Grenville

Cardboard, Thanks for the heads up on the debt repayment!

Any recommendations on brokerages that allow orders to be placed directly on the Toronto Stock Exchange for a US based investor? Are there brokerages in the US that allow for accounts held in US dollars or Canadian dollars? I'm trying to find the best route to buy and sell Toronto listed stocks directly instead of using the pink sheets.

They keep the old ones well hidden, but they can still be accessed. I can't find the 2010 one yet: http://www.fairfax.ca/Assets/Downloads/2006_AGM_Slide_Presentation.pdf http://www.fairfax.ca/Assets/Downloads/2007_AGM_Slide_Presentation.pdf http://www.fairfax.ca/Assets/Downloads/2008_AGM_Slide_Presentation.pdf http://www.fairfax.ca/Assets/Downloads/2009_AGM_Slide_Presentation.pdf Ericopoly, Thanks for the links to the old slides!

General question regarding the acquisition of income trust by normal companies. Why don't all these interested companies by the income trusts before they convert? I know that income from income trusts are taxed at higher rates if a corporation owns them, but if they will be converting soon anyway why wait for the conversion to acquire? It seems like these trusts will be more expensive after the conversion than now. Is there some funny tax laws if the conversion happens inside a corporation versus on a stand alone basis? Thanks!

Not to beat this issue to death, but another interesting article regarding the Iceland Volcano and its bigger sibling. A Bigger Iceland Ash Blast Probably Coming Soon, Says RMS http://www.property-casualty.com/News/2010/4/Pages/A-Bigger-Iceland-Ash-Blast-Probably-Coming-Soon-Says-RMS.aspx?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+NationalUnderwriterPropertyAndCasualtyBreakingNews+(National+Underwriter+Property+and+Casualty+Breaking+News) Also at the AGM Prem in answering a question about stress testing for insurance events that could wipe out the insurance subsidiaries said that there were no losses due to the Icelandic Volcanic Ash.

Prem answered a question in regards to this at the AGM today. Summary of Prem's answer with some additional details from me: OTTI (other than temporary impairment) write downs flow through the income statement leading to a reduction in the cost basis for the various investments. LVLT original basis was $2 and now its $0.7 due to an OTTI write down. The important thing to remember is that as the value of LVLT rebounds any MTM (mark to market) gains are registered in shareholder equity (book value) through OCI (other comprehensive income). The MTM gains on LVLT will not be realized in the income statement until the investment is sold. The gains are not "hidden", they show up in book value. My additional color: Book value reflects the MTM of the common equity positions. The only ones it doesn't reflect are the equity accounted investments like ICICI that are held at carrying value. P.S. Please let me know if I missed something, but that's how I understand it.

From the SEC complaint: http://online.wsj.com/public/resources/documents/secgoldman2010-04-16.pdf 18. At the same time, GS&Co recognized that market conditions were presenting challenges to the successful marketing of CDO transactions backed by mortgage-related securities. For example, portions of an email in French and English sent by Tourre to a friend on January 23, 2007 stated, in English translation where applicable: “More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!” Similarly, an email on February 11, 2007 to Tourre from the head of the GS&Co structured product correlation trading desk stated in part, “the cdo biz is dead we don’t have a lot of time left.”

Thanks for the link!

Viking, Thanks for your comments. I do think the ongoing volcanic eruption in Iceland could have more adverse consequences. There is a much larger sister volcano next to the one that has erupted and has shown in the past to be affected by its neighbor. The key will be if it continues to emit the volcanic ash. According to what I read, the emission of the volcanic ash has reduced. The volcanic ash is wreaking havoc on flights all through Europe as major airports have been shut down. Here are some links: Iceland Volcano Eruption May Result in Significant Insurance Claims By Ravi Nagarajan http://www.rationalwalk.com/?p=6360 Europe flights could be grounded into weekend by ash http://news.bbc.co.uk/2/hi/europe/8623534.stm Iceland Volcano Eruption Could Mean Business, Cat Claims http://www.property-casualty.com/News/2010/4/Pages/Iceland-Volcano-Eruption-Could-Mean-Business-Cat-Claims-.aspx "Mr. McGuire said the last eruption from this volcano lasted more than 12 months, so if this eruption has a similar duration, the ash could periodically present a problem to U.K. air space." Fairfax: On the flip side, the strong performance of Fairfax's investment portfolio should lighten the effect of the higher CR and insurance losses. The havoc continues! Europe Cuts 70% of Flights; Relief May Come April 22 (Update2) http://www.bloomberg.com/apps/news?pid=20601087&sid=aN_UBn1azuKs&pos=8 “Expect ongoing interruptions for the next four or five days,” Teitur Atlason, at the Icelandic meteorological office, said in a telephone interview today. “The eruption is still in full swing, and the volcano is spewing pretty dark ashes as high into the air as 5 to 6 kilometers.” .... Deutsche Lufthansa AG cancelled all flights to and from German airports today. All long-distance flights to Germany with a scheduled arrival until 2 p.m. tomorrow were also cancelled, the company said in a statement on its Web site today. .... Hubs serving 2 million people and 48 percent of Europe’s air traffic have been affected by the disruption, the Airports Council International industry group said yesterday in a statement."

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages http://www.sec.gov/news/press/2010/2010-59.htm "The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO. .... According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio."

Viking, Thanks for your comments. I do think the ongoing volcanic eruption in Iceland could have more adverse consequences. There is a much larger sister volcano next to the one that has erupted and has shown in the past to be affected by its neighbor. The key will be if it continues to emit the volcanic ash. According to what I read, the emission of the volcanic ash has reduced. The volcanic ash is wreaking havoc on flights all through Europe as major airports have been shut down. Here are some links: Iceland Volcano Eruption May Result in Significant Insurance Claims By Ravi Nagarajan http://www.rationalwalk.com/?p=6360 Europe flights could be grounded into weekend by ash http://news.bbc.co.uk/2/hi/europe/8623534.stm Iceland Volcano Eruption Could Mean Business, Cat Claims http://www.property-casualty.com/News/2010/4/Pages/Iceland-Volcano-Eruption-Could-Mean-Business-Cat-Claims-.aspx "Mr. McGuire said the last eruption from this volcano lasted more than 12 months, so if this eruption has a similar duration, the ash could periodically present a problem to U.K. air space." Fairfax: On the flip side, the strong performance of Fairfax's investment portfolio should lighten the effect of the higher CR and insurance losses.

Any idea if any material CAT activity shows up in the insurance subs combined ratios? (Icelandic volcanic plume, Chile, US NE flooding...)

http://www.bloomberg.com/apps/news?pid=20601108&sid=aYwzP_QKgSno video 38mins: http://www.bloomberg.com/avp/avp.htm?N=video&T=Olson%20Interview%20on%20Berkshire%20Hathaway%20&clipSRC=mms://media2.bloomberg.com/cache/vB68vVbn0gag.asf Description: Olson Interview on Berkshire Hathaway April 13 (Bloomberg) -- Berkshire Hathaway Inc. Director Ronald Olson talks with Bloomberg's Betty Liu about Berkshire's investment in Goldman Sachs Inc., Warren Buffett's leadership and the company's succession planning. Olson, a partner in the Los Angeles law firm of Munger, Tolles & Olson LLP, also serves with Buffett on the Washington Post Co. board.

More details regarding the deal: Here is Sandridge's official press release: http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-newsArticle&ID=1409330&highlight= " .... The transaction uniquely positions SandRidge as one of the largest producers of West Texas conventional oil and gas. The oil opportunities will come primarily from drilling and development of shallow, low risk reservoirs located on the Central Basin Platform ("CBP"), a part of the Permian Basin in West Texas. The CBP has produced over 13 billion barrels of oil since the 1930s. The combined company will have over 200,000 net acres in the Permian Basin and 5,700 identified locations to drill primarily in the shallow San Andres and the Clear Fork formations. Additional upside exists with down spacing and future secondary and tertiary potential. SandRidge also owns low risk natural gas properties in the Pinon Field, and significant exploration opportunities in the West Texas Overthrust. Tom L. Ward, Chairman and CEO of SandRidge stated, "This acquisition of Arena continues the strategic shift we initiated in 2009 to increase our oil production and reserves. This transaction will add low risk drilling opportunities in the Central Basin Platform where we have been drilling and acquiring since 2007. We plan to have hedged over $3.0 billion of oil revenues in total after closing and model this transaction to be accretive to 2011 cash flow per share." Mr. Ward further noted, "We also have exceptional gas assets in the West Texas Overthrust. We believe our Pinon Field is one of the premier plays in the United States and we have tremendous drilling upside for long-term natural gas growth and expansion."

"Oil and gas exploration firm SandRidge Energy is acquiring west Texas rival Arena Resources Inc. for $1.6 billion, a deal that shifts SandRidge further into conventional oil-field assets amid a continued fall in natural-gas prices. SandRidge will pay Arena shareholders $2.50 in cash and 4.77 shares of stock for each Arena share, which values Arena at $40 per share. That is a 17% premium from its Friday close of $34.26." .... "It's a transformation from a natural-gas company to a more balanced portfolio," Mr. Ward said. "The economics of natural gas just aren't as good today as they were a few years ago." http://online.wsj.com/article/SB10001424052702303912104575163951499661086.html?mod=WSJ_hpp_LEFTWhatsNewsCollection Corporate Presentation from Arena Resources Website dated 4-1-2010 http://www.arenaresourcesinc.com/Arena_Presentation/pdf_presentation/arena_presentation.pdf

Is there a printable or downloadable version? Thanks for posting the letter!

Nice blog post: "Analyzing Insurance Stocks: The Income Statement" http://streetcapitalist.com/2010/03/31/analyzing-insurance-stocks-the-income-statement/

Catalyst to Restart Second Pulp Line at Crofton Mill http://www.paperage.com/2010news/03_30_2010catalyst_crofton.html

Thanks for posting the text of the interview!

Warren E. Buffett, USA, informed us in accordance with Section 25, para. 1 of the German Securities Trading Act (WpHG) that on 11 March 2010 due to the exercise of all financial instruments which bear 1.945% of the voting rights (3,840,000 voting rights), he no longer held, directly or indirectly, any financial instruments that grant him the right to subscribe to shares in our company and would thus have fallen below the threshold of 5% of the voting rights if he had held shares instead of those financial instruments. Accordingly, as per this date he held directly or indirectly 7.988% of the voting rights (15,767,900 voting rights) pursuant to Section 21 para. 1 in connection with Section 22 para. 1 sentence 1 item 1 of the WpHG. http://www.munichre.com/en/ir/publications/notifications/default.aspx

Thanks for posting! Nice to see an interview with one of the FFH directors.

Anyone notice the lack of sales of the Berkshire B shares by the Gates Foundation. The last posting on the SEC site is 2-26-10. It curiously coincides with Warren's letter and the annual report. Any thoughts? http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001166559

Don't forget to set your clocks forward before the meeting! Time changes at 2am on Sunday March 14! See you guys at brunch!

Contango Announces an Investment in Alaskan Mineral Exploration http://manualofideas.com/blog/2010/03/aaron_edelheit_on_contangos_st.html http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100308005852&newsLang=en

Count me in!