Parsad

He's said it a number of times now...the most recent comments that have been published are in "The Snowball". Also in this excerpt from Schroeder's other book: http://www.huffingtonpost.com/alice-schroeder/warren-buffett-and-the-bu_b_351034.html In the 1990s, more passivity crept into his investing style. By then, Berkshire had far more money than it could use. During the Internet bubble, rather than sell overvalued stocks such as Coca-Cola (another of his Inevitables), Buffett diluted the risk from these stocks to Berkshire's balance sheet by acquiring General Re. With hindsight, he did say his failure to unload some of those stocks was a mistake. He explained that his role as a board member had gotten in the way of his selling Coca-Cola. Buffett finally stepped down from the board in February 2006, avoiding another referendum on his independence as a board member. Privately, Munger complained that Buffett should have resigned from the Coca-Cola board earlier so that they could have sold the stock. Selling would have pushed down the price, but not by as much as it eventually declined. "I always used to tell Gates that a ham sandwich could run Coca-Cola. And it was a damn good thing, too, because we had a period there a couple of years ago where, if it hadn't been that great of a business, it might not have survived." The company--and its stock--did rebound. By 2008, most of its business problems had been largely resolved, and CEO Neville Isdell, who announced his retirement in 2007, had settled the Justice Department investigation and closed a $200 million racial discrimination lawsuit. The new CEO, Muhtar Kent, had led the company's successful push into non-cola drinks, where Coca-Cola had been lagging and was strategically off course. Still, as of early 2008, Coca-Cola's stock price, at $58, was fifty-six percent above its lowest price, but did not approach its pre-bubble high of more than $87 per share, and couldn't justify Berkshire's having held the stock for a decade. And it would soon turn out that Coca-Cola's stock price was tracking the overall stock market, which would be revealed as part of another speculative bubble, this one buoyed by the ebullient "consumer economy" and driven by cheap credit. Cheers!

Bringing this conversation back to the name change.... Parsad, when are you going to change the main page to.... Biglari Holdings? Not until there is a shrieking outcry from board members. This is Parsad's house, not Biglari's! ;D No, I'll change it soon enough...maybe once Google Finance and everyone else get the ticker symbol straight. Or maybe after the first big acquisition by Biglari Holdings. Cheers!

Something I have been concerned about for a few years is finally coming to fruition. I believe that Chinese banks have over-expanded over the last several years and that the bad loans would eventually appear. It seems as though some of the big Chinese banks have a $70B shortfall relative to regulatory requirements...and things are still relatively good in Asia...I can only wonder what the magnitude of the shortfall could become. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=angRgjyJDhQQ&pos=6

Buy and hold works amazingly well when intrinsic value keeps growing. Everything held equal it is by far the best way to invest unless you don't pay taxes. I disagree. I think buy and hold reduces your margin of safety as valuations rise relative to intrinsic value. Buffett could have done a whole heck of alot with the cash tied up in Coke over the last twelve years...even after paying capital gains taxes! For the record Fairfax hasn't been near intrinsic value in the 4+ years I've owned it so maybe you are not selling at IV, you are trading in and out of a stock based on historic patterns. A stock doesn't need to be near intrinsic value for someone to sell it. If you buy stocks when they are less than 40% of intrinsic value, and sell when they are at 75%, is that worse than buying a stock at 60% of intrinsic value and selling it at 95% of intrinsic value? Simple mathematics would tell you that the former provides a return of almost 90%, while the latter provides a return of about 60%. Cheers!

I think some board members have a misconstrued idea of what value investing is...or at the very least value investing in terms of Ben Graham. You buy investments at a discount to intrinsic value and you sell when that margin of safety is reduced. This whole Buffett "buy" and "hold" value investing idea is something that came up because Buffett had to do so to encourage people to sell their businesses to him. Why would someone sell their life's work unless you promise not to sell it off in bits and pieces or to someone else at a profit! If you've read the early Buffett Partnership letters, and even early days of Berkshire itself, you've seen Buffett trade out of positions as the prices moved closer to intrinsic value. Mohnish is doing just that. Sardar will have to behave like modern-day Buffett, as does Prem, but Mohnish understands that the markets provide him an opportunity to exploit the folly of others. What Buffett has done with Berkshire is not only amazing, but admirable from an ethical standpoint. If Buffett behaved like young Buffett, his returns would have been better by selling certain businesses or positions as they reached intrinsic value or surpassed it. Cheers!

Excellent interview! Thanks Keerthi! The one thing I truly have admired watching Mohnish over the years is that he has become an incredible teacher and lecturer. He has a very natural fluidity to his ideas and how he gets them across to the listener. Combined with his self-deprecating sense of humor, it is always enjoyable to hear him speak. Cheers!

The Omaha World-Herald's Warren Buffett Watch: Update on Miles dividend article, DQ Mobile and a couple of other subjects. Cheers! http://www.omaha.com/article/20100411/MONEY/304119999

Thanks for the notes everyone! Cheers!

33 States and the Virgin Islands are now borrowing money to fund unemployment benefits. Cheers! http://money.cnn.com/2010/04/08/news/economy/state_funds_jobless_benefits/index.htm?source=cnn_bin&hpt=Sbin

I had no problem with the name change, but I didn't think he should have named it Biglari Holdings. Now that the vote is done and shareholders approved it, I'm looking forward to what else he does, since this is only the beginning. That being said, as a loyal shareholder, I will always voice my opinion against certain decisions he makes, and praise him for the many he gets right. I thought I would share a funny email exchange I had with him this morning: Sardar, Someone on the message board said that you received only one letter regarding the name change…I’m guessing it was mine? You do realize that even the Israelites doubted Moses? Lead the way Moses, lead the way! ;D All the best, Sanjeev Parsad You're forgiven. Regards, Sardar Cheers!

I'm guessing that the only letter was mine! ;D Cheers!

I disagree. I think the company has now hit a critical mass, where the bottom line improves as they continue to increase their percentage of revenues from the fulfillment business. Depreciation is falling off and costs are under control. As long as inventory turnover remains quick, or speeds up even slightly on the direct side, they will be able to continue to generate net operating profits. Cheers!

A Forest River manager who helped form the acquisition deal of the company by Berkshire is now suing Berkshire. Cheers! http://www.bloomberg.com/apps/news?pid=20601108&sid=aLydkapMrw_k

C'est la vie! I agree, now we move forward and see what else Sardar has planned. Cheers!

Also check Sidestep.com or GTAhotels.com for deals. We got a really nice hotel for dirt cheap on GTA. You want to stay in the downtown Toronto area, and preferrably close to the lake...the hotels nearest to Roy Thompson Hall and Joe Badali's are the Strathcona (as mentioned), Fairmont Royal York, Intercontinental Toronto, Westin Harbour Castle, Residence Inn Toronto, Novotel, Soho Metropolitan, Radisson Admiral & Hyatt Regency Toronto. As long as you are downtown, you are still a 10-15 minute cab-ride to anywhere anyways, so don't worry too much. Cheers!

Fairfax Financial Shareholder's Dinner When we first started our annual dinner in 2006, we had nine people attend and Francis Chou was our lone representative from Fairfax. The following year, we had about 17 people and Francis brought Sam Mitchell as well. The third dinner in 2008, we had about 28 or 29 people and our guests were Sam and Francis again. The fourth dinner in 2009 had about 38 attendees and Fairfax surprised us by sending Sam Mitchell, Wayne Cadwallader and Brian Bradstreet...of course Francis was also there...he never lets us down! This year's dinner will have well over 50 attendees...probably close to 60! Don't worry, we have a mic and speaker system set up this year! ;D It's an amazing opportunity to ask questions and listen to answers from some of the best investors in North America, as well as meet with fellow Fairfax shareholders and "Corner of Berkshire & Fairfax" board members. We will also have a raffle with various prizes, including Fairfax memorabilia and books signed by Prem, and other prizes donated by Corner Market Capital. All proceeds, along with the $5 admission (and matching contribution by Corner Market Capital) will go to the Crohn's Colitis Foundation of Canada, in honor of Jo Ann Butler. With two weeks to go, if you haven't RSVP'ed me, please do so. See you all there! Joe Badali's 156 Front Street West Toronto, Ontario Drinks: 6:30pm Dinner: 7:00pm Q & A: 8:00pm-9:30pm RSVP: sanjeevparsad@shaw.ca Admission: $5/head with all proceeds going to the "Crohn's Colitis Foundation of Canada" in memory of Jo Ann Butler (Corner Market Capital Corporation will match all admissions).

Very interesting article on how Pimco operates. Cheers! http://articles.latimes.com/2010/apr/04/business/la-fi-pimco4-2010apr04

Will do! Cheers!

I think the low rates were needed after the Tech Wreck and 9/11, but the fact that they left them there so long was the real problem. And then all of the new mortgage products brought out due to government intervention...whether it was Greenspan, Congress, Committee on Housing, whoever...there was no regulation, no thought about what was happening. I remember in 2005, I watched a segment on CNBC where there was a panel of mortgage lender CEO's. Angelo Mozillo, CEO of Countrywide, was discussing how they just brought out a new product that allowed 110% financing with no money down! I was incredulous...how was this happening? That should have triggered warning flags with regulators, or even the parasitic ass-kissers at CNBC, but it didn't! People in the moment lose objectivity...Greenspan was as guilty as anyone else. Cheers!

Here is a chart showing Buffett's estimated dividend income from his private portfolio. Cheers! http://www.bloomberg.com/apps/news?pid=20601109&sid=aQwHfdedaxac&pos=15

AP article on Overstock and Patrick Byrne. There is also a good quote by Sam Mitchell of Hamblin-Watsa in the article. http://finance.yahoo.com/news/Overstocks-brash-CEO-delivers-apf-210153310.html?x=0&.v=4 I remember about four years ago when we asked Sam about Overstock at our annual Fairfax dinner. He was leaning up against one of the counters in Joe Badali's, as about 15 of us were gathered around him listening, and relayed a story about Patrick's tenacity and ethics. It was a story about Patrick meeting Henry Kissinger with his father Jack one day. While everyone else shook hands and nodded to the former Secretary of State, Patrick lashed out and took Kissinger to task over something...I can't remember exactly what the issue was...but he was only a teenager. I believe Kissinger was as stunned as everyone else, but it was the only way Sam could relay exactly what brews inside him. It was very funny! Cheers!

I definitely have one this year: Do the positives of the name change, truly outweigh the negatives? Cheers!

Thanks CFA! I took a look at Piccolo's menu, and it looks terrific. Looking forward to it. Cheers!

Berkshire finished number one based on Harris Interactive's survey of 30K people on their most admired company. Least admired...Freddie Mac! Cheers! http://www.reuters.com/article/idCAN0110654220100404?rpc=44

Good little article on how the quants are back in business and making tons in compensation. Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/features/taking-stock/quants-accept-no-blame-for-financial-crisis/article1522497/