fareastwarriors

Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) announces a net loss of $157.8 million in the second quarter of 2013 ($8.55 net loss per diluted share after payment of preferred share dividends) compared to net earnings of $93.7 million in the second quarter of 2012 ($3.79 net earnings per diluted share after payment of preferred share dividends), primarily reflecting unrealized losses on its bond portfolio, partially offset by strong underwriting results. Book value per basic share decreased to $361.87 at June 30, 2013 from $378.10 at December 31, 2012 (a decrease of 1.6% adjusted for the $10 per common share dividend paid in the first quarter of 2013). "We had strong and much improved underwriting performance in the second quarter and first half of 2013. Our net loss in the second quarter was only due to net mark-to-market bond losses of $500 million as a result of higher interest rates, including $400 million on our state and muni bond portfolio, a majority of which is insured by Berkshire Hathaway. Our muni bond portfolio was mainly acquired in the last quarter of 2008 at an after-tax yield of 5.79%," said Prem Watsa, Chairman and Chief Executive Officer of Fairfax, who further commented, "we are maintaining our defensive equity hedges due to our concern about the financial markets and the economic outlook. We continue to be soundly financed, with quarter-end cash and marketable securities at the holding company in excess of $1.2 billion." http://www.fairfax.ca/news/press-releases/press-release-details/2013/Fairfax-Financial-Holdings-Limited-Second-Quarter-Financial-Results/default.aspx

Potash’s $20 Billion Market Transformed by Uralkali http://www.bloomberg.com/news/2013-07-31/potash-s-20-billion-market-transformed-by-uralkali.html ... For some potash miners, the concern is that prices may fall close to, or less than, the marginal cost of production. Uralkali has costs of $62 a ton, compared with more than $100 for North American miners and almost $240 in Europe, according to the company’s July presentation. ...

Akman Copycats Risk Air Products Regret http://www.bloomberg.com/news/2013-08-01/akman-copycats-risk-air-products-regret-real-m-a.html

I'm sure SAC generate a lot commission/fees for GS.

Ackman Says Pershing Square Takes Stake in Air Products http://www.bloomberg.com/news/2013-07-31/ackman-says-pershing-square-takes-9-8-stake-in-air-products.html ... The hedge-fund firm’s stake in Allentown, Pennsylvania-based Air Products cost about $2.05 billion and is now valued at about $2.2 billion, Ackman, 47, said today in an e-mail. Air Products, which had a market value of $22.1 billion as of yesterday, is the previously unidentified target described by Ackman in a July 8 letter to clients. ...

Ackman's Pershing Square to Announce Largest-Ever Investment http://online.wsj.com/article/SB10001424127887324170004578638470384339086.html?mod=WSJ_business_whatsNews ... Mr. Ackman's firm is investing more than $2 billion in a U.S.-based industrial company, people familiar with the matter said. The identity of the firm remained unclear Tuesday. The investment will represent nearly 10% of the company, which has a market capitalization of more than $20 billion, said the people, who added that the company's stock over the past several years has underperformed the broader market. ...

It's probably a safe assumption that it's never happened to any guy who hangs out on a value investing message board. You are almost certainly the first. Live for us, Eric, live. +111111

http://online.wsj.com/article/SB10001424127887324354704578637613345900562.html?mod=WSJ_business_whatsNews#articleTabs%3Darticle ... For years, 66% of the world's potash—a highly effective potassium-based fertilizer ingredient—has been sold through two marketing groups: Belarusian Potash Co., or BPC, and North America's Canpotex. The two traders had set identical prices in major markets such as India and China, effectively operating as a cartel similar to the exclusive diamond trade. ...

Uralkali Breaks Potash Cartel to Grab Market Share http://www.bloomberg.com/news/2013-07-30/uralkali-sees-potash-price-slump-after-exiting-bpc-trade-venture.html ... Uralkali shares fell as much as 25 percent, the most since November 2008, and traded down 17 percent at 154.93 rubles by 5:45 p.m. in Moscow. Trading was suspended for a half hour after shares crossed the 20 percent threshhold. K+S AG (SDF) shares plummeted as much as 27 percent, the most in 15 years, and Israel Chemicals Ltd. (ICL) fell 18 percent in Tel Aviv. Potash Corp. and Mosaic each dropped 23 percent in New York, while Agrium declined 8 percent. ....

+1 Thanks.

http://www.bloomberg.com/news/2013-07-26/cash-is-trash-not-to-these-value-fund-managers.html Cash Is Trash? Not To These Value Fund Managers

http://www.bloomberg.com/news/2013-07-25/berkshire-s-bnsf-allowed-to-count-purchase-costs-in-rates.html Berkshire’s BNSF Allowed to Count Purchase Costs in Rates

Liberty, thoughts on the book?

Now you are making me want to buy all 3 books mentioned. My library is already stuffed.

Banks' Role in Commodity Business Faces Scrutiny Senators Are Told That Banks' Practices Are Boosting Materials Costs. http://online.wsj.com/article/SB10001424127887323829104578623594254370634.html?mod=WSJ_business_LeadStoryRotator Banks' ownership of oil pipelines, metals warehouses and other commodity-related assets poses a risk to the financial system while imposing extra costs on companies and consumers, lawmakers and witnesses said at a Senate hearing Tuesday. The criticism comes as the Federal Reserve reconsiders its decades-old decision allowing major banks to start trading, storing and transporting raw materials. Goldman Sachs Group Inc., GS -0.16%J.P. Morgan Chase JPM +0.19%& Co. and Morgan Stanley, MS +0.83%three of the largest financial entrants into physical commodities markets, held $35.2 billion in physical commodities at the end of last year, according to Fed data. ...

A Towering Fine for Naught, as the S.E.C. Tracks Cohen http://dealbook.nytimes.com/2013/07/22/a-towering-fine-for-naught-as-the-sec-tracks-cohen/

http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?src=me A Shuffle of Aluminum, but to Banks, Pure Gold

A Buffett Fortune Fades in Brooklyn Case of Othmer Gift to Ailing Hospital Is Cautionary Tale for Wealthy Donors. As early investors with Warren Buffett, Donald and Mildred Othmer quietly amassed a fortune that they believed would sustain their favorite charities for generations. Among those organizations: Long Island College Hospital in Brooklyn, N.Y., for which the Othmers created a $135 million endowment in the 1990s, "to be held in perpetuity," according to their wills. Less than 20 years later, much of their gift is gone. And the hospital's owners have been cleared by state regulators to close the money-losing nonprofit, which has sparked protests because the 155-year-old facility was one of Brooklyn's largest private employers. In a series of court-approved transactions, hospital administrators repeatedly tapped the fund to serve as collateral for loans and to cover malpractice and other costs, according to court records. The transfers were permissible to keep the hospital going, the court ruled, saying that is what the Othmers would have wanted. Doctors, nurses and community activists say the treatment of the Othmer gift illustrates a pattern of financial mismanagement on the hospital's part. Mr. Buffett has even expressed concern. "This came as a huge surprise to me," said the billionaire investor, who learned of the situation earlier this year in an email from a Brooklyn resident. "I would think if [the Othmers] were alive they would feel betrayed." A spokesman for the State University of New York Downstate Medical Center, the hospital's owner since 2011, declined to comment. A spokesman for Continuum Health Partners Inc., the previous owner, said, "we did everything possible to keep [Long Island College Hospital] financially solvent so that the hospital could continue its mission to meet the healthcare needs of all who turned to us for help." New York's Department of Health on Friday approved Downstate's plan of closure for the hospital beginning July 22. The Othmer case, experts say, shows how even the best-laid philanthropy plans can go awry—and provides a cautionary tale for wealthy individuals who hope their gifts will make a long-term impact. Natives of Omaha, Neb., the Othmers married in New York in 1950. An accomplished chemical engineer and inventor, Mr. Othmer taught at Brooklyn's Polytechnic Institute, now a part of New York University. Mrs. Othmer taught English in the 1930s. The couple had no children and lived modestly. They traveled to far-flung places like Burma and Japan and signed their letters "Midon," a combination of their nicknames, Mid and Don, according to a 1999 book about them. In 1961, they each invested $25,000 in a partnership run by Mr. Buffett, who knew Mrs. Othmer's mother. When Mr. Buffett dissolved the partnership in 1969, the Othmers ended up with roughly 14,500 shares of Berkshire Hathaway Inc. BRKB +0.29%stock valued at $42 a share, which they never sold. "They just stuck with me," Mr. Buffett said, recalling lunches of ham sandwiches at the Othmers' Brooklyn home. When the Othmers died, their Berkshire shares were valued at more than $780 million. At today's prices, they would have been worth $2.5 billion. Between Mr. Othmer's death in 1995 at age 91 and Mrs. Othmer's death in 1998 at age 90, at least 12 institutions benefited from their generosity. The University of Nebraska at Lincoln, which the Othmers attended, and Polytechnic received more than $135 million apiece. Long Island College Hospital was the other charity to receive a nine-figure gift. The hospital is roughly half a mile from the five-story townhouse where the Othmers lived. Mr. Othmer served on the hospital's board for 22 years. His wife was a member of the hospital's Women's Guild. Theodore Wagner, a New York-based lawyer at Carter Ledyard & Milburn LLP and executor of Mr. Othmer's will, said Mr. Othmer was a meticulous man. Mr. Othmer's 30-page will dictated such things as who should get his collection of 12 elephants, each carved of a different Burmese wood. Mostly, their goal was to create permanent funds for the institutions they had loved, to ensure "they would survive and grow," Mr. Wagner said. Such endowment funds are commonly used by universities, hospitals and other nonprofit organizations to hold donations. Only the income generated by investing the principal amount is meant to be used. In the case of the hospital, the wills stipulated that most of the Othmer endowment was "to be held in perpetuity and the income only to be used for general purposes." By the late 1990s, the hospital was in financial trouble, according to court records. In 1998, soon after Mrs. Othmer died, it handed over operations to Continuum, a private hospital operator which this week approved a plan to merge with New York's Mount Sinai Medical Center, in a bid to improve performance. In 2000, the hospital sought court permission to use the principal from the Othmer endowment. It invoked the legal doctrine of "cy pres," which gives a court power to revise a will to save a charitable organization from failing if certain conditions are met. In its petition, and subsequently, the hospital argued that the Othmers would have wanted to protect its existence. The Kings County Surrogate's Court initially allowed the hospital to use about $89 million as collateral for loans and spend an additional $15 million to buy and renovate a building that was later sold off to developers. Although cy pres, which means "as near as possible," is a standard part of the law governing charities, it is used infrequently because the process is stringent, lawyers say. Starting in 2000, the hospital on at least three occasions requested—and received—permission from the court to borrow against the Othmer funds, use it as collateral or allocate it to short-term expenses. A portion of the money at one point was repaid to the fund but most wasn't, the records show. In 2011, the hospital sought the release of the remaining money to pay off malpractice and other claims, citing a condition in its proposed merger with Downstate, a deal it pitched as essential to its survival. The court allowed the hospital to take the last $26.8 million of "unencumbered" money as well as $63 million of Othmer money pledged as collateral since 2000. Also that year, $85.7 million of the endowment was put into a trust to pay medical-malpractice claims, according to public records. The court also transferred control of the funds to Downstate and said it would be liable to repay all the Othmer money. In a January letter to state Comptroller Thomas DiNapoli, Downstate President John Williams wrote that the university would "replenish the Trust only when and if it is able to." Barbara Gartner, a 73-year-old Brooklyn Heights resident, first heard about the Othmer funds at a citizens' forum in February. "People kept saying, 'nobody knows what happened to the Othmer funds,'" Ms. Gartner said. At first she was curious, then outraged. Ms. Gartner pieced together the history from public records. She emailed Mr. Buffett, who said he wishes he had known sooner. The Othmers "did not spend huge sums on themselves but instead wanted the money to go back to society," Mr. Buffett said. "And at least one institution couldn't wait to change the terms under which it received the money." Write to Anupreeta Das at anupreeta.das@wsj.com http://online.wsj.com/article/SB10001424127887324263404578614183479259720.html?mod=WSJ_article_EditorsPicks#articleTabs%3Darticle

So What's the Matter With Shale Gas, Anyway? Sometimes it seems as if the environmental movement has been left behind by the sheer speed of America's shale energy revolution. That may be because a resource—natural gas—that environmental groups once saw as part of the solution has become part of the problem, at least as they see it. Shale gas and oil are widely viewed as one of the biggest forces to hit the U.S. economy in modern history. Total U.S. gas production has rocketed 33% since 2008 and oil 46%, driving down energy costs. The expanding shale industry supported 1.7 million jobs in 2012 and produced $62 billion in state and federal tax revenue, according to IHS/CERA, the energy consultancy. "The new narrative about shale gas is about jobs, economic growth, global competitiveness, and a U.S. manufacturing renaissance," says Dan Yergin, the energy expert and author of "The Quest." The public gets the narrative. A Pew Research poll found 48% of respondents favor increased use of hydraulic fracking of shale; 38% are opposed. Where does this leave the environmental movement? Trying to change the conversation about shale gas. For years, environmental groups saw gas as something of an ally in the cause. Gas has half the carbon footprint of coal. It was the ideal substitute for coal and a "bridge" to greater use of renewable energy such as wind and solar. But as shale gas production soared, the price of natural gas plummeted. Environmental groups now worry that gas is moving in to stay, taking the momentum out of the shift to nonpolluting renewables, slowing conservation, and creating new environmental problems. "To the extent that we're locking in new gas power plants, it's not the best way to build a cleaner society," says Fred Krupp, president of the Environmental Defense Fund. "The pace of development caught everyone by surprise, and environmental groups and our laws and regulators are playing catch-up," says Dan Lashof of the Natural Resources Defense Council. "In a lot of cases, the gas industry has run roughshod over local communities." Gas, adds Michael Brune, head of the Sierra Club, "should be used as little as possible for as short a time as possible." Renewables are the answer. The broader environmental argument now goes like this: There's an under-appreciation of how much methane leaks into the atmosphere when natural gas is fracked, piped and stored. Methane, the chief component of natural gas, is many times more damaging to the environment than carbon. Sloppy production can erase the advantage gas has over coal. (The Environmental Protection Agency, however, recently found that industry pollution controls have reduced production-related gas leaks by 20% from previous estimates, even though more gas is being drilled.) Meanwhile, the cost of energy produced from renewables is falling. States such as California and Colorado are expanding their targets for energy generated by renewable sources, and policy makers should do more to encourage this trend nationally, environmental groups say. Communities, they add, are increasingly bristling over pollution at drilling sites and the chemicals pumped underground to extract the gas. And there's the matter of climate change. Global limits on emissions, environmentalists contend, will inevitably crimp use of fossil fuels. Best to constrain the expanding use of gas now. "The fundamentals of the industry are bad," says the Sierra Club's Mr. Brune. "You have a resource that's becoming less competitive and more controversial over time." That said, "The reality now is that, for better or worse, gas is here," says Mr. Krupp of the EDF. "It's hard to imagine that Texas, Oklahoma, or Pennsylvania is going to stop pumping gas." So his organization has joined with Chevron, CVX +0.54%Shell, Consol Energy, CNX -1.46%and other environmental groups to construct voluntary best practices for shale development. "There is a big opportunity now for more of the companies to step up and lead," he says. Narratives do change. It may not be wishful thinking for environmental groups to contend that a comprehensive shift to renewable energy is not only necessary but inevitable. But for the moment at least, it's also tough to argue with the transformative power of price. Dow Chemical DOW -0.12%and other big manufacturers are adding to operations in the U.S. to take advantage of the new low cost of gas energy. That trend is speeding up, not slowing. http://online.wsj.com/article/SB10001424127887324263404578614122954685146.html?mod=WSJ_hpsMIDDLENexttoWhatsNewsSecond

http://www.bloomberg.com/news/2013-07-09/heinz-profit-climbed-12-ahead-of-buffett-lemann-deal.html Heinz Profit Climbed 12% Ahead of Buffett, Lemann Deal

Dazel, Can explain further your thoughts on PICO?

http://www.bloomberg.com/news/2013-07-05/buffett-s-berkshire-increases-davita-stake-4-3-amid-stock-slide.html Berkshire bought 639,200 DaVita shares on July 2 and 3 for about $73.4 million, according to a regulatory filing today by the Omaha, Nebraska-based investment company.

http://www.nytimes.com/aponline/2013/07/03/business/ap-us-natural-gas-inventories.html?src=busln&_r=0 US Natural Gas Supplies Grew Last Week

http://dealbook.nytimes.com/2013/07/01/wall-street-must-reads-for-everyone/?ref= some titles mentioned in the Comments sections are interesting as well.