ExpectedValue

If people pay can't pay their credit cards they probably can't pay the loans to Wells Fargo. Probably means that we'll see more write downs on assets.

Hopefully we see some journalists report on the event! http://www.exchangemagazine.com/morningpost/2009/week17/Monday/042015.htm Prem Watsa gives UW talk on his guiding business principles WATERLOO - Prem Watsa, one of Canada's most prominent business leaders, will discuss his guiding business principles during the University of Waterloo's Friends of the Library lecture and authors event next week. Watsa, chairman and CEO of Fairfax Financial Holdings Ltd., will become UW's ninth chancellor on May 1. His talk, entitled Fair, Friendly Acquisitions ... The Fairfax Story, will take place Monday, April 20 at noon in the Theatre of the Arts, Modern Languages building. In his talk, Watsa will focus on the culture, guiding principles and values driving Fairfax, including its focus on people, ethical action and doing the right thing regardless of the outcome. "This year's lecture will be an opportunity for the campus community and interested members of the public to witness the first-ever campus talk by the University of Waterloo's chancellor elect, Mr. Prem Watsa," said Mark Haslett, university librarian. "Attendees will also have the opportunity to appreciate the creative works of over 40 individuals from the UW community that will be showcased at the event." Watsa was born in Hyderabad, India in 1950. He earned a bachelor's degree in chemical engineering from the Indian Institute of Technology in 1971. He moved to Ontario the following year and later earned an MBA from the University of Western Ontario. His professional career began at Confederation Life Insurance Co. in Toronto and he served as vice-president of Confederation Life Investment Counsel from 1974 to 1983. He then spent a year as vice-president of start-up firm GW Asset Management. Watsa co-founded Hamblin Watsa Investment Counsel Ltd. (now fully owned by Fairfax) in 1984. The next year he took control of Markel Financial Holdings Ltd. In 1987, he re-organized Markel and renamed it Fairfax, which is short for fair and friendly acquisitions. The name reflects the company's guiding principles, which maintain that honesty and integrity are essential in all relationships and will never be compromised. The annual public lecture and authors event, hosted by the university library, highlights the creative process and features a display of books, musical scores, photography and art produced by UW's faculty, staff, students and alumni. Among the contributions are artistic pieces by Craig S. Kaplan, professor of computer science, and a fictional work by Don Ranney, retired professor of kinesiology. The public is welcome to attend the talk, presented by the Friends of the Library.

I think a lot of institutional money sat out March because they still see deteriorating fundamentals in the economic data that's coming out.

According to the 2008 AR, hasn't he been selling COP?

Max linked the article, it says that Charlie brought the idea to Warren.

I think it's better to look at BYD as a major battery manufacturer that coincidentally purchased an automaker and made them profitable. If cars flop, they still have the ability to sell batteries and compete. That makes it appear more like a Buffett-style investment.

I think its a tough situation. I would like to know how much of a decision-making capacity Dreman was in at the fund. One thing though -- the strategy of buying low PE or low P/B companies, without analyzing the 'E' or 'B' in depth would have led fund managers to make gross miscalculations on their investments... which is what we saw in situations where value investors piled into WaMu, Bear Stearns, and so on.

"Last week, Wells Fargo & Co (WFC: 19.50 -0.56%) pre-announced $3bn in expected profit and growth for the first quarter of 2009, along with growth in a closely-watched earnings ratio known as tangible common equity. The stock soared over 30 percent on the incomplete earnings news, with an official announcement due later this month. Some analysts have questioned the results, as both loan loss reserves and charge-offs came in unexpectedly low, helping the bank boost reported profits. It appears, however, that as much as nearly one-third of the bank's first quarter earnings may be nothing more than the result of an accounting treatment; without such a move, tangible common equity would be 10 bps less than the 3.1 percent the Street expects."

Coca-Cola also sells Mexican coke which is made with sugar cane, in case you dislike HFCS

Even scientists debate theories and problems. "Unambiguous guidance" = Arrogant ignorance

If Wells Fargo didn't need the capital they would have given it back. They wanted to keep it so that they could be better capitalized and possibly lend out to make some more money (nothing wrong with that, that's what a bank is supposed to do). However, if lending really did come to a standstill there would have been some kind of government program created to put loans out there. Nobody should be thanking Wells Fargo for its lending and thinking that their jobs were saved by it. Their jobs were saved by the American taxpayer's money flooding into banks. Since they (Wells Fargo and other banks) essentially owe their ability to operate due to the taxpayers, they should be OK with taxpayers having some influence over things like compensation. Also, keep in mind that this bill still has to pass in the senate and it's likely that it will be watered down or modified. It's not even a law yet. The fact that this bill focuses on bonuses means that banks may simply have to adjust base-salaries upwards to make up for the reduced bonuses. I doubt this is going to turn into the "Stalinist" / French Revolution scenes that some of you seem to be evoking.

My point is that before the TARP, the confidence behind our banking system was shaken - to the point where they were very susceptible to bear raids. We had Bear Stearns, we had Lehman Brothers, and it's likely that we would have had more. In order to stem that off, we had to lend these companies money because their business models DEPEND upon confidence. This is not your usual value investor situation where you can ignore the lack of confidence and have faith that these companies could thrive without confidence. So Wells Fargo can call these additional restraints asinine and you may think that they're unethical, but that's the price that they are going to have to pay for the confidence that comes with US taxpayers backing them. Because without it, they might not be able to operate. That's the price that comes with being a Bank and having to make sure that every day the public is confident about you. Don't like it? Don't invest in those types of companies.

http://www.grabup.com/uploads/e56e5da069cf8d180061b1a0cc3e936a.png?direct judging from the TED spread, yes, there is more confidence.

I don't think I would want to do business with anyone that can add restrictions to a deal months after it was struck. Would you treat me that way if I had taken a personal loan from you? Is that your ethics? Banks depend on confidence. If confidence dries up they're in no position to bargain.

"Thing is, it's got nothing to do with percentage of ownership. Is Wells Fargo 80% owned by taxpayers? No, it isn't. So why does it also apply to them?" They don't have to keep the money that was given to them, they can pay it back and those restrictions would be lifted. If they didn't need the money in the first place, they should be able to pay it back rather promptly.

So if GenRe had blown up then the managers as See's Candies don't deserve a bonus? Would Berkshire Hathaway be 80% taxpayer owned? If so, it would be the taxpayer's decisions, as in that case, they are the true owners of the business (not the executives). Executive compensation should be something controlled by shareholders -- read Icahn's speeches on this issue if you feel otherwise.

Why would a tax payer want $160M of their money go to pay bonuses to the group who nearly crashed the financial system? It's their money that's bailing out the company, they should have some say in the matter.

Bonuses should only be given out if the business is profitable. In this case, it clearly is not.

Could you discuss this more? Esp. the companies you've avoided investing in after the First Marblehead lesson.

correct article: http://www.tilsonfunds.com/BuffettInflationSwindle.pdf

Cramer is on CNBC, which is why Jon Stewart's interview is mostly about CNBC.

http://dealbreaker.com/images/thumbs/monthlyletter-feb09.pdf scroll to "Appendix A"

"On the asset side, a big source of jitters is GE Capital's $36.7 billion in commercial-real-estate investments. These are equity-type investments, the first to absorb any losses. As a result, most firms are currently applying big haircuts to this type of asset. In its fourth quarter, Goldman Sachs Group, using mark-to-market accounting, took a 25% write-down, totaling $961 million, on its commercial-real-estate equity investments. GE Capital, which values its holdings using estimates of future cash flows rather than marking them to market, took $300 million of impairments last year, equivalent to less than 1% of the equity investments... since GE was a big commercial-real-estate equity investor in the frothy years -- it added $12.6 billion of these assets in 2007 alone -- investors should watch this portfolio very closely. Attention should also be paid to GE Capital's $59.6 billion of overseas residential mortgages, many of which are based in troubled markets like the U.K. Some $3.3 billion of these mortgages are more than 90-days past-due, but GE Capital's loan-loss reserve is equivalent to only 11.5% of the past-due total, up only slightly from 10% at the end of 2007."

I don't. With this Sanjeev controls the hosting and we don't have to see ads. What's not to like? Investor Village does not even appear properly on all browsers (Safari)

BAC didn't need TARP money? Why then did they do a common stock offering days before in a feeble attempt to raise capital?