ShahKhezri

Since this is becoming a big 2012 event, what do you all think will be the result? -Debt paydown (mortgage, credit card, etc), although most who benefit probably don't have as much debt. -Reinvestment in the stock market -Discretionary spending

From Barron's: No position, but looks interesting.

That's a really good question and you have to be comfortable with the ebb and flow of FFH's investing style to invest. I've been a shareholder since the low 200's, around 2008, there are other board members here that have held a position longer and know much more. Right now you hear a lot of talk about RIMM, DELL, the newspaper investments, that haven't done too well and that's fair. However, this is their style and over time they have done remarkably well (there have been the ICO's, SD, the banks in early 2009, the CDS, the Muni's and a lot of others). There are shareholders that sometimes piggyback on some of their investments, I try not to. Prem is more of a Ben G. type and if I remember correctly he named his son Ben Graham. I also own MKL, but don't think that they don't receive their share of criticism. Often, the criticism is on why Tom is conservative and why in 2009 he wasn't as aggressive. I think that's fair as well, but personally I kind of like the fact he sticks to his circle, he's more of Berkshire circa (Coke, PG, quality). I owned Y until today, but they are different as well. There's also WTM (which I haven't followed for a long time). Any specific reason you sold "Y"? I just started reading their annual reports and am quite impressed with the combination of their combined ratios and investment returns. I think Joe is going to do a good job there. I bought last year around $280 after their TRH acquisition. At the time it was a 5% position. I own a full position in (30%) FFH and (15%) MKL, I started unloading a lot of the smaller positions over the past two months to pickup BAC warrants. With Y, I just like AIG more, I still think you will do well with Y over the long term. Annual reports are great, they have joined the deflation camp recently.

That's a really good question and you have to be comfortable with the ebb and flow of FFH's investing style to invest. I've been a shareholder since the low 200's, around 2008, there are other board members here that have held a position longer and know much more. Right now you hear a lot of talk about RIMM, DELL, the newspaper investments, that haven't done too well and that's fair. However, this is their style and over time they have done remarkably well (there have been the ICO's, SD, the banks in early 2009, the CDS, the Muni's and a lot of others). There are shareholders that sometimes piggyback on some of their investments, I try not to. Prem is more of a Ben G. type and if I remember correctly he named his son Ben Graham. I also own MKL, but don't think that they don't receive their share of criticism. Often, the criticism is on why Tom is conservative and why in 2009 he wasn't as aggressive. I think that's fair as well, but personally I kind of like the fact he sticks to his circle, he's more of Berkshire circa (Coke, PG, quality). I owned Y until today, but they are different as well. There's also WTM (which I haven't followed for a long time).

I actually spent quite a bit of time on it this past weekend. I'm curious, where do you think they will raise that last $500MM? another warrant/spinoff? I was going to look over more material this coming weekend before writing about it, but the inventory/pension/working capital improvements are pretty impressive. Also, trying to connect the dots on EL and the SHLD debt exposure. He's pretty much all in on this, equity, debt and the pension exposure to SHLD debt. I think Domestic Sears has a real shot at having -1% to 1% comps this quarter. It's 1 quarter I know and the K-Mart stores should just turn into Dollar Stores. The Barclay's analyst report was really confusing, basically they stated..."this was the second time the company held a conference call and we expected an announcement but we were dissapointed and the street was as well and that's why they punished the stock." I'm paraphrasing. I really liked the CC, they are definitely more open. My only exposure at this point is through FAAFX, but that may change.

I've come across a lot of good blogs by readers here that I would have never run into just by randomly surfing the web. H/T to the folks that routinely update their blogs with updated info.

Interesting...I kind of disagree though, I think BAC is about 9-12 months ahead of AIG. I think AIG still has to do spinoffs, cost cutting, etc. that BAC has already done or is implementing.

Agreed. I broke-even on this last year and quickly got out when it hit a trail stop. I was on the CC last week and was shocked when he made his "surprise dividend increase" announcement, it seemed to me like he was going after the shorts with a surprise announcement. Further, he's been repurchasing shares and suddenly he's increasing the dividend...something didn't seem right. Good luck to longs though, if it works out, it's going to make a great run.

From KW: On March 13, 2012, we announced a €250 million (approximately $325 million) capital commitment from Fairfax Financial Holdings ("Fairfax") to acquire real estate and loans secured by real estate in the United Kingdom and Ireland. Investments under this program require Fairfax's agreement to participate on an investment-by-investment basis. As of September 30, 2012, we have purchased two investments within this platform, the historic 210-unit Alliance Building in Dublin, Ireland, located adjacent to Google's European headquarters, for $50.0 million and Brooklawn House, a Dublin office property, for $18.5 million. We invested $25.7 million of our equity in the investment vehicles that acquired these assets. Since Fairfax became our partner in the Japanese apartment portfolio in September 2010, we have distributed a total of $51.5 million, of which our share was $24.0 million.

I think he's better at shorting selling. When a stock goes up because he doesn't talk about it as a short at a conference, that's power.

I think what's crazy is most are talking about a slowdown and ONLY a 5-10% slowdown.

JEast, I follow it the transportation sector quite a bit because of my day job. I also read Jeff Saut from Raymond James every monday (link below), here is what he had to say this week on this subject. Adding to the angst has been the D-J Transportation Average (TRAN/4892.62), which has decoupled from the D-J Industrial Average (INDU/13437.13). Verily, since the June 4th low the Industrials are up roughly 11% while the Trannies are flat. This decoupling has become even more noticeable recently, causing many pundits to suggest there is a big decline coming for the Industrials. Last week Mark Hulbert, in his MarketWatch column, elaborated: "The transports, as virtually everyone who is even slightly paying attention already knows, are seriously lagging the Dow industrials. It is widely assumed that this bodes ill for the stock market. But I am not so sure. A careful market analysis of the last three decades suggests that the Dow Jones Transportation Average is not the leading indicator that so many think it is.” Now many argue that the Transports are a leading indicator because if companies are doing well the Transports will benefit from higher volumes to carry those goods to market. Others will opine that our economy is more service-based, and not as manufacturing-driven as it used to be, so the Transports don’t count. As an avid believer in Dow Theory, I am always watching the Trannies. Yet, the recent weakness, at least to me, is not yet concerning. I have commented that I think much of the weakness is attributable to the railroad stocks, which have been affected by the weather. First, it was the drought that hampered grain shipments; and then it was Hurricane Isaac. The “rails” have roughly 23% of their revenues tied to coal and grain shipments, so ex-Coal and Grain volumes are up around 2% quarter to date. The airlines have also come under pressure as fuel prices have risen. Regrettably, it is going to take a little longer before we see if the Transports’ weakness is a one-off thing, or a more meaningful event. Interestingly, Mark Hulbert concludes: “But here was where the real shocker came in: The correlations that I did discover for the Dow transports were inverse. In other words, the stock market over the last three-plus decades tended to perform better following periods in which the transports were weak rather than strong.” Of course, this Industrials and Trannies discussion leads to thoughts about to Dow Theory. Therefore, it would not surprise me to see the Transports break below their June 4th closing low of 4847.73 while the Dow stays above its June 4th closing low of 12101.46. That would represent a downside non-confirmation and should result in a re-rally for the equity markets. For the record, to render a Dow Theory “sell signal,” at least by my method, would require both averages to close below their respective June 4th closing lows. Link: http://raymondjames.com/inv_strat.htm Hope that helps. I don't have an opinion one way or another, but I don't think it's a smoke signal.

Completely agree. I was short CMG from 385 to 301 about two months ago. My thesis was not Taco Bell...basically their ability to raise prices was limited and comps were slowing.

Actually, buying it for the insurance business is a better reason than the investment acumen going forward. There are many people here that have been involved with the FFH story a lot longer than I have (pushing 5+ years). FFH has significantly added to their insurance operations since 2007...and through 5 years of soft market, we have yet to see these operations in a hard market (we haven't seen NB, Zenith potential yet). I think people are looking for the next CDS gain, you will be dissapointed (not saying the deflation CDS is toast, it's a hedge).

40% FFH, 12% MKL, 8% CHK (sold calls at 19, so thats going to be turned into cash), 7% Y, 6% VRSK, 5% FAAFX, 5% BAC & AIG Warrants, 10% L/LUK/OAK (combined), 1.5% TROX, 1% VRX, 1% AAP. Have sold SEB & IEP the past two days. FFH, MKL and Y were purchased at significantly lower prices, they will not be sold. Looking at GLW, DLB, MIL (who I think has done an absolutely remarkable job following through on what they said they were going to do), GLRE, WTM, WRB. Short: CRM, SPG, PSA, FXI, FOSL, CNX, TIF, COH, CLH, DKS, POOL. I dont include physical gold as an allocation, but if I did, it would be over 10%.

Yeah, gas at $4.0+ takes away from whatever savings you got from your lower mortgage rate. Most people in the 5.0%+ have already refinanced...going from 4% to 3.5% doesn't do much.

I think OAK's cc's are a gem.

FWIW, he's made a killing in gold and PM's, that chart doesn't do any justice to what he's been long.

Fleck is awesome, you're not going to get new ideas out of him, but he'll keep you away from the madness out there. I haven't read him for a while, a buddy has a subscription that I used to read. You're running into him because you're probably reading a lot of gold stuff. He sits on the board of PAAS if I remember correctly. He's also good friends with Fred Hickey, who is absolutely sharp.

Just to be clear, by trail stop is never in the market, it's just a number that's on the spreadsheet after a 15% haircut from the highest close since I've held it. I sell the day after a close below 15%. Olmsted, I completely agree with your thoughts. Easier said than done. Generally, if you don't have a position that is a control position, it's tough to have that ideology. EL is able to do it, I'm not. Just my thoughts though.

I use it on Shorts and Trades. On Core positions that I plan on holding for long term, greater than 3+years, I don't use a trail stop. I used it on gold stocks where the IV depends on the output and cost sturcture (dependent on oil). Earlier this year, it saved me on ARCO, sold at 19 becaue it hit a 15% trail-stop. I covered UA at 53 because it hit a 15% trail-stop. I also sold VRX at $51, so it doesn't always work out. I think it's very easy to say, if the stock is down 15%, 25%, x%, great I can buy more, it's another thing to actually do it. On LT positions, I can do that, because my position is built through 3-4 quarters and it's not as if I'm buying large chunks, it's just that I like to start small, make sure that management is doing what they said they were going to do and follow that with purchases. On trades, where I'm looking at 6-9 month holding, trail stops help.

Currently nearing a 10-year holding period for the gold/silver I purchased in 2004 at $394/$7, respectively. Also hold a significant amount of MS-63's, 65's and the King Umberto Italian coins. Back then, I was reading quite a bit of Fleckenstein, his logic made sense and quite frankly it was dumb luck. Also, call it what you want, there was a little bit of Lynch ideology behind it. I was born in Iran, I know the middle east pretty well, I know what they value (physical/shiny things) and what they don't (paper assets because they know the government's are corrupt). There is no such thing as the full faith of the treasury, and that has less of a meaning every passing day. Anyways, I had an opinion that oil was going higher and the people that would gain from oil assets going higher were the same people that liked physical/shiny things. It was dumb luck, I never researched the marginal cost of production or anything that on this board would be considered fundamental analysis. For that reason I don't talk about it because somehow Buffett/Munger planted this idea that value investors shouldn't look at it. I think that's kind of stupid. Value investing is looking at any asset class and after careful due diligence and conservative assumptions investing in that asset given there is a margin of safety. I'm not a gold bug and I'll call a spade a spade, it was dumb luck with a view that oil was going higher and that people benefiting from that would buy shiny things, I was 19 at the time. I also don't think the end of the world is 6-months, 6-years or X-years from now. I don't subscribe to that, I don't think you can/should invest if you think that. WB bought a significant amount of silver at $4 and change...yes I know it's an industrial metal...but still. The entire swimming pool analogy makes very little sense to me, if anything that just makes it more valuable to the people that see wealth that way (limited) I've invested in the miners here and there, but never really spent time on them. That's not a surprise considering the time to sell them is typically at low valuations and time to buy at valuations that don't look attractive, psychologically I don't do that well. The cost to store is not a big deal at all, it costs about $50/year to store it at a bank. The best part is that because it isn't easily liquidated, it has kept me away from trading it and just hold it long term. I don't know when I will sell, I will at some point.

Right company, wrong department.

I've been relocated to Charlotte from San Fran and will be in the city starting August 13th. Anyone here live there? Work there? Insight? I will most likely live uptown and close to work.

I think the hybrids are the best way to be invested. Have done some work on pmt, two and Stwd.