Parsad

When you read carefully their recent annual report, it comes clear that it’s not written by true value investor; rather some kind of top down macro speculator with ever changing strategy. I'm not defending Tilson, since I'm by no means a fan, but what exactly does this statement mean? I always hear investors saying this, but what exactly are they trying to say. Was Prem's CDS bet not a macro bet or speculation? Was Buffett's derivatives investments in the S&P500 not a speculation? What about Seth Klarman's cash position for the better part of a decade? These are all bets on an expected outcome...there is no intrinsic value input involved! There is no such thing as a "true value investor"...since the whole idea of investing is to find something of value and watch it appreciate...then sell it and find something else of value. How you find them and how you conduct yourself is a personal choice, and there are varied risks to all of them. So I think the whole Bill Miller isn't a true value investor, or Pabrai, or Tilson, or whoever, is a silly juxtaposition many investors like to apply. The endgame for all investors is to make money. Cheers!

I'm only going by his mutual fund performance as linked to above, but that to me shows that he had no divinity what was coming in 2008/2009. Don't get me wrong, I'm not saying he's a bad investor. But I sure as hell wouldn't be writing a book about a crash that I didn't see coming! I think quite a few people actually saw it coming. Problem is that there is an institutional imperative that permeates the investment industry...you have to be fully invested at all times to beat the market long-term, otherwise you will miss the best days. When an investment manager holds cash, they are criticized for that, so most managers hold very little cash. Hedges have frictional costs...so you benefit heavily if you are correct, or you suffer death by inches if you are incorrect over a long period of time. Think about how long Fairfax had to be wrong about the coming correction, until they were proven right. If the bubble had persisted for two-three more years, they would have lost the whole CDS investment and they would have looked very stupid, instead of brilliant. Unfortunately, it's alot of the other managers who looked stupid in 2008, as most could not predict exactly when the world was going to come to an end...not easy to do! Even Francis suffered in 2008, and he knows how Hamblin-Watsa thinks better than anyone. He was just too late getting approval to use credit default swaps in his funds, so he suffered like everyone else. It's very easy to be critical of managers in hindsight. I doubt too many people on this board would have survived intact if they did not hold Fairfax or subscribe to Prem's views. As far as the book is concerned, it's kind of moot. These days, who isn't writing a book? It's absolutely insane in the publishing world. I see young managers who haven't got the sense to run a fund writing books on how to invest! Crazy! You've got all these journalists who missed the bubble writing about what happened for millions of dollars. Like they've got a clue...Joe Nocera comes to mind! If I ever write a book, somebody please shoot me. Cheers!

Anyone know what his returns are like? One of you say his returns are good since inception, another says that it tanked during 2009 The mutual funds tanked in 2008, but they've done very well in 2009. The Dividend Fund run by Zeke Ashton has done better than the Focus Fund run by Whitney since inception. T2 Fund, the hedge fund, has done very well from inception...handily beating the S&P500 TR by a considerable margin...it operates as a hedge fund and shorts often, thus it did quite well during the turmoil in 2007 and 2008. Cheers!

His partner is a good guy...Glenn Tongue. I don't think Whitney's a bad guy, just very good at marketing himself...perhaps too much, and it rubs people (me included) the wrong way. Some of his past support for guys like Chanos, Herb Greenberg and Sam Antar also is a discredit to sane and ethical behavior, but I just notch that up to poor judgement of character. The fact that he appears on CNBC more than Buffett doesn't help either. The T2 Partner results are quite good though since inception. Cheers!

Surprisingly, I'm actually on the same side as Chanos on the China issue. I'm still not convinced that the Chinese bank's real estate and business loans are solid. That the Chinese economy has thrived on Western consumption, and without that we will see the Chinese economy brought down to a normal scale of growth, rather than the supernova that it's been for the last decade. They will be #2...hell they may even become #1 eventually...but I think it is going to take longer than many investors believe it will. Then again, I'm the same guy who thought rap was a fad twenty years ago, so you probably shouldn't listen to me! ;D Cheers!

Hi Zero, There is a lot of money that is supporting the current stabilization. The question is: Can the economy stand on it's own two feet once the support is removed? I don't think so...not for the next couple of years. A new equilibrium has to be reached and that won't happen as long as you have the government propping things up. Unfortunately, they are damned if they do and damned if they don't. They've chosen the former, but that means equilibrium is just delayed. If they chose the latter, then you will have a precipitous retrenching that may make things worse longer term, as one domino would create greater pain for the next domino having to retrench even further. Cheers!

Interesting tidbits by Mark Mitchell on Steve Cohen, Kingsford Capital, Herb Greenberg, etc. Cheers! http://www.deepcapture.com/new-evidence-raises-serious-questions-about-kingsford-capitals-donation-to-the-columbia-journalism-review/

According to a New York Observer article, the "Sith Lords" are Michael Milken and Steve Cohen. Barry Ritzholtz sounds like most of the turd blossoms that are intertwined in all of this. Cheers! http://www.observer.com/2010/media/shooting-naked-messengers

The SEC is seeking a ban to unsupervised access to exchanges. I guess naked short selling still doesn't exist according to the brilliant minds that excoriated Patrick Byrne over the last few years. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=aimlCbzLU9OY&pos=5

If it was a passive investment, he would have filed a 13-G, but he filed a 13-D. Perhaps, he just thinks it's a good investment and wants board representation. Perhaps, he's wants control. Only Gabelli knows, and we'll probably find out before the AGM. Cheers!

Looks like about 11.5% or so. And that's after all distributions of SNS shares to WEST shareholders. http://www.sec.gov/Archives/edgar/data/93859/000119380510000139/xslF345X03/e606309_ex.xml Cheers!

It wouldn't. Cheers!

I'm not sure what Gabelli's intentions are. In fact, I know he's attended the Berkshire meeting every year I've gone, and is pretty friendly with attendees. I would not be surprised if Sardar knows Gabelli. This could a positive or negative event. If negative, why would Sardar fear Gabelli? I'm not sure fear is the right word...the only thing Sardar fears is his own reflection! ;D Sardar has righted this ship and shareholders are beholden to him, so I doubt he would have difficulty keeping his job. But Gabelli does control billions and it would be very easy for him to buy 20% and try and influence the board. Cheers!

He could also be buying because we don't know what Mario Gabelli's intentions are. Cheers!

Hi Bronco: 1) BRK is a very mature company, Fairfax is mid-stage and Steak'n Shake is still a baby. Based on size, the prospects for Steak'n Shake are best. Based on valuation, all three are relatively close to fair value based on the risk of the businesses they run...BRK and FFH's business is the most volatile, based on the risks they assume. Steak'n Shake's burger business, if well managed, is a cash-cow with less volatility, but Biglari could easily add more risk by entering the insurance business. All three have terrific balance sheets, ethical management and good potential, none are dirt cheap. I'm not adding to any at the moment. 2) Who knows. I think Fairfax and Steak'n Shake will continue to do very well. Berkshire's size is really a problem now. Buffett's age and who is going to replace him is another issue on the investment side. They may be as good as Buffett, but they have to be as ethical and honest. The collection of businesses there are the best we'll ever see. What we won't see is a CEO who can command the respect of the managers like he does. 3) Oh, we've had a bunch...Fairfax, Overstock (both debt & equity), Steak'n Shake, Wells Fargo, Odyssey Re, Clear Channel (debt), Boston Pizza Income Trust, Keg Income Trust. The best based on what we paid relative to book and the eventual return...that would be Fairfax and Steak'n Shake...both up over 300% from the lows we bought at. Actual investment based on the dollars invested, be it options or equity...Steak'n Shake options (up over 1200%) and Overstock options (they were up over 800% one year). 4) That's easy. We bought options of RDN, PMI and MTG in the U.S. fund, and equity of all three in the Canadian fund in 2008. We thought they would lose 50% of their equity, but didn't expect 70-80%. It didn't hurt the U.S. fund much, but it did impact the Canadian fund early on. We learned our lesson well on that one! 5) Can't talk about that. Cheers!

This reminds me too much of the whole Jerry Yang incident witht the Yahoo/Microsoft deal. Yang looks stupid now as Google and Bing are eating up their market share. Cadbury's board is silly in not working with this deal and Kraft would be silly to pay up. Cheers!

I'll play the role of Steve Cohen...in a Darth Vader helmet! ;D Cheers!

Yes, that is correct. That's how he became interested in Buffett. He read that fact on an airplane I believe after Phil Cooley gave him a book on Buffett...or something like that from what I recollect. That being said, I believe I share the same birthday as Tom Cruise and I'm not a Scientologist, nor a big movie star. ;D Cheers!

Hi Tom, You may have a legitimate concern, but it would be completely foolhardy for anyone to short a company that has $50M+ in cash, and virtually no debt outside of long-term leases. Much of the noise is probably coming from people who were shorting this stock earlier last year, and are trying to recoup those losses. They played a fool's game and lost. Cheers!

It's amazing what happens to people when they experience a life-changing challenge. That was a fantastic article by Ebert, and I think his blog may be the best writing of his life by far! He wasted his time as a movie critic. Cheers!

That's a natural progression I would imagine...surprised that it is being adapted so quickly...India truly is changing. Should help increase their footprint even more. Cheers!

I actually dont think that is that bad. Most large companies have "art" and other interior design features that would cost just as much. If you put an antique map on the wall, then you don't have to put a painting. Further, the art/painting isn't "necessary" shareholder spending, but for a company that size that can benefit from having a corporate headquarters that isn't just walls and paint. A better looking atmosphere will increase employee attitudes and not turn of clients/outsiders when they come for meetings. Plus, they will probably be used for 50+ years. $12 million/50 years $240k/year, which is a rounding error to a company with 647 shares outstanding. In addition, CHK probably didn't get a bad deal; I know their CEO had huge financial problems (I think he margined his stock & was forced to sell during crisis). He was probably in a position where he had to sell. Sorry Watsa, I have to disagree with you here. Other than Fairfax's foyer area and the boardroom, there really isn't much to look at in their office, yet employee moral is terrific and clients want to deal with Fairfax. Even the foyer and boardroom don't have any real significant art or anything, other than a bust of Sir John Templeton and framed historical checks and share issues by Fairfax. Pretty plain jane for a company with $30B in assets and an $8B market cap. I think employee moral is best when employees are given respect, treated as equals and have a working environment where they feel productive and needed. Fancy offices and lobbies are as fleeting as that $1500 Louis Vuitton suitcase or a Rolex watch. I remember going on a tour of the CN Tower a few years back, and the tourguide was telling us how the Royal Bank building's windows looked gold colored, because there were real flecks of gold included in the production process of the window glass. I nearly vomitted thinking about that and exactly how ostentatious that is. You are correct that for many people, an artifice building or guilded lobby provide some comfort, because they feel that their money is more secure for some reason...thus the fancy buildings most banks and insurance companies built over the last 120 years in North America. But that probably attracts the wrong type of shareholder, employee or customer into the office. Cheers!

Hi Shalab, It was partly U.S. purchasers, but the bulk was coming from other parts of Canada (in particular Alberta & Saskatchewan), as well as quite a few European and Asian buyers. At one point back then, it took 70% of the average household income to service the average home in Vancouver...mortgage, interest, property taxes, maintenance. That number has not changed much in the last two-three years. I thought we were in a bubble three years ago and I still think we're in one now, but alot of people disagree or come up with reasons why it isn't...net migration into the city, desireability, lack of inventory, lack of land or qualified sites near the city, waterfront land is built out, etc. People always have an answer why something isn't in a bubble, until the pin prick hits and then suddenly everyone saw it coming. Right now, no one sees anything coming. Incidentally, there was a fairly recent penthouse sale in our downtown area for $15M for 6000 sq feet on the 43rd floor of a new building...and that isn't raising any eyebrows! There's a house in a very nice area not far from where I live in one of Vancouver's suburbs. A very nice house on about 1.5 acres of land...they are asking $19M! The house was built for $6M a little over ten years ago! That area while being quite nice, isn't even close to Vancouver's nicest areas. I can only imagine some of the listing prices those homes would fetch. Cheers!

What happens if there is an e coli outbreak at SNS? Then I'll buy a whole heck of alot more shares! ;D Cheers!

Cash flow, then we're talking about $45M. I hope we hit your $50M mark. Cheers!