Parsad

Parsad, maybe you can explain this to me, as I've always been confused--why do the redemptions matter? For example, many people have said that Berkowitz shouldn't have taken on the extra money from "hot money" investors, but I never understood why. When they sell, they only hurt themselves and not the other investors right? I think Berkowitz said in one of his videos that everyone could leave and he'd still make money off his portion of the fund. No, it just means you have to be prepared for possible redemptions. You need to maintain liquidity, so that means you cannot have significant amounts of the portfolio in illiquid, microcap investments, where there may be a huge discount to intrinsic value. As partners redeem, you end up concentrating in your best ideas like Berkowitz. What you find is that you then get a second exodus because some partners who stayed with you, are now concerned about the amount of concentration in few ideas. In the end, Berkowitz and those partners who stayed, end up doing very well because the fund is very undervalued and concentrated. But in the meantime, the manager is left somewhat frustrated by having to spend so much time massaging emotions and fears. That's just part of the business...whether you have no lockup or a 2-year lockup. There is always redemption risk. It's why someone like Sardar has a massive advantage over any other fund manager...captive capital is a huge advantage! It's also why Buffett can keep compounding massive sums of capital at reasonable rates. If you look at in those terms, what Berkowitz does with $12-15B, is probably as tough, if not tougher, than what Buffett does with $200B. But it is, what it is! Cheers!

What is a good way to show a track record? Would brokerage statements suffice, or is there a more formal way of doing it? Do you mean for your personal account or a fund? Cheers! For a personal account. I have a brokerage account, at some point I'd like to be able to post my results in the same way. You should probably track it properly (either by spreadsheet or software) including when capital flowed in and out. Use your annual returns, and if you are missing any full years, indicate what the full period for that year was. Cheers!

Very interesting. Do you have a lockup? It seems like emphasizing the lockup and a fee schedule which rewards longer lockup periods would help solve that issue. Nope, no lockup. We're masochists like Bruce Berkowitz! ;D Cheers!

Ok, so here is the somewhat complete listing of events for the Fairfax 2013 AGM: Wednesday April 10, 2013 Ben Graham Centre's 2013 Value Investing Conference Fairmont Royal York Ballroom Tentatively: 8am-5pm Host: Dr. George Athanassakos, Ben Graham Chair at the Richard Ivey School of Business The value investor panel will include Francis Chou, Tim McElvaine, Robert Robotti and Tom Russo. The morning speaker will be Gary Shilling and the luncheon speaker will be Jeremy Grantham. Complete details for George's event, including conference ticket and registration information, can be found at: http://www.bengrahaminvesting.ca/Outreach/2013_Conference.htm Norm's 2013 Fairfax Pre-Dinner Meeting Fairmont Royal York Railcar Bar Tentatively: 3pm-6:15pm Host: Norm Rothery, notoriously stingy investor (www.ndir.com) and writer for The Globe & Mail There's room for about 25-30 people, so some of you may be sitting on the Railcar's roof or holding onto the sides "New Delhi" style! Fairfax Financial 8th Annual Shareholder's Dinner Fairmont Royal York Ballroom 6:30pm-11:00pm Host: Sanjeev Parsad, Founder of "Corner of Berkshire & Fairfax" website 6:30pm - Meet & Greet 7:00pm - Speakers & Dinner 8:30pm - Presentation Guests (from you know where!) We will of course have our usual raffle and silent auction. A wonderful dinner is on the menu, and a cash bar will be open again. Tickets are $150 (including dinner), or $75 (no dinner, water & beverages will be available). Get your tickets soon, as we are going to be running low. Just go to the "Corner of Berkshire & Fairfax" homepage (www.cornerofberkshireandfairfax.ca), and click on the ticket purchase box on the right hand side. All profits from ticket sales, auctions, and raffle will be donated to the "Crohn's & Colitis Foundation of Canada", in memory of Prem Watsa's executive assistant, JoAnn Butler. Thursday, April 11, 2012 Fairfax Financial Annual General Meeting Roy Thomson Hall Host: V. Prem Watsa, Chairman & CEO of Fairfax Financial and perhaps savior of Canada's beloved Research in Motion 8:30am - Registration 9:30am - AGM Noon appox. - Cocktail in Lobby There should be plenty of kiosks again for shareholder's to visit. All of the Fairfax managers and executives will be on hand to answer your questions. Prem should have a very interesting presentation as usual, and I'm sure there will be plenty of questions on RIMM, Sandridge and most likely Fibrek. And who knows, we may get another Ajit Jain sighting! ;D MPIC Funds Annual General Meeting Roy Thomson Hall - Pickering & Green Rooms Host: Alnesh Mohan & Sanjeev Parsad, Managing Partners of the MPIC Funds 1:30pm - Meet & Greet 2:00pm - Presentation 2:40pm - Q&A As usual, we will have plenty of beverages and food. We look forward to seeing all of you again!

Hi RK, yes that is the issue. Do you know, or does anyone else know, if the author's name used to show up on the feeds? I never use it, so I can't remember if it did or didn't show up. Cheers!

What is a good way to show a track record? Would brokerage statements suffice, or is there a more formal way of doing it? Do you mean for your personal account or a fund? Cheers!

Investment advisory business is very restrictive in most jurisdictions. Even if you manage individual accounts, I believe you still have to be registered as an investment advisor to take non-accredited accounts...double-check with those that currently manage IR's and are up to date on the regulations. For LP's, even if registered, under the exemptions most fund managers use, there is no way around the accredited investor requirement other than the friends and family exemption...and those are quite restrictive. Incidentally, friends and family are the worst partners because they tend to treat the fund as a personal piggy bank...not understanding the long-term nature of investing. We struggled with this for the first three years in the Canadian fund. We no longer accept friends and family, really into the fund! If you register as an advisor though (you'll need your CFA or MBA), then you can actually structure your fund as a mutual fund and you would be able to solicit any investor like Tilson Funds, etc. There is a significant amount of reporting and regulation though once you start a mutual fund, including trustee expenses, etc. Cheers!

With respect to why I'm doing this versus other tracking stuff, I just started keeping more rigorous track of my records to accurately see how I was doing, then I was letting my family know how it was going in emails, and finally it morphed into me formalizing it into "partner" letters just for fun. Hi Racemize, I can totally understanding tracking your own results and see how they do over time. I'll tell you one thing though. I won't give an ounce of recognition to personal account track records if I was investing with someone managing my money or running a fund. It's just not the same thing. You've got to look at a record running public money. - The capital in a public fund, especially with no lockup, is fluid. Personal capital is totally captive and pretty much permanent. - In a personal account, you are dealing with one personality...your own. In a public fund, it is completely schizophrenic in terms of the emotions and personalities. - With personal capital...one mistake and you are still in business. In a public fund, one mistake and you may be history! - Few, if any really, frictional costs in a personal account. In a public fund, you have accounting, legal, custodial, administrative, audit, mailings and setup costs. - In a personal account, you can go to 100%, leveraged position in one stock. In a public fund, you will rarely see a manager take a 20%, unleveraged position. There are a couple of advantages to managing OPM though: - Your fees are leveraged as the fund gets bigger from additions of capital, whereas your own personal account only grows based on your returns and your contributions. - If the fund is of size, you can start to do more esoteric things that a smaller sum of capital would not allow you to do...control positions, activist positions, etc. So, as much as I admire everyone's personal track records, and I hope everyone continues to build plenty of wealth, getting an actual track record of managing public capital is more important for potential investors. Give you an example...my personal portfolio was up over 125% in 2012...all BAC! MPIC Fund I, LP and MPIC Canadian LP did better than one tenth of that, because most of our partners would leave if I put everything into one stock! ;D Cheers!

I've been notified by a board member that our RSS Feed is no longer showing the authors of posts in Google RSS Feed Reader. I've looked high and low, as well as all over the Simple Machines software, on how to change the settings, but there is no setting that needs adjustment. Does anyone know if Google changed the way it presents RSS Feeds, or how to fix this issue? Cheers!

I don't know the ongoing overhead very well, but I think just start-up legal fees are in the 20-50k range--without a lot of AUM to cover it (particularly if I go with no static fee), that's just not worth it for me. Hi Racemize, The best advice I ever got was from Prem...he said "just start it with whatever capital you have and can raise, and build a track record." I would suggest you just start. We started with only $400K, even though we had verbal commitments of over $2M! So, just start with whatever you have and can raise. The cost to start would be about $20K or less if you do your research and find quality advice at a reasonable fee. You can amortize it back to your partners over five years like we did...as did Mohnish and a number of other managers. I think our early partners had no qualms about paying a few hundred dollars a month in amortization costs to cover the legal overhead. We saved some money early on, as Alnesh did the accounting. We are of size now, where hiring our own bookkeeper/accountant to do the work on both funds is reasonable. All the administrative and day to day stuff was/is handled by me. We have terrific service providers in terms of our brokes, legal, auditors. It's alot of work, but I can tell you that I wouldn't have it any other way. If I had waited to see that $2M in verbal commitments materialize, I would still not have a fund today! Cheers!

Would any of you ascribe any importance to the word "rapidly"? The word "rapidly" also caught my eye when I read it the first time. I really thought it was both in poor choice and poor taste for Sokol to say that. That being said, Buffett is now in his early 80's and none of us are going to live forever...except Ericopoly, because he can now afford his own cryogenic freezer and monitoring system for the next 50 years! ;D Cheers! Terrible taste indeed... saying it to a cancer patient. However this is a written response and this guy probably had time to think over his words. Did he also try to indicate something else with this dirty punch below WeB's belt? We don't know. It's possible. Apple kept Steve Jobs' condition under wraps for a long-time. I think shareholder's have to trust the CEO and board's judgment about such things. Cheers!

Looking at the title of the article, it's hard to decipher if this is a compliment or not. I still think Prem should be ranked higher than Drake! ;D Cheers!

Would any of you ascribe any importance to the word "rapidly"? The word "rapidly" also caught my eye when I read it the first time. I really thought it was both in poor choice and poor taste for Sokol to say that. That being said, Buffett is now in his early 80's and none of us are going to live forever...except Ericopoly, because he can now afford his own cryogenic freezer and monitoring system for the next 50 years! ;D Cheers!

For our west coast boardmembers, in particular those familiar with the Tully's Coffee brand, actor Patrick Dempsey had the winning bid in bankruptcy court. Growing up next to Seattle, and spending an inordinate amount of time there with family and friends, I'm very familiar with Tully's. I always hit the one in Bellevue/Lincoln Square whenever I stay for a couple of days and am doing some shopping. Cheers! http://www.bellevuereporter.com/news/185696661.html http://www.cnn.com/2013/01/04/showbiz/patrick-dempsey-coffee-chain/index.html?hpt=hp_t2

Wow, very harsh words. Makes me really wonder WTF went on behind the scenes. Buffett has been behind-the-back vindictive before so I wouldn't be surprised if he did something that crossed the line for Sokol Could be. Or vice-versa. Buffett has always said that "you lose a shred of reputation for the firm...and I will be ruthless!" He cut Alice Schroeder out of the circle pretty quick over the book. If you piss him off or damage his/Berkshire's reputation, you are gone. While the SEC didn't find anything to charge Sokol with, I think everyone here thought it was unethical when the information came out. Cheers! Interesting information...where would you suggest one begin looking to find similar stories about Buffett's behind-the-scenes decisions? It is obvious that he painstakingly grooms his public image, but in private he is a different beast. Read Schroeder's book..."The Snowball". I thought it had too much of the gossipy stuff, but some of that helps formulate how Buffett's relations with people formed or why they may have deteriorated. Also has plenty of detail on his life and business as well. Cheers!

Wow, very harsh words. Makes me really wonder WTF went on behind the scenes. Buffett has been behind-the-back vindictive before so I wouldn't be surprised if he did something that crossed the line for Sokol Could be. Or vice-versa. Buffett has always said that "you lose a shred of reputation for the firm...and I will be ruthless!" He cut Alice Schroeder out of the circle pretty quick over the book. If you piss him off or damage his/Berkshire's reputation, you are gone. While the SEC didn't find anything to charge Sokol with, I think everyone here thought it was unethical when the information came out. Cheers!

They are apparently now available inside Fairfax's William Ashley store. Could be a nice fit within the Fairfax family. Already kind of like the See's store inside NFM. ;D Cheers! http://www.teuschertoronto.com/pages.php?pageid=3 http://williamashley.com/web/ http://www.teuscher.com/

Very good article in Forbes by Mohnish and Guy on what is needed to help get Club Med countries back on their feet. By the way Mohnish, where is Guy's picture in the article? ;D Cheers! http://www.forbes.com/sites/mohnishpabrai/2013/01/03/how-a-chinese-economic-policy-could-save-club-med-countries/

Gun shy Citi is apparently only going to ask for a minimal buyback and no dividend increase! Whereas it looks like JPM is going to do both once again. We should probably hear something about WFC and BAC in the next couple of weeks. Cheers! http://finance.yahoo.com/news/citigroup-seek-permission-buy-back-011754399.html

Welcome Phaceliacapital! Yes, you are correct that there is a good group of core boardmembers. We have plenty of good lurkers as well. Enjoy the board! Cheers!

Comments by Sokol. Cheers! http://www.bizjournals.com/columbus/blog/2013/01/sokol-i-should-have-left-berkshire.html?ana=yfcpc

@rkbabang, LOL ! That was my first thought when I saw the plot. It does look like a collective FU from COBF members to the rest of the market No, just proof of Buffett's "Superinvestors of Graham & Doddsville" analogy. This not a one-off. Many of the same people who made a ton of money on BAC, also made it on Steak'n Shake a couple of years ago, on WFC & GE a couple of years before that, and Fairfax a few years earlier. Swing big when Mr. Market offers you a 30 cent dollar! Cheers!

Don't forget Larry Sarbit, Leith Wheeler, as well as the guys at Vertex Asset Management...as well as my friends at Riverside Capital...perhaps the only value investors in Saskatoon! ;D Cheers!

Article on how Apple may already be testing iPhone 6 and iOS 7. Cheers! http://www.cnbc.com/id/100350155

I was assuming that whatever adjustments occur from return of capital or dilution, would equally affect the common as well. Cheers!