Parsad

I've taken another tack, and that is to limit myself to a modest update on the news for the first 7 days of each month. Ditto for Twitter & I found myself not even wanting to visit there this month because it's so full of inflammatory nonsense. Spending nearly a month with your head in the sand is liberating. I highly recommend watching re-runs of Rowan & Martin's Laugh In to see how nothing has changed since the 70's. The absurdities are pretty funny when framed by great social satirists. The Obamas thread was about divorce... and only highlighted the Obamas as a great example of a couple who makes it work. Nothing political about it. It was also moved over to the Politics board early this morning. I will try and make sure no political threads end up on any section other than the Politics board...that is the purpose of the Politics board...to keep that stuff off of the other boards. Otherwise it will end up there! Cheers!

I didn't see the original email reminder, but just saw it in the one today. Mohnish's lunch is at a dirt cheap price today of $11,300! What do you get...a lunch with a fantastic investor for you and 7 friends. All proceeds go to the Dakshana Foundation. Only 22 hours left to bid: https://www.ebay.com/itm/Power-Lunch-with-Mohnish-Pabrai-Founder-of-Dakshana-Foundation/123460245966 Cheers and good luck!

Few things: Catastrophe losses may be higher than expected...volatility in market prices...drop in developing markets and currencies like India. If so, what are the outcomes: Short term losses in catastrophe, but higher premium prices for the market and FFH...the stock market always recovers...they can buy more Indian businesses at cheaper prices. Short-term the market is a voting machine...thus the volatility and market price drop. In the long-term it's a weighing machine...if you are holding it for the long-term, go occupy yourself with something else like a nice glass of wine and dinner, a weekend excursion, a baseball game or do some chores around the house. ;D Cheers!

How long have you guys noticed this?

Some people are happy that way. I'm perfectly content to sit in my house and look for stock ideas or read...or watch my Canucks...or a football game. You don't have to go bungee-jumping and zip-lining while curing your own artisan meats, and then ride your bike through the streets of Paris to be happy. Sometimes a cup of coffee and a donut is all you need! Cheers!

Well, at least FFH won. The money is bugger-all and, even if it's actually collectible (that's a big if), it probably doesn't even come close to covering FFH's cumulative legal expenses. But, at least it silenced the short-and-distort crowd. SJ On a cost-return basis it may not have been attractive. In terms of getting some of these miscreants to pay and having our day in court...it was worth it! That being said, some didn't really get their just desserts...Cohen, Loeb, Herb Greenberg, Peter Eavis, John Hempton, etc. Cheers!

Microsoft co-founder Paul Allen passed away from complications related to cancer. https://www.cnn.com/2018/10/15/tech/paul-allen-dead/index.html

And he's done it in alot less time than anyone else with injuries, not starting early on, etc. Depending on when Brees retires, it's either going to be him or Brady. I think Brees can play another 3-5 years, and Brady has no plans of retiring in the next 5 years. Cheers!

Name one technology CEO from Gates era that got it perfectly right. Also, he essentially stepped down in 2000, before the internet even really took off and essentially handed everything over to Ballmer to focus on extracurricular activities and his private wealth. Gates remains in the top five wealthiest people in the world by any measure, and pretty much in all calculations stands second to Bezos. How badly did he really drop the ball! Cheers! Well maybe a lot of others didn't get it perfectly right. But someone seriously dropped the ball at Microsoft. I don't know I can't really tell if it's Gates, Balmer, or organizational inertia/incompetence. Now, don't get me wrong, I like Microsoft, it's incredibly successful, I own a lot of it and made a lot of money owning it. But if you go back and read their ARs like way back, it is freakishly weird how well they called the future. About most things. Search, mobile, etc - not so much online shopping. So they had the insight. They had the vision. But they failed to execute - i.e. dropped the ball. If they did follow through and executed on their vision Microsoft would be worth at least 4 times what they are now. That's in excess of a trillion bucks. These are mind bending numbers to leave on the table. For a Microsoft shareholder that is tragic. I'm not talking about Microsoft. I'm talking about Gates. Charlie Munger sits on the board of Costco, knew Gates and Buffett, and still Costco will have a hard time in the future with Amazon. Does that mean someone dropped the ball at Costco, or simply a better CEO came along with a better model? Great CEO's are often discarded because their companies failed to prosper relative to history, but even if they continued to prosper relative to industry, they are still relegated as mediocre leaders. Do people really think that a Berkshire run by Greg Abel, where insurance is run by Ajit Jain and the board by Bill Gates, isn't going to work? Cheers! I'm not sure we're talking about the same thing. Sure, Gates is Gates, and Microsoft is Microsoft. They're both really successful. But when I'm talking about these insights Gates was maybe even CEO of Microsoft. Probably around the borderline. And I'm not talking here about someone else coming with a better model. They had the model! Almost to a tee! Then someone else did it. That's pretty infuriating from a shareholder's point of view. Now one may say that Gates doesn't care about that, that he's made enough money and he's now focused on curing malaria and AIDS. Btw, I admire a lot what the Gates foundation has achieved and what it aims to achieve. But wouldn't they be in a stronger position to achieve goals if Gates had 150 billion instead of 50 billion? That's the Buffett philanthropic principle. Gates left the CEO job in 2000. He has nearly $100B and is right behind Bezos. Now he's managed his wealth better than Buffett...does that make him a better CEO than Buffett? Of course not. Just like Gates isn't a worse CEO than Bezos, Zuckerberg or the Google co-founders. These are some of the greatest leaders in modern business...we're splitting hairs when comparing them. So it's ridiculous when people say that Gates missed the boat...Buffett missed Walmart and Apple. Cheers!

Name one technology CEO from Gates era that got it perfectly right. Also, he essentially stepped down in 2000, before the internet even really took off and essentially handed everything over to Ballmer to focus on extracurricular activities and his private wealth. Gates remains in the top five wealthiest people in the world by any measure, and pretty much in all calculations stands second to Bezos. How badly did he really drop the ball! Cheers! Well maybe a lot of others didn't get it perfectly right. But someone seriously dropped the ball at Microsoft. I don't know I can't really tell if it's Gates, Balmer, or organizational inertia/incompetence. Now, don't get me wrong, I like Microsoft, it's incredibly successful, I own a lot of it and made a lot of money owning it. But if you go back and read their ARs like way back, it is freakishly weird how well they called the future. About most things. Search, mobile, etc - not so much online shopping. So they had the insight. They had the vision. But they failed to execute - i.e. dropped the ball. If they did follow through and executed on their vision Microsoft would be worth at least 4 times what they are now. That's in excess of a trillion bucks. These are mind bending numbers to leave on the table. For a Microsoft shareholder that is tragic. I'm not talking about Microsoft. I'm talking about Gates. Charlie Munger sits on the board of Costco, knew Gates and Buffett, and still Costco will have a hard time in the future with Amazon. Does that mean someone dropped the ball at Costco, or simply a better CEO came along with a better model? Great CEO's are often discarded because their companies failed to prosper relative to history, but even if they continued to prosper relative to industry, they are still relegated as mediocre leaders. Do people really think that a Berkshire run by Greg Abel, where insurance is run by Ajit Jain and the board by Bill Gates, isn't going to work? Cheers!

Name one technology CEO from Gates era that got it perfectly right. Also, he essentially stepped down in 2000, before the internet even really took off and essentially handed everything over to Ballmer to focus on extracurricular activities and his private wealth. Gates remains in the top five wealthiest people in the world by any measure, and pretty much in all calculations stands second to Bezos. How badly did he really drop the ball! Cheers!

Hi All, As many of you know, I spend some of my time involved in non-profit work...blasphemy! I'm the chair of the Cystic Fibrosis "65 Roses" Gala in Vancouver again this year. My co-Chair passed away back in April when I had my own health scare (I'm perfectly fine now and will be around for 20-30 years), but she was the longest surviving double-transplant (heart/lung) in Canadian history. So this year, we are doing something a bit more special in her memory, and I'm soliciting donations from my compatriot board members. No donation is too big or small, and I really would appreciate it! I provide this board essentially free to all users, and I've never asked for anything for myself. So if you feel you get some value out of the message board, please translate some of that value into a donation for the "65 Roses" Gala. https://www.cf65roses.com/lite-ui/?controller=home Much appreciated and my sincerest thanks! Cheers!

My friend Andrew Wilkinson, founder of Metalabs, has one of the most unique stories I've ever heard. He started Metalabs when he was about 18 and grew it into the business that it is today...and he's barely into his early 30's. With the excess cashflows from Metalabs, he founded his investment company, Tiny. Through Tiny, he and partner Chris Sparling, have made numerous acquisitions and investments in startups, cash flowing businesses, etc. If we can get enough interest going on here, maybe I can get Andrew to speak at next year's Fairfax dinner! He likes to keep a low profile, but I suspect in another 10 years, a lot of people will know his name! If you've got a business you want to sell, contact Tiny, Premier Diversified Holdings, or our friends at Enterprise Diversified...we are all looking! Cheers! http://tiny.website/

Absolutely! But Gates hired Larson, who has been doing the job for over 20 years now. If you are looking for someone to put quality people in place, I think Bill Gates not only has the contacts, he has the same respect Buffett does in terms of people wanting to work for him. That would make an ideal Chairman, especially since so much of Berkshire stock will be in the Gates Foundation...essentially, they will be the largest shareholder. Cheers!

Are you kidding me! Bill Gates has his hands in as many industries as Buffett through Cascade Investments. Gates might have made his fortune in technology, but I suspect he'd be an extraordinary money manager. I would certainly put him ahead of Li Lu! And Munger is a huge fan of Li Lu's. Cheers!

#4 baffles me. Why woyld you say that? Gates made a great, and sometimes ruthless, leader of a software company, but how is that anything like Buffett and Munger, or a combination of the two? Buffett was far from a benign leader. He could be ruthless when he needed to be...Sokol's firing, Salmon Brothers incident, the original takeover of Berkshire because he got screwed over on 1/8th of a dollar. I can't imagine a better Chairman than Gates. Howard is a very nice fellow, but really I think shareholder's would be best served with Gates as non-executive Chairman. Who else in the world would better understand how to maintain a moat through thick and thin? He became the richest person in the world when he was a little older than Zuckerberg, and remained so for most of the last 30 years once Sam Walton's wealth was split up and until all of the other tech wonderkinds took over the world. In this type of environment he has not only endured, but survived and maintained his wealth, all the while creating the greatest philanthropic foundation in history, funded by his best friend who was often the 2nd richest man in the world over the same 30 years! And he's still young enough to Chair Berkshire for another 30 years! Cheers!

Depends on what you value most! Best value: I bought a Spiderman comic book in 1978 for $1.25, when I was 9, which I still own today and it's worth about $1,700-1,800...20% compounded over 40 years. I read it only once when I bought it, otherwise it remains in mint condition. Best emotional value: Five dollars I spent in January of 1991 at Army Navy Department Store in downtown Vancouver, when I bought my father a pair of galoshes for his shoes, and then we went and had fries and gravy with some coffee in the basement of Woodward's Department store...it was the last thing I bought for him before he died in April of that year. Best changed my life: Invested $25/month in AIC's Value Fund back in 1994...whose annual report I read in 1998, and which held Berkshire...which led to me reading Buffett's 1998 letter on their website...which led to me joining the Motley Fool's message board in 1998 for free...which led to me buy Berkshire shares in 1999...which led to the MSN Message Board...which led me to Fairfax...which led me to start Corner Market Capital...which led to starting CofBF...which led to taking over PDH...the remainder of the story is unfinished! Cheers!

Sanjeev, I'm trying to understand your thought process here. It seems you are saying that it would be ok for you as someone who runs an investment fund to have 25% or 40% of your net worth held in an investment vehicle outside of the fund you run for investors? ...am I missing something important here? Of course! People have homes, family businesses, other assets that aren't in a fund. Do you expect all fund managers to have 90% of their assets in their fund? I expect a fund manager to have a healthy portion of their net worth in any fund they run, but I don't expect them to have all of their assets or even the 90% threshold that are met by managers like Buffett and Watsa. That's just not really fair or rational. When I started out, I didn't have much in my funds, but today I have alot in my funds. My behavior hasn't changed at all in how I run the funds. You are either dealing with ethical people or you are not. I'm sure Bernie Madoff had a lot in his funds, and he still screwed over everyone! Francis is one of the most ethical people you will ever meet. Whether he has 90% of his assets in Chou Funds, or 50%, or even nothing, he will not behave any differently. Cheers!

Let's just say it's more than Stonetrust. Cheers!

I can answer these for you based on my understanding behind the purchase. 1)What do people think is the motivation behind Francis Chou purchasing Stonetrust Insurance company from personal $s ? For many years, he has been looking for a personal vehicle...Stonetrust provided that opportunity. a)Is purpose to deploy personal wealth and make more $s for self, family, or charity? Yes to all. Remember, Francis was the one who understood Buffett's use of float and told Prem about it many, many years ago before Fairfax. He thinks that he can grow capital utilizing float and Stonetrust is his chosen vehicle to finally do that. b)Is there a view towards incorporating Stonetrust into Chou Funds or vice versa? perhaps as a way to improve results for the Chou Funds? No. There is risk in his management of Stonetrust and he's not interested in exposing investors to that risk of losing their capital. It will not be offered to the general public. The Chou Funds will fluctuate in value, but over time, he will always make money for them. The likelihood of Chou Fund investors losing capital over the long-term is low. He cannot provide the same protection in Stonetrust. 2) Is it reasonable for an investment manager to deploy such a significant amount of $s (?$70M +) in a purchase other than his own fund? Does the alignment of interests hold? Most of his wealth is still tied up in the Chou Funds, so it isn't like his interests aren't aligned with Chou Fund investors. It would be no different than if he owned a $70M apartment or commercial property outside of the Chou Funds. Am asking these questions as a longtime Chou investor (>10 yrs), with significant portion of portfolio in Chou Funds who is considering the pros and cons of staying in the Fund. His investment in Stonetrust should have zero influence on your decision to stay a Chou Funds investor. Cheers!

Yes, we use a service called "SkipTheDishes" about 2 times a week. We eat out about 2 times a week. I buy breakfast or lunch generally 2-4 times a week. I also use Save-On-Foods grocery delivery business 2 times a month. If we have guests over we may cook or barbecue, but sometimes we also use a food delivery service...be it SkipTheDishes or a restaurant's own delivery. I do not watch wrestling, but I do watch a lot of sports...I do not subscribe to any specific sports network. My last discretionary purchase were healthy wraps from Chopped Leaf today for dinner for my family...I picked them up when I dropped off my dry-cleaning. Cheers!

Thanks for this info Sanjeev. It is going to be a used one because it's against my religion to buy new cars. But it won't be anything crazy old. Something like 3 years used. Yeah, me too! 3 years old or so...go for it...she will love it! Cheers!

It's for a luxury ride. I was thinking Mercedes but Jags are NICE! So I'm thinking it would be really cool if she could have one of those :). But I also don't want to get her the car from hell. That would defeat the whole purpose. She drives a Lexus now. So of course either way it'll be a downgrade in reliability. But I don't want to go down too far. Jags built in the last 5-6 years are fairly reliable and comparable to most manufacturers. Certainly not top of JD Powers, but not the money-sucking Jags built in the 70's, 80's and 90's. Jags built between 2000-2010 have far more issues than Jags built after Tata took over. Not sure if you are talking about a new Jag or older Jag. If you are talking about the newer Jags, sure buy your Mom a really nice car. If you are talking an older car, Jags pre-2010, and she's used to driving a Lexus, don't do it. Get her an older E series Mercedes Benz, Cadillac or an older 5 Series BMW...maybe even another Lexus. Like any car, especially used, if the owner(s) took care of it, it will be a good car. If the owners didn't, then you may get stuck with a car that needs alot of updating and repairs. Cheers!

Some of you might not have heard, but the 2nd Q conference call was the last one with Prem. Paul Rivett, President of Fairfax, will be leading the calls going forward. Paul will do a fantastic job, and fear not, Prem will still be speaking at the AGM and various other engagements. Going on 33 years at the helm...what a great Canadian business leader! Here is the transcript: https://seekingalpha.com/article/4194636-fairfax-financial-holdings-ltd-frfhf-ceo-prem-watsa-q2-2018-results-earnings-call-transcript For those that want to listen to the real deal...you've got till 5pm Friday, August 17th: https://www.fairfax.ca/news/press-releases/press-release-details/2018/Fairfax-Announces-Conference-Call-d7158b57a/default.aspx Cheers and enjoy!

What given2invest said about Tilson is all valid so I won't dive into that again. Also, please don't lump Cohen - the insider trading king - in the same category as Buffett. Regarding Ackman, at first sight he seems like the real deal. But if you follow him for a while you realize that he's just a fantastic salesman and a great bullshit artist. That's why he has the 100+ slide decks. He looks great on CNBC and all that adds up to a lot of AUM. The fact that he probably lucked into some good trades also helps with the cult of personality. On the flip side despite all that's happened I think Einhorn is a great investor but he is being harmed by the hedge fund model. Basically the whole long short thing. The aura around hedge funds being that they have to be long and short at the same time and make money on both. That's what sold and you have to go with it if you wanna make money. It doesn't help Einhorn given that he got notoriety for his shorts. I think he's a great long stock picker, but he's forced to be short by the model. Let me elaborate a bit and get a little academic. If you assume the markets are efficient and you're a long/short fund with equal exposure then you'll make risk free. Now I don't think that the markets are efficient and these guys are not perfectly long/short. But still, given the market inefficiency and you being good, you'll generate some alpha. Maybe you do it on both sides. But alpha is hard, and in a raging bull market there's no way you generate enough alpha to beat the market. So the system is setup to make you fail as a hedgie. But hey, that's what sold AUM! The rest of your post about rich kids and real jobs doesn't make much sense. Buffett was basically a rich kid and he turned into a great investor. Working on the street is not a real job and you don't learn anything about investing by working on the street either (you do learn a lot about Excel though). Plumber, mechanic, doctor, those are real jobs. But I don't see the legions of great plumber-investors. Investing is just like any other craft. You get good through much study and practice. I'd also say that in this discipline, like many others, being a rich kid helps. But I think in investing it helps more. Also, there's a very big difference between being a good investor and being a good fund manager. Einhorn is a brilliant guy, even though I'm not a fan of his antics. Ackman is smart, charming but reckless. Tilson was great at running with their ideas, and if their ideas weren't plentiful...his buy Berkshire below intrinsic value analysis would usually come out...his philanthropic work was more notable. Cheers!