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Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

Cheers!

 

 

Who is the guy on the left? For a second there, I thought he was Michael Burry...

 

I think its Guy Spier

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Some of you may like this:

 

Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

Cheers!

 

Parsad,

 

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

 

Man, would I have wanted to observe those two talking...

 

Because we have fun screwing around with you guys!  ;D 

 

I don't know why he sent it to me...you guys are going to have to ask him if it is of any significance or coincidence.  His AGM is coming up in a few months, so I'm sure the question will be broached by someone from here.  Cheers!

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Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

Cheers!

 

 

Who is the guy on the left? For a second there, I thought he was Michael Burry...

 

Nope, that's the lovely Mr. Spiers...the Edge to Mohnish's Bono!  ;D  Cheers!

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Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

Cheers!

 

Parsad,

 

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

 

Man, would I have wanted to observe those two talking...

 

Could be because he knows people on the board are in interested in Fiat and because there was some speculation that Pabrai owned Fiat and had referenced it in a talk (I think Plan first mentioned Fiat as a possibility). 

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John Elkann … wow. I guess this is some sort of punishment for not going to religious gatherings. Mea culpa, mea culpa, mea maxima culpa.

 

PS: The Ferrari FF is cool but is not a real Ferrari.

 

I agree.  Looks like a Hyundai Veloster!  Cheers!

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Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

 

Cheers!

 

Oh, you are a friend of Mohnish?!

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Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

 

Cheers!

 

Oh, you are a friend of Mohnish?!

 

Yes...he's one of the greatest guys I know.  Cheers!

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Some of you may like this:

 

Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

 

Cheers!

 

Oh, you are a friend of Mohnish?!

 

Yes...he's one of the greatest guys I know.  Cheers!

 

Wow! Does he go to this forum too?

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btw: I have a weird feeling that fiat is Pabrai 's secret 40x holding, as some suspected ...

Guess I will build a tiny position in this pullback and then study more - the europe market is a real headache

 

 

Blasts from the past

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Guest hellsten

In case you guys didn't read:

 

http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

 

Thank you. This thread and the GreenWood Investor article are a great read.

 

Regarding FIATY, I even like the nightmare scenario outlined in this presentation:

http://www.gwinvestors.com/Main/Resources_files/2013%20Q1%20Investor%20Call%20Presentation%20%28High%20Res%29.pdf

 

Fiat SpA Nightmare scenario In the event of a Euro Disaster:

• Bondholders cannot block the distribution of Chrysler and Ferrari shares to current shareholders

• Both assets alone are worth more than the stock’s price

 

I'm wondering though if there's something I've failed to understand; mainly if there's something that can kill FIATY. In any case, I'm comfortable investing alongside EXOR. If Guy and Mohnish own the stock then I'm even more happy.

 

And thanks Sanjeev for sharing the picture of Guy, Mohnish and John Elkann :)

fiaty.png.11833256b9fd2391eaedd55892b21250.png

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FIAT (€4.6; Reduce) / FIAT INDUSTRIAL (€8.5; Buy): Investing €5.7bn in Brazil by 2016

 

After a meeting with Dilma Rousseff, Sergio Marchionne (CEO of Fiat and Chrysler and Chairman of Fiat Industrial) announced an investment plan for Brazil totalling BRL15bn (€5.7bn) between now and 2016. For Fiat, this investment will enable the construction of a plant in the state of Pernambuco whose production capacity should reach 250,000 units from 2015. It will also enable the raising of capacity at the existing plant at Betim (Minas Gerais state) from 800,000 to 950,000 units a year by 2014.

 

As for Fiat Industrial, the plan will mean the start-up of defence vehicle assembly at the Sete Lagoas plant (Minas Gerais state), which currently makes Magirus vehicles (fire trucks, in particular). The CNH tractor factory at Curitiba will also be expanded.

 

The amounts invested will furthermore bolster the two groups' R&D. Sergio Marchionne reckons that the total investment will create 7700 new direct jobs and 12,000 indirect jobs.

 

Part of this plan (BRL9bn, i.e. €3.4bn) had already been announced as part of the 2011-2014 plan. The additional BRL6bn (€2.3bn) was added yesterday. The breakdown of the total between Fiat and Fiat Industrial has not yet been indicated.

 

In any case, these investments form part of a natural process of expansion in a market which is very important for both groups, where localising production means that heavy supertaxes can be avoided. Note that we are expecting the Brazilian auto market to advance by an average of 5% over the next few years. Fiat is currently number one in Brazil with a market share of 22.7% (passenger cars + light trucks). As for Fiat Industrial, the planned investments will enable Iveco to consolidate its positions and beef up its locally produced offering. Furthermore, CNH is to develop its production capacities to make the most of the market boom (+33% in Q1 13; +10%-20%e in 2013) and to hold on to its number one position (44% market share).

 

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Bank of America/Merrill Lynch analysis:

Our price objective of EUR2.00 (US$2.71/ADR) is based on comprehensive DCF analysis.

 

Source:

http://www.borsaitaliana.it/documenti/studi.htm?filename=98420.pdf

 

Thanks for posting

 

This report pegs the value of Ferrari stake at €2.4B, referring to the transaction of a 5% stake from Mubadala:

Fiat has paid €122 million (Dh612.8m) to buy back the 5 per cent stake in Ferrari that was sold five years ago to Mubadala Development, the investment company owned by the Abu Dhabi Government.

 

...

 

Mubadala bought the 5 per cent stake in Ferrari in 2005 for a reported €114m, which suggests the company made an €8m profit on the transaction. At the time Ferrari was valued at about €2.3 billion.

http://www.thenational.ae/lifestyle/motoring/fiat-buys-back-ferrari-stake-from-mubadala#ixzz2SbohXbhX

 

They also use a 1.6 EBIT multiple for the EV of the Chrysler stake, but their estimate of EBIT is much higher than that of GW (3.3 vs 2.1).

 

The DCF analysis assumes a straight line 2.8% NOPAT margin over 10 years, which means that they are not considering the effects of leverage on NOPAT.

 

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http://skiddmark.com/2013/03/the-truth-about-ferraris-brand-power/

 

When Ferrari are separated out, we see an enterprise value (EV) of $6.01 billion with their brand accounting for 61% of that – $3.64 billion.

 

To put that in perspective, looking through the list of premium automotive brands, we have BMW and Daimler-Benz with brand power values of 22% and 21% respectively. Both companies are heavily leveraged (with high levels of debt financing their growth), hence their high EVs of $104.5 billion and $95.0 billion each (compared with market caps of $58 billion and $56 billion). Volkswagen Group are in a similar position, $100.7 billion enterprise value with a brand power of 24% – which reflects the considerable investment they’ve also made in their future business.

Unsurprisingly, Ferrari’s nearest competitor is Porsche. With a year-on-year sales increase in February of 18.2 per cent (30.5 per cent in the U.S.), the German powerhouse delivers a brand power of 43% on an enterprise value of $26.1 billion.

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Bank of America/Merrill Lynch analysis:

Our price objective of EUR2.00 (US$2.71/ADR) is based on comprehensive DCF analysis.

 

Source:

http://www.borsaitaliana.it/documenti/studi.htm?filename=98420.pdf

 

Thanks for posting

 

This report pegs the value of Ferrari stake at €2.4B, referring to the transaction of a 5% stake from Mubadala:

Fiat has paid €122 million (Dh612.8m) to buy back the 5 per cent stake in Ferrari that was sold five years ago to Mubadala Development, the investment company owned by the Abu Dhabi Government.

 

...

 

Mubadala bought the 5 per cent stake in Ferrari in 2005 for a reported €114m, which suggests the company made an €8m profit on the transaction. At the time Ferrari was valued at about €2.3 billion.

http://www.thenational.ae/lifestyle/motoring/fiat-buys-back-ferrari-stake-from-mubadala#ixzz2SbohXbhX

 

They also use a 1.6 EBIT multiple for the EV of the Chrysler stake, but their estimate of EBIT is much higher than that of GW (3.3 vs 2.1).

 

The DCF analysis assumes a straight line 2.8% NOPAT margin over 10 years, which means that they are not considering the effects of leverage on NOPAT.

 

Here is the PDF, quite a pain to view it via their Java applet.

 

Hope the market starts to believe Fiat is worth €2.00 a share.

FIATY_ML_Report.pdf

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Some of you may like this:

 

Hi Sanjeev,

 

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

 

Warmly,

 

Mohnish Pabrai

 

 

Cheers!

 

Oh, you are a friend of Mohnish?!

 

Yes...he's one of the greatest guys I know.  Cheers!

 

Wow! Does he go to this forum too?

 

Mohnish was actually posting 2 or 3 times at the old predecessor forum, the MSN Berkshire Hathaway Shareholders message board. I barely recall, but I remember that he actually responded to one of my postings in a thread about him, after I teased him with some SEC filing about one of his purchases. He was in earlier years posting on the Fool.com occasionally. He also comes to Toronto to the Fairfax AGM and this boards shareholder dinner. Actually Prem Watsa is also a major doner at Pabrai's Dakshana Foundation and an advisory board member. So, I bet for sure, Mohnish still seems to be some permanent silent reader of this forum here. Prem, Francis, Guy Spier and also Allan Mecham are aware of this forum.

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