Parsad

Good to hear from you Moore! That explains the infrequent posts now. No worries! We are also building up cash...40% plus now...and we continue to whittle down investments that have gone up considerably. We had sold about a third of our BAC warrants. We still have all the equity and most of the warrants...higher interest rates will actually be beneficial to banks long-term, even though short-term stock volatility may arise. We are in BAC and WFC for the long-term. I expect the annual dividend at BAC to be about 20% of our equity cost within three years. Surprisingly, I remain little concerned with the United States, but continue to worry about Europe and Asia...I don't think the numbers are real. We aren't finding any real bargains right now, and are digging around in the very small-cap and micro-cap area. Cheers!

Interesting Bloomberg article on Robert Kuok and his empire. Cheers! http://www.bloomberg.com/news/2013-01-31/billionaire-kuok-says-his-empire-can-last-generations-.html

Hi Net-net, The problem is then you start to get too much clutter with different boards. Special situations don't come around that often, so the board would be sparingly used. You also can't track a specific stock and keep a historical record for that stock like we do in the "Investment Ideas" section...whether it is a long-term investment or shorter-term special situation. Cheers!

At this point, I don't think the hedge fund route would provide him any more comfort than running the mutual fund. A 2-year lockup would not have made a whole lot of difference to him, but it probably would have saved some fools from selling out before the rebound. I suspect he is going the permanent capital route, and it very well may be through St. Joe. Cheers! Oh goodness, that would be awful if he turned his back on the mf.... I really hope he doesn't even if people do want to pay him more... But the way he said that did seem worrisome... I don't think it's about being paid more...but the fact that he's susceptible to his investors pulling their money completely out every time the world faces a crisis. We aren't even out of this one yet, and there is every possibility it could get worse...I don't think he wants to put himself at risk again...both within the fund and mentally. Berkowitz has enough money where his entire family, including his children and grandchildren will never have to work. It's not about money. Cheers!

Review the video beginning at 26.30 minutes (and listen to section 28.40 min) "We have a few things we are thinking about. It is possible..." it's interesting he looks away and come back with a little smile. heh In the video, he also says that he had a standard mutual fund but people want to pay him more. I really hope he's not gonna leave the little guy behind and manage hedge funds (around 29:25). :( At this point, I don't think the hedge fund route would provide him any more comfort than running the mutual fund. A 2-year lockup would not have made a whole lot of difference to him, but it probably would have saved some fools from selling out before the rebound. I suspect he is going the permanent capital route, and it very well may be through St. Joe. Cheers!

That's even worse! Your basic costs to keep a room cleaned, linens changed, new plastic cups, fresh little soaps and shampoos, etc will run you a minimum of $15-20/night even with a crappy hotel in a rural area. The margins totally suck and you are still running at only half occupancy. The only way to make this work well is the Patel way! The whole damned family needs to work long hours and not take a real salary.... Since you want to work 2 days per month, you are a far cry from a Patel! (but there's no shame in that either). SJ You would also have to sell your home or rent it out, and move your family into one of the rooms at the hotel. ;D But it works! Cheers!

Can there be an issue with a margin of safety being too wide? No. Margin of safety is just the difference between market price and your estimate of intrinsic value. Whether that difference is ever minimized is up to the management and shareholders. It goes one of three ways: 1) Management makes poor decisions and intrinsic value comes down closer to market price. 2) The price stays stagnant as poor decisions slowly marginalize intrinisic value...stock stays stagnant. 3) Management, either on their own or through activism (shareholder, outside party), make the right decisions and the market eventually values the business closer to intrinsic value...be it through growth or liquidiation. Cheers!

Yes, I think he feels beholden and responsible for the capital he currently manages for existing partners. He'll continue to operate the fund for them. And I think you'll now see more things happening within St. Joe or some vehicle of that nature. Cheers!

Yes, I think this is what is happening. He learned a very tough lesson with the amount of redemptions he had to deal with. I think he may have been at the point where "how do even my long-term investors lose faith in me? Time to reduce that risk." Cheers!

Yup, looks like he is closing for now anyways. Cheers!

The real world investments are fascinating. Ultimately the price is 9x cash flow on this thing for a private illiquid deal. This speaks volumes, especially when I see a stock trading at 3x FCF and someone tells me the price is appropriate because the stock is illiquid. You are so correct! Don't forget leveraged as well. I suspect Premfan is buying cash, but many people would buy this property with a mortgage...generally 3-1 debt to equity. Even if your illiquid stock carries corporate debt, it is highly unlikely the leverage is greater than 1-1 debt to equity...often, you can find illiquid stocks trading at less than cash with no debt..which is what I'm buying right now. But investors, professionals and amateurs alike, stay away from these ideas because of their size and apparent illiquidity. Cheers!

Article on delinquent student loans. Cheers! http://www.bloomberg.com/news/2013-01-29/overdue-student-loans-reach-unsustainable-15-fair-isaac-says.html

Yup...tangible book...I mean it this time damnit! ;D Cheers!

Depends. If you have good management in place, then yes, it could operate quite well with you only on site some of the time. At the same time, being on site only on occasion, also opens you up to considerable fraud or theft if you are incorrect in your judgement. Not to mention your hotel's reputation for service, cleanliness, friendliness, occupancy and execution. I have a friend who owns a hotel about five hours from Vancouver. He lives in North Vancouver, but he is on site usually for two weeks of the month, even though he has good management in place. He has to be there and much of the administrative and book-keeping work is done on site, so it occupys a considerable portion of his life. He has a wife and two young children as well, so he's a very, very busy guy. You should also consider what competition is around you as far as the hotel is concerned. My friend's hotel is really the only hotel on the lake in the immediate area, and he owns the largest marina there, which is attached to his hotel property. So, his hotel has certain amenities that the competition cannot provide, since that zoning is not available in the future for any other properties near his hotel. Cheers!

Hi Ourkid, I hope Prem and Francis eventually merge Chou Funds into Fairfax and Francis rejoins Hamblin-Watsa...maybe even sits on the board at some point, as everyone is getting older. They could even rename them as "Fairfax Funds" and there is no reason why Fairfax could not have a money management business subsidiary. They all came from that industry, and they all know how lucrative it is, and how the leverage in the hands of good managers is pretty amazing. But who knows...maybe Francis likes his own little world away from the hub-bub! Cheers!

The Fed will release bank stress tests on March 7th. Although, like last year, I'm sure news will start to trickle out well before the actual release date. Cheers! http://www.reuters.com/article/2013/01/28/financial-regulation-stress-idUSL1N0AXBXR20130128?feedType=RSS&feedName=marketsNews&rpc=43

Short article on it as well. Cheers! http://finance.yahoo.com/news/warren-buffett-made-2012-bid-161701127.html

Just remember, if for some reason Fairfax needed Francis, I don't think it would take even an arm twist from Prem to get him there. And even though technically Francis does not work at Fairfax, I would not be surprised if he has a significant amount of input into Fairfax's investments simply as an advisor, shareholder, friend of the company and loyal sounding board. Cheers!

Bloomberg article on Germany's Quandt Family, their investments and unfortunate ties to the Nazi regime. Cheers! http://www.bloomberg.com/news/2013-01-27/nazi-goebbels-step-grandchildren-are-hidden-billionaires.html

I don't see what you saw on Morningstar, but I suspect that they have an error. There is no way, NO WAY, that Prem would sell his stake in Fairfax. He will die before he does that, just like Buffett...or it will go into a trust for his family or into an endowment. The bulk of his shares are also held in "The Sixty Two Company", not his own name. Cheers!

The used to hang alot of people...still do in some parts of the world. And once in a while, some of those people were probably innocent. I would not want to just see any hanging or execution, nor a generalized administration of capital punishment. But for someone like Bin Laden, Hitler, admitted serial killers...sure I would have no qualms about seeing them receive some form of the death penalty. And I'm a staunch liberal! Cheers!

Is it sick to admit that the best part was watching Bin Laden shot? I saw it last night. Yeah, that's sick. The original plan was to capture him and bring him to New York City for trial like Bush's Guantanamo Bay prisoners, read him his rights, provide him with the best attorneys and waive the death penalty out of compassion for his extended family with many wives and children. Then, if convicted, probation and rehabilitation like the prisoners who were rehabilitated to Saudi Arabia. That unexciting plan was ditched after Hollywood took over. LOL! Cheers!

Is it sick to admit that the best part was watching Bin Laden shot? I saw it last night. No, because that's the part I'm waiting to see! ;D Cheers!

Would love to see a fund which guarantees returns, "or your money back". Anyone know of one? Collecting fees is so damn easy. Segregated insurance funds. Other than that, I believe it may be a contravention of securities laws...or at least completely frowned upon to guarantee such a thing. The other funds that make such guarantees are often found to be frauds or ponzi schemes as well. Cheers!

Einhorn? How about Herb Greenberg or Jim Chanos? Cheers!