ragnarisapirate

Access to a G5? What are you talking about, Sanjeev?

Amazon is jumping in... It seems like margins will eventually be decreasing for NFLX over time, with added competition. http://finance.yahoo.com/news/Amazon-to-launch-film-rb-4008883978.html;_ylt=Ahqcgain8LHy.DftbBAbbGS7YWsA;_ylu=X3oDMTE2ZHFmZnFqBHBvcwMxMgRzZWMDdG9wU3RvcmllcwRzbGsDYW1hem9udG9sYXVu?x=0&sec=topStories&pos=9&asset=&ccode=

Interesting. Did anyone else notice that in the exhibit showing the purchase history of CAW stock, all purchases were (more or less; the first was off by a share) split evenly between The Lion Fund and Biglari Holdings?

I remember looking at WDC when it was in the teens, and passing for others, mainly, BH, of all things... I am shocked that it is trading at under 10x year out earnings. Thanks for bringing it to my attention. I am thinking that some Jan 2013 call options might be a good addition to the SHLD leaps that I have. Out of question, what is the short thesis? I mean, you take the cash out of the company and your effectively paying 5 billion for a cash generating machine. That does seem like a no brainer, as Myth says. It almost seems like they would have to try to wreck the company. Why hasn't someone tried to buy them out?

I am kind of surprised that people say there are not bargains out there. Granted, there are a lot fewer than 2 years ago. BUT, there are a bunch of little companies that are trading at under 15x earnings (some, significantly so, ~7x) which, are also sitting on a plethora of cash (their market cap's worth, after you take out their debt)... Were we all spoiled by the recent destruction of the markets? Or am I one of the only people fishing for easy to catch bluegill (IBAL, or, market caps below $20 million), rather than harder to catch large mouth bass (ZINC) or marlin (KFT)?

Let Charles Darwin do his thing, and weed out the weak. I, for one, give a big hat tip to the guys at Starbucks! ;)

An observation (with neither a negative or positive tone to it): I am always surprised that people on this board have an interest in sports... Investment (well, more specifically, value investment) doesn't seem to be the type of thing that would have disciples that would like such things. Don't get me wrong, I take in an occasional game, and like to occasionally go see some pro stuff in person, but, still, I am surprised. Thoughts on this?

Parsad you are in fantasy land if you think potential acquirers should not be open to renegotiating an offering price. It isn't a fantasy land if you over pay for the company, as it seems Parsad believes Biglari to be doing. But, maybe Sardar sees something there that we don't... I am not going to say it is a bad deal, but, on the other hand, I certainly don't have money invested in Fremont. To address Bookie and Myth, from my own personal perspective, the activism that Biglari embraces is probably what draws people to him. Generally, value guys don't go activist very often, when they do, there can be significant and outsized gains to come about (remember SNS at 3 bucks a share?). While people may not like Biglari, I don't see why anyone would ever want to ignore what the guy does. Additionally, playing devils advocate for a moment, I will ask this: if one is investing in BH for the allocation abilities of Biglari, why would they want to do anything that would risk the company falling out of his hands (such as being against the new share structure). On a similar note, If I was a shareholder of BRK, I probably wouldn't want the people that formerly owned Burlington to vote in the same manner of me... The companies were set up quite differently, and protecting the sanctity of Berkshire would be on the top of my list of things to do. While not traditionally shareholder friendly, it isn't like the shareholders of Burlington (or whatever company BH could go after with the second class of shares with) didn't have a choice in being able to vote in the new parent of their company when they vote on the merger agreement. As I said before (and, on a more serious note), I see this as another tool in the belt that BH wears. Certainly, it could be mis-used, but, could also be used incredibly well. Only time will tell, and, as of now, I am basically on the sidelines... BH ain't cheap.

First and foremost, just how depressed is the real estate market in Florida? From my own perspective, a lot of what you should be willing to pay would depend on the rents and utility that you think you could get... say, you can fix the mortgage at 5% for 30 years, and gross, say 50K in rent, which, once you take into account fees for real estate services, repairs and such, will leave you with, 5K, 10K, or even 15K. What is that worth to you? Additionally, would you want to go to the same place for vacation for a significant period of time (or, use the proceeds to go elsewhere). What about budgetary issues that the state will probably end up facing? will that hurt the long term value of the house? I would advise you to be be mindful of where you go to buy. My family likes to vacation in the area surrounding Port St. Joe and, maybe 6 years ago rented a placed called "the Bayou Belle". By Port St Joe, I am referring to the place with the paper mill that Einhorn hates- which I tend to agree with; the town is super shitty, but, the beach is relatively secluded and nice. What if St Joe does develop a ton of houses down there? the additional supply could really hurt you. But I needn't digress from my story. :D The specific house we rented for the week was a nice vacation rental, called "The Bayou Belle", which was named for the bayou that was, maybe 50 feet from the house when we were there. My brother and I noticed an aerial photograph of the place which was probably 5 years old at that time- the bayou was probably 150 feet away from the house. Last summer, when we were in the same area, when strolling along the beach, we noticed that the bayou had, quite literally, gone through edge of the house, which, took out one of the decks AND walkway that went directly to the beach... The place had to have a bunch of concrete pillars installed, and honestly, I don't see how there wouldn't have been a bunch of settling throughout the thing (which is really unfortunate, since the whole thing had tile floors). I would be scared to buy anything close to that house for anything close to a "fair market price"- which says a lot, considering the types of project houses I have been willing to buy in the past. ;) It's all about weighing options, goals, and risks. As a rule of thumb, I wont even think about touching a house (even for me to live in, as a residence) if I can't get it for 100 months worth of rental payments. My last house, was bought for 60 months rent, and the one before that, 30 months rent. Though, I will also caution that with this thinking, you often times shy away from what are traditionally referred to as "growth properties", which, may be what you are going for in Florida, and would price you under what the market is still at. Here are some pics of what I was talking about with the bayou belle. New pics of the outside, which, strategically hide the bayou (apparently, they recently added a new walkway) http://www.homeaway.com/vacation-rental/p213457 Here is an old pic, with the old walkway. http://www.flipkey.com/properties/view/110295/bayou+belle/ here is a google map, you can see in the sand where the bayou has moved... from the middle, to the far left. http://maps.google.com/maps?oe=UTF-8&q=port+st+joe&ie=UTF8&hq=&hnear=Port+St+Joe,+Gulf,+Florida&gl=us&ll=29.684441,-85.285674&spn=0.002792,0.006539&t=h&z=18

It seems that BH will be taking on a similar share structure to BRK... only, the B shares won't be able to vote. This could make for an interesting study on what investors actually value their vote at (due to the conversion that will inevitably occur when there is a price disparity in the differing share classes. http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7628491-1163-7009&type=sect&TabIndex=2&companyid=11049&ppu=%252fdefault.aspx%253fcompanyid%253d11049 It seems that these shares could be used to strengthen his position in the company, provided that he never converts to the B shares. To me, this has the potential to help with acquisitions (remember Burlington and the new split of the B shares of BRK?) I do wonder if when this is implemented into practice, the control issue will hurt intrinsic value more than the potential gains. This adds to the undeterminable factors that cause me to discount the hell out of the stock in the event I make another purchase. Additionally, it seems that they are preparing to up the offer for fremont. http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7628490-14564-17866&type=sect&TabIndex=2&companyid=618608&ppu=%252fdefault.aspx%253fcompanyid%253d11049 This guy is relentless. It will be interesting so see how this goes over (both at fremont, and in the market). Do you guys know of an instance in which someone has gone after a company so much, so publically, where the shares traded at such a depressed price, relative to the offered amount?

Phil Fisher's second book was great, as well as his 'common stocks, uncommon profits'. Obviously, you should give Graham a read. Buffett's Partnership letters are great too. While not on value investing, I would strongly recommend reading The Black Swan, as well. Read 10Ks like crazy.

Interesting way of approaching it. What do you think that you are going to do in regards to her reply? Flying out there would be a really cool thing to do.

Not trying to defend the guy, but, I am not trying to glorify him, either: He might not want to retire them, so that they can be sold at a time in which the company is over valued in relation to a different company that he is trying to buy a stake in. It seems to give the company more flexibility, even though he is able to control more of BH... Maybe he wanted votes. Are shareholders better off with him there? What about with the company voting to get better tax treatment? To those questions, I think that the answer is obviously yes. REMEMBER: the issue here should probably be board independence, since they are the people that approved the plan initially, not Biglari's shares. The board is independent too, as they were almost all there even with previous management, and were initially against Sardar Biglari taking over. Furthermore, for a company to truly reflect the wishes of it's shareholders, I believe that CEOs should be able to vote their shares on their own compensation. I see little difference in his voting on compensation than activist investors (such as Biglari) trying to vote themselves into the boardroom (should BH shares be able to vote for him to get a board seat, and thus, receive compensation, at Fremont?), or even try to get a dividend/share repurchase. Just because someone stands to gain by voting for something, doesn't mean that their actions are wrong. His allocation abilities are part of what gives this company value. As I have said before, I have sold off virtually all of my stake; I personally own a single share of the company. So, at present, the over/under valued and arguments matter very little to me. I would be willing to buy in again, but not at the current price, which seems to be more than fair. All things equal, under $300 and the company is interesting to me... $200 and I will buy a bunch of stock; at a price like that, you can price in any moral/ethical/emotional issues/reactions you might have with the guy and do quite well. It is all about what kind of 'risk' for this kind of stuff you price into the security... to me, it seems easy to go against the stock blindly because some don't like what Biglari has done, I think that this is a mistake. It is obvious the guy isn't Buffett (I would argue, based on the type of investment that he does, but that is another story)- but he certainly is closer to Buffett than to Ken Lay... Middle ground people... come to the middle ground. :D

well put.

I agree as well... A great idea for the board to keep track of this! mightent we want to add in some others that people on the board like? MVC? Loews? BRK? What about taking some side bets? ;P

For those interested in his investing, you might want to check out this book, it's an easy and enjoyable read. http://www.amazon.com/Keynes-Market-Economist-Overturned-Conventional/dp/047028496X

Does anyone else have any trouble attaching any kind of expected multiple of earnings to the AUM of BH? My reasoning: When you invest in the Lion Fund, you are investing in Sardar. If something happens to him, and the funds leave (which, they probably would; how many people would be in Fairholme w/o Berkowitz?) a HUGE chunk of potential earning power is gone. Other companies only invest their own money, hence, the principle will still be there, even if it isn't allocated efficiently. Additionally, it seems (all things equal) that the intrinsic value of BH would generally be less when the market is up, and more, when the market is down- there are a lot more candidates for them to take over in a bear market, generally, at better prices! No?

This last year was good to me... I didn't have a single stock that was down. Best performer was CTHR, which, I started buying in late 09, averaging in at ~60 cents/shr... Sold it at various times, with an average sale of something like 2.60? "Worst" performer was VIFL, which I bought and sold 2 separate times in the year. Both times I netted something like 25% in a very short period of time. I am pretty sure that this is about the best year that I will ever have. I was very lucky. Since I love nano-caps (and so far, try to not do much with companies over $25 million in market cap)... As far as top ideas, I have been harping on International Baler (IBAL); a nano-cap which is more or less a net net, with no debt, they effectively have a p/e of 8. I love the business that they are in, and think that they are a decent bet in the face of inflation OR deflation (deflation, their cash is more valuable, inflation, they can export more, plus, they make things that help people scrap commodities). I look for them to be rid of their NOLs soon, and won't be shocked if they put their dividend back into effect in the near future. Another company that I have been harping about is Nevada Gold (UWN)- a small casino operator; they are trying to lever themselves up to the hilt, but, it seems to be on terms that are pretty favorable to them. I don't see them going bust, and the up side seems to be huge. They report earnings and have a conference call on Tuesday, and their new acquisition will be included in the results for the first time. Since this company is changing so quickly, I am pretty excited to hear what is going on with them! There are a lot of others that I find interesting, but, these are the 2 I find to be the most intellectually stimulating (which probably says a lot about me!).

to quote from the article: "Mark Madoff, 46, was found hanging from a ceiling pipe in the living room of his SoHo loft apartment as his 2-year-old son slept in a nearby bedroom, two law enforcement officials told The Associated Press. Madoff, who reported his father to authorities, has never been criminally charged in the biggest investment fraud in U.S. history and has said he and his brother Andrew never knew of their father's crimes. A law enforcement official told the AP that Mark was not facing imminent arrest and hadn't spoken to investigators pursuing possible charges in over a year." Wow. The whole thing is a shame.

I generally agree with what Broxburnboy said. It really boils down to how much income you need. I think if you are happy living off of $150,000 and you want a AAA rated income with some inflation protection then you'd probably sleep well with stocks like KO, KFT and JNJ. But due to the yields you'll need somewhere in the ballpark of $5,000,000 if you are 100% invested. If working people can live on $150,000 without huge piles of cash sitting around then why can't you? If the market dips 30% it doesn't really matter -- did KO/JNJ/KFT ever cut their dividend in 2008/2009? Just watch the income -- stop watching the net worth. If your stocks are down 30% during a depression but your dividend payers raise your dividend by 5% then why should you feel stressed out? Just watch the income. For some of you, your talents can generate an income of equivalent risk with far less invested... or so you believe anyhow (maybe it's true, maybe it's luck). I have young children so the idea of being idle really doesn't apply. It's idle empty-nesters who have issues with the lack of routine. You have the time to start new hobbies. I've been thinking of applying for a license with the ATF -- distilling my own alcohol sounds like a fun thing to try. Maybe it will become a business, maybe it will just be holiday gifts to friends. Doesn't matter, no pressure. You forget about black swan events in a person's life. What happens if a person decides that they really can't stand being around their wife with your all the new found free time? What if you mess up with your distilling and blow up your house and are severely burned, resulting in health expenses? What if you have a heart attack and need a bunch of money for surgery? One would care about market value of an investment then. Granted, I agree with your point, but, being the contrarian that I am, I just had to throw that out there... :) But seriously, why wouldn't a person still manage their investments a bit more actively (especially if they are members of this board)? It doesn't take a rocket scientist to find cheap securities.

If that is really what you want, and you have yet to do that, you should just quit... NOW. If you are on this board, you are probably smart enough to make something work. Virtually anyone can start with 10K and start something that will do well for them. Not bring in the rat race is one of the better decisions that I made.

It is interesting to me that a guy who more or less has the weight of the whole financial system on his back, can't take the stress of a bridge tournament. wow.

MMM, hot blonds. Hopefully I meet some on vacation in December. I dont think I can get a visa there, but am thinking of trying Australia on a work and holiday visa. Why Norway in particular. yes, why norway? additionally, can someone post a link to the thread about the roth IRA and a loan that ERICOPOLY wrote??

And all this time I have been wondering if the slow load times were something on my end! Sanjeev, thanks for doing whatever you did to get this thing moving faster!