussed at the AGM was previously undisclosed in quarterly reports, annual reports, or individual filings. I'm sure they will put up the slides soon enough. Cheers!

By the way, I thought of you Sanj when they were serving those mini burgers. Quite tasty. What did you think.(I was quite hungry after missing breakfast) I didn't get to eat one! You only get a certain amount of time to see everyone each year, so I was saying hi to everyone and didn't eat anything. I just had a Coke just before our own AGM started. The day before, I did go to my usual haunt when in Toronto for what I consider the best mini-burgers I've ever had. It's at a place called Trevor's Kitchen & Bar. A little funky restaurant in the lower level of a heritage building...38 Wellington Street East. They make these little Kobe beef mini-burgers...by far the best mini-burgers I've ever eaten. I make a trip there every year when I go to Toronto and make sure I get to taste them. If you go before 6pm (they open at 4pm), they are half price at the bar. Cheers!

Al, Kilroy, Alnesh and I were talking about that this afternoon, when there were only the three of us left at the MPIC AGM. Your name came up as one of the nine that were there on that first dinner five years ago. Cheers!

Hi Folks, I would just like to thank all the people who attended our fifth annual "Fairfax Financial Shareholder's Dinner". First of all, we raised $3,820 for the "Crohn's & Colitis Foundation of Canada" in honor of Jo Ann Butler, with a few more contributions still coming in. We hope to have raised close to $5K when all is said and done. We could not have done it without all your support! The generosity was overwhelming...attendees were just handing over $20 bills instead of $5...a few people wrote checks, handed over hundreds of dollars or bought handfuls of raffle tickets! We would like to thank Prem, Pat Hios and the rest of Fairfax Financial for the raffle prizes, as well as our director Andrew Cooke for the See's Candies he donated, and Alnesh and his accounting partner, Paul Robertson, for the wine they donated as prizes. We'd also like to thank Joe Badali's Restaurant for allowing us to hold our dinner there, and to their staff for patiently catering to our needs well past closing! Once again, Fairfax was very supportive of the dinner and were well-represented. Our guests from Hamblin-Watsa were Sam Mitchell, Brian Bradstreet and Peter Furlan, and of course our honorary chairman for the panel - Francis Chou of the Chou Funds! They answered question after question for about an hour and a half. Brian ended up staying till about 11pm and I had to actually intervene because the group of shareholders around him had lots and lots of questions. The AGM was well-attended and everyone was in a jovial mode. I won't expound too much on the meeting, as I'm sure there are plenty of other boardmembers who will be posting their notes. Prem was one of the last people to leave and was working the room as I've never seen before. It was actually quite funny because Pat and Vinod had to try and get him to the Presidents meeting, but Prem was absolutely engaging all the shareholders and answering every question they had, so it was an almost impossible task to drag him away. Needless to say, anyone who attended could not walk away from the event without completely grasping the culture of the company from the top down. Like any first rate organization, Prem sets the tone and the humility, ethics, and shareholder-friendly culture trickles down every layer of the company. I cannot emphasize how important it is for any long-term shareholder to come to the annual general meeting at least once. You do that and you won't ever sell a share! Finally, I'd like to thank all of the attendees at the MPIC Funds AGM, especially our partners! We hold the event for you guys and want to celebrate your trust and support. On behalf of Alnesh and myself, we look forward to seeing you all again next year! Cheers!

Hi Onyx, That is a very generous gesture! Thanks very much. Cheers!

About friggin' time! Cheers!

Mark Mitchell has a story on the Goldman Sachs saga. Interesting how many people in this story have worked with or for Michael Milken in the past. Cheers! http://www.deepcapture.com/goldman-sachs-john-paulson-and-the-hedge-funds-that-pumped-and-dumped-our-economy/

That's incredibly generous Dazel! I will post the grand total on Friday. Hope you can make it next year! Cheers!

The real risk for Goldman is all the idiots who will now come out of the woodwork to recoup losses that Goldman isn't really to blame for...such as AIG! http://www.cnbc.com/id/36656434 I can already see perma-tan man Angelo Mozillo blaming Countrywide's demise somehow on Goldman's advice. Goldman is guilty of playing both sides of the field and hiding material information, but a lot of people did alot of stupid things that had nothing to do with Goldman. Cheers!

I thought this was a funny article. Apparently, the first president of the United States owes roughly $4,577 in late fees, on two books checked out in 1789 from the New York Public Library. Cheers! http://www.cnn.com/2010/LIVING/04/19/george.washington.overdue.books/index.html?hpt=T2