Parsad

Hi All, We are getting closer to the event date. Please get your tickets at the link above. If you need anything, please contact my assistant Nicole Chin. We have some great presentations again this year...including one from our own Keith Smith and his Bonhoeffer Fund! And of course, our guests from Fairfax Financial who will be running their usual Q&A! Important note: The event is at the Sheraton Toronto Centre this year, as there was some construction at the Royal York...and all of the events were moved there. We will be back at the Royal York next year if things continue. Speaking of next year and continuing...that will be dependent on ticket sales and we will decide how things progress going forward. We may downsize or possibly eliminate the event altogether. It's been a great run, and hopefully we can continue it, but it will come down to participation. Thanks for your support over the years and we look forward to seeing you all at least once more this year! Sanjeev

Who knows what will happen, but I have a feeling Joe Average hasn't even started selling yet. Buying and ultimately selling bitcoin, isn't as easy as the advocates would have you believe. So there is a lag between when the larger players sell, and the small average investor's get to sell. The smaller players, especially the ones buying last at the higher valuations, will be left holding the bag. Cheers!

Thanks everyone...in particular rbkbabang for updating the images! The logo looks much better now. Cheers!

Mad genius or just plain mad...obvious where I stand on this one, from the first time I heard about him and saw his written crap on TheStreet.con! Cheers! https://finance.yahoo.com/news/meet-man-behind-bitcoin-genius-ads-internet-134441715.html

Eye of the beholder! When it was designed, I thought the bars showed incremental growth...no cannabis or bit-coin...nice 12-15% annual returns. The plane and planet are simply to show that there are investors on here from all over the world, and no matter where you fly, you'll find value investment ideas and value investors. Cheers!

++ simple fix! How about to grab this JPEG file named "cropped-cropped-Handover-Corner-Of-Berkshire-Fairfax-JPG-e1516151433460" from the site, fix it and send it to Sanjeev for a reinstall on the CoBF webserver installation? [ ; - ) ] -I have forgotten how to do [read: manipulate] this in i.e. Photoshop, and nobody has asked me to document my investment returns here on CoBF so far, so I've had no need to refresh my memory! Thanks everyone! I figured the site isn't going anywhere, and it was time to make it a bit more permanent and recognizable. John, I can send you the different JPEGS if you know what to do...I'm not particularly tech savvie. I believe doing a clear version wouldn't be that difficult if you know what you are doing. Cheers!

Which is essentially paying $18,800/year for 5 years (or about 100k) for your Canadian citizenship. For US healthcare, it's crazy expensive if you're not on an employer-sponsored plan. It's absolutely ridiculous. If I was retired or whatnot, and not wealthy, I would not be living here. I always ask, who is getting rich from all this? Is it the doctors? I don't think so. The government? Doubtful. Insurance/Pharma? Now we're getting warm... I have my own plan this year. To keep things updated, for a family of six in the US: $960/mo for coverage, with a $3800 deductible and $14k total out of pocket. I think there's a 20% co-insurance or so. This isn't terrible at all. When I was able to buy through a group it was $200 a month, plus a $5k deductible and the company paid $1000 a month on my behalf. I was able to find something better on my own. But all of that said. If you're tapping out on health care that $18k a year is cheap. Also worth noting. I've since done some research into this. The investor visa is ONLY available in Quebec. Canada suspended it, but Quebec still has it. For $1.2m USD you can become Canadian and live in Quebec. Worth considering at least... I can't believe how high insurance premiums are in the U.S. I feel for you guys! Regarding the investor visa program...the loophole everyone is exploiting is that you can still enter the Quebec program, but you don't have to live in Quebec...you can go anywhere. Alot of people have been taking advantage of the loophole to move to BC, Alberta or Ontario. They have not closed that loophole yet...even though they should! Quebec gets the $1.2M, but other provinces end up footing the bill for the participant. Cheers!

Hi All, It's that time of year again. This year's dinner is on April 25, 2018, the night before the Fairfax AGM. Tickets and details can be found below: https://www.pdh-inc.com/2018-premier-fairfax-conference.html If you have any issues or queries, please contact Nicole at [email protected]. We'll be updating the event page regularly as we finalize speakers, menu, etc. Also, if anyone is interested in sponsorships, donations for the silent auction, etc., please contact Nicole as well. Thanks very much and look forward to seeing you there! Sanjeev

Happy New Year all! Cheers!

Merry Christmas all! Thank you for your contributions and friendship...wishing you all a wonderful 2018 as well! Cheers! “Every time a bell rings, Berkshire’s stock goes up a thousand dollars!” - a Berkshire shareholder’s Wonderful Life

No, that's not what I meant at all. I was trying to point out that PDH made up such a huge component of the fund at one point. We have no control over PDH's stock price...intrinsic value will be ultimately decided by the amount of cash that comes out of the business...that has a longer time frame than the more traditional public-company or fixed-income assets in the fund. When we invest in the fund, the ideas we put capital into are undervalued by the market and take anywhere from 6 months to 3 years to get back closer to intrinsic value as the market revalues. The businesses within PDH may take years as they scale up before they are reflected in PDH's intrinsic value. Cheers!

Depends on the time frame you examine...if you measured at the beginning of the bull market we were destroying the index. If you measured half way through this bull market, we were beating it by close to 6% annually. If you measure in totality after one of the longer bull markets in history, we are modestly ahead. We haven't gotten any dumber, and the non-PDH and non-cash portion has averaged something like 70% over the last two years...chances are with PDH making up a smaller percentage of the fund now, we are going to outperform dramatically again in the next decade. But for all intents and purposes you are correct! It is worth noting that our 11 year results were done with an average of nearly 35% cash in the fund over those 11 years. When the S&P500 drops again by 20-30%, our clients will sleep well at night knowing we are taking advantage of circumstances...and they didn't pay us a cent in those down years. For our clients in IRA's...they are doing better than the index with all of the benefits of their non-IRA partners...and that small 2% advantage will be greatly to their benefit after 20-30 years. Cheers!

+1! Especially since no hockey is scheduled. Cheers!

Or you could say..."I'm thankful for not being Al Franken...Sad! Cheers!

Hey Guys, Specifically Cardboard and Liberty...feel free to debate and make generalizations about broad groups...but don't target each other in your posts. I also recommend that to all participants...feel free to rant and rave...but other than a quote embedded in your reply...don't take shots at specific posters. Thanks everyone! Cheers!

With low interest rates and rising home equity, North American's have been buying alot of new cars, and I've found that alot of really, good used cars are available...both at dealerships and private sellers. I've almost always bought from the dealer, but other than my Mini when I bought it, I have never bought new. My latest replacement is a 2012 BMW X1 that had only 47,000km on it and was less than half the price of a new X1. It was in really fantastic shape, mint interior, all the features I wanted, looks and runs terrific! It also had 1.5 years left on an extended bumper to bumper warranty, so if I find anything wrong I can get them to fix it. I've always followed the manufacturers recommendations for service, and have never had a problem with any of my vehicles by doing so. Yes, I may have paid an extra $300-500 a year more in maintenance, but I've never been stuck on the side of the road and my car has always run incredibly well. I also buy only used cars that have been serviced according to the maintenance schedule. In terms of pricing, you have to do your research and know what you are looking for and what is a reasonable price for the year, make, model, condition, packages, etc. You might save a couple of thousand buying from a private seller, but at least with a dealer you do have some recourse and rules on canceling a sale and returning the vehicle. You also can get accurate service records and many dealers provide free Carfax on the vehicles they are selling. In Canada, you are also required to disclose any accidents or repairs over $2,000 or $2,500...can't remember exactly which...but reputable dealers won't risk their reputation or business by not disclosing, whereas a private seller has every incentive to do so, as they are disposing of a single vehicle. I think the best way to view your car purchase is if you are driving your vehicle 3 hours a day, 5-6 days a week, thorough rural roads, mountain highways, and lousy weather conditions, etc, how important is it that you save that $2-3K when you weigh it against 5-6 years of ownership?! Most people spend more on Starbucks coffee annually! I'm ok paying that much more by buying a great used car from a dealership rather than a private seller. Cheers!

In my opinion the whole real estate thing is a mirage and the possibly the next shoe to drop. These retailers occupy huge swaths of real estate. These retailers are going out. Plus they're going out at the same time. Who's gonna come in their place and absorb that huge supply? Definitely nobody that's gonna pay current market prices for it. The real estate's a dud. Depends on the real estate...Sears had already distributed their better quality properties into Seritage. They were stuck with lesser quality properties...thus they had to sell their brands. The problem wasn't that Lampert invested in Sears. The problem was that he sold off assets at a snail's pace, until he had to sell off assets to stem huge losses at a business that he didn't want to put any more capital into and it was dying. It was bad execution, not a bad idea. Cheers!

As per the title of REM's song: Everybody hurts sometimes! Cheers!

Francis has been looking to buy a private business for many years, but could not find what he wanted. I have no idea if this is in line with that objective, but from what I understood, the intention was never to take the business public if acquired. He planned on using it to acquire other businesses over time...more like a personal holding company...his own personal Fairfax Financial. If he ever does go public, this would be one guy people should definitely invest into as a shareholder. If he does not go public...well, then you are out of luck! Cheers!

Terrific interview as always! Thanks!

Prasad, Mohnish, is certainly impressive in that he had the integrity to make his clients whole: + 6% / annum after 10 yrs. However, 6% return in 10 yrs is a 80% gain, the S&P 500 TR has return more than that in 10yrs, so as you said, he made a profit something like $8M above expenses, all for lagging the S&P500 TR. Just want to clarify things for real...... thanks Well it depends on what time frame you are examining. - If you invested with him from day 1, you're money has compounded about 9 times and beat the S&P500 TR by about 4-5% points a year. - If you examine the last 10 years, he's hit the minimum target for his fund partners and been compensated based on the LP agreement. - If you use the last 3 years, then he's demolished the index...should he be compensated exorbitantly for this short-term over-performance. You can argue for or against Pabrai depending on what time frame you pick out of the air. The one argument you cannot make is that his fund design is not the most equitable for partners who invest over the long-term. And if partners are focused on only short-term...which many normally are, no matter how "long-term" minded they say they are...then they should not be investing with fund managers and go with passive investments. But to answer your question as clearly as possible...yes, he deserves the compensation he receives, because it is based on him beating the set hurdle agreed upon, and getting compensated solely on the success of that...as the LP agreement and design of the fund were intended to do. Alternatively, he could change the LP and set the hurdle at 10% and ask for 50% of any profits above that as the incentive fee. But then you would still have some people say that the markets have returned 15% compounded over the last 7 years and he's only returned 10% a year! Cheers!

I completely agree. And you know, IIRC the reason Buffett chose a 6% hurdle was because that was the average 30? year treasury rate at the time. What are your thoughts on that? Or even a floating annual hurdle rate that mimics the 30 year? We've used 6%...Mohnish has used 6%...it certainly hasn't hurt either of us. What do you use now? And what made you change? We still use 6%...so does Mohnish. We've never adjusted the hurdle and it's carried over year to year from the high watermark. It's the most equitable way to be compensated and in the best interest of the partners. They don't make money, we don't get paid for anything...the better we do, the better we get paid. Cheers!

I completely agree. And you know, IIRC the reason Buffett chose a 6% hurdle was because that was the average 30? year treasury rate at the time. What are your thoughts on that? Or even a floating annual hurdle rate that mimics the 30 year? We've used 6%...Mohnish has used 6%...it certainly hasn't hurt either of us. You'll get the argument that there are managers who have done very well for their partners even though they may have a "0.5 and 25","1 and 20", etc. My rebuttal has always been then if they are that good, why NOT go to a 6% hurdle, no set management fee and only an incentive fee? The set management fee protects the fund manager, not the partner. The no fee, adequate hurdle (can't be less than 5%) and compensation based solely on incentive fee protects the partner and rewards the successful manager. Cheers!

wow! how much did he manage at the end? found the answer: $75M, if he takes 2%/per year that is still $1.5M per year Kudos to Tilson for taking the high road and graciously choosing to close his fund. But $1.5M a year...and I believe he may have started with more capital...for an 8.4% cumulative return over 7 years?! Mohnish didn't get paid a nickel for 10.25 years, and he's still called a bum by some. I think all fund managers should be operating using the "Buffett Partnership" model. Cheers!

Hm, I would be careful about this. IIRC, Rick Guerin did something similar, and he ended up selling his Berkshire shares to Buffett @ $40 a piece to satisfy a margin call. He's already reduced his BRK position as seen in the 13F's. Yes, he used leverage at that time, but did not use it much before...BRK was under $100K at the time. Today it's at $270K+...I doubt if the fund is levered at all right now. Cheers! Works until BRK falls 50% as it has done 2 or 3 times.