Estimated Profit

$.02 Gold, like Dollars, Euro, Yen, has value only insofar as one has faith in that value. How much faith do we have in the value of our paper currencies? How much faith do we have in the United States to keep the sacred trust of the global reserve currency? How much faith do we have in the European Union to exist as it does now in a decades time? In our world that is more and more global we must understand that the faith that we are going to put into a common currency must be shared. Gold seems the only logical recipient of that faith for all the reasons mentioned earlier in these posts. The giant gold cube argument is a non starter in that Buffett owns huge cubes of paper instead of metal. No difference.

I'm surprised that nobody complained about the whistles. Boston shouldn't have been in the finals IMO. Tampa's game 7 had no whistles either and their special teams are more solid than Boston's. Take the power play out of the games for the most part and you have a huge advantage to the team with the weaker special team play.

I find it interesting that you use the word: "comlain" as much as you have. Also that the author should offer a solution to her observation. I think of this a "food for thought" type of article and I'm happy that no solution was offered in it. I often parallel aincient Greece and Rome to USA. The reason I like this article so much is not that it offers a solution, but that it confirms my bias. :D

The VIX doesn't seem to indicate panic yet. Even though Time magazines and others are usually somewhat coincident indicators we don't have real downward pressure in the markets yet. The last time we saw that was after March 11th and the Earthquakes in Japan. http://stockcharts.com/h-sc/ui?s=vix There is good reason to be hedged here and this cover is probably among the first of many to come. I would wait for the VIX to be higher prior to allocating serious amounts of capital.

I really enjoyed Alice Shroeder's article. The comparaisons to USA and Rome are many and varied but this one is particularly eloquent IMO. Enjoy (or not) http://www.bloomberg.com/news/2011-06-02/the-danger-of-living-on-bread-and-circuses-alice-schroeder.html :P

Flame Away. If no one else will say it I will say it. Step 1 - Infiltrate message boards. Become someone that noone suspects and create multiple aliases. The more influential the message board the better. Step 2 - Identify a sector of the markets that is weak. Currently Chinese companies. Back in the day, Insurance companies. No one wanted to invest in insurance during the lead in to the Gulf War. Step 3 - Meet with your non eagle scout hedge fund buddies and identify the company that will be taken down. Step 4 - Short the pants off of it Step 5 - Buy lots of puts and accumulate enough shares to avoid any potential downtick rule so that the shares plummet when the report is released with LOTS of market orders. Step 6 - Have some friends in the media to loudly shout what is going on and give recognition to the perpetrators of the scam. Quote the report to maintain journalistic "integrity". - à la: "Blue Horeshoe loves Anacot Steel" Step 7 - Release the report, and release the Craken THE PROBLEM WITH ALL OF THIS IS we are currently speaking to people paid to support Muddy Waters. What is all this Hempton isn't a bad guy crap? I haven't replied in a while because I'm tired of posting and hearing nothing but the replies of henchmen paid to help pull off a fraud. Sparsad, don't try to talk to Brolga under another name, no matter how many names he has here at this time. Again - flame away agents of darkness. >:(

In the States do you have the option to split the amounts? 50% ARM and 50% fixed? Here in Canada we can do that though our mortgage terms reset every 1-5 years in general. At any rate, if you can split the amounts do that...

I only have a limited amount of capital that I can use for hedging purposes. approx 15% which hedges 30%

By the by, I did put my money where my mouth was on Friday. I had a rough weekend but I'm feeling pretty happy about it now.

Hey, if I could trade my reputation for 10m - 100m in my 30s... I might just do that. That's a pretty high pay grade for temporary negative press that main street will never hear about. Also, then he writes books and gets taken on as a consultant in future frauds like Hempton. All this FFH stuff hasn't stopped him from doing business.

Hello People, I'm currently using SDS (10%) and QID(5%) to hedge my portfolio to a correction in the overall market. I had a bad experience using betapro to try to profit off of the downside of commodity markets in 2007 due to the nature of the beast. Futures contracts roll ended up making no price movement unprofitable. At any rate, if anyone has any comments on the [in]appropriateness of the above mentioned positions to be used for a short term hedge, it would be appreciated.

This is too much like deja vu. The level of collusion it would take to drive a stock down like TRE's was is immense. This was an orchestrated attack, no doubt about it. If the report is fraudulent the perps have made their fortune. One of the things that I dislike most about the report is the casting of doubt using the corporate structure of the company. The company has many subsidiaries or holds assets in other jurisdictions this is transalated into a "complicated structre" and "difficult to analyse". All you have to say is a girl is a slut and she's a slut. In this sort of corporate situation millions upon millions are made and no one is ever brought to justice. As an aside it seems TRE is defending itself more vigorously today. http://www.newswire.ca/en/releases/archive/June2011/06/c2925.html

This smacks of a brolgaboy style post. Anyone around here who isn't aware that manipulation / short attacks happen hasn't been around for long. This is all bringing back memories.

This smells too much like FFH in2003. Way too many similarities. This feels too much like an attack to be legit, everything lines up: Quiet period before earnings Innuendo, no proof, market action too quick to not be collusion amongst players with very deep pockets, big names with bad associations being quoted, here Madoff, Ponzi, back in the day, Lay,Skilling, Enron, fraud... Fraud... FRAUD. Illiquid stock, company has little time to defend itself... The only thing different is it didn't happen memorial day, a holiday Monday on an inter listed stock. I can't have more faith in MW than in the various investment houses from ? BMO, TD, BNS, Dundee etc. Etc even though Institutional Imperitive is strong with these ones.

Brolgaboy hasn't jumped off a bridge yet? I'm not sure if I'm happy or disappointed. I suppose it's good to love even God's littlest creatures but that name still gets my hackles up. >:(

I was searching for a price on the last 10 year bond offering that FFH did in June(?) as I was interested in picking some up when it was priced at $102 lo and behold when I searched the inventory for bonds that yielded north of 5% over a period of 10 years, I saw that there was another issue from another company that came due in 2019 not 2020 that had a yield about 50bps lower than the FFH bond. The company was Yellow Pages. Frankly I couldn't believe it. The Yellow Pages bond had a higher price than the Fairfax bond with only one year maturity difference. What is Mr. Market thinking? ???

A banker friend of mine who does loans and opens accounts works part time at a hospital parking lot. It turns out that he gets paid more per hour working as a parking lot attendant than as a full time bank employee. It never ceases to amaze me that a job paid for by the government is paid twice as much as a similar private sector job would be paid. Doubly amazing is that it is the private sector that pays the government employees wages at the end of the day. http://www.bloomberg.com/news/2010-09-07/your-fat-paycheck-keeps-your-neighbor-unemployed-kevin-hassett.html Deflation is necessary in some sectors. But unions are so strong in many cases that they won't let it happen. Case in point Toronto's triannual garbage strikes. High wages for unskilled jobs are a burden on all. And we must watch as declining services are met with higher prices steering our dollars away from other areas of the economy.

Can anyone comment on the amount of money FFH is making right now on it's bond portfolio?

Whitney Tilson on CNBC this morning. Speaks of MSFT as well as JNJ, BRK and bonds. http://www.gurufocus.com/news.php?id=105975

Kind of reminds me of what you've built here Sanj. Helping many, asking for nothing.

Hi guys, I am lucky enough to have a good friend who is wildly passionate about Technical Analysis and I have learned from him and he from me. Over the last few years we have morphed our styles together so that we market time instruments whose valuations we feel are compelling. If there is something that we want to own we use the charts to time our entry and exit points and given the volatility we have been outperforming handily. Using the TA in helping us make decisions is enormously helpful. For example, look at a weekly chart of TLT the 20+ Year T Bond index. You'll notice that yields haven't been this low since Dec 08. This is a reflection of QE to be sure but it is also a measure of fear. In one picutre I can see that bonds look too high, the equity markets are in all likelihood too low. As a measure of fear it looks to be a good time to put on risk. At any rate, finding what you like, buying when the chart says so, selling when the chart says so has worked well in the last 18 months for me. If I end up in a losing position and nothing has changed with the fundamentals of the company then I don't have to worry about it, I hang on, or add as the situation dictates. If I make a mistake and sell something too soon, I look for the next opportunity and keep on trucking. :)

Hi Sanj, I've been to two dinners. I love the guests, it's always great, but mingling with people from the board is the highlight for me. Turn it into an evening focused on the speakers and it'll be like a roadshow, might as well tune into the webcast after the event. ;) Seriously though, I appreciate the informality of the night and sitting beside people whom I know solely by moniker. I like your option dinner at a hotel, start the evening off with a cash bar and mingling for boardmembers and invitees. Costs won't be that much higher because we all pay for dinner anyway. Have people paypal in advance to confirm numbers and payment and then we're off to the races. P.S. If you ever want any help with anything, email me, or even ask the board, I'm sure you'd have volunteers aplenty with just about any task that you'd like to farm out.

With all due respect Cardboard I don't think there are any lines to read between. Looking at the quote: In our opinion, this is the worst time to hold cash and short-term treasuries unless you believe we are headed into a 1930s style depression. And if you believe that you should redeem all your Fund units. In equities, we believe the financial, retail and pharmaceutical sectors are undervalued. Francis seems to be giving a pretty clear opinion here. He then goes on to describe, in detail, the Warrant opportunity that he wouldn't mention if he were as bearish as it seems Prem is. I suppose it would be important to note that Prem's hedging his book is much more important than hedging a personal or mutual fund portfolio is. We are very leveraged at FFH 4:1 as is often quoted. Prem may not be as bearish as the headline positions would make it seem. All he needs to do is earn 4% on his overall portfolio and that's adding 16% to book. Keep the CR low and voila, who cares that you didn't blow the doors off we're compounding at a great rate. Finally, a 200 million investment in a hedging derivative is only approx 1.25% of the value of the overall portfolio. Not bad for protection for the entire enchalada. It just makes a great headline. At any rate, it seems that Francis is bullish to me. :-\

Here we go again with the black boxes with these financial institutions. Though Citibank and Deutsche Bank may have hedged by selling the contracts to other counterparties, that won't mean Jack if the other counterparties are forced into bankruptcy by this or other stupid decisions. I laud Chou for the sharing of his ideas of the US financials long term potential but the risks are still real. Peter Garrett might sing of their "short memories".

Hey Sanj, The link you posted requires a subscription. Any chance the text can be posted?