constructive

That might be a good legal argument but it is financially naive. But for emergency financing, the companies would have entered bankruptcy in 2008, potentially Chapter 7 as they would have rapidly run out liquidity to even keep the lights on.

Yes, since 2008 and especially since the third amendment I have viewed the companies as being in de facto receivership. No, I don't think there is a good foundation for the bullish argument about what conservatorship should involve. HERA, the senior preferred stock agreements, FNMA and FMCC filings, and FHFA reports do not state or imply that that shareholders will receive any value from the conservatorship. When FHFA is tasked with putting Fannie Mae in "sound and solvent" condition, that refers to the company, not the securities. The way they put the company in solvent condition was by impairing the existing securities (subordinating them to $188B in government equity), kind of like how bankruptcy can put companies into solvent condition by impairing the existing securities. Unlike bankruptcy or receivership, the case law on corporate conservatorship is almost nonexistent. In some cases (insolvent credit unions for example), the term has been used interchangeably with receivership. The assumption that conservatorship means the company's value will be "returned" to shareholders, or that the conservator is required to act for the benefit of shareholders, does not appear to have solid precedent.

Americans were willing to pay 15-20% on mortgages just a few decades ago. The economic system will adapt to whatever happens, even something much more extreme than Fannie and Freddie shrinking 50% and mortgage rates rising 1%. That's the beauty of "creative destruction".

Treasury's primary goal is simple: radically reducing the size of FNMA and FMCC. The status quo is achieving that goal. They don't really care about how much money the government makes or whether the companies ought to be privately owned. Treasury is a dead end, and gridlocked Congress isn't much better. The only likely source of reform continues to be the courts.

And poor execution at many brokers, while not really quantified anywhere, is just as real as any other cost. If you ever use margin/short positions, options, currencies, illiquid securities, or any foreign market where IB has direct access, I would strongly recommend them. Otherwise if you only trade large cap stocks, brokers like Fidelity or WellsTrade seem like reasonable choices.

Well, if you can squeeze an extra 0.5% of costs per year out of your return, it can add up to ~30% over your lifetime, potentially millions of dollars.

Do you smell any opportunity that will soon be caused by forced selling here? :) There's a lot of selling pressure on the CEFs like PHK and PGP.

https://www.inkling.com/read/valuation-mckinsey-5th/chapter-4/empirical-analysis-of-returns

I don't think so. Berkshire_and_Fairfax_Rolling_Returns.pdf

My argument is more like: he has great judgment in general, just not on Clear Channel in particular. Kind of like Ackman and Target. Other people's mistakes are extremely useful to learn from. I have made lots of investing mistakes, but none of them as big as Clear Channel. If you're a swing for the fences, venture capital type investor, the occassional massive loss is OK. If you're a vanilla value investor, it's really not.

Right, he participated in the buyout led by Bain and Thomas H Lee, at $36 a share. I don't think it's too soon to say that was a bad decision.

Huh, I'm surprised that Clear Channel hasn't gone bankrupt yet. Looks like it will happen soon enough.

I do agree that if you're looking for a decent .com, the hit rate is extremely low. But the upside if you find one is much higher than other TLDs, where it's easier to find decent domains.

Buying existing brand names in foreign countries is illegal and will result in you losing the domain and maybe worse. Like I said, simple generics in smaller foreign markets (stuff like vacaciones.co or seguro.co) might be a good place to look. However, flipping foreign language domains for a fair price is probably difficult, especially if you don't speak the language. Those might make more sense to be developed for ad revenue.

I've looked at a couple of domaining sites. It's pretty clear that ~99% of registered domains aren't worth the registration fee. It can be pretty funny how terrible a lot of names are, and how convinced people are that they're valuable. I am just thinking about hand registering a small number of domains, listing them and/or auctioning them within a year. If they don't sell, then I'd throw them back. Also not interested in hosting. That will minimize the invested time and capital. Here's another potential value area. I've pointed out that most TLDs are lousy. But short, exact keyword matches in foreign languages might be valuable. For example, banca.co.ve. The Venezuelan version of banking.com. co.ve's cost $70 though, so they are less promising than .co's or .mx's.

Here's some data to back those comments up: http://www.idnx.com/ http://www.idnx.com/#tld Most valuable keyword topics: http://www.domainsherpa.com/most-expensive-google-adwords-keywords/

I think Italy is the long term (10-20 year) problem. Greece and Portugal are too small to break up the union. Spain and Ireland can grow their way out of trouble. Shorter term, the problem is more political than economic. Anti-Euro political parties are on the rise. If they find tactics that work in one country they can apply them elsewhere to gain momentum.

Yeah, it seems like the dynamic is similar to venture capital. You might lose money on 70%, break even on 20% and make money on just 10% of your investments. When it comes to equities I'm risk averse, not a VC style investor at all. Of course you are right regarding trademark infringement. I remember you saying you bought premwatsa.com to protect his name. Have you bought any other domains besides CMC and COBAF?

I disagree. Everything I have read suggests that high quality .com sale prices are higher than ever. So it could be a bubble but it's not a slump. There is very minimal demand for any of the new TLDs, or anything other than .com. http://w3techs.com/technologies/overview/top_level_domain/all Buying the right domain name can easily be the most critical part of a business' marketing spending. It doesn't make sense to go cheap / risky instead of getting the name you really want.

Yeah that could be a promising area. Marijuana could be another one.

Has anyone here invested in / speculated on domain names? The gold rush is over but I suspect there are still pockets of opportunity here and there. All 1 word and most 2 word generic .coms seem to be taken. But there might be opportunities in 3 word generic, or 2 word potential brand + generic category, or 2 word with a hyphen. Or you could buy higher value names at auction, or in negotiated transactions. Anything that rolls off the tongue easily, gets direct hits, gets google searches, or sounds monetizable. One problem is that you have to pay a yearly renewal fee while waiting for a strategic buyer to emerge (and hopefully pay you over 20x - the average domain name selling price is supposedly $2000). So it may make sense to develop basic websites in order to pick up ad revenue. I've got a list of a few names I like, haven't bought any yet.

Was that really the price he paid after the salad oil collapse?? Pretty close. AmEx had 4,461,058 shares outstanding at the end of 1964. 1962 year end book value was $68 million. 1963 year end was $79 million. 1964 year end was $83 million. At that time they had not taken a charge related to the scandal. If Buffett paid around $40 per share initially he would have been buying at 2.2x book. EPS in 1963 was $2.52 per share. That means 16 times earnings. Dividends were $1.40 per share. You're right. I was going off the fundooprofessor link which isn't the correct market cap. It got down to around 15x earnings. He continued buying for several years as the price rose, so his average price was probably between 15 and 20x earnings. I do think that the analysis focused on (non-Buffett controlled) float misses the point. Their competitive advantage wasn't float, it was the rapidly growing payment platform. The salad oil scandal actually showed that float was a weakness. They had so much float that it led them into bad commercial lending decisions.

Sometimes people miss the fact that Buffett's current Amex position was not established in the 1960s. He bought 5% of Amex during the salad oil scandal and sold out in 1968, making around 30% annualized. At 22x earnings and 3x book, it wasn't a typical cigar butt. It was a play on credit cards which were a huge growth story. The credit card business was growing over 40% a year while the legacy travelers check business was growing around 10%. In 1993 Berkshire bought 10% of Amex and has increased it since then.

There are very few US listed European banks trading above book value - AIBYY, IRE, LYG, SAN, BBVA. You might see if they are more attractive to short than EUFN.

The Essays of Warren Buffett The Intelligent Investor The (Mis)behavior of Markets The Alchemy of Finance (even though I understand less than half of it)