Parsad

XTRA Lease continues to order more semi-trailers. Cheers! http://www.bizjournals.com/stlouis/news/2012/02/13/xtra-lease-orders-9400-new.html?ana=yfcpc

I think for boardmembers, it's always nice to see people from here succeed. We have a very wide and diverse group, but the one common trait is how we invest. Cheers!

Please contact them directly for any performance-related questions. Their website is: http://arlingtonvaluemanagement.com Cheers!

Thanks for that, Sanj. I would imagine that over time the 2.4% flat would be better for clients. Right? Here are my quick calculations. I don't have my financial calculator so my assumptions might be off. If he's had a 400% return over 12 years. I think that is about 12% per year. I'm also assuming that is after fees. So if he made 15% before fees, under the old structure that 15-2.4 = 12.6% Under the new structure, that 15% * .85 = 12.75 -1% = 11.75. Why would anyone choose the new structure? Even something as low as 8% before fees is pretty close. In Allan's case, as well as a handful of others, I make the exception on the fee structure because the results are there. But I'm a huge, huge proponent of the original Buffett partnership fee structure. The manager makes nothing in bad years, and more than the normal set fee in good years...the incentives are more in alignment. But if you are a good manager that has proven results like Allan, than you can make exceptions to the fee structure. His soft lock-up is also one that I think is a much better idea than the hard lock-ups some managers have. There are some funds out there with five-year hard lockups. I could get my investors 20%+ a year with such a thing. That takes alot of pressure off a manager when they are looking at long-term investments. We may start another fund over time with a soft lockup and even more concentrated, but I like our clients having a fund like we have with no lockup. More work for us, but I think it gives them more comfort knowing their capital is completely accessible without penalty. Cheers!

He had a solid supply of Ramon noodles, Orange Crush and Fritos! ;D Cheers!

As well, some comments on lockups: Also, if people are inquiring, it's worth noting we have soft lock ups - 3%, 2%, 1% for the first 3 years. Trying to attract compatible capital to help let our philosophy and actions sync up. After 3 years there is no withdrawal fee. Cheers!

Sorry, I was incorrect on the fee structure. Here is Allan's response: When we started our fund it wasn't possible/realistic (laws mandate being a accredited & qualified investor to charge performance fee) to implement a performance based fee structure. So to help afford the Ramon noodles we charged 2.4% flat. We now have two funds with the option of the original 2.4% flat, or a 1 and 15 performance structure - no hurdle, but with a high water mark. With $80M under management...no more Ramon noodles! ;D Cheers!

No, I believe he has the same structure as Mohnish, myself, Shai et al...25% above a 6% hurdle. Have to double-check with him. Cheers!

He's got over $20M in AUM now. So I think he gets by on a little more than peanut butter and jam sandwiches! ;D The first time we met in person, I actually sat down on a stool in the bar at the Omaha Marriott, and Allan and I just started talking. Eventually we figured out we were both investment managers, and he was a member of the Corner of Berkshire & Fairfax message board. I think we were watching hockey. But he has never seemed like the type to live well above his means and enjoy life's excesses. In most respects, he's just like almost everyone else I know and meet in Toronto at our dinners all the time...a die-hard value investor. Cheers!

A friend of mine thought he would help our boardmembers who are interested in Sears Holdings, view it another way: Lots of people are confused with Sears. I will not give you the analysis but I may give you clues on how to look at it in a different way. 1) Please read the prospectus of SHLD 6 5/8% senior secured notes due 2018 2) Notes to financial statements #21 of the latest 10K 3) Notes to financial statements #15 of the latest 10Q 4) Segregate the Guarantor subsidiaries and the Non-Guarantor subsidiaries. You have some outstanding analysts and portfolio managers on your board and they can easily tear apart the financials of Guarantor/ Non-Guarantor business. Remember, Lampert is a capital allocator and, if he is good in anything, he should be good in segregating assets. Go to work! Let's hear what you find. Cheers!

One of our boardmembers, and a friend of mine, Allan Mecham of Arlington Value Management, had a great story written about him in Smart Money. I told you guys some time ago, that the best numbers I've seen based on risk/reward over the last ten years, was Allan's record. Maybe the rest of the world is catching on! Cheers! http://www.smartmoney.com/invest/strategies/the-400-man-1328818316857/?cid=yahoofinance

No, we were concerned about China before Chanos came out. And we posted on here that unfortunately we agree with him on this. But we knew China was rich enough and growing fast enough to hide their problems for a significant period of time. Cheers!

I've been concerned about China for some time, especially the loans their banks have been giving out over the years. We've been as concerned as we have been about Europe, but they've been able to defer issues because of their growth and reserves. I'm getting pretty damn concerned with China now. After reading today's article in the Financial Times, how can the rest of the world not see a massive, massive problem with China's financials? They just hope that if they kick it down the road far enough, they may grow their way out of it. How much of China's growth was funded by historically bad loans? Like the United States, it is one country and one government, so they won't face some of the same issues as Europe, but I can't see how China cannot slow down going forward. Cheers! http://www.reuters.com/article/2012/02/12/us-china-debt-idUSTRE81B0XY20120212

Frankly, I've been wondering that too, but there were no complaints from anyone, so I left it alone in case people thought I was over-reacting. Going forward, I'm going to just delete any posts like that altogether. This thread is now locked and will be deleted once the message is received. Cheers!

I disagree. If you see a company that has $10M in cash, no debt, no other liabilities and is not losing money, but its market capitalization is at $6M, how is that gambling? There may be gamblers in the stock market, and investors in casinos, but they don't look for the same thing as the intelligent investor, nor do they conduct themselves in that manner. Cheers!

Ericopoly = Arnold Rothstein from Boardwalk Empire 8) hehehe but he thought of himself a gambler not a value investor ... and he died young I think http://en.wikipedia.org/wiki/Arnold_Rothstein I believe what I do lights up the same reward centers in the brain that keep gamblers at the table. It feels good when it goes up, I want to buy more when it goes down, it's never "enough". That's a gambler. However that 20% is still a nice amount of money that pays off our mortgage, funds the education for the children, and leaves a few year's of my prior pre-tax earnings to fund our after-65 nest egg. So I'll still be comfortable. It will be one of those "better to have loved and lost than never to have loved at all" stories. My kids might actually grow up much better seeing us as a normal working family -- did you see that photo of the Romney boys??? Yuck!!! Disagree with you. The same part of the brain may activate, but what you do is completely different than a gambler. - Gambler's make bets solely on the probability of a specific event possibly occurring. - You, along with any intelligent investor, do not make "bets" on an event possibly occurring, but that an event is completely inevitable...the event being that other investors eventually recognize the underlying value of something that has been completely mispriced. I would say it's more akin to someone rumaging through garage sales or attics, and looking for things that other people haven't recognized as having enormous value. The same joy may run through your brain and veins as a gambler who has won big, but it is as dissimiliar as any two things in life could be. Cheers!

Hi Norm, No worries if you read his blog. I have a problem with the way he went about the whole thing back then. Showing up on message boards. Calling shareholders to tell them his theories and to sell the shares. A bug in Peter Eavis and Herb Greenberg's ear...not too mention that genius Fabrice Taylor. Just slimey! And I'm a guy who happily holds a grudge against scumbuckets, so I'll never let him off the hook. Won't patronize, won't support in any way. There are plenty of other people with terrific intellect and insights, where I will never feel dirty listening to what they have to say, so they will get my ear and readership. Cheers!

The former Vice-Chairman of Fremont Michigan Insuracorp's board has joined the board of Biglari Holdings! Another run at an insurance company coming up soon? Cheers! http://biz.yahoo.com/e/120210/bh8-k.html

Again, not directing this at your Parsad, I am just voicing my opinion here, I value your thoughts and think you are a great investor, but just have to disagree here. If you were long for the same reasons as I, there should be no reason you should be raising cash here, because if you are its merely a market timing exercise. Hi Moore, You're perfectly right and correct to voice your opinion. The way we invest, we sit on cash. When things are offered to us, we buy. If they continue to fall, we continue to average in until they stop falling! But once they start going back up, we average out of part of that position, because we tend to go significantly overweight on it. And I'm not talking a 2% or 5% position, but alot more. For really good ideas, we take 10% positions as the minimum and BAC was a really good idea! Unlike virtually every other hedge fund, we have no lockup. You want your money, you can have it in 60 days or less. Usually alot less because we keep significant liquidity. We like it that way, and our partners deserve to have it that way, because it is their money. But that means we average in and we average out to mitigate risk. We don't hedge, because over time the frictional costs do more damage than just simply averaging. So that is why we increase cash once our bets pay off. Incidentally, I haven't sold a single share of BAC or WFC. I said that BAC would be at tangible book by Christmas and book in the next couple of years. I'll review our positions again when it hits each of those marks. ;D Cheers!

This old article from October 2003 should bring back some memories. Not only did the National Post rip into Fairfax and accuse it of being the next HIH, they even took a shot at the only analyst firm that called it a buy...Ferris Baker & Watts. http://www.citronresearch.com/wp-content/uploads/2007/03/hih_and_fairfax.pdf I wonder who the "overseas shortseller" source was for the article! I believe he currently runs a blog that many people actually admire. Twat! Maybe Prem should talk to Ian Karleff who wrote the article back then, and is now the managing editor for the National Post. Perhaps Diane Francis should write a story about what happened to Fairfax, as she now gets an expose from time to time interviewing Prem for the Post. Thanks to Shai for sending me the link! Cheers!

I would not be surprised at all if he added, and he probably added below $6! I think you'll see a handful of other value managers who probably added in the upcoming filings. And you'll probably see a bunch of other managers jump on board once it hits nine bucks! I remember so many people jumping on board of Fairfax's wagon once it was over $300. Reading the recent article on Biglari Holdings, I couldn't but smile a bit reading Zeke Ashton's comments on Sardar. No one wanted to touch the thing at $3 or $60 post-split. Now people are happy owning BH at $400! I'm far happier looking for the most hated, villified stock out there, and seeing if there is any value to be had. Cheers!

Ok Al, I'll bite! Why April 9th? Is that your birthday or something? ;D Cheers!

Yup, he's not talking about Fairfax's stake in Overstock, because you can't force them to sell. But if you get enough of Francis' unitholders to worry, especially institutional clients, then you could get some redemptions going. This guy is a piece of shit! Normally I don't get this aggravated, but Francis is one of the most ethical people I know. Buffett would easily hire Francis...without hesitation! I love Prem, Mohnish, Tim et al, but the nicest person I know in the financial industry is Francis. Hands down I would trust him with my money, my family's money, you name it. The guy gave up all compensation while working as vice-president at Fairfax, because he thought it did not look good he was being paid to work there and Fairfax had investments in the Chou funds. He didn't want anyone to ever think he was double-dipping. He's loyal to a fault. Never sold a single share of Fairfax since he bought them at $3! If Prem ever needed him to help out at Hamblin-Watsa, Francis would be there in a second. Never discusses the big score Fairfax made in credit-default swaps. Never says a word, even after Brian Bradstreet and Prem said it was his idea. Never seeks out credit, has incredible humility and goes out of his way every year to attend our dinner. I remember the very first dinner, he just sort of poppped on by, and then Uccmal yelled at me and said "Sanj, Francis is here!" We had no idea he was going to come. Just nine of us for dinner, and here he was just showing up to hang out with us and answer questions. Every year, he never misses our dinner, and then he hangs around for another hour and a half surrounded by shareholders answering all sorts of investment questions. Never complains or says a bad word about anyone. Simply a great guy and role model! I know he's not going to respond to anything Antar says, so that's why I'm venting! ;D Cheers!

Keep the cash. While BAC is still very cheap, the markets in general have gone up quite quickly, and the world's problems haven't suddenly disappeared. Things will get cheaper again, be it the entire market or an individual stock...just wait for the fat pitch. While we are digging for ideas as usual, we cannot find as much that interests us and cash is once again building up. We have plenty of exposure to areas that we thought were cheap, and don't want to go much over where we are. So we'll wait once again! Cheers!

Looks like things are picking up a bit after the post-Christmas slowdown. Cheers! http://www.bloomberg.com/news/2012-02-09/north-american-rail-freight-carloads-for-feb-4-table-.html?cmpid=yhoo