Parsad

Announcement related to Ben Graham Centre's 2014 VIC: Seminar on Value Investing and the Search for Value July 14 - 18, 2014 Toronto, ON This seminar, taught by Dr. George Athanassakos (Professor of Finance and the Ben Graham Chair in Value Investing at the Ivey Business School, Western University), is geared towards financial professionals and individual investors seeking to enhance their knowledge of value creation, valuation and value investing theory and practice. Ms. Gaelen Morphet, Senior Vice-President & Chief Investment Officer, Empire Life Investments will be a guest speaker on July 18. http://valueinvestingeducation.com/seminars.htm

Vegetarians turn away! One big Christmas turkey I cooked today. Cheers!

I've got a 28 lb turkey in the oven...dinner for about 30 family and friends tonight. It's so damn big, it doesn't fit the large roaster properly, which is meant for turkeys up to about 22 lbs. I'll put a picture up later once it is done. I've put herbed butter all over it, with oranges, lemons, onion and rosemary stuffed inside, and I baste it every 45 minutes or so with white wine, vegetable stock and the drippings from turkey and the herbed butter. Mmmmm! Cheers!

Wishing you all a very Merry Christmas and Happy Holidays to all! Thanks for all of your contributions, but most importantly for all of your friendship! Cheers!

To the boardmember who is 100+, please tell me your secret to longevity...and hopefully it includes eating bacon! Cheers and congratulations!

I have mixed feelings about VIC. In late 06, we went to a meeting where an outstanding value investor with a no longer small fund was recognized for having the best documented record of all 2000 +funds that had been tracked by a service since Y2K. I punched Tim and said that our record had been better than his. Then I got a big head and said that I wanted to submit an idea to VIC and get some satisfaction or recognition. My idea was for a company we had bought in the summer of 06 that had by then become our largest position: Lancashire Holdings: it was selling for less that what I projected their forward NAV would be the next time they reported. Plus, It was practically a net net because they had high quality, short term assets and had had almost no losses and hardly any reserves in consequence. My submission was brief because VIC said the maximum word count could be no more than 500 words. I didn't hear from them, but then a few months later, I discovered that they had accepted an analysis of LRE that had been submitted a few weeks after mine. In fairness, that other submission was outstanding, much better than mine. Even so, I was a little ticked because the other poster had been allowed about 2500 words for his submission. Later in 07, I spotted changing conditions that I thought would lead to a turnaround in Star Gas, a previous posting on VIC that had tanked and been reorganized after the original post. After loading up, I sent my thesis to them, but again, it was ignored, even as that stock doubled in the next few months. Both of my submissions referenced BV\SH and increasing earnings available for stockholders rather than EV/EBIT which was not the best metric, given their capital structures and where the value lay in those two companies. Go figure. ??? That's because those qualifying the ideas are an aggregate of the general community. Their results as a whole will never be better than the average. It's why VIC theoretically is a good idea, but not in practice or functionality. In general, they are an analyst community and we know how analysts do on average! ;D The results here would be probably the same if taken in aggregate. But because we don't have a general committee that judges the ideas, there are pockets of individuals who clearly can outperform the markets by significant amounts over time. This board allows you to try and coat-tail those people...VIC and most investor forums do not. Cheers!

Norm wrote a very nice article in today's Globe & Mail about the board's discussions on giving back. Much appreciated Norm! Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/value-investors-share-their-favourite-holiday-charities/article16004375/

My secrets are that 1) I don't manage other people's money, just my own. I think that right there gives me an advantage over you professionals (no withdrawals) and reduces stress. 2) I go big when I have a good idea. In the past I have usually had 2-5 good ideas at a time. This year it was mostly just BAC with a lot of leverage. 3) I coat tail other investors at least to initially find my ideas. When I find one I love, I invest big. I made a lot following Biglari into Western sizzlin, Friendlys, Steak & Shake. I did well with NFLX and CMG a few years ago (sold both too early), as well as ISRG. I made out very well with the MIDD/OVEN merger a few years back. And now BAC. I have no idea where my next idea will come from, but I'll know it when I find it. It seems to be working so far. Nice number rkbabang! Cheers!

George has a terrific list of speakers for next year: http://www.bengrahaminvesting.ca/Outreach/2014_Conference.htm - Mohnish Pabrai - Irwin Michael - Richard Lawrence - James Rosenwald - Bruce Flatt And not on their website yet...Wilbur Ross! It will once again be at the Fairmont Royal York, April 8th. Registration for the event should open soon...most likely today! There is an early bird rate: Non-alumni $650. After Feb 28 $800. Alumni $600. After Feb 28 $700. Table of 8 - $4500. Cheers!

Let's go with the tried and true: Peace on Earth and goodwill towards men (and women)! Frankly, I have everything I need or want in this life except 50% more investment capital in the funds. That would pretty much be it. I get to do what I want with who I want. I have a nice comfortable home. Every day I pretty much do what I want. The last thing left, which is my New Year's resolution, is to get into shape again! I'm pretty happy. Cheers!

WSJ article on checklists. Cheers! http://on.wsj.com/1cswJRF

As some of you know, Mohnish has created "Dakshana Canada" as a registered charity, so that Canadian donors can get tax-deductible receipts for their contributions. There is now a link on Dakshana's site for Canadian donations: http://www.dakshana.org/donate/donate.asp I'm very pleased and humbled to be serving on the board of Dakshana Canada, alongside Tim McElvaine, Francis Chou, Mohnish and his wife Harina. Thanks very much for your contributions, support and any interest you can generate! Cheers!

That's because you are viewing it as the institutions do through MPT...their cycle is 6 months to a year out. They've created this demand for Chanos...fundamentally he should not exist, but he does because of the way institutions view markets and volatility. Cheers!

That's why I'm saying that this is a debate that probably won't be resolved. The people speaking out against Chanos (stripping away any personal issues they may have) believe that the opportunity cost of shorting is probably high -- with or without an investment in Chanos' fund. The people speaking in support of Chanos are saying that "If you must short, then..." The former group does not accept that premise. The latter group does. Ergo -- debates with no end. Here is Sanjeev on the matter: Again, the debate is not about hedging. Sanjeev is saying CHANOS PROVIDES NO VALUE WHATSOEVER, while pupil and I are saying, THE NUMBERS PROVE OTHERWISE. Sanjeev is saying Chanos had a couple of big hits. How can one possibly say that without providing evidence that he completely botched the 2005-2013 investment cycle? We only have returns through 2005, and they look pretty darn good. Clearly there is a bias against Chanos if one cannot honestly admit that he has an absolutely phenomenal long-run shorting track record, considering really the most he can make on each investment is 100%. Why is it biased? Here's a perfectly good alternative to Chanos that is cheaper and provides better long-term returns with no down years...Vito Maida's Patient Capital: http://www.patientcapital.com/calendar-year-returns#chart3 Modern portfolio theory emphasizes asset allocation examining beta and correlation with market indices, so you create a market for someone like Chanos, who really does not need to exist and adds little value to his investors. Vito has had no down years, including severe S&P years, while providing upside returns 4 times greater than Chanos. If you think Chanos is good at shorting, than Vito must be phenomenal simply as one who deploys capital...and that is what it comes down to...deployment of capital and mitigating risk, not being simply long or short. Cheers!

Come on Sanj, So you know of a swap / short product that can provide me with way to make big returns during market downturns, over over time can still deliver me a money market like average performance? Really? I'm intrigued. LOL... Let's not let our "love" for Chanos get in the way of the obvious fact that a short-only fund (understand that maybe Chanos isn't 100% short only) should be benchmarked like this: negative [market return] + short term cash return - cost to borrow index. Over Chanos' tenure, his "benchmark" is probably -8-10% annual. Now we can all say that this is not a benchmark we would ever invest in, and indeed, most people don't short for the sake of shorting, but they short to take the extra cash / liquidity offered so they can then invest more aggressively. Let's seperate benchmarks from those who choose to invest in them... Chanos has exceeded his benchmark while investing within its rules far more than most of us here could likely do.... Just as thePupil said. Now I agree, there is a real issue with counting on shorting to reduce your volatility in a way that is reliable (and yes, reduced volatility is obviously important for anyone taking withdrawals...)... Chanos' returns have not really been 1:1 inversely correlated to the market which creates a problem when you are actually seriously thinking about using shorting to gain more than 100% exposure to something else or otherwise leveraging risks assets... sometimes both sides of a pair trade can go wrong (ask Fairfax) and even if that only happens rarely, it is a real issue for how we define risk if and when it does happen... Ben PS - I'm getting too old... I think this is the second time in 5-6 years I've posted basically this same post on this same forum... ;-) I don't disagree with you Ben, but this is the institutional mentality that drives such behavior. Fairfax is as culpable as anyone else recently...they hedged because they were levered...if they weren't so levered, no need for 100% hedges. It's gone completely against them for four, nearly five, years. This thought process leads to such behavior, and Chanos' reputation just perversely perpetuates such institutional mentality. Cheers!

So basically you don't think anyone should ever engage in short selling because it is a low return proposition over long periods of time? That is a very fair belief and I won't argue against it. No, on the contrary Pupil. I think if someone is short-selling, they should be able to selectively do better than 2% annualized, just like longs can do better than 2%. I'm saying that Chanos is doing a shitty job! Chanos sells his fund to institutions, telling them that from an asset allocation standpoint, we can provide you net 2% annualized returns even when markets are tanking or going up. So institutions to offset their long positions, will allocate a portion of their capital to Kynikos. It's just stupid! Cheers!

You are talking like any modern MBA or portfolio theory student. I hear the word "alpha" and I gag! Why would you need to pay someone 1 & 20 to do what swaps or other cheaper products could achieve? And that +2% is over years relative to the S&P 500. Any wonder why pension funds and endowments are so mismanaged...because of their short-term concern for "alpha", while paying idiots like Chanos a fortune. Your argument was identical to the one Whitney Tilson used when I originally posted that years ago. Cheers!

Sorry, he was 1 & 20...not sure what he is now...see attached PDF. This negative correlation stuff has no value any longer with swaps, bear ETF's, etc. Chanos adds no value to his clients on a long-term perspective and his whole existence survives on his client's fears. Like Abbey Joseph Cohen, David Rosenberg, et al, he's built a reputation on a couple of hits and his media presence. Long-term, he provides no value whatsoever and has been wrong far more than he's ever been right about markets! Cheers! Chanos_-_Performance.pdf

Chanos: “I think hedge fund fees are probably still in a bubble although I would point out that the reality is that the days of 2-20 are kind of well behind us and even a lot of shops that charge that effectively make a lot less. Isn't Kynikos 2 & 20 last I remember? What value has this guy provided his investors over 30 years? Cheers!

Nice job Shane! Cheers!

Just saw this movie tonight! An outstanding film with amazing performances from Christian Bale, Woody Harrelson and Casey Affleck. If you like the grittiness and quiet beauty of movies like "The Deer Hunter" or "Mean Streets", you'll love this movie. Personally, I think it's a new classic for the genre. How you make rundown steel mills look as bucolic and serene as winding roads through the Appalachians, I don't know, but just a terrific movie from beginning to end! Cheers!

Finally, I did something today that I've read about other people doing in the news, so I thought I would try it. I was having breakfast at IHOP this morning, and one of the waitresses was joking to some younger customers that walked in "Welcome to the International House for Old People", because most of the restaurant was full of seniors...yours truly excluded, but my body felt like it! Anyway, I called the manager over after I was done, and asked if I could anonymously pay for the meals of all of the seniors in the restaurant. She was really excited, and quietly started printing one tab after another...about 15-17 tabs...then tallied them up and gave me the grand total. I was even more excited than her, and it felt great! I told the manager and staff to just tell them when they ask, that someone wished them "Merry Christmas", and if they can, they can pay it forward to someone else sometime in the future. I highly recommend it...felt really wonderful! You can even do a much smaller, but equally wonderful gesture, like paying for the person behind you in the drive-thru at McDonald's, Tim Horton, Starbucks, etc. Next time, I may stick around quietly in a corner just watching their reactions when they come up to the till! Cheers!

That was very funny and I cracked up laughing painfully loud! But you are an idiot. ;D Yes, too soon. Cheers!

Do you have more details on the effort / where one can give money? Been given non-profit status. Basic structure is set up. Mohnish will have more details shortly available for Canadian donors. Cheers!

Well, I've got two that I support personally and through Corner Market Capital: - The Crohn's & Colitis Foundation of Canada - We've raised nearly $50,000 to date through our annual Fairfax Financial Shareholder's Dinners, and I've been part of the team helping with our BC Gala that raised almost $100,000, as well as we had a little assist in getting Mark Ram (formerly of Northbridge) onto the board of the CCFC. Not to mention the annual June 9th Gutsy Walk that is across Canada! - Dakshana - Mohnish's foundation does amazing work prepping gifted, but underprivileged and less fortunate Indian children preparing for the Indian Institute of Technology (IIT's) entrance exams. Extraordinary high success rates that will undoubtedly change not just the lives of those that get into the IIT's and other highly recognized schools, but many others in the student's immediate family, neighbourhood and in some cases, entire villages. Dakshana Canada just launched, and Tim McElvaine, Francis Chou and myself are on the board, alongside Mohnish and his wife Harina. So Canadian donors get tax receipts going forward! Prem also has committed $1M a year for five years to Dakshana. - I also raise food and toys for our local toy bank and food bank that assists lower income families that just need a little help to get them through the Christmas season. There's bound to be a similar local non-profit doing the same thing in virtually every city and town. Cheers!