oldye

You're talking about the bid. A more accurate analogy would be that some wacko owns 10% of your business and decides to sell 1% for $500. At that point MTM would say that the whole business is worth 50k.

It never made sense to report the last round lot trade of the quarter/ year as the accounting value of an asset. As soon as the number is put to paper it is wrong. Problem is that model/cost accounting is just as flawed, and equally susceptible to gaming. Investors will always be left with the responsibility to determine the intrinsic value of assets on their own. No formula, model can be developed that will accurately tell you what someone else will pay you for an asset. Of course that doesn't mean formulas won't be developed and sold as the end all be all.

"That's why I wound up believing beachfront property is a good investment. I don't think there's ever going to be any more beachfront than there is now. Now people are getting bigger and the amount of money is getting bigger. So beachfront is pretty sure to go up in value." Take a drive on PCH(1) in California. Lots and lots of pristine land that hasn't been developed and may never be but its there.

I say NO to Pepsi all the time, its not that I think I could tell the difference during a blind taste test or anything. I just find that this is a easy way for me to cut down on sugary drinks.

sorry but name an index that has done 10%?

Usually sold on ebay for around 5$ in April.

S&P can Kish Mein Touchess in my opinion they have no right to rate anything, in many ways they have been complicit in committing what in essence is financial terrorism. They're guilty of treason, you know the last scene in fight club where all the financial institutions in the U.S are blown up...well these guys were the security gaurds that watched them plant the bombs. Their only job was to call the cops and sound the alarm but instead they took bribes and kept quite. Now after all that, they're trying to weaken confidence in the strongest institutions that we have in this country. These people are traitors and we should be mad as hell.

Say you think the company is capable of increasing its value by 10$ a share/year. At 50$ you have a 20% ERR, at 30$ you get a 33% ERR, only reason you'd want to sell at 50 is if you could do better than 20% somewhere else.

At every price point there is your expected after tax rate of return, because you bought i'm assuming you know what the rate of return is at 30,40,50 etc. If at 50 the expected after tax rate of return is lower than the opportunity cost you gotta get out. short answer is reread Ben Graham

http://www.glgroup.com/News/What-if-AbitibiBowater-Is-Forced-Into-Bankruptcy--36012.html "It is by no means certain that AbitibiBowater will be forced into the bankruptcy courts. However, if something of that sort does occur, creditors will find that the company operates a number of assets which, if stripped of debt, would compete quite effectively in their markets."

They've lent them over 400 million @ around 18%, by now we should take it that they know where their circle of competence is and are likely operating well within it. I find it funny that these so called "lenders" from the article aren't actually named, ask why would bond holders want the so called fire sale? Sounds like someone might be trying to light a match.

Common Al, Buggy whips? Its certainly not out of the realm of possibility but prior to the crisis demand for paper had been growing YoY at a rate slightly higher than population growth, during a period of strong digitization. 1 economic crisis won't be the death knell of paper, I believe it'll have to wait for the generation born in the 80's and 90's to take charge and change the way things are done.

Hurricane activity might be down but a few well placed hurricanes like last year were enough to cause the 3rd worst season ever. Berkshire can't afford to be in a position where it depends on anyone, including the stock market in the event of a major payout. The opportunity cost of holding cash is very high while the pricing is weak, Fairfax is probably doing the same thing and cutting exposure.

According to Buffett, AXP is becoming a bank holding company and he can't own more than 9.999% without special permission.

It used to be that AAA meant 0.02% chance of default. Of course Berkshire and hell the U.S government aren't really AAA. They have 0 chance of default, let me rephrase that, in the event of a default there would be no one around to rate them or care.

two agencies have to downgrade before the official rating is changed Congress should subpeona every employee at Fitch so that when an investigation is launched they'll have plenty of perjury charges to doll out.

"Buffett’s role as chief investment officer also puts the company at risk if he becomes unable to do the job, Fitch said in a statement." http://www.bloomberg.com/apps/news?pid=20601087&sid=ajBmZZIBU9Vk&refer=home

The sec should be investigating the connection between short selling funds and Fitch. This is financial terrorism.

sell at the sound of trumpets buy at the sound of mocking?

hilarious!!

Just like the auto industry FFH Cos are built to write way more business. No one knows how they'll do during a hard market or what competitive advantages they'll achieve.

No, not the puts ... but maybe the losses on CDS that WEB has to fork up each time the market drops. Same things goes with the banks. Each time the market drops, the value of balance sheet mortgage assets (on or off Balance sheet) falls, and then the bank has to raise capital, thereby diluting shareholders. This is what has been happening to the banks the last 6-12 months, and WFC is not immune to this either. If consumer credit losses and CRE loan losses blow out, then they'll have to raise capital too. Who knows where unemployment is going. It's not the smartest thing in the world to think that leveraged institutions will never have to liquidate assets to meet funding requirements. Why think of the cds as being any different from the other types of insurance Berkshire writes? No one suggest that writing hurricane insurance decreases intrinsic value, even if they end up paying out more than they receive on a given year.

Unless there is some chance of liquidation at current prices, it is not the smartest thing in the world to think of liquidation value as intrinsic value.

someone else said it best, Fairfax Fifty Hello!

you are right, naked puts create moral hazard, and due to the madoff exemption naked shorting.