Parsad

Yes, I agree! Be very, very careful with this one. It could go either way, but things are pointed the wrong way at the moment. Fixing the stores and sales isn't going to happen overnight...in the meantime, suppliers and lenders could get antsy if things get worse. Cheers!

Too bad Bing keeps burning cash though! Cheers!

Hi Ragnar, I actually like the guy too. Perhaps, he's going a bit extreme on the reductions he wants to make, but at least he's moving in the right direction, not playing partisian politics, and remaining above the fray of the Republican party egos. Funny how the guy who really started "The Tea Party" is the one that the Republicans, especially tea partiers, don't want to vote for. I think Jon Stewart said it best yesterday..."It's really striking how far the Republican party has gone from its true roots." Cheers!

Could it be because the Gates Foundation is tackling issues that the Federal government isn't? Population growth, malaria, providing resources for the education of 3rd world children? Buffett is on the record, as this thread states, that he is more than willing to pay more tax to alleviate the issues the United States is facing. He's not asking someone like yourself or myself to contribute more. He's asking for a certain subset of the population to contribute, where there is a clear inequity in the way the system is benefitting them due more to luck and wiring, than the beneficence of God's will, talent or work ethic. He's not asking anyone to do more than him. And let's not fool ourselves into thinking the GOP is interested in cutting costs. They will spend themselves, be it through reduced corporate taxes, a war in Iran or what have you. Do you really think that Mitt, Newt, Santorum et al are any different than the Democrats? Clowns the whole lot of them! They will chew each others bones just to get an edge over the other. Only Ron Paul is showing any backbone or class, and he kind of screwed himself over with the whole newsletter thing. As unemployment continues to go down over the next few months, and the Republicans continue to kill each other, it looks more and more likely that Obama is going to pull a Clinton and get a second term. Cheers!

I think it is. Watsa has been wrong on many heavily shorted ideas where he didn't have an edge. RIMM, Sino Forest bonds. Maybe Chou has some other reason for having 12% of his fund in Overstock, he does seem to love dying retailers. To Watsa's credit he sizes the bets appropriately, and has the ability to make spectacular macro bets, not so much for Chou. I would be very comfortable betting that Chou will continue to underperform. You're quite incorrect here. The CDS idea was Francis' and Brian Bradstreet's, but Francis couldn't get approval from the Ontario Securities Commission in time to buy the credit default swaps, whereas Fairfax was able to execute on the idea right away. By the time Francis received approval, the prices of the swaps had started to rise and he could never get back in. Francis is probably one of the most intelligent investors out there, and you don't have to take my word for it...just ask Prem, Brian Bradstreet or Sam Mitchell. Investors should examine their results over a decade not a couple of years. In regards to Overstock, he's making a bet that a company with $1.1B in revenues and 25M customers can earn a 1.5-2.5% net profit margin long-term. That would undercut their competitors and value a growing business at less than 10 times earnings. Overstock's problems haven't been the business model, but a distracted CEO who seems to be in denial regarding his obligations to shareholders and his obligation to an ethical dilemma. Hopefully the recent setbacks in the lawsuits restores focus back on the business. Cheers!

it's for show. why? because no republican is going to reach into his wallet and give money to the US Gov. Buffett is just trying to get them to shut up. Yup. Ever since he expressed his displeasure in tax rates, the GOP has been on his case saying "Well, why don't you donate your money then to the government". He's just pointing out, as blatantly as he can, that the GOP talks a big game but are as selfish as the Democrats and won't shell out a dollar. Both parties like pointing out each other's follies, but neither is willing to make sacrifices for the good of the country until push comes to shove. Cheers!

I find myself caught in the middle thought. Like Sanjeev, I've gone defensive and I believe that is the right thing to do for me right now. But I also find it difficult to watch this market rally while I sit on the sidelines. It the classic "discipline" problem I guess. We haven't gone totally defensive or anything. We are still very much long our U.S. financials, but certain other investments continue to rise where we have and will continue to take small profits from. As well, things like Winn-Dixie were bought out. U.S. financials were so distressed that they have a long ways to go to recover. I said that I expect BAC to hit tangible book this year, and it still will have a long ways to rise over the next few years. We don't plan on selling a single share for the forseeable future. It will pay nice fat dividends a few years from now that will probably be a significant percentage of our total cost. Cheers!

Yup, that is a brilliant move! He's going to get a ton of free advertising too, because Letterman always talks about the restaurant next to the theatre and he'll probably do the occasional skit using the restaurant. I remember him talking fondly of Steak'n Shake burgers a couple of years ago on his show, and I asked Sardar if he sent him one of those "Gold" cards that Burger King, etc send to celebrity fans who mention their restaurant. He said it was already in the mail, so Letterman got one. Nice looking store, and it looks like it's catching the attention of the people walking by. I guess Rupert G's restaurant was closed...or maybe he's the new franchisee! ;D Cheers!

Charlie donated 10 shares of Berkshire to the University of Michigan. Cheers! http://dealbook.nytimes.com/2012/01/10/mungers-gifts-1-2-million-to-university-of-michigan/?partner=yahoofinance

I'm always amused by these headlines. The "Pros" feared another Great Depression a few months ago, now they are touting U.S. stocks after the market has made a significant run. Way to go pros! Every month as you get bolder, I will be getting defensive. Cheers! http://tinyurl.com/83amf37

Hi Folks, We are 60% sold, so please get your orders in, as they are going fast. Cheers!

Hi Folks, We are 60% sold, so please get your orders in, as they are going fast. Cheers!

Looks like a no-go. Cheers! http://blogs.wsj.com/deals/2012/01/09/warren-buffett-wont-be-singing-for-the-chinese-after-all/?mod=yahoo_hs

Actually, I've heard his take on that and you may think differently after: He says that by keeping an underperforming salesperson on the floor, he's not doing them any favors. He believes that there may be better opportunities that they are more suited to, and he'd much rather fire them and let them find their path, then keep them on the payroll because he feels sorry for them. All he would be doing is delaying the inevitable. Mohnish also practices this. I have a friend who once went to him to ask for advice about his investment fund, and how he could improve his business and generate more clients. Rather than sugar coat the news, he just said "Well, your results aren't good!" He could have lied and said "Just keep plugging away", but again he wouldn't be doing this person any favors. This friend subsequently went on and is doing something that he's far more content with. Cheers!

More info on Buffett's upcoming performance: http://globalspin.blogs.time.com/2012/01/06/chinas-lunar-new-year-extravaganza-to-include-a-surprising-star-warren-buffett/?hpt=hp_t3 Cheers!

Sorry, when I said "redistribute", I meant buying back shares, reinvesting in other investments or paying dividends. I have no problem with anything he does with excess cash, but by not reinvesting in the business cost-effectively, you end up signing its death warrant...and that's what we've seen over the last few years. Retail is incredibly fickle, and it is very much either a value proposition (Walmart, Target, etc) or experiential (Macy's, Apple Retail Stores, Saks, etc). When you aren't providing either one, you tend to start losing your market share. And that loss tends to accelerate the longer the experience or value proposition deteriorates. The restaurant business is similar. People excuse the lack of capital costs Steak'n Shake is investing because the value proposition is so damn good. If Sardar ever raises his prices without investing in the restaurants, you'll see the same thing happen. Cheers!

They will prove to be right, just not now! ;D I think there will be serious issues cropping up through the end of 2012 and into 2013. I'm not getting very warm and fuzzy feelings about what I'm reading with Chinese bank loan losses and loan provisions. I think the U.S. will do fine, and we are definitely in recovery mode which is slowly starting to heat up, but the headwinds will come from offshore...continued problems in Europe and over time China will cause problems. Cheers!

The more Sears drops in price, the more I'm intrigued, but let me ask you this: How is the decline in Sears business any different than Office Depot? There is a fundamental, qualitative change in the shopping habits of the consumers that used to be regular shoppers at Sears. Can that be fixed by a value investor, who has strategically reduced the amount of capital spent on the retail experience? I don't think so. You need a retailer to fix Sear's problems, but allow Lampert to redistribute "excess" cash that isn't used in maintaining the business and making the retail environment appealing to shoppers. Not excess cash by reducing necessary capital expenditures...Sardar should learn this lesson now, rather than 10 years from now! Another thing is that Sears has been far too slow in making changes...they've been moving the same speed as Europe! They need to engage in continental shifts in their model, not slow, plodding iceberg moves like the recent announcement of 120 store closures. They need to close 500-700 stores! Cheers!

I would prefer if no one posts the PDF on here, as it is copyrighted material. You can download a program called "PDF Creator" for free, and then merge all of the shareholder letter PDF's directly from Berkshire's site into one document. Use the program to create PDF's of the HTML letters first, and then you can merge them. Cheers! http://sourceforge.net/projects/pdfcreator/

One of our local newcasts did a three-part story on Vancouver billionaire Jimmy Pattison, and his second in command, former British Columbia premier Glen Clark. Both grew up in the working class neighbourhood of East Vancouver, and Clark still lives there to this day. I've always thought for a long-time that Pattison is probably the closest thing to Warren Buffett Canada has in terms of buying businesses. He started out as a car salesman and now has businesses as diverse as grocery stores, magazine distribution, neon/sign production, billboards and even "Ripley's Believe It or Not" & "Guiness Records"...businesses that he understands, and that he picks up or develops when they are cheap and out of favor. Pattison is very good friends with Buffett, and has the same common sense mentality, gift with numbers, work ethic and charm. A friend of mine ran Pattison's Neon Products division for many years, and he told me a bunch of great stories about him. I also picked up one of his habits...Pattison always eats lunch at his desk, so that he doesn't waste any time during the middle of the day...he'll even brown bag it, or just get a bowl of soup and crackers. Enjoy! Cheers! http://www.globaltvbc.com/exclusive+video/6442549010/story.html

Still looking very, very strong. Cheers! http://www.bloomberg.com/news/2012-01-05/north-american-rail-freight-carloads-for-dec-31-table-.html?cmpid=yhoo

Perhaps a song while playing the ukelele? ;D Cheers! http://www.bloomberg.com/news/2012-01-05/buffett-to-sing-on-china-lunar-new-year-show-xinhua-reports.html?cmpid=yhoo

Hi Folks, Just a couple of updates on the dinner. 1) Since only a couple of people have bought the single seat, no dinner tickets, I don't want them to be sitting by themselves in the back. Instead, those that have bought dinner and those that have not will just have different color nametags, but everyone will sit together on the round banquet tables. 2) We are about 50% sold already, so please finalize your plans and buy your tickets in the next few weeks, as we will probably be sold out by March/April. Cheers!

Hi Folks, Just a couple of updates on the dinner. 1) Since only a couple of people have bought the single seat, no dinner tickets, I don't want them to be sitting by themselves in the back. Instead, those that have bought dinner and those that have not will just have different color nametags, but everyone will sit together on the round banquet tables. 2) We are about 50% sold already, so please finalize your plans and buy your tickets in the next few weeks, as we will probably be sold out by March/April. Cheers!

I think shareholders have to also understand that most of the senior management, as well as many other employees, have alot of their personal fortune tied to the company. The dividend was implemented originally, so as to allow employees to garner some income from their shares without having to sell any. I suspect that as many of these senior employees contemplate retirement, the last thing they would want to do is ever sell their Fairfax shares, but at the same time, they would like to continue to receive some sort of residual during retirement. Prem also has alot of charitable endeavours that he supports, but naturally would not want to sell his shares to maintain his philanthropic efforts. The dividend is a way to retain their ownership, while benefitting other aspects of their lives. I think shareholders have to resign themselves to that fact, as Fairfax will continue to maintain this balance between a modest dividend, opportunistic share buybacks and reinvestment of excess capital. Cheers!