Parsad

Good article! Cheers!

Room for improvement of course, but I like the trend in all departments. Primarily stabilization in real estate loan losses and provisions, and overall their loan loss provisions are showing nice drops. We still have to see the impact from the $5B in operating costs that will be eliminated over the next couple of years...this thing is going to get lean and mean. I still see it hitting tangible common equity per share sometime in 2012...so the $12+ range per share. Based on their legacy loan portfolio, I would prefer if they used capital to increase Tier 1 common equity further, rather than distribute it in dividends. Some cash spent on share buybacks would be fine with me. Cheers!

I don't remember the quotes you referred to Carl, but I have on numerous occasions adjusted my views on LVLT primarily to ease the burden on a friend who has an ungodly sum tied up in LVLT...whenever emailed. ;D We've never owned LVLT in our personal, corporate or fund accounts other than some call options we owned briefly in 2008, lost money on, and sold. Batting 0% in actuality! My friend is batting 0% too! Cheers!

Level 3 has done nothing but grow the intrinsic value of the business. It is Mr. Market who has been so destructive on incorrectly placing a price on the worth of the business. Intrinsic value is all the cash that can be taken out of a business over its life and discounted back to the present. Take a look at the chart below and is cash coming out of LVLT or being sucked in by LVLT? http://financials.morningstar.com/ratios/r.html?t=LVLT&region=USA&culture=en-US Building the most advanced IP fiber optic network in the world is no easy task. Now the next stage is to deliver the content or goods, by hooking up the ends. The Super Bowl streamed live online is a prime example. Live streaming HD video over the Internet will bring in the big bucks. Probably, but is it enough to compensate for the annual capital costs required to build out and maintain the network, as well as pay back all of the debt the company has and will continue to accumulate? I have no idea, and I don't think you know either, and I'm pretty sure the executives at LVLT aren't sure as well. Why does FAIRFAX FINANCIAL HOLDINGS LTD/ CAN hold so many shares of Level 3 Communications? They own the debt too, so they've hedged their bets. If the company goes under, they get part of the network. If the company succeeds, they get their notes paid off and their shares go up. In the meantime, they've enjoyed and continue to enjoy some pretty nice interest payable on those notes. The worst thing that will happen to Fairfax is that they will break even over the years. The worst thing for just equity owners is they could get completely wiped out. Cheers!

Incidentally, I used the term "value trap" in the conventional sense. Personally, I don't think there is such a thing, only poorly run businesses. And LVLT is one of the worst as far as destruction of shareholder capital, and keeping their shareholders waiting in anticipation of that day where critical mass occurs. Cheers!

since it's been 14 years of no ROI, and you say it could be 10 years; but ROI is coming. that's some opportunity cost. 24 years? Yup! But at least there is some possibility of a return. One of the biggest value traps of the last 30 years. Cheers!

AT&T is jacking up data rates. They say that the boom in wireless usage...growing at 40% a year...is responsible. I'm sure there is an opportunity cost for some long-time LVLT shareholders, but it is very likely that within the next ten years, this sucker may start to make some real money...for its shareholders and not just Fairfax! ;D Cheers! http://finance.yahoo.com/news/t-jacks-data-plan-prices-233528599.html;_ylt=AhnvQ3HkHqxukOMT6ZRvxOSiuYdG;_ylu=X3oDMTQzODhpcjV1BG1pdANGaW5hbmNlIEZQIEp1bWJvdHJvbiBMaXRlBHBrZwM3Y2YzMTQ0Ny05MDY2LTM5OTgtODE4Yi1kN2VmZWE5Y2Y4MjgEcG9zAzEEc2VjA2p1bWJvdHJvbgR2ZXIDYzExMWYwNjAtNDIyZi0xMWUxLWJkZWMtMDc3ZGJkOGExZDZh;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

Virginia representative Scott Ringell has been donating 15% of his congressional salary to pay down the national debt for the last two years, and Buffett has matched it. Buffett contacted Ringell and was delighted that the representative was already doing this before Buffett's challenge. Ringell has an invite to come to Omaha. Cheers! http://finance.yahoo.com/news/-Impressed-Delighted-Warren-cnbc-3066968483.html?x=0

Government is close to a deal with banks to writedown the principal on nearly a million mortgages! Cheers! http://finance.yahoo.com/news/donovan-very-close-foreclosure-deal-172113197.html;_ylt=AnIyAMAzrjv7mBfRIsFgPIWiuYdG;_ylu=X3oDMTQ0cGphMDQ1BG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yeSBSaWdodARwa2cDZDEzZGJjNDUtMTgzMC0zYmQ5LTg2N2MtYTI2ODQ4NWRkNjE3BHBvcwMxBHNlYwN0b3Bfc3RvcnkEdmVyA2YwNDJlZjkwLTQxZmYtMTFlMS1iZmZmLTMzNTRjYzY4NWIwOA--;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

Going to be very hard to nail SAC. Too smart, too deep pockets, and the tentacles cannot be tracked back to SAC. Cheers!

He took a hint! ;D Cheers!

Regular annual stress tests will be required for large banks. Good move by the FDIC. Cheers! http://online.wsj.com/article/SB10001424052970204555904577166721385547642.html

I think most of us knew this well before Fitch stated it. I expect it to be orderly as well. Barring any last minute agreements or plans, default or some sort of agreement with creditors (still technically a default) is inevitable. Cheers! http://www.cnbc.com/id/46021999

Incidentally, for those haven't seen the "Monkey Boy" video (like myself), here it is...not impressive stuff! http://www.youtube.com/watch?v=wvsboPUjrGc This guy may need a handler! Cheers!

Even if he paid under another name, I would get security (other Fairfax shareholders circa 2003-2006) to throw him out! ;D Actually, I wouldn't toss him out. I would sit him on the same table as myself, Uccmal, Cardboard, LessthanIV, JamesEast, et al, and let him squirm a bit. Cheers!

I did for quite a while...I wore a Western Sizzlin hat...then a Friendly's hat...finally a Steak'n Shake hat. I stopped at wearing a Biglari Holdings hat, once the CEO took 25% of the long-term intrinsic value away from me. As such, the only hats I continue to wear are Fairfax and Berkshire, and the CEO's would never dare dream, let alone actually do, the same thing. Cheers!

No, but Steak'n Shake got a huge bit of advertising by Letterman in tonight's show. They did about a 8-10 minute segment on Steak'n Shake with Letterman telling a story about Steak'n Shake and his youth, how the new owners bought Friendly's then sold it, and now he thinks Tony Danza owns it! Very, very funny! The cameras then went into the restaurant and Letterman chatted with the staff, and ordered his burger exactly how he wanted it. It will probably become one of the busiest restaurants in the entire chain. Cheers!

Wonderful picture of Buffett on the cover of Time: http://www.time.com/time/covers/0,16641,20120123,00.html You read the article here if you are a subscriber (with another nice photograph of Buffett)...I'll be buying a copy instead! Cheers! http://www.time.com/time/magazine/article/0,9171,2104309,00.html

Any long-term boardmember here and shareholder of Fairfax knows of Fabrice Taylor. Taylor wrote a few articles in the Globe & Mail about Fairfax back in the day, that pretty much mimicked the articles written by Peter Eavis for the Street.com. Both journalists in their articles sounded eerily like John Hempton (who was working for Platinum Asset Management at the time) and John Gwynn (who worked for Morgan Keegan). Eavis wrote some 80 articles over a year and a half, and then disappeared to start a tax shelter...err...church in New York. Hempton left or was dismissed from Platinum, went somewhere else, and then started the blog, Bronte Capital. Gwynn was terminated from Morgan Keegan for distributing his research on Fairfax Financial to Kynikos and SAC Capital before publication, and died after being sued by Fairfax...I don't know anyone who ever found out how he died. Eventually, Fabrice Taylor left the Globe & Mail to start a new venture...the reinvigoration of "Frank" magazine...which was going to expose the seedy underbelly of Bay Street (Toronto's Wall Street). Taylor who held himself to the highest standards of disclosure and ethics, was funded by private investors associated or familiar with Bay Street, yet he refused to disclose exactly who was funding him. Regardless, with his trusty CFA designation, his steely analytical mind, deep pockets of his investors, and the network of contacts he coveted, he ended up running "Frank" into the ground in about nine months! An ignominious end to another Fairfax antagonist...so I thought! Taylor eventually crawled back out from under his rock and began writing for the Globe & Mail again. Now his newest venture, in coordination with The Globe, is "The President's Club" Investment Letter. I know, I know...already all of you are getting goosebumps from just the title alone..."The President's Club". You've always wanted to be a member of a club, and you've always wanted to do better with your investments, now you can have both! And all for $99 + tax. Or you could join the "Premium" club, but you'll have to contact them directly to see how much the shake-down...err...newsletter costs. https://www.thepresidentsclub.ca/ Cheers!

What I hate is when you see a company deflecting an issue, rather than dealing with it head on. Does it matter if CIT's payables are only 5% of inventories? The point is that CIT views Sears' ability to pay suppliers as a credit risk. Why not say that "While we understand CIT's decision, Sears has already taken steps by closing and selling 120 locations (preferrably 500), and liquidating inventories to ensure that we have sufficient liquidity for our future needs and obligations." Instead, they just say it only accounts for 5% of inventories...and what if two more lenders do the same? Cheers!

Gurufocus did a fantastic interview with Tom Gayner of Markel. I don't think this has been posted yet. Cheers! http://www.gurufocus.com/news/157847/answers-from-tom-gayners-interview-with-gurufocus

Big drop! Looks like a slowdown in the early part of 1st quarter...cautious orders probably expected due to Europe. Cheers! http://www.bloomberg.com/news/2012-01-12/north-american-rail-freight-carloads-for-jan-7-table-.html?cmpid=yhoo

Time magazine has done a fantastic story on Mohnish and his Dakshana Foundation. Really great! As many of you know, Prem has donated $1M a year for the next five years to Dakshana. I think the foundation is a very good example of Mohnish's ability to see the scalability in an idea. Over time, Dakshana's coffers will be replenished by many of its successful graduates. Very proud to have him as a friend as well! Cheers! http://www.time.com/time/nation/article/0,8599,2104173,00.html

Please take this constructively, but I literally cringe when I hear people make statements to the effect that "he must know something we don't" or "he must have a better perspective than me." I don't profess to be god's gift to investing wisdom, but if there is one thing I have learned over my time investing, it is to not blindly trust in management nor believe or assume that they must know something (positive) that you don't know. Even if they continue to say everything is going to be fine. Even if they go out and buy some stock. Don't rely on them! Rely on your own good judgment based on the current facts about the business itself when viewed as objectively as possible. Yup! Good comment. Cheers!

No Cardboard, we took a small hit in 2011...early into financials and Overstock hurt us with their problems. But we've recovered alot in the first couple of weeks of 2012, and we were fortunate with a couple of other investments like Winn-Dixie, and some newer positions we added that went up significantly. Cheers!