Parsad

Berkshire has made their proxy filing to split shares. Cheers! http://www.sec.gov/Archives/edgar/data/1067983/000119312509239358/dpre14a.htm

Hi Eric, Regarding the question of securing a margin account against Canadian equities: Ajay (our prime broker) isn't in the office right now, but I've left the question with one of his associates. I should have an answer for you Monday morning. If they do it, I'm sure some other brokers will also. Cheers!

I think Buffett already said, that the compensation of the potential CIO's if they worked for Berkshire, is nothing compared to what they are already earning, and that their net worths are already substantial. Thus they are doing it for the right to work at Berkshire, not to make money from Berkshire. I'm guessing Brian Bradstreet et al at Hamblin-Watsa are doing it for the same reasons, since any of them could have gone out on their own a long-time ago and started hedge funds or private equity firms. Friggin' Sam Mitchell sold his stake in Marshfield Associates and decided to work at Hamblin-Watsa as a principal. That should tell people something! Cheers!

Article from the Globe & Mail on the NYSE delisting. Cheers! http://www.theglobeandmail.com/globe-investor/fairfax-financial-delisting-shares-from-nyse/article1370299/

We were also getting a lot of coverage from U.S. investment firms and things such as Motley Fool which were the result of being listed in the United States. Have you ever seen anything in the U.S. on Onex or Power Corporation? This is neither a positive, nor a negative...we are measuring intrinsic value, not popularity. On another note, we have no problem at all buying Canadian stocks in our U.S. dollar account that we use for MPIC Fund I, LP. Some U.S. discount brokers may be giving you problems, but most won't, and certainly most full-service brokers won't give any problems. If you are a U.S. resident, and aren't happy with your broker, please feel free to call ours: Ajay Desai/Qui Lam - Morgan Stanley Smith Barney - 1-800-731-9418 Their service is simply the best, and we cannot recommend them enough! Cheers!

Guys, A few answers to your questions: First, a 13-f filing is required by anyone who owns $100M or more of U.S. equities. So a 13-f will continue to be filed, unless Fairfax decides not to own any U.S. equities. Second, the transition from the NYSE to TSX will be seamless. When you put in an order, your broker will simply buy either U.S. or CDN denominated shares of Fairfax based on what you desire. The US dollar stock will be available on the TSX from Monday, and FFH will be delisted from the NYSE on December 10th. Third, NYSE exchange positions will be closed out, but anyone who has an outstanding short position will still have to meet that obligation they have, since they borrowed the stock. They can buy the stock on the TSX if required. Fourth, regarding your NYSE call options, it is best to contact your broker and get details on that. Cheers!

I think that is a good move. Cost savings, less regulatory headache and shorts can suck it! Cheers!

Don't bet your life on it. More likely Gate's CIO Michael Larson would be a prime candidate. Although Gate's would make the perfect Chairman for the company. Cheers!

Professor James Galbraith, son of John Kenneth Galbraith, comments on the recovery. Cheers! http://finance.yahoo.com/tech-ticker/article/375136/%22A-Truly-Extraordinary-Slump%22-Reports-of-Robust-Recovery-Premature-James-Galbraith-Says;_ylt=ArJ1x1td6V7LJSeCSONYR_a7YWsA;_ylu=X3oDMTE2cjV1YW9lBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDYXRydWx5ZXh0cmFv?tickers=XLF,XHB,%5Edji,%5EGSPC,DHI,TOL,PHM&sec=topStories&pos=9&asset=&ccode=

Hi Folks, Sorry, the ISP provider was having a connection problem between the message board's database and its server. It was just rectified in the last half hour after being down for a day. I'm sure there are lots of posts you all need to catch up on! Thanks and cheers!

So, does the replacement value of the property a railroad owns really matter if the company doesn't plan to do anything other than to continue to hold and use the property for rail operations? I think you hit on the head Tooskinneejs. No one is denying that BNI will be around a long-time, but the question that people have is if it's going to be a Netjets or MAE? Those right of way assets, like the real estate Sears owns, have a tangible value. The question is if the return on those assets is going to be great, middling, fair or poor. Greenwald seems to think they will be fair to poor, which I disagree with. But the jury is well out on those that believe it will necesarily be great. Cheers!

Why do you say that this will lead to years of Stagflation? I think stagflation is a best case scenario. I'm just of the opinion that we have record amounts of housing stock, and prices while stable, aren't about to rise any time soon. Consumers are saving and paying down debt. With all the stimulus being thrown, we are still finding that businesses are retrenching and trying to run more efficient operations. Thus the bottom line for businesses will improve, but unemployment and wealth creation will continue to suffer, especially in light of all the regulatory burden that will be instituted and higher taxes going forward. While deflation remains a risk if the stimulus is removed, I think slow growth with elevated levels of inflation from the stimulus will be around for many years. We said a couple of letters ago, that we think businesses will prosper modestly over the next several years. That being said, investors should be looking at individual investments, not the broad market or macroeconomic environment. Cheers!

I think there is no debate - we will not see deflation in our lifetimes. I have no idea what is going to happen, but I can tell you that deflation is still very much a real possibility. In fact, we've been experiencing a deflationary environment for over a year now. Cheers!

Just some stunning stats on mortgage delinquencies in the four hardest hit states. Can you say years of stagflation? Cheers! http://finance.yahoo.com/news/Mortgage-delinquencies-hit-apf-3335040403.html?x=0&sec=topStories&pos=1&asset=&ccode= The statistics, which are culled from TransUnion's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst. -- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago. -- In Florida, the rate was 13.3 percent, up from 7.8 percent last year. -- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008. -- In California, the rate jumped to 10.2 percent, from 5.8 percent last year.

even people realising that it is a bubble and who choose not to participate, might refrain from taking the opposite side of the trade because they know that the irrationality might persist for longer than their bank accounts. And when people refrain from taking the other side of the trade - then this also helps forming the bubble. I think this is incorrect. Bubbles don't burst because there are investors with opposite positions. They burst usually because at some point, they are no longer sustainable. As one triggering event occurs, a cascading effect usually leads to the unwinding and deleveraging of the entire system. Now investors with the opposite position can speed the process of the unwinding, but they are never the underlying trigger. By the same token, I don't believe Prem et al. just got lucky with their CDS "hedge", just randomly buying a cheap hedge that happened to pay off during a random panic. I think they identified something that was likely to be a bubble, and figured out a way to profit from it. I don't think Prem and the team really were as concerned about profiting from the hedge as simply protecting their behinds from a one in fifty year storm. They held those hedges for over three years before they enjoyed the full benefit...and that was just icing on the cake. For an insurance business, it is often necessary to hedge against certain macroeconomic risks, because it means the difference between being able to write business and being out of business. For the average investor, hedging provides little value as the frictional costs over time will actually hurt their results. Cheers!

No the letter is legit, as they've filed with the SEC. I believe this is the no-backdown Patrick, thus the non-reviewed filing of the 10-Q. Most other CEO's would have bowed to Grant Thornton, filed the restatements and then filed another restatement when they finally figured out what was the correct treatment by the SEC. But in that old Byrne way, Patrick fired Grant Thornton, and took the risk of filing an unreviewed 10-Q until they've figured out what the SEC believes is the correct treatment. Naturally the shorts, Sam Antar and Gary Weiss are going to have a field day with this. They'll be furrowing their greasy brows and wagging their weasely tails for weeks! Cheers!

Here is the transcript from the interview with Charlie Rose. Cheers! http://www.charlierose.com/download/transcript/10711

folks was wondering what everyone thought the next potential bubble might be and how would you profit from it. It's a good question to be concerned about, but I think investor's energies are probably better spent looking for undervalued businesses and profiting from them. When you look for bubbles, you are generally looking for irrationality in a specific area, but as we all know, irrationality can often persist longer than our bank accounts can continue pouring money into hedges. Unless you can find something where the capital outlay is minimal, while the probabilities of a triggering event occuring over a reasonable timeframe is acceptable, you may be aiming for a lame duck investment. Cheers!

Sanj, why do you say that Burlington will suck up BRK's cash for the next 50 to 100 years? Sorry, I should rephrase that. Burlington, like MAE or Netjets, are capital-intensive businesses. Overtime, they will be able to plow back alot of their income into their own businesses, leaving less cash in the hands of the CIO's. Many other Berkshire businesses like See's, GEICO, etc, spew off alot of cash into Berkshire's hands. They can't really plow it back into their operations. If Berkshire spent that $44B on businesses like that, that would mean billions more flowing into the hands of the eventual CIO's, who aren't going to be as good as Buffett with large amounts of capital. Cheers!

Yeah, I guess I should have clarified that "off-topic" discussion rule. I don't mind off-topic, as long as I don't get multiple complaints from boardmembers. So feel free to discuss "off-topic", but if multiple complaints come in because the subject is controversial or offensive, then I may have to pull it. If I start getting complaints from Patriot's fans, you're out of luck! ;D Cheers!

She's getting as much press as Doug Kass or Whitney Tilson these days when it comes to Berkshire and Buffett. I think it's kind of crass and naturally self-serving, but hey Buffett created the beast in the first place by giving her all access. Didn't anyone at Berkshire see this possibly coming? They run their businesses thinking about the worst possible outcomes, yet Buffett didn't think giving this woman more access than anyone else could backfire? His original intention of his annual shareholder's letters being his legacy and biography was the best and most fitting idea. Cheers!

Definitely off-topic, but I know there are some football fans here, if not Colt and Patriots fans. My boy Manning pulled his team through one more time against the amazing Brady. Unbelievable finish to this game! 9-0 baby! Cheers!

When you look 30+ years out, and attempt to rank which businesses/industries are most likely to still be around, I think BNI would definitely be above Coke on the list. Just as I think Coke would be above Google and Microsoft (even though both have larger franchise values). Sorry Max, I have to disagree here. While railroads have been around since the early 1800's, BNI itself was formed recently. Coke has been around since 1886. That's enough history to probably assume that both moats are at least equal. I would also argue that Burlington's business is solely dependent on the success of the U.S. over the next 50-100 years. Whereas Coke's success isn't dependent on any single nation. If the U.S. stumbles over the next 30 years, that's ok because China or India will be drinking more Coke. Coke's moat would also be unhindered by new technological advances, nor would profit margins be compromised by other's developing new distribution centres for competitive products. I believe the only real weakness Coke could be exposed to is if litigious judgments are made against Coke, by consumers who decide that the product could be detrimental to one's health. I think it is a very remote possibility, but there is always the chance that it could happen over time, not unlike the tobacco industry's demise over time. Smoking at one time was as acceptable and commonplace as someone eating a Big Mac or drinking a can of Coke today. Who knows what things will be like 50 years from now? On another note, I would also like to comment to boardmembers that what is good for Berkshire, isn't necessarily in the best interest of the average small investor, or even small investment firm. Berkshire makes investments for Berkshire's size and succession planning. The average investor really has neither concern when buying something for their portfolio. Burlington, like MAE, will suck up excess cash at Berkshire for the next 50-100 years. That means less cash in the hands of the potential CIO's, who are unlikely to be as good as Buffett...at least over such an extended period of time and with large amounts of capital. There are much smaller and cheaper targets that we all can look for. Cheers!

Here is an article about his visit to Peoria, complete with a photograph of him eating at SNS. And those are the new thicker fries that some areas seem to be serving. Hey Sanjeev....unfortunately my trip got cut short and I was unable to check out the menu. Sorry guys. No worries Keerthi! Cheers!

Short article discussing the merger of WEST and SNS. Cheers! http://www.roanoke.com/business/wb/226282