LC

So the corporation owns the assets, and shareholders own the corporation, but shareholder's don't own the assets? Not sure how I follow that logic. If I own 100% of a company (and for simplicity let's assume no debt covenants), can't I go sell the company's assets if I want?

Thank you indy!

A short blog post on some reinsurance company busts over the years. http://nihoncassandra.blogspot.de/2013/08/greenlight-redlight.html It makes me wonder...the post leaves out reinsurance successes such as Berkshire's reinsurance companies (although to be fair, Berkshire isn't a hedge fund). Perhaps success in this case has to do with the humility and discipline of the manager and corporate culture (i.e. not taking overconfident, undue risks).

Just have to listen to Munger's lessons on cognitive biases. In this case, incentive bias. Clooney doesn't star in the "safe" movies (ex: the mediocre action movies guaranteed to draw an audience) easy money makers. Loeb wants Sony to make more of those movies and take less risk, which would reduce opportunities for Clooney. Not very surprising that Clooney is against it, even though he is typically a lot smarter than that. The same applies to Loeb. He doesn't care about any artistic or cultural values, he just wants the most profitable ventures put forth. What's wrong with that? Isn't the purpose of a business to put forth its most profitable ventures? Depends on your time frame. Do you want to put our the most profitable movies this summer or do you want to build a studio that great directors, actors, stage people etc. want to work for, and build a history of making quality work?

Just have to listen to Munger's lessons on cognitive biases. In this case, incentive bias. Clooney doesn't star in the "safe" movies (ex: the mediocre action movies guaranteed to draw an audience) easy money makers. Loeb wants Sony to make more of those movies and take less risk, which would reduce opportunities for Clooney. Not very surprising that Clooney is against it, even though he is typically a lot smarter than that. The same applies to Loeb. He doesn't care about any artistic or cultural values, he just wants the most profitable ventures put forth.

I don't know much about Loeb's back story or reputation but I can't quite argue with this quote from Clooney as it stands:

Great video collection, there are a few there I haven't come across. Thanks as always Sanjeev.

Another point is that once scale is achieved, they will also be able to purchase energy in bulk for some additional favourable economics. But I think Nate has it right: the idea of owning a car for independence (and a sign of a youth's entrance into adulthood, and all the other emotional ideas society has about car ownership) need to die a widespread death before this can ever achieve the scale needed to make it work.

Sounds like you need reinforcement of your decision to hold cash. Buffett's biggest mistakes have been ones of omission, i.e. missed opportunities. The mistake people make when they read this is saying to themselves, "Well I won't have that happen to me, I'm going to grab those opportunities!". Then they reach too far and perform poorly. Instead, you should consider it a good problem to have! After all, if you have something in common with Warren Buffett, isn't that a good sign? Value investing is very price dependant. If the prices don't work, no amount of rationalization can make it work. The price is what it is. Buffett and Munger have held cash/cash equivalents for YEARS before prices made sense to them. More importantly, just because prices make sense to someone else doesn't mean they make sense to you. This is an important lesson as well. I would advise if you can't find good values, keep looking. Do not compromise!

Well, assuming you agree with the pension assumptions and there truly is an overfunded situation, then yes you back it out if you want to do EBITDA/EV type analysis. (When I look at compounding investments I try to look at FCF on it's own and then form a qualitative view of the economics of the business (i.e. the moat, if any). I only look at EV or BV to form an opinion on how much capital investments are necessary, how much capital was put into the business in the past and how those past investments have ended up in the current EV.)

I think it depends on what the investment thesis is too. If you're saying the company is undervalued on an asset basis then I would consider it an asset. But if you're looking at a compounding machine or if the thesis hinges on the company's earnings, I'm not sure it plays a huge role. Also consider the company's competitors. Do they have pension liabilities? How does the funded status of each compare?

I'd take a page from Warren & Charlie's book and say muni's, but with rising rates and defaults...what's so wrong with cash!? In addition...the article seems too paranoid. The Era of Uncertainty? I am almost certain that Americans will be eating hamburgers, drinking Coke, living in single family homes, commuting via car, using their phones, using medical care, burning fossil fuels to heat their home in the winter and using electricity to cool it in the summer, and watching TV in 10 years. What exactly, is so uncertain? Interest rates? I can see it now, grandmothers everywhere in the sweltering heat exclaiming how they refuse to turn the central air on because interest rates are too high. Or my friends and family refusing to use their phones because of "macroeconomic uncertainty". Corporate profits are at all time highs, therefore I refuse to drink Coke. I'd like an RC Cola, please!

"I've owned 400-500 names, but most of the money was made in 10 of them."- WEB, Berkshire AGM 2013 How can Buffett's 20 punches quote be considered contradictory? He said if you took that approach it would improve your results, he didn't say it was his own approach. I think it's a general mindset. If you hit your 20 punch limit and have been successful, and then BAC comes around trading at .5 tbv, are you going to pass? I don't think Buffett meant it as a hard and fast rule, although I'm sure if people did treat it strictly I'm sure they would do fine. All I'm saying is there are always exceptions!

Below is a link to the S&P buyback index. May be a good plaice to start investigating when looking for cannibals: http://us.spindices.com/indices/strategy/sp-500-buyback-index

I think as the world communicates more with each other (ie the Internet) people will realize that they like not dying more than they like being stupid and fighting each other. That's my glass half full perspective, anyways.

What designations are necessary for bval positions? Is a CPA necessary?

Didn't Warren write long term puts on the S&P? We should rename you "Uncle Eric" :D

think about this model: you have a business which generates 100M every 10 years, but requires 100M in capex at the ten year mark to stay in business. is this a good business? it depends. for ten years, you get to invest those cash flows before needing to pump the capital back into the business. meanwhile you gain use of that "float" so to speak.

Hiya Which series have you been buying? I saw a reference earlier in the thread about 17c/$1 but I can't tie this back to the quotes or price appreciation I can see over the last 1.5 months? Thank you - C. FNMAS and FNMAJ trade at about 20% of par For Freddie: FMCKJ, FMCKL-M-N all trade in the $4-$5 dollar range.

Why not grant them a work visa instead...the govt collects its tax but still has the authority to deport if needed. The immigrant doesn't need to operate on the wrong side of the law.

Freddie's prefs are on their investor page. Fannies list of prefs is on this page http://www.fanniemae.com/portal/about-us/investor-relations/stock-information.html No tickers though

Ehhh...I think the appeal of American citizenship is that you can come here with nothing and you have the chance to "make it". Not that you have to come here with a $1000 deposit and then pay out another $30k. Kind of throws a kink in the "rags to riches" story.

I'm also planning on kicking the can (taxes on BAC) down the road for a long time, then realizing the gains as a resident of another place. Until then... I will buy this house I currently rent with cash. I will get that cash using portfolio margin borrowing power. It will be hedged with a BAC put. I will effectively have spend the pre-tax value of the BAC shares on the house. The ongoing earnings that BAC generates will effectively reimburse me for the cost of the BAC puts. This is my plan to spend the money without paying taxes. Eric, I've got to say, you're just excellent. you just gave me an idea to reduce the interest rates on my student loans, maximize the tax benefits of them, pay for my MBA and spend my investment returns to pay for my living expenses. Kudos to you, and thanks!

I'm surprised biglari holdings commercials haven't been queued on CNBC already... ;)

And we're just talking about one company. Take the sum of the IV of all companies and businesses existing in society, in the world, and what does this number describe? Is it the intrinsic value of humanity's activity on the earth? If that is the case, should this "total IV" also account for ecological damage, "happiness" created, etc...or are these concept already priced in by the cash flows.