Parsad

True, but the world has been through such plagues. It might be man-made, but the human race will survive and thrive. Unless we get hit by a 3 km long asteroid! ;D Cheers!

Have you looked at what's on TV? Divorce rates? Single and unwed parents? Acceptable drug use? A book that talks a bit about the change in culture is "Quiet: The Power of Introverts in a World that Can't Stop Talking." She goes in some depth about how, at one time, we were a culture of character (Buffett's generation and prior). Doing the "right" thing was championed. Now, we are more of a culture of personality (people like Kim Kardashian). Where we value what gets are attention compared to what's intrinsically motivating. No doubt the world is changing, as it always has. I think we are in pretty good shape if the biggest moral issues you point out are TV shows, Divorce rates, and Drug use. Think about the mass atrocities that have occurred in the past. No doubt they still occur today but I think a lot more is being done to prevent them. Maybe I'm a cynic, but I'm willing to bet that we ain't seen nothing yet with mass atrocities. :P You sure? 12M Russians killed during World War I...Hiroshima...Nagasaki? We've seen some pretty big atrocities. Today, with the internet, drones, tracking devices, etc, there is nowhere to hide for the culprits. Look at Osama...10 years later, they nail him in a house in Pakistan, or the various dictators around the world that have been removed in the last two years through uprisings spread online. Even imagine what would happen if North Korea did something stupid today? Forget the Americans jumping all over them, the Chinese and Russians would be on them too. There is potential for great atrocities to happen, but awareness happens quicker and response time is reduced significantly as well. Cheers!

Number 1 should actually have to pay his salary back. He did a shitty job and the company is on the precipice. Cheers!

I still recommend Andy Kilpatrick's book "Of Permanent Value" for anyone wanting to know about Berkshire. It's not an investing book, but a historical retrospective of Buffett, Berkshire and everything associated with it. For investment reading, there is nothing better than his own annual letters. Hands down the best piece of writing you are going to read, because it is from the man himself. If you read those letters, you will know 80% of what you will ever have to know about business and investing. The other 20% comes from actually doing it, failing and succeeding. Cheers!

Have you looked at what's on TV? Divorce rates? Single and unwed parents? Acceptable drug use? A book that talks a bit about the change in culture is "Quiet: The Power of Introverts in a World that Can't Stop Talking." She goes in some depth about how, at one time, we were a culture of character (Buffett's generation and prior). Doing the "right" thing was championed. Now, we are more of a culture of personality (people like Kim Kardashian). Where we value what gets are attention compared to what's intrinsically motivating. I don't see a lot of value in unhappy marriages. Divorce rates in the past would have been much higher if it weren't for two things: 1) a huge stigma against it, and 2) marriage having far different purposes than it does now (i.e. economic rather than a relationship). Single and unwed parents have much the same cause. TV may in fact be a moral decline, but a different one than you may think; I think it's the willingness of the corporations and producers to make whatever crap that sells to make money. The almighty dollar rules above all. In our recent past, the evils were simply different; let's not whitewash things. It wasn't that long ago, historically, that women were nothing but accessories to men, with few rights as people. Do I need to go into slavery, racism, and so on? Look back at chicken and dog fighting being much more common. Not that these things are gone now, but the areas, the emphasis was different. The main reason people think things are so awful is sensationalism, and a rose-tinted glasses look at the past. Drug use--depends on the drug. Alcohol has always been a hugely popular drug in this country, and it has much more harm than does something like cannabis. We tried prohibition before and it failed, we were just a bit slower this time since it isn't *quite* as huge a section of the country that uses weed. Harder drugs do have bigger negative effects, but we have gone about solving the problem with guns and prisons rather than trying to rehabilitate and remove the need for the drug. Guess which one would be cheaper and more effective? Overall though, crime is in a multi-decade downtrend, though you wouldn't think that if you watched the news. There are real problems in this country, but we *have* come a long way, in fits and starts. Thanks for the thoughtful response, rmitz. You bring up valid points. I will respectfully disagree about marriages though. I feel that people give up way easier now. Perhaps it's my rose tinted glass (and perhaps because I didn't live in the time), but it seems to me that people use to try a lot harder to keep their marriages intact. Happiness is a choice. It takes sacrifice from both parties. Now, it's so socially acceptable that people, many times, aren't willing to sacrifice when they can simply trade in their spouse for a new one...kind of like a car. Paul, I think you are just getting old! ;D They were saying the same thing in the 70's with free love and all that...you had gritty shows on tv like "The Streets of San Francisco" or "Hawaii Five-0" and movies like "Taxi Driver" and "The Godfather". Heck, the Stones put out an album called "Sympathy For The Devil!" The previous generation thought the world was going to hell in a handbasket. But guess what? That free-love generation ended up creating the likes of Bill Gates, Steve Jobs, Jeff Bezos, etc. Some of the people who have changed this world for the better...not worse! Morals aren't in decline. They have always been the same...with some ebbs and flows. Culture is fluid and changes with the times, as does what is acceptable and what isn't. The world for all of its flaws is getting better, not worse. As Buffett says, your children will live better and longer than you, and their children better than them. Just think about how much in capital will flow to the world through "The Giving Pledge" alone? I'm an optimist...it will always be easier to blow ourselves up, but humanity will somehow manage to triumph...and capitalism will not only pave the way, but will be the ONLY way to get there. Cheers!

I think Buffett should make Gates the Chairman and Vice-chairman for Howard Buffett, when he and Charlie are gone. I think that would give more comfort to shareholders and management. Cheers!

I don't think Berkshire shareholders would have a problem with that either. Also, you won't get any dissension from management about who takes over as CEO as well. I have a hard time seeing Gates accepting that responsibility though, as he is so busy with his foundation. Gates would have made a more appropriate Chairman than Howard Buffett. Cheers!

I remember that Buffett said... if Charlie, Warren and Ajit are ever in a sinking boat – and someone can only save one of them – swim to Ajit (Jain). That's true - his reason was that Ajit has added the most value to Berkshire out of the 3 of them. I would disagree with him there :) I agree with you that the quote is just Buffett being humble, but Ajit is also 20 years younger than Buffett. So part of Buffett reason might be because Ajit has a longer time period to impact the results at Berkshire. He was also prepping shareholders, because Ajit was/is on the shortlist to take over. He also praised David Sokol in the past in similar ways, as well as Tony Nicely. That way, when the time came, shareholders would understand his choice. With Tony aging, Sokol gone, I can't see anyone else at Berkshire being the first choice now. He would be great! Cheers!

You know this question is now going to come up at the AGM, since they got these AIG executives. http://blogs.wsj.com/moneybeat/2013/04/26/new-ajit-jain-signals-in-the-berkshire-hathaway-tea-leaves/?mod=yahoo_hs I've met Ajit on two separate occasions...both times he was incredibly polite and genuine. The first time, he bit off the head of a suit standing next to me when I was talking to Ajit about Prem...it was back in 2004. The fella said "Isn't he the guy who is in alot of trouble now?" Ajit snapped at the guy..."Is he IN trouble, or is he OUT of trouble?!" The guy went quiet! The second time was outside of the Omaha Marriott as he was leaving, and he took several minutes to talk to me, and then asked for my card. I was a bit surprised. I very much believe he should be the guy to take over after Buffett. Cheers!

Short little film on a veteran who was involved in the early testing of the atomic bomb. Very good...sad! http://screen.yahoo.com/operation-plumbbob-134423632.html Cheers!

Yes, and a week before Christmas...err, Berkshire Hathaway AGM. Santa...I mean Warren...is watching! ;D Cheers!

Yes, quite a shocker in the insurance business I think. Especially considering AIG's turnaround and existing leadership. Good for Berkshire though. Cheers!

First, the questions you are asking are predictions...and like any prediction, they are often incorrect and usually irrelevant to how a business operates in the future, as most CEO's have to be flexible, adaptable, focused and pro-active. Predictions are usually based on circumstances as they are, rather than what they may actually be. It's like Wayne Gretzky's quote about going to where the puck will be, rather than where the puck is...Fairfax's team has to continue to go to where the puck will be. 1. What do you think the pre-tax total return on the investment portfolio will be over the next 5-10 years? How do you arrive at that figure (i.e. what asset mix and returns are you assuming)? I have no clue, other than to say that they will continue to have plenty of fixed income instruments as long as Brian Bradstreet is around...he's one of the best in the world. They are very opportunistic, so if markets correct, they will go top-heavy into equities and distressed debt. 2. Historically, it looks like approx. 75% of the portfolio was invested in cash/bonds. The past 25+ years have been an amazing time to be a bond investor. Going forward, the tailwind from int. rates is gone. What is a reasonable return on Fairfax’s bond portfolio over the next 5-10 years assuming int. rates stay low? Again, you cannot view their portfolio as static. They made a massive move from bonds to cash recently, and in the last few years, they had made a massive move to insured municipal bonds. The team is very flexible with their portfolio...like Gretzky, they will go to where the yield on investment is highest...be it through preferreds, corporate financings, bonds, equities or acquistions. I don't expect the yield on the overall portfolio to be much different than the past as long as the existing team is together...so don't segregate what the returns on the bond portfolio may be. 3. Does anyone know any specific details about Fairfax’s fixed income portfolio. The returns of Brian Bradstreet and his team are out of this world. What % would be high yield or distressed? What kind of bond investments do they own? What is classified as 'taxable bonds'? For example, if Fairfax lends money to the Brick or Megabrands, are these investments counted in the bond returns? The original Brick deal was through the purchase of debentures. The Megabrands deal was done through a private placement purchase of stock and warrants. Usually, these types of investments are reported under "Investments in Associates"...Note 6 in the 2012 Annual Report Financials. I recommend you read all of their annual reports from day one, and that will give you a better idea of how the company allocates capital and reports it on their financial statements. Alot of work, yes...but there are no real shortcuts for really understanding a business. Cheers!

lol; I have been recirculating the same holdings like farts in a spacesuit. Markets go down, I buy a stock of Leaps (bac, jpm, aig), markets go up, I sell them. About 5-7% of my portfolio is churning every couple of weeks right now - quite lucrative really. Same, but this is what worries me! We have had a great year so far, but I'm just doing what I always do...buy cheap and then sell it as the market rationalizes prices. In the meantime, we keep lots of cash. I'm getting very worried...very worried that the markets are just blowing off every piece of disturbing news. Spain is in a full-on Depression, not unlike the 1930's in the U.S....Japan is being incredibly aggressive with their monetary policy...China is slowing...U.S. is recovering, but still tepid in many ways. Yet, asset prices for almost everything except commodities is ballooning! Buffett has been right for several years now...I'm concerned that Prem will be right in the near future. Cheers!

Wow, if you go to Expedia, there is virtually nothing available other than a couple of hotels in Omaha and Council Bluffs. With the stock at record prices, I think they may have a record turnout! Cheers!

In the last flash crash, orders that were 30% away from market were cancelled. So... maybe your amazing trades will be cancelled and the exchange will have screwed you over. This could make a future flash crash a lot worse. I know I won't be buying on the way down... I do not want to get screwed over by trade cancellations. Also, you could get screwed over by limit orders if they trigger in a crash, but the market recovers almost immediately or before you have time to do anything. I'm sure some triggers went off today, and people lost money in just a matter of minutes. Cheers!

It's funny, they are panicking like this with a 120 point drop. Wait till they see a 2,000 point drop one day! Cheers!

If you live in the Los Angeles area, Mohnish will be doing a presentation for the FBLA this Friday. I recommend that parents take their teenage children if they can, as it will be tailored to them. Here are the details: On Friday, April 26 at 3:30 PM Mohnish Pabrai is presenting to the FBLA Club (Future Business Leaders of America) at Northwood High School in Irvine, California. Both his daughters go to Northwood – a great school! The presentation is nearly the same as the same one he gave last month to MBA students at Columbia Business School, Harvard Business School and Boston College. He will tailor it for Northwood students. It focuses on the miracle of compounding and finding your passion. He’ll present for about 30 minutes, followed by Q&A. Total time will be about 60-80 minutes. You (and your friends/family) are welcome to attend. It will most likely be held in the Northwood High School’s state-of-the-art Theatre. Please do reply with a count if you plan to attend to naleo@pabraifunds.com The address is 4515 Portola Parkway, Irvine, CA 92620. Cheers!

It's just a parody. I wouldn't read it into it one way or the other. Although Concentrata is pretty damn hot! Cheers!

That's actually what I did. I had price targets for the other half, but they hit them all in the same day. They just kept going up $1.95, $2.20, $2.50, $2.80, $3.10 and $3.30. I kept selling bits of the remaining half after the initial $1.95 sale. By the end of the day I had hit my price targets and was out. I just had no idea that it would go up another $3 the next day. ;D Cheers!

I did many years ago...about 9-10 years ago. I was buying gold (ounces, coins, rings, etc) when gold was at $350/oz. I sold them all over a couple of years in 2007-2009...unfortunately early at around $800-900/oz. I haven't done it since, as I thought gold was overpriced and speculative. Although what you are doing is no different than value investing, but you are looking for mispricing in coins, etc. Cheers!

Yes, that is the type of company that it could work for. I don't follow BBRY as closely, but understanding what their sales trends have been over the last few months, and the progress of their products would be useful. I suspect this earnings report will surprise, but once the Q10 comes out, I think that will do even better. There is a hard-core group of Blackberry users waiting for the physical keyboard phone. There is no other real product out there like that, as everyone is moving to the touch keyboard. So Blackberry could enjoy a significant short squeeze, not unlike the one we've seen for the last few months. But there has been significant positive market psychology around BBRY for the last few months. Another is Apple...but the liquidity is much higher, while product trends do not look as good right now. But the stock has been so battered (unlike BBRY), that any positive news will send the stock moving higher. The risk here with both becomes the time arbitrage. The next quarter might not be the one to create the short squeeze...it may take one or two more quarters, so you have to evaluate the timing risk. Understand that while fundamental analysis goes into the stock (Apple is cheap, BBRY sales are improving), a significant amount of speculation is occurring here because of the time arbitrage. You may have to even stagger your bets on a couple of maturities, or look for options that seem mispriced relative to risk/reward. We don't make these bets often, and they are usually on businesses we understand really well. It is very likely that we won't attempt on either of these stocks, or on any other stock for several months. Only when the pitch looks relatively fat, our assessment seems more likely, and the upside is huge, would we consider swinging because of the timing risk. Cheers!

I don't do anything fancy like many people. I view options in the same way I view the stock, but I weight the time arbitrage risk against the possible reward from the market mispricing. The only way to do this is to run through the events that could affect the stock by understanding the psychological aspect of investing. What is the impact of the quarterly report being poor, and how much do I lose? What is the impact of the quarterly report being about the same as past years, and what is the possible upside? What if the quarterly report is very good, how would the market reaction be and how much would the stock rise relative to intrinsic value? What is the ratio between loss of capital and the upside? If this report is not good, how much time would the company require to improve performance? Etc, etc. This tends to work best with companies where there is a significant short position and tighter liquidity. Companies that have more than adequate short-term capacity to cover their debt maturities. Also, businesses where you have some aptitude for the industry, how it operates, the business cycles, misinterpretation of data, etc. I think we've made money on about 60% of our option bets over the years...a little less than equities which is around 65-70%. We also tend to bet big on the good ideas...1-2% of the fund...and usually never more than 4-5% of the fund in options. The shorter duration the bet, the less we put in generally. While we would never have more than 4-5% invested in options at cost, an idea can easily grow to be more than that. For example, our options on Steak'n Shake at one point grew to almost 18% of the fund from a 3% position...we kept paring it back and it kept growing...over about a year. This Overstock bet and the Bank of America bet we did a little while ago, both went over 5%, even though we only put 1.5% and 1% of capital into each idea respectively. But I've never made that much money in such a short time span. It's just the way it goes sometimes as the market rationalizes something. Plenty of analysis, but a bit of luck in it too with the time arbitrage! You just try and make good calculated bets. I can't remember where I read it, whether it was Tim telling me, or I read it in Peter Cundill's book, but the one thing Cundill did that was very impressive was that he always found different ways to make money. We're inundated with the culture of value investing a la Buffett...good businesses with competitive advantages...but Buffett over his life has always made money not by sticking to a single philosophy, but by finding irrational and mispriced assets, regardless of anything else. It's why so many say Buffett contradicts himself. It's not double-speak as some like Doug Kass allude to at times, but that Buffett understands his ability to exploit inefficiencies. He also understands that most people cannot do it. It's also the foundation of Ben Graham's philosophy...buy when irrationality and inefficiencies exist and you have some margin of safety. It's why Buffett makes the index swaps bet, or the negative coupon Berkshire bonds, or Blue-chip Stamps which led to everything else. He looks to exploit irrational behavior. Prem does this too but won't admit it...credit default swaps, deflation hedges, RIMM, etc. I think you have very good examples of people on here that can do that as well. Not everyone, but you do have a handful of people who are very good at it. Ericopoly is on one extreme. He found huge inefficiencies he exploited with gigantic amounts of leverage and concentration. It took a great deal of analysis, alot of luck on the time arbitrage, and dinosaur-sized balls! But as you can see from Eric's posts, he spends an inordinate amount of time focusing on risk control and market psychology. He's got both the science and art side of investing going, and he's got the perfect temperament to handle the leverage and concentration. So that is how we view options...the same as equities, but constantly recalculating the time arbitrage risks and how the market might behave. Cheers!

I will let you know! ;D Cheers!

Why do people do what they do? Two stupid young guys killing and maiming so many others. Humanity is capable of such great and wonderous things, as well as such horrific and grotesque acts. If there are others, I hope they get it out of him. Cheers!