VersaillesinNY

Well, talking about the wolf, the timing couldn't be better; let's take a look at his recently published annual letter. http://www.wintergreenfund.com/downloads/wintergreen_fund_annual_report_20141231.pdf wintergreen_fund_annual_report_20141231.pdf

David Winters had a good start, he was mentored by Max Heine and Michael Price. One of the problem is that he opened his Wintergreen fund prior to the financial debacle. From 2006-2008, you could spot him on Consuelo Mack wealthtrack and cnbc preaching his optimism on the stock market. Winters was clearly raising funds and got burned like most of the value shops during the crash. At Wesco’s annual meetings, he used to ask his lollapalooza questions and played the faithful Munger-Buffett fan. He seems to be a nice guy although he also seems to have lost it during the Coke compensation drama. David Winters took it to a personal level and openly criticized Buffett for abstaining during the Coke vote. After that, his fund sold its entire BRK position. In retrospect, Wintergreen's shareholders got negatively impacted by the sale given BRK strong performance. Even if Winters doesn’t advocate smoking; I couldn’t invest in his fund due to its permanent large exposure to tobacco companies (18.2% of the portfolio as of Jan 2015) and comfortable management fee. I think he is making too much noise about Coke while only having 5% or $105 million of his fund invested in the company. Buffett’s recent comments will adversely impact Wintergreen fund's ability to grow its shareholders base while under performing the market. David Winters should focus on delivering performance to its remaining shareholders instead of being a pain in the neck (excuse my French).

Attached is Warren's recent interview with a German newspaper. It seems that Buffett is starting a PR campaign in order to buy more businesses in Europe. Warren_Buffett’s_German_To-Do_List_·_Handelsblatt_Global_Edition.pdf

My mistake sleepydragon. Journalists like alarmist tones in order to increase their audience. As a BRK shareholder, I feel that management is transparent and the Newsweek article goes to the trash bin.

It's clear to me that Newsweek is often alarmist and wrong.

The Brazilian judge and Porsche driver has a curious definition of Batista's insider trading case: "Eike had insider information that he used to obtain profits. He is like the woman who cheats, and the shareholders are like her husband: By the time they found out it was too late.”

Aswath Damodaran - "Valuation: Four Lessons to Take Away" - Talks at Google - Feb 17, 2015 This guy is just great!

LC, Are you suggesting to set up the next Cobf meeting at a NY cigar club?

Mark Mobius on investing in Cuba - Feb 17, 2015: http://t.co/GTraYHHTTA

It seems that Batista has now lost 100% of his fortune... and a Fabergé egg. "Authorities raided billionaire Eike Batista’s mansion in Rio de Janeiro this morning, impounding seven vehicles, his mobile phone and 90,000 reais in cash, among other assets, according to a police spokesman. The action came after Brazilian federal judge Flavio Roberto de Souza this week ordered the seizures of financial assets of Batista, two of his sons, his ex-wife and the mother of his third child in his trial for alleged insider trading and market manipulation. The police raid comes as the 58-year-old struggles to pay down debt he owes to banks and sovereign-wealth fund Mubadala Development Co. and threatens to plunge the fallen magnate further into the red. Four of the startups he founded as part of his EBX group have gone bankrupt, beginning with its flagship OGX -- now known as OGPar -- in October 2013, followed by shipbuilder OSX, miner MMX and energy firm Eneva, formerly known as MPX. Batista, whose fortune peaked at $35 billion in 2012 before his commodity and logistics empire collapsed, is $1.2 billion in the hole, according to the Bloomberg Billionaires Index, giving him the rare distinction of being a “negative billionaire.” “All he has left now is debt,” said Marcelo Battisti, a former credit manager at Banco Itau who now heads his own consulting firm. “In normal conditions, becoming a negative billionaire is almost impossible, because most billionaires don’t tend to take on a lot of debt. Do you think Bill Gates has a mortgage?” [...]" http://www.bloomberg.com/news/articles/2015-02-06/brazil-s-negative-billionaire-batista-faces-asset-seizures http://www.wsj.com/articles/brazil-authorities-seize-cars-documents-from-eike-batista-1423231189

Warren Buffett’s Broker to Retire From Citigroup http://www.chicagotribune.com/business/ct-confidential-john-freund-0203-biz-20150203-column.html http://blogs.wsj.com/moneybeat/2015/02/03/warren-buffetts-broker-to-retire-from-citigroup/ Some anecdotes from the man executing Warren's trades.

Fairholme 2014 annual report Fairholme+Fund+Annual+Report+2014.pdf

Unfortunately, another bad year for the duo. These guys are trying hard but redemptions will lower their ability to seize opportunities. Their well written letter covers topics such as natural gas, Ocwen and gold miners. GoodHaven annual report 2014 GoodHaven_2014_Annual_Report.pdf

Ackman Says Benefits of Oil Price Drop Outweigh Costs http://www.bloomberg.com/video/ackman-says-benefits-of-oil-price-drop-outweigh-costs-X0R_10X0SCihlcBujMXo~Q.html

Warren Buffett Dec. 2014 Letter to Berkshire Hathaway Managers ("The All-Stars"). memo-to-managers-dec-2014.pdf

A new interesting essay by George Soros. A New Policy to Rescue Ukraine - January 7, 2015 http://www.nybooks.com/articles/archives/2015/feb/05/new-policy-rescue-ukraine/?insrc=hpss

Jeffrey Gundlach’s Surprising Forecast - Jan 3rd, 2015 http://online.barrons.com/articles/jeffrey-gundlachs-surprising-forecast-1420259030

2014: 8% 2013: 25% 2012: 32% 2011: (12%) 2010: 21% 2009: 45% 2008: (33%) I like this tread since it allows me to revisit my mistakes and challenge some ideas. This amateur portfolio’s performance is quite disappointing in 2014. Too many losers are offsetting too many winners. I need to protect the downside in order to improve returns. BRK, WFC, WMT & MDLZ are passive investments representing 50% of my portfolio with a concentration on BRK (30%). Winners: Idenix, BRK, WFC, BBRY, MSFT, VRX, FB, AAPL, POST & ZTS. Losers: DGI, LUK, BYD, AU, Tesco, SNY, Mittal, LUKOY, BP & XCO. DigitalGlobe – The lost orbit: Poorly managed since the Geoeye merger. The company has been overselling their future earnings to analysts. A buyback program is driving the stock up. Hold and see. Leucadia - The sleeping beauty: More upside than downside. Management is trying hard and time will tell if they can match expectations. A lot has been discussed on LUK by board members; I remain on the optimist side. BYD - The green dragon: Exceptional CEO, top 5 patent Chinese award, a bet on Munger & Li Lu’s Chinese electric cars in a competitive environment. I briefly met Li Lu at a BRK meeting, he is humble and brilliant, how can he be wrong on BYD? AngloGold – The gold bug: I once had a good chat with value maestro Jean-Marie Eveillard who pitched me “Invest in gold to protect your portfolio against extreme outcomes”. Ray Dalio preaches the same, but I should have paid more attention to Jim Rogers: “Buy gold, not miners, because miners can go bankrupt…”. Then came South Africans workers strikes, lower gold and uranium prices & the Ebola epidemic. AU is not the low cost gold producer; I was dead wrong on this one. Tesco – The fake moat: I believed at Tesco’s moat. It was a perpetual bond paying a stable dividend like WMT. I couldn’t see the downside, eroding market shares & margins caused by aggressive hard discounters. Then came profit warnings, management changes & accounting fraud; Terrible and probably oversold… Sanofi – The arrogant frog: With the board ousting the CEO, shareholders value was temporarily destroyed. Time and a future CEO will tell if they can grow the business. Mittal - Dhandho: I’ve been blinded by their CEO/founder’s success story. However, over recent years Lakshmi Mittal and his son have accumulated mistakes: expensive acquisitions & buybacks, high leverage followed by share dilution. Even Mohnish who pitched Mittal in his book ended up buying Posco. As a long term bet on global steel demand, I just swapped the position with the low cost Korean producer. Lukoil - Nasderovia: One of the best managed Russian companies. Privately owned (so far!), insiders buying, shares repurchases, dividend increases, operating cost in Rubles/sales in USD, Mark Mobius on the board of directors; even cheap under Professor Damodaran’s filter. I recently met Jim Grant and his classic bow tie, he told me: "Russian Oil & Gas companies are cheap even after stealing!" At least this time our opinions converge Mr Grant. I’ve been averaging down on Lukoil at $34. I will hold as long as I can keep up with the relative pain and the long term political risk. BP – Where the sun never sets: A long term bet on a beaten oil & gas producer. A cannibal repurchasing shares and delivering a stable dividend. The 20% Rosneft holding, the oil prices crash and the 2010 Gulf oil spill trial are not helping. Good things happen to cheap stocks. Exco – An illusion of resources: My wrong bet on US shale gas & oil and its value shareholders. Where is the moat? I never understood why they were burning cash by paying a dividend. A big mistake and limited carnage with a 2% initial position. Happy New Year to the board and many thanks to Sanjeev for creating this corner of value!

Byron Trott: The billionaires' banker http://fortune.com/2014/12/29/byron-trott-billionaires-banker/ Happy New Year's Eve!

Seabord [sEB] will benefit from a normalization. Any other thoughts from the Democrats & Republicans on the Board :)? Cuba’s Half Century of Isolation to End http://www.bloomberg.com/news/2014-12-17/obama-to-announce-u-s-cuba-relations-shift-as-gross-is-released.html Leon Cooperman on his vist to Cuba http://video.cnbc.com/gallery/?video=3000339967 Ana Montes did much harm spying for Cuba. Chances are, you haven’t heard of her. http://www.washingtonpost.com/sf/feature/wp/2013/04/18/ana-montes-did-much-harm-spying-for-cuba-chances-are-you-havent-heard-of-her/

Thanks for sharing Cooperman's great speech on Singleton. Cooperman mentionned an early investor in Teledyne, Intel and Apple: Arthur Rock. Pardon my ignorance, but I'm just discovering this pioneer venture capitalist. "Teledyne I’d been introduced to Henry Singleton and George Kozmetsky before I moved to California. They were both vice presidents of Litton Industries and they ran a division focused on electronics. Henry was as intellectual as anyone I had come across. He was really brilliant. He had invented the gyroscope, which was used in airplanes and spaceships and missiles to keep them oriented, and that was a huge invention. During the war, he had invented a method for degaussing submarines, which allowed our submarines to go by German submarines without being detected. It was a huge invention and made the seas a lot safer during the war. So he was running this division of Litton with George Kozmetsky and we at Hayden Stone financed them in forming Teledyne. I became a director of Teledyne and soon after formed the partnership with Davis, and we invested in Teledyne. I then became very involved in the early stages of Teledyne. I was always more interested in building companies than in building a business for myself. I didn’t foresee how big the venture capital business would become, but I don’t think it would have ever interested me anyway to build a big venture capital investing firm. I liked to invest in just a few companies and be associated with them and help them grow. So I spent a lot of time in those days with Teledyne and also with SDS. At Teledyne, we started out by buying a defunct company that had lost all of its military contracts and was about to go broke. Teledyne bought it for very little money and then was able to get contracts and build that business up. Then during the next ten years we bought about 125 companies, most of which had something to do with scientific products. There was no general theme. This was a conglomerate of scientific companies, and most of these were allowed to operate with very little direction from corporate. Henry Singleton was this very brilliant, intellectual type who could foresee all of these problems that no one else saw, and he saw the opportunities. I was the sounding board for Henry. He’d call me up all the time. What did I think about this, what did I think about that? We went on a stock buy-back program. We reduced the number of shares by 90 percent during the period probably from 1980 to 1995. We just kept on buying back stock and that, of course, increased the value for the remaining shareholders. So we used to talk about that and whatever problems the company had. I spent a lot of time in Los Angeles and had a lot of dinners and lunches with Henry. And for the twenty-five years that he ran Teledyne, we compounded the growth at 25 percent a year for twenty-five years. But Henry, despite all his brilliance and braininess, had a tough time developing people. So after he left, things started to deteriorate quite a bit. Teledyne was eventually sold to Allegheny Corp. after we spun off the two insurance companies. And the stockholders made out extremely well." A must read - Interview with Arthur Rock - Harvard Business School, March 2001 http://www.hbs.edu/entrepreneurs/pdf/arthurrock.pdf http://video.hbs.edu/videotools/play?clip=interview_arthur_rock 2012 NVCA Annual Meeting: Mike Markula Interviews Arthur Rock https://www.youtube.com/watch?v=mgoikems0f8 Rock of Valley on New Terrain, July 2010 http://www.wsj.com/articles/SB10001424052748704293604575343074137247004 Arthur Rock - Legendary Venture Capitalist, May 2007 Transcript: http://archive.computerhistory.org/resources/access/text/2012/05/102658253-05-01-acc.pdf 2011 Movie trailer: Something Ventured – the art of venture investing/ Available on netflix Arthur Rock-Strategy vs Tactics-importance of jockey http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/arthur-rock-strategy-vs-tactics-importance-of-jockey/msg30562/#msg30562 arthurrock_HBS_profile.pdf

These guys have a good track record. IVA Funds Annual Report - September 30, 2014 IVA_Funds_Audited_Annual_Report_-_September_30_2014.pdf

For those who follow Tweedy: The lackluster results for our Funds during the quarter were driven largely by significant declines in our oil and gas related shares, as the price of oil as measured by Brent Crude declined approximately 17% during the quarter. While we had some very nice returns in a few of our pharmaceutical, financial and defense holdings, it was not enough to offset the declines in our energy related holdings. With declining oil prices driving oil shares lower, it is easy to lose sight of the longer term fundamental case for oil and gas. While we have no clue as to what will happen to oil prices in the short run, we believe over the longer term, the supply demand equation for oil and gas should remain relatively tight, due to declining production curves, increasing demand, and higher finding and development costs. At the margin, experts suggest that the marginal cost today of finding and developing a barrel of oil is approximately $80 to $100. While Saudi Arabia remains a significant unknown factor in the near term pricing of oil because of its ability to substantially increase or decrease production, longer term trends remain, in our judgment, favorable.[...] http://www.tweedy.com/resources/library_docs/quarterly/FundCommentary%20Q3%202014%20-%20Final.pdf FundCommentary_Q3_2014_-_Final.pdf

An interesting article by George Soros: Wake Up, Europe http://www.nybooks.com/articles/archives/2014/nov/20/wake-up-europe/?insrc=hpss

This is pretty sad. Mr Big Moustache will be missed, he was such a great visionary leader. RIP. Total might face some volatility in the upcoming days. "Killed by a drunk snowplow driver, possibly with the connivance of drunk air traffic controllers: a painfully Russian end for the man Putin called “a true friend to our country.”" Fortune magazine "Free spirited and deliberately provocative, this passionate debater was not afraid to defend his ideas that sometimes flirted with controversy. Supporter of shale gas and of higher tax rates." HEC ---------- Christophe de Margerie, the Total SA (FP) chief executive officer who oversaw the biggest increase in reserves at the French oil explorer in at least 15 years, died in a Moscow plane crash, Interfax reported. The 63-year-old CEO died at Moscow’s Vnukovo Airport when a business jet crashed, Interfax said, citing an unidentified law enforcement official. Four people aboard a Dassault Aviation SA Falcon jet died when it crashed into a snowplow late yesterday, Elena Krylova, a spokeswoman for the airport, said by phone, adding it’s against policy to name the victims. Russian officials started an investigation into the crash of the plane, which was headed to Paris, the Moscow regional transport prosecutor’s office said in a statement. Calls to Total spokesman Charles-Etienne Lebatard and to the French Foreign Ministry weren’t immediately returned. During a 40-year career that began in Total’s finance unit, de Margerie oversaw far-flung operations for the French petroleum giant from Indonesia to the Middle East to Kazakhstan. Earlier this year he helped negotiate the Paris-based company’s entry into Russian shale under a Siberian drilling venture with OAO Lukoil; the company also is a partner in the vast Russian gas development on the Yamal Peninsula. Nicknamed the “Big Mustache” for his ample white whiskers, de Margerie cut a larger-than-life figure at international energy conferences including IHS Inc.’s CERAWeek event in Houston earlier this year when he discussed the impact of surging exploration and drilling costs on oil producers and consumers. As CEO, de Margerie could be seen lingering with a glass of whisky in hand talking with analysts and industry representatives long after the end of conferences he addressed. Total is the world’s fourth-largest non-state energy company by market value, after Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., according to data compiled by Bloomberg. The French company’s $228 billion in annual sales exceeds the economic output of nations such as Ireland and Vietnam. Under de Margerie’s reign, reserves-life, or the number of years of current production that could be replicated using existing reserves, rose in every year but one, the longest such streak for Total since at least 1998. Total was reevaluating plans to explore for shale oil in Western Siberia with partner OAO Lukoil amid economic sanctions against Russia, the company said last month. http://www.bloomberg.com/news/2014-10-20/total-ceo-de-margerie-dies-in-moscow-plane-crash-interfax-says.html http://wew.oilcareerfair.com/news/oil_gas/a/133120/Totals_CEO_Says_Successor_Will_Be_Company_Insider http://tempsreel.nouvelobs.com/l-enquete-de-l-obs/20140516.OBS7444/vodka-petrole-et-cac-40-qui-est-vraiment-le-pdg-de-total.html