gary17

I'd just add that my contacts in china (owner / operator of a public company and a senior banker ) seems to suggest the problems in china are manageable. Perhaps we the outsiders see this better than they can, Also, when Buffett has an optimistic view I think it is fair to say that view is shares by Ted, Todd, and munger as well.

Zenaida, hope your mom will do well, hang in there, all the best .

It is quite interesting that with the Malaysian airline , all the nations in one of the most disputed parts of the water in this world are working together ... This gives me some comfort when dooms day comes they'd be trying to figure out a solution.

Hi Eric - how does this work in terms of sizing the hedge - do you look at your overall portfolio value; pick a percentage that you want to hedge - and buy enough puts where the value = the % of the portfolio that you want to hedge? Thanks Gary I'm having a freakout at the moment. There is no grand formula. Just panic decision making. just calm down.... if everybody thinks a correction is just about to happen - chances are it won't happen. that's just how it works. Gary

Hi Eric - how does this work in terms of sizing the hedge - do you look at your overall portfolio value; pick a percentage that you want to hedge - and buy enough puts where the value = the % of the portfolio that you want to hedge? Thanks Gary

I think if you adjust for inflation Buffett"s company was a lot bigger than Fairfax today.

Hot money is true. In Taiwan , especially Taipei. Real estate doubled or triples the last two years ... Just ask Zippy! Same in Beijing, Shanghai , and HK. Why is The HK real estate guy lee Kai shing getting out of real estate in HK? He probably see something coming

How much lending has US Bancorp done to borrowers in China? I agree that markets will go down, but remember... it was hedged against the market. So what's the point of selling? The market might unwind back to 2010 level, but these banks very well might not -- there is all that retained earnings since then. I think the question we should be asking is how much lending have US Bancorp, WFC, BAC, etc done to borrowers that have financial ties in China / Europe - the financial system is so well connected now... the risk today is the "unknown unknowns" -- I was reading the other day how the Bank of Japan chief saw no need of intervention - he had one job and probably went to school for very long - and he missed it. All the experts in the world missed the Great Recession. Even Buffett has said he didn't see 08 coming so he invested in Moody's. The greatest minds put the EU together and didn't see the mess they are in now... I guess that's what Prem is worried about - this 1 in a 100 year event that nobody can fathom. When the planes hit WTC - nobody thinks it could collapse - my structural prof told me nobody believed it could collapse. Well - he spent the next 5 years in committees to try and figure out why it did. And perhaps that's just Prem being cautious - he wants to prevent getting wiped out for something he or others have not been able to foresee... Gary

Eric I think we must not underestimate a blow up of china and Europe same time as I noted above - these events could have a lot of impact on US financials, and the governments around the world have very few options left... Interest is already low! And we have been printing money. Of course, Prem will look smart IF these events unfold, What nobody knows is WHEN

I believe they don't want to deleverage because that affects their earning power and hence intrinsic value. The hedges can sit until they realize the gain. So if their time horizon is long ,then it makes sense they want the leverage to build up the intrinsic value and when the time is right get rid of the hedges. I guess while he sees uncertainty in macros he's also recognizing there are cheap businesses out there to own. For example bank of ireland. And blackberry.

Packer I believe they are betting on this one in a hundred event happening where we see deflation in Europe and China bubble burst. I can agree with him on China. I'm not sure how to look at Europe... But Prem is expecting what had happened to Japan to happen in Europe. Now if these two does happen, then it would affect the US. The added risk here is also that after the Great Recession, there appears to be no more tools in the box for the governments around the world to deal with all this. So this could be a big and sustained decline. I think for some of us that risk might be tolerable. But harder for Prem / Fairfax. The bottom line is how likely will all of this unfold , and when. The one thing I never really understood is if the QE has been helping the US or everybody ... Even economies in Europe and Asia. I mean the US is pumping money into the uS economy. But are there boarders as to how the money flows? I would imagine money flows more easily today than many decades ago when previous recessions happened.

Little surprised they kept 2/3 of bank of ireland and let The US banks go !

thanks - so they are cutting down their initial 34% by 6% ... considering how much the Euro has appreciated seems like they are just getting part of their initial investment back so the ADRs pre-market are at $20 or about 0.365 euro / share whereas the actual IRE shares in London are now 0.34. interesting.

Hielko, can you please explain to me how does a synthetic long work... thanks

It is interesting the ADR continues to be about 7 to 8 percent premium to the London shares...

I don't know But I think they need to think outside the box a little. Can they get China involved. China has in the past been very vocal about sovereignty. what specifically should USA do?

I think this event sends a loud and clear signal to iran and North Korea : no matter what get nukes, or nobody will treat you seriously

What about the international treaty signed - Ukraine gave up nukes for sovereignty guarantee from Russia.... I'm continued to be amazed by cnn to have the resources to be at all places.... that's a great competitive advantage.

I'm not really sure. I just read a bit part of revenue is from the UK... I'm not into numbers... just thought the story was good. There are competitors. Allied Irish Bank. And also an arm of royal bank of Scotland. Forgot the name.... but not having a government assigned bureaucrat on the board is in my view a good thing. RBS is doing very bad right now. If, IF, they have to sell their Irish asset, then this story could become a lot more interesting.

Speculation about profitability Speculation about dividend. And probably some retail investors confused about the split ... Relative to AIB it is dirt cheap even though the former is nationalized. Ireland real estate up a lot lately Ire the only private bank in ireland and does fifty percent of business in UK So with all that I did let go some of my positions last week... And of course as soon as I sold it went up 25%... From 16 to 21 :(

Applied quarterly I believe The plan would take effect Jan. 1, 2015, and the levy would be assessed each quarter, applying the 0.035 percent rate to each company’s total consolidated assets after subtracting the $500 billion exemption.

I find it interesting that he's cash in the estate - 90% will go buy SPY and 10% short term bonds - so he has no faith in buying BRK? Is Warren suggesting SPY will do better than BRK over the long term? Gary

Very ,nicely written. Thank you for posting. Interesting that to be truly long term one should just ignore the macro and focus on the business itself ... And buy stocks with predictable pricing power in the future.

Gio, I don't understand A) why would the portfolio be 25%less if someone has been fully invested... His equity portfolio did really well and even if 70% invested probability beats the market by a wide margin B) how do his clients get comfortable with when the manager will deploy cash effectively. He's had cash since 1999 and seem to have missed the dot com crash, the crash after 911 and the recent 2008 crash too.

I picked up some lancashire this week too :>