constructive

Pinterest at $3.8B seems somewhat less crazy than those others. It seems stickier.

http://pandodaily.com/2012/02/26/steve-jobs-was-right-dropbox-is-a-feature-not-a-product/ "In 2009, Steve Jobs wanted to pay more than a hundred million dollars for Dropbox. As Houston later told Forbes’ Victoria Barret, when he politely turned down his hero’s offer, Jobs declared that Dropbox was a feature, not a product."

Oops, just noticed this is not the normal What Are You Buying thread. Don't think we need multiple threads saying the same thing. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/what-are-you-buying-today/

Started a position in ALSK I am not on board with the mass switch into GNCMA. ALSK looks cheaper to me.

Remember this from a few years ago? Ackman seemed to think these securities had a high risk of permanent loss of capital when they were priced much lower. http://video.cnbc.com/gallery/?video=1786618239&play=1 Bill Ackman (Pershing Square): Who are you a fiduciary for? The shareholders? Clayton Rose (Freddie Mac boardmember): Our fiduciary duties run strictly to the conservator. Ackman: So you can make decisions that are adverse to shareholders? Rose: Correct. Ackman: Yet there is no liability to you? Rose: Correct.

I think commodity vs franchise/moat/competitive advantage is a gradation not black and white. Most business have limited competitive advantages which they try to grow over time. Competitive advantage is highly influenced by sector and this effect is fairly stable over time. You will find many healthcare businesses with significant competitive advantages but few coal companies. You can identify these sectors and businesses by their high long term ROIC. They have lower fixed capital intensity and higher human capital intensity than commodity businesses. Personally I find it useful to concentrate on a few sectors where high ROICs are concentrated: technology, healthcare, consumer brands, media, financial services, etc. Outside of finding another business, some of the strategies for pure commodity companies would include moving up the value chain (for example, through superior service, consumerization or financialization). And horizontal or vertical integration.

Berkowitz trying to take credit for "helping" AIG by buying their stock on the secondary market is self-righteous nonsense.

Right, which law was that? The best analysis at the time suggested that the 80% warrants were worthless since the equity was most likely worthless.

Every investment has similar potential mental errors, either on the investor's part or management's part. I don't see how meta thinking is more useful than primary investment thinking (i.e. "present possible or factual mistakes").

People will still want the ability to override driving control. Accidents will still happen whether caused by man or machine. So states will still want to mandate insurance.

"Armed with these extensive powers, FHFA promptly entered into a sweetheart deal with Treasury whereby Treasury purchased a new issue of senior preferred stock from Fannie and Freddie for about $188 billion, which carried with it a 10 percent dividend, and an option that allowed Treasury to acquire some 79.9 percent of the common stock for the nominal price of $0.00001 per share." It was the opposite of a sweetheart deal. Besides the US Treasury, no other entity in the world was willing and able to provide financing to Freddie and Fannie on any terms. Buffett got a 10% coupon from relatively healthy GE and GS - the going rate for insolvent Fannie and Freddie might have been 20%. "A conservatorship requires the conservator to act in the best interest of its beneficiaries—here the shareholders of Fannie and Freddie at the time the conservatorship was imposed." Based on what? Nothing in HERA or FHEFSSA or the PSPA or public statements by FHFA. The beneficiary of the conservatorship is the US Treasury, not public shareholders.

I regularly rank my top 20 ideas. I've assigned each rank a weight from 12% down to 3%. I compare those weights to my portfolio and if they are far off I think about adjusting them. In the right circumstance I'd like to put 20%, 25%, 30% into a single idea, but generally I don't have that much more certainty in my top idea compared to my other ideas.

http://markets.ft.com/screener/customScreen.asp

Some of the European companies on my watchlist include: AFK Sistema SSA.L Deutsche Balaton BBH.FRA Altamir LTA.PAR ABC Arbitrage ABCA.PAR Sagicor SFI.L Lancashire LRE.L Aegon AEG Akka Technologies AKKA.PAR Docdata DOCD.AEX Next Radio TV NXTV.PAR Cairo Communications CAI.MIL Gaumont GAM.PAR Bahnhof BAHN B.STO Lukoil LUKOY Gazprom OGZD.L TGS Nopec Geophysical TGS.OSL Bonheur BON.OSL Porsche POAHY

The way I see it, negative earnings divided by negative book value means positive ROE! Buy buy buy! :D

No, of course not. Let's say I considered investing with Madoff in 2005, and after some research estimated that there was a 30% chance the fund was fraudulent. Obviously, this would be sufficient for me to abandon the idea. A few years later we discover that he was committing fraud. In other words I was incorrect, there was a 100% chance he was committing fraud. After processing new information, my 30% estimate is no longer useful. I'm just saying, I apply a fairly heavy weight to factual history, as opposed to my analysis of things that might have happened. If you were forced to run through the dynamite factory after the idiot survivor, would you follow his path or would you run some other route?

Well, I agree. But some people have abnormally high risk tolerance. (I think Biglari fits that description, and gio does not.) I certainly think a good outcome suggests it's more likely that the decision was correct, than a bad outcome does. Investing isn't roulette - the odds are unknown. Most of the time I can only make extremely rough guesses about future "probabilities". I feel it would be presumptuous to second guess the past too.

If they didn't get that tax reassessment at Steak'n Shake shortly after he took over, Steak'n Shake probably would have gone to zero, and the Lion Fund might have closed because it was nearly 100% in SNS. Do you prefer that type of behavior, or Prem's behavior to take a 2.2% position in a dying industry he feels has breakup value but doesn't work out? If both were running insurance companies, and at some point Biglari will, do you think a good insurance executive writes all or nothing policies or a diverse group of non-correlated risk policies? The former has a tendency to shine brightly and then blow up! Cheers! Parsad, don't you give him any credit for being right about BH and CBRL? They could have gone badly but they didn't. Gio, I think that saying Biglari "knows the fast-food industry better than almost anybody else" is absurd. He only has a few years track record. His turnaround at BH was impressive but since then progress has been slow. And his success investing in CBRL is primarily due to them being a pretty good restaurant chain. Whether or not it has suboptimal capital allocation, I am pretty confident that Cracker Barrel is a better restaurant organization than Steak N Shake is.

Their projection of $494M EBITDA in 2017 sounds fantastic. Not sure how realistic it is. 2013 EV/EBITDA P/E EBITDA margin 2015 EBITDA margin KODK 7.4 7.2 6.6 15.4 XRX 7.3 10.7 12.1 CAJ 4.9 12.6 16.1 Ricoh 10.8 19.4 6.4

I was part of the 401k committee when my 80 person company switched to Fidelity last year. I persuaded them to add several low cost index funds. But I wasn't very successful in keeping actively managed funds out of the plan - we ended up with 50 funds filling every imaginable style box. According to the Fidelity rep, Brokerage Link is provided at no additional cost to the company ($200 annual cost to participants). I didn't push for it but it's very nice to have.

http://seekingalpha.com/author/ipodesktop/articles

Sounds very interesting gio - good luck. When you say you are a contributor to the website and will receive a 20% revenue share, does that mean you will have your own newsletter or will you be one of several contributors to a newsletter? And will your essays and portfolio be freely available after some period of time has elapsed? An index of 50-60 owner operators seems like it would be dilutive to your best ideas and take a lot of time. I'd suggest making it smaller, but still talking about companies that aren't on the index.

My long positions are lower beta on average and my short positions are higher beta. So looking at a daily basis, the beta is higher than the market and correlation is low. But looking at longer time periods, beta is lower than the market and correlation is moderate.

http://dealbook.nytimes.com/2013/10/17/want-a-piece-of-a-star-athlete-now-you-really-can-buy-one/?_r=0 "On Thursday, Fantex Holdings will announce the opening of a marketplace for investors to buy and sell interests in professional athletes."

There are appealing parts to EMH, but this part seems pretty lousy. It's not even wrong in a clever way, it's wrong in a dumb and naive way.