Rabbitisrich

One thing to consider is that Buffett very clearly attributed the BYD purchase to Munger, and he hasn't professed any particular insight into the company. If BYD truly explains most of Lu's outperformance, then circumstances have changed, or we should view the article with some skepticism.

Has anyone tracked down the Munger interview referenced in the article? "In my mind.."

Miller drew his numbers from the Motoko Rich article, which cited a Moody's study of Fed data. I can't find the actual study, or even the data referenced, but they may estimate income differently.

Uccmal, are you underwater on the lots you sold? If so, do you get the tax loss even if you exercise the rights?

http://www.nytimes.com/2010/06/29/technology/29dell.html?src=busln Lawsuit aside, Dell's delay tactics imply an inability to solve the dysfunctional supply chain issues. I remember Michael Dell referring to broad strategic plans as a reason for his return, but I don't recall him specifically referring to supply chain reliability, or reputational goodwill amongst IT managers. Is anyone long this company?

Wouldn't you be better off with a CPA or a CA? I am waiting for my level III test results and I wouldn't hire myself over a CPA/CA with fund accounting experience.

LRE posts 4 years claims development somewhere near the end of their AR. It's under 'claims development' and breaks down into the gross, ceded, and net tables.

Really? My cousin and her family moved to Montreal a couple of years ago, and they make it seem as if the taxation is tyrannical.

Some interesting news about Dell and the Chrome OS: http://www.reuters.com/article/idUSTRE65K19S20100621

I had a difficult time getting through the article due to all snarky implications in place of substantive analysis. At some point there should have been an argument for Einhorn's analytical errors; instead, Mitchell provided cui bono arguments. Seymour Hersh, he is not.

Thanks for the link. It seems like a roundabout way of attacking the NRSRO system, i.e. a practical non-starter.

Hmmm... I'm not sure.

USA Today published an article yesterday noting that important technical floors were breached or in danger of being breached. I also took the CFA exam last Saturday and most people I spoke with seemed to have an opinion on the causes and the future of the near term market volatility. Is it really that hard for people to say, "I'm not sure"?

No problem, I'm near sighted with slight astigmatism and dry eyes, so computer reading isn't normally a wonderful experience. An attachment for your monitor to reduce the glare and the blue light might help a lot, and you might find that wearing light sunglasses helps as well!

Regarding CNA, if you like the company at the current price you are surely betting on Motamed, rather than the Loews. Reserve developments have been positive the last couple of years and they pulled capacity back in the '07-'10 pricing environment. But I would feel more comfortable with the company if their assets more closely resembled Chubb's. In 2008, they liquidated much of their treasuries in favor of a large increase in their corporate portfolio. Time will tell if they were truly opportunistic or simply chasing yield; either way, given the evidence of major discretion on the investing side and the absence of a great record on the insurance side, it's probably a good idea to demand a big turnaround discount in addition to the normal soft market, hurricane season insurance discount.

Try reducing the brightness and contrast of your screen.

Ackman's idea is interesting but how would it be implemented? If you tie payments to bond performance, then how will the performance be measured? After all, ratings change according to changes in the business or in the capitalization, and those factors change simply due to time. If a manager sells his most profitable unit at a low price days after recieving a AAA, then it seems unacceptable to restrict payments to the rater. Also, if the company is paying the rater, but it can also retain payments if their own default risk increases, then that seems to create a perverse incentive to default on payments. In addition, Ackman's plan seems to bring the rating company's role a bit too close to that of a bond manager. Let's say Ackman's plan becomes the status quo... if the market overly weighted ratings under the current system, how blindly will it use ratings when the raters are accepting credit risk? We could actually see an increase in moral hazard! My personal belief is that current discussion about ratings focuses too much on the raters, whom are simply the logical results of the current system. I don't see a solution that doesn't focus upon the why and the how of rating consumers.

Keep in mind that a lot of people on this board have a full position in Fairfax. I wouldn't fear to hold a large position, which in fact I do, with my 'preserve my capital' money, but $380 is not where I would place my 'don't tell your neighbors' money.

It also shows Buffett's political instincts in maintaining relationships with people who may or may not be personally insufferable.

All that being said, the website looks like a worthwhile read.

I sold my lots that I purchased between $345-$352 to be ready for potential volatility. It's still a fairly small chunk of my Fairfax stake, so it'll be pretty painful if the negative scenarios occur.

Yeah, it's a bit speculative at this point. The market reacted similarly to Nutrisystem 30% ago. It's hard to imagine that Jones will be able to maintain their brand strength with this move. The canned version didn't take off at Target, and they lost a lot of their exposure to yuppies and Birkenstock-wearing Jack Johnson fans when their DTR partners cancelled orders. Advertising spend is still almost 50% less than last year's, and last year was 23% less than the prior year. Also, the press release didn't specify how much time Walmart will provide for this experiment. I have a bit of nostalgia for the Jones brand from my college days, but it seems like they are shedding their old tight pants and ironic t-shirt wearing customers.

http://www.noaanews.noaa.gov/stories2010/20100527_hurricaneoutlook.html Uh oh.

Opihiman, I don't really follow your example. The two put premiums result in different losses for the same return. Take the example to its logical extreme: You wait until the third day to sell the put and the underlying falls to near zero. You would then require a premium in which your ultimate loss will be much smaller than it would have been in the prior days. The premium received changes your risk profile. The example is meaningless if you are using a hindsight bias, since in that case you are presuming losses before the case. I don't think the OP intended to sell options with no consideration of the underlying. In fact, he explicitly states that the opportunity cost is the purchase of the underlying.

The OPs usage is appropriate if you consider that a margin of safety aims to reduce your odds of loss in the face of uncertainty. Wouldn't you agree that a higher put premium relative to strike price increases your margin of safety given no change in the risk of the underlying? The boardmembers are reacting to your tone more than you statements, which are otherwise fair. OP is clearly new to investing and to options, so a less aggressive response would have been more helpful.