Parsad

If you have to choose one, go to Omaha. You should hear Buffett & Munger at least once in person, and see what they've built. We're not going anywhere at the Fairfax dinner, so you can always come the following year. Prem is also still quite young and in very good shape, so you'll definitely be able to hear him for many more years! :) Cheers!

<I>Regarding the other critique by RichardGibbons. You're right, I responded too impatient, irritated and cynical. Luckyly for me Jurgis comes to the rescue to show why I'm getting tired of (what appeared to me) another person wroshipping Keynsianism blindly. Look at his post:</I> Guys, please stop with the posts specifically targeting any one individual. Feel free to use their quote, but avoid personal attacks in your rebuttal. Otherwise I have to start deleting posts and threads! Cheers!

I assume that nothing can be done in 'restructuring' the contract? I always felt that it's too much to pay for the china GM, especially given that the CFO is the wife? See CSE Form 7 filing for August. http://thecse.com/en/listings/diversified-industries/premier-diversified-holdings-inc Never say never...but if contracts aren't in shareholders interests from the start, terminating them comes at a cost. Cheers!

China is china...more color in the annual letter. Cheers!

I haven't seen any sale of PDH shares from corner capital so obviously Parsad is in denial if I follow your comments. I hope he will appreciate your attention with your condolences, you were right from the beginning. Congrats! :o Those options and shares were issued before my watch to our general manager in China, brought over from Siemens China. It was a "kicker" as Junto said, but not my kicker. Nothing even remotely close to that contract has been offered since I took over as CEO...not to employees, not to directors and certainly not to me. Dilution was always going to happen because we had to diversify the business and start to generate different streams of cash flow. That was not going to happen overnight with only income coming from China. As you mentioned, the company is more diversified now, but is still a work in progress. You now have Sequant Re, Mycare Medtech, our real estate investments, 18% of Russell Breweries, our investment portfolio, the China MRI clinic and contrary to what Junto suggests about the diagnostic business, the Burnaby PET/CT Clinic which is starting to scale up very nicely with our addition of Clinical Trial scans. Look at our balance sheet...the Burnaby Clinic is carried at the depreciated cost of the PET/CT equipment...essentially the same as two years ago when it was shut down. You all understand the difference between accounting carrying value and intrinsic value. Can Junto in anyway convince a reasonable investor that the Burnaby Clinic is worth the same today as two years ago, when we are doing 30 scans a month, essentially now profitable, and scaling scans upwards going forward? This Clinic whose reputation was in tatters now has nearly 100 doctors referring patients. A Clinic who has no other competition than the provincial government, who we are building a relationship with? A Clinic that is now doing clinical trials where we do not have to buy the radioisotope for the patient or incur the shipping costs...gross margins on these scans are close to 80% and net profit margins are about 35%! What do you think this Clinic business is worth today already and what should its true accounting value be? Certainly not the depreciated cost of the PET/CT equipment! Judge me in another 3 years, so that I have at least 5 years at the helm! And as Goldfinger said, have you seen me sell a single share yet? Cheers!

No. Outside of inflated tech stocks, equities are still appealing compared to the alternatives, so betting against stocks at the moment may not be the best idea. Question is, and there is ample ammunition for this line of thought, is there an exogenic event that would cause yields to go back to much more sensible levels? The world is an economic powder keg at the moment...is someone or something going to light a match? If yes, then staying out of most asset classes is a good idea. If not, then stocks will continue to prove more appealing. That being said, I do know of one asset class that provides equity-like yields with zero correlation to other asset classes. In fact, an exogenic event would have little or no effect on this asset...insurance-linked securities! Why every pension fund, endowment, family office and large hedge fund isn't allocating a portion of their capital into it, I don't know?! But it exists! www.sequantre.com Cheers!

I don't hate my investors. I hate the fact that for some of them, their emotional constitution gets far better of them than their rational side. I would surmise that if and when the smoke clears, many will be kissing his ass again. People had the same comment back in 2007/2008 about him when the fund was down 70%. I know of very few managers (cannot even count them on one hand) that continued to manage their fund after such a loss and recoup those losses for his partners. Munger would be the only comparable I could bring forth. Pabrai could have easily taken the much-followed route of shutting his fund down and then start a new one in 2009 like many investment managers did. No need to try and get back up to a high watermark...but he didn't and he made every penny back. Most managers cannot beat the markets long-term. I just think that the assumption that those that did for many years are suddenly poor investors or incapable of doing so is shortsighted. With an operating company, there are no expectations to manage. The capital is captive and you can take a very long-term view. The operating manager can look stupid for many years until proven right...think Prem and his deflation bet. Far easier than managing a fund where investors can pull capital on you whenever they get scared or start to second-guess your abilities. Cheers!

To be fair, and I'll admit I'm not very familiar with Chou, his letter doesn't inspire much confidence. The section on Valeant is almost cringeworthy reading. It reads like it was written by an 18-year-old college student who fancies themself an "investor"... LOL! I can assure you that Chou is the type of investment manager that Buffett would not hesitate to hire. He once said that he was looking for someone like Peter Cundill...well Chou embodies everything that Cundill was about. If Berkshire shareholders had no clue who Ajit Jain was, it is likely they would not hire the man who has made more money than anyone outside of Buffett for Berkshire. Cheers!

I think investor expectations are so f**king wacky that investors themselves don't know what they are talking about. Buffett hasn't beaten the indices over the last 7 years...is he suddenly retarded? Not good enough? A has been? Apparently Chou, Pabrai and Watsa don't know what they are doing anymore! I've made money for my partners since May of 2006...beating the indices over those years by about 3.5% annualized...that's the top 1% of money managers during that span. Even this year, we are up 9% for the first half, while the market is up 3%, but I've got a partner who is pulling some money because I don't report often enough or consistently enough. I suppose they would prefer if I expounded on the markets, macroeconomics, stock picks and all of the other value investing bullshit you could put into a letter, instead of making money for them and working my ass off! Incidentally, that 9% is on a portfolio holding about 45% PDH which hasn't moved...so I've returned about 18% at June 30th on half of the portfolio I could allocate into ideas. Again, it must be time to part ways with me, since I have no f**king clue what I'm doing. Maybe Francis should be put out to pasture with me...Pabrai too...he's really sucking ass right now. Anyone else you guys can think of that are poor performers? Cheers!

http://www.forbes.com/sites/danielfisher/2016/08/29/young-hedge-fund-manager-cracks-the-private-equity-code-small-stocks-and-leverage/#4d5d2aaf4147 Cheers!

You guys have it a bit mixed up. They are exchanging the converts. Total dollar amount of the convertible position remains the same. Cheers!

Great article on Doris Buffett (Warren's sister) and her philanthropy through the Sunshine Lady Foundation. They are looking for volunteers in the Boston area. Cheers! http://www.bostonglobe.com/business/2016/08/13/meet-doris-buffett-warren-sister-she-wants-your-help-spending-her-brother-billions/aEc47mXfoSeRkTgal5FgvK/story.html

LOL! Sardar wins again! Cheers!

Hi KJP, Thanks very much for the eloquent post! Much appreciated and I agree that this reduces the quality of discussions and is disrespectful to all members. If boardmembers could use the "Report to Moderator" feature when they run into these types of posts, it would make it much easier for me to monitor what is going on in a certain thread. Some days it is easy for me to monitor the posts, and then some days, the sheer volume of posts is enormous. Reporting a post at least speeds the process for me to target a specific post and then review that thread to see if the behaviour is recurring. Thanks very much! Sanjeev

I take issue with this statement. While I see what you mean in terms of technological development, advances in certain fields, etc., it's estimated that millenials will be the first generation in a long while to NOT be better off than their parents on average. My nieces, nephews, their friends are all millenials. They are all in a better position than I was at their age. While cost of housing is higher for all of them, they have better quality jobs, benefits and prospects than I did. They have cheaper access to capital. They have better medical, dental and general healthcare. They have better access to information, technology, air travel and personal freedoms. Their mixed race friends that are couples don't face past prejudices and their gay friends don't worry about being beaten while walking home at night. Expenses outside of housing are actually generally more affordable than in past generations such as food costs, utility costs, automobile costs, etc. Millenials are graduating in a world that demands they go to college at an exorbitant cost, take on tens of thousands in debt to do so, to be eligible for jobs that are highly competitive and barely pay better than the $15/hr demanded by fast food workers who don't need degrees, just so they can become "contributing members of society"/tax payers which means they are immediately on the hook for carrying the rest of the country with their income taxes by taking. The United States, as well as Canada, actually has more opportunity in science, technology, healthcare today than any other period in the last 50 years. With the boomers retiring en masse, millenials will have access to a dearth of jobs as teachers, police officers, doctors, dentists and especially tradespeople. My nieces and nephews are all leaving university or college with jobs or decent prospects. Further, tax rates are at historical lows while deficit and debt are at historic highs. Any millennial with a brain can see that the likely trajectory in taxes is up even while the likely trajectory of benefits for our generation is down (social security being nonviable, growing health care costs to be carried publicly, deleveraging of public balance sheet at some point given the 100k/tax payer balance at the moment, etc.). This is true. Doesn't negate the higher quality of life they will enjoy and the longevity that will exceed ours. Millenials are looking at more debt (personal and public), higher taxes, more expensive housings/cars/etc., lower social benefits, lower incomes, and lower investment returns going forward. On top of that, very little of this was their fault (other than maybe student loan balances). This is all the consequences of decisions made by those representing their parents and grand parents. Disagree on the lower social benefits, lower incomes and lower investment returns. The last five years were some of the best returns the market has ever seen and it won't be the last. Millenials are also about to benefit from the largest transfer of wealth in history as they inherit from their parents and grandparents. Sure we have smartphones and computers are ubiquitous. It's still hard for me to see how that makes up for a lot of the above and can definitely understand why the younger generation is pissed off and supporting non-traditional candidates like Bernie and Trump. If you watch old episodes of "All in the Family" or "Good Times", you would think that the world would have run out of food by 1999 and that domestic political turmoil/protests/riots would never end. The country goes through cycles, where bombastic candidates like Trump fuel voter's fears, and the country has gone through a period of turmoil, either economic or political, including unsuccessful foreign policy. This is a replay of the late 60's and early 70's. A generation that thought things would never get better, yet they had one of the greatest periods of success in history...the Boomers! The Millenials may worry in the same way, but everything points to them having as good a life or better in the future. Cheers!

I've refrained from putting anything political on here, as such posts always end up in a flurry of rhetoric, but this one really made me laugh. I love Wilbur Ross the investor, but if Americans want to know (do they even really care?) what the rest of the world is looking at and the perspective they have on what is happening in this U.S. election, this is all you need: https://www.yahoo.com/finance/video/wilbur-ross-trump-joking-khan-114100665.html No real way to defend Trump's comments on the Khan family, but even poor Wilbur gives it a go! This oomphaloompa is so close to being the next President, even right-wing conservatives in Canada can't believe what is happening. I know, I know...Hillary sucks...and I agree! But really, you guys are contemplating giving the keys to Trump? Every single person on this message board today, is living better than the previous generation, yet the fear this guy is permeating makes many Americans think they are still stuck in the middle of the Great Depression or in the midst of World War II. I'm willing to bet that almost everyone on this board is living better than they did even 8 years ago! Yeah, I know you guys can't stand Hillary, but don't give the keys to this raging lunatic who contradicts everything Americans and the rest of the world holds true. And stop trying to explain what he REALLY meant when the crap comes flowing out of his mouth...not worth the effort or the self-denigration! Cheers!

For someone who likes to hold themselves to lofty ethical standards, he sure had some unethical tactics in how he tackled his fraud thesis on Fairfax Financial. I'm glad he doesn't mind what people think of him, as I've always felt he had the characteristic odor of what I sometimes wipe off the bottom of my shoe! A blast from the past that the rest of my life can do perfectly fine without. That being said, many people on this board became incredibly wealthy betting against Hempton, Eavis, Greenberg, Chanos, Gwynn and the rest of the FFH shorts. Cheers!

Thanks everyone! Much appreciated! Have 4th of July to my American compatriots! All the best, Sanjeev

Hi Guys, Yeah, there was an update by Watermelon Webworks and the banner is blocking a bit of the message board on iPhones and Blackberry. They are working on it this weekend and everything should look back to normal after the weekend. Thanks! Sanjeev

Coremark report on Fairfax India...good read. Cheers! FIH_Initiation_2016-06-10.pdf

My misunderstanding was I thought there was a compounding hurdle. Without the compounding hurdle I can see how he’s now in carry. Thanks. No problem. Many investors I've talked to all assumed that the hurdle was compounding. I believe Buffett's hurdle with his partnerships back in the day were also non-compounding. That's not true. Buffett's hurdle was compounding. I'm pretty sure Lion Fund was compounding. As is Mohnish's funds, our funds and many other funds that I know of. There are also many others that do not compound. Cheers! I'm almost certain Buffett had a compounding hurdle. I also believe he had another arrangement without any hurdle at all but would assume some percentage (25% ?) of the downside in exchange for a larger percentage (50% ?) of the upside. Anyways, my understanding was that Sardar modeled his comp plan off of BPL, that's why I was under the impression it was compounding. I have enormous respect for people who use the compounding hurdle in their partnerships. It's nice that some people still want to make money with, not off of, their LPs. I missed your responses until today. I've done some research and couldn't find anything confirming that Buffet's partnerships hurdles were in fact compounding. Thus, I'd love to get your source on that statement. In practice, it wasn't an issue because Buffett delivered massive gains every year. From Buffett's July 1962 Partnership Letter: The. above calculations of results are before allocation to the General Partner and monthly payments to partners. Of course, whenever the over-all results for the year are not plus 6% on a market value basis (with deficiencies carried forward) there is no allocation to the General Partner. Cheers!

He was my father's favorite boxer and in many people's minds, one of the great generational athletes, but Muhammad Ali passed away at 74. http://sports.yahoo.com/news/muhammad-ali--simply--the-greatest---dead-at-74-042902069.html

I think picking a specific period is arbitrary. - If you go solely by 2010-2015, then we haven't beaten the market. - Add one year...2009-2015 and we have beaten the market and are on par with the best investors. - Look at 2006 to 2015 and we are in the top 1%. But our numbers don't matter because no one gives a flying fig about our long-term results. They really only care about shorter term periods or recent history. Many of the managers who started when we did are no longer in the business. We keep plugging away slowly like Francis did 20 years ago. So much capital in the wrong hands and we can barely get a speck of sand on a huge beach! Cheers!

This has really went off the rails. I wasn't criticizing the famous investors listed, I was defending Buffett and his IBM pick. There are certain qualities that IBM had that prevented a real blowup. I will refrain from further comment. Hi KC, I wasn't referring specifically to you or anyone else, so please don't take it personally. It just seems as though every time there is a blowup by a manager, their entire career's work becomes negligible relative to that blowup. You are correct...they have had significant losses in ideas, and Buffett has never lost more than 1% of capital at Berkshire according to Munger...but he's arguably a six-sigma event relative to his peers. In this business, you are only as good as your last year or last month...the "long-term" investor is no better at viewing the long-term as the average investor. Thus it's a bit frustrating to see good managers get lumped in as mediocre in discussions. Cheers!

I love reading. I'm of the opinion that it matters less what you read, but the fact that you DO read and ABSORB everything you read. I'm not going to shoot somebody down for reading infoporn, fiction, non-fiction, newspapers, blogs, online, hardcopy, whatever...just read. In fact, I think people who read everything have a pretty good idea of what the world around them looks like. And for those that like to read only very narrow-subject material, all the power to them, because they are specializing in a niche of great interest to them. I read all sorts of material: - I don't know how many legal documents, filings, press releases, invoices, etc go across my desk in a month. - I read two-three newspapers a day. - I read about two books a month. - I read flyers, pamphlets, junkmail, everything. - I read online - I read offline - I read blogs - I read magazines - And of course, I read 10-K's, 10-Q's, presentations, business plans, powerpoints and everything else I can get my hands on related to investing. I don't want to read less...I want to read more and more! Cheers!