Parsad

No, no, he provided those results long before. His results may be better or worse from then. I don't know what they are like now, and that's why I asked. It was over a very short time period, and from what I saw, systems did not provide any advantage whatsoever. There were also 3 and 5 year lockups. If I had a five year lockup, I could get 18-20% a year for partners. Lockups provide enormous advantages! But I personally would not feel comfortable being locked up with a manager for five years, so that is why we have no lock-up. It's the partner's money and they should have access to it if needed. It just means I have to be that much better at my job, and I can live with that if it gives them more comfort. Cheers!

100% agree Al! Also 100% agree with this! Cheers!

Hi Packer, This one is an auction and the proceeds are going to Dakshana. We are going to see exactly what the free market values it at! ;D I've got another signed copy that we will be raffling off at next year's dinner in April 2012, and those proceeds will go to "The Crohn's & Colitis Foundation of Canada". I also still have the autographed Peter Cundill book too. And that will be part of the raffle as well. Cheers!

1) Stock Market Valuation I am not as optimistic as my friend Uccmal whose views I respect very much. For example, I think the US stock market has been significantly over-valued for the last 14 years (roughly the entire period I have been investing), with only very brief periods of fair valuation (eg March 2009). There have been longer periods in those 14 years where stocks have not been outrageously /dangerously priced (just “high”), however, in no time in these 14 years have these “high” prices been accompanied with governments and central banks both “doing the right thing” at the same time from a long-term perspective in order to give me the confidence to fully take off the hedges. Rather, its been high prices accompanied by kicking the can down the road one more time. The methods of other smarter people than me also indicate stocks are “high” (assuming price stability that is): Buffet’s Fortune articles in 2000/2001 go over how to value stocks to GDP (although he was being somewhat optimistic in those analyses so adjustments are necessary, and one can track Munger’s comments from the period to get a sense of the adjustments necessary), Grantham’s valuation methods for the S&P 500 have been very good over the last decade. My conviction on valuation leads me to continue my hedging … You are assuming investors are only buying the market. If the market has been overvalued for 14 years, then how did I manage to quintuple my initial investment capital in that time? In fact, my initial investment in Corner Market Capital is up 4,000% over the last five years. If you are searching for value, then you are buying individual investments...equities, bonds, entire private businesses, etc...not the market. 2) Portfolio hedging and the kicking of the can Watsa bet along with Buffett in late 2008 that the can would again get kicked, and kicked it was - big-time, and Watsa took off all the equity hedges. In no way had anything fundamental been fixed and he knew that when he did it (Watsa that is) – he bet on the stimulous having a huge effect (Grantham also called that – and exactly in March 2009 no less). Its one thing to bet on the can getting kicked and the effect – you have to be very wily to be sure the can will a) get kicked again, and b) of the effect of the kicking - however I would argue that that involves some degree of risk because the politics could somehow turn against you and then you get caught 100% in stocks in a depression. Both Buffett and Watsa – being wily enough though - took that calculated risk at the end 2008/2009 and were proved right. Actually, although sometimes I thought I was nuts to do so, I have been hedged to at least some significant degree probably at almost every point since I started investing over a decade ago – because stocks have either been 1) way over-valued or 2) highly value accompanied by mismanagement of the economy at all points in that period (other than very brief points like March 2009 where we got to some level of fairish valuation). I was fully hedged going into the crisis, but I could only bring myself to take off 50% of my equity hedges at that same point Watsa took off 100% of his. I have been 100% hedged through all of 2011 having fully transitioned up again from that 50% hedge. If you contrast the last 4-5 years of my hedging with Watsa, he took off 100% of his hedges in 2009 … but they went back on in 2010 and he is again 100% hedged now – so he wasn’t long without them precisely because nothing has been fixed, the can keeps getting kicked and the stock market remains high. But now what is changing is that they have kicked the can so damn far down the road, they got to the end of road, but that didn’t even stop them, they went out and got the dozers and built more road to kick it a couple more times. So although I want to simply hedge 100% (ie basically 100% cash plus a value spread) like in 1997, I can’t be what is effectively 100% cash now (ie the financial system was going to collapse then and effectively 100% cash was great then, but now the threat has been shifting to the monetary system – and 100% cash is not good in that situation but nor do I want to be unhedged 100% long in stocks because nothing has changed on that front either - ergo Watsa is 100% hedged) … This argument doesn't wash with me, and I have no idea why individual investors always reflect back on what Prem is doing. Fairfax is an insurance company. One that carries asset to equity leverage of 4-1 and about $2B in consolidated debt. Their business absolutely exists based upon their credit rating and levels of statutory surplus. If either goes down, they could be out of business. It is very likely that Fairfax's credit rating would drop significantly if they lost 10% of their assets, which would be roughly 35% of their equity. If somehow the credit rating stays intact, the amount of business they could write would shrink enormously in such circumstances. He has responsibilities to his employees, shareholders and customers. Especially the customers who bought policies that need to be paid out in the most dire of circumstances. Like Berkshire, or any other insurance company, Fairfax's check cannot bounce. That's why Prem hedges. 3) The Right Dry Powder (precious metals versus cash?) and Optimal Hedging/Portfolio Construction in this Environment As value investors, we have been content keeping our “powder dry” in cash in the past, or like Pabrai did before the financial crisis started, some have even kept it dry in Berkshire Hathaway. Like Pabrai questioned himself keeping his powder dry in Berkshire during the crisis, I question keeping powder dry in cash in these times. Maybe this thinking came from my hedging, but I started thinking a couple years ago, if I am 100% hedged like Watsa, my net position is basically 100% cash with, hopefully, me earning my value investor stock picking spread. But its basically 100% cash plus a spread and do I want to be 100% cash now at this point. In the past decade that has been fine, stocks have gone nowhere overall so hedging 100% and being effectively 100% cash plus a spread has been fine, but not now because other forces are becoming increasingly prominent: one of the potential directions we are headed in seems to be towards a whole new monetary system (maybe the odds are 60% in my view). The others are a depression (maybe at 20%), and also the chance of just some sort of muddle through (20%) which eventually becomes inflationary/ stagflationary – this is what the central bankers are shooting for as it’s the most palatable option. I certainly don’t want to be 100% in cash if we go to a new monetary system, nor do I want to be 100% in highly valued stocks if we go into a depression, and I don’t think I want to be 100% stocks in stagflation. At a minimum, I want my “dry powder” to be “safe” in all situations and ready to deploy in undervalued stocks. But forgetting the minimum, from an optimal portfolio perspective for the next 5 years, I want to make as much money as possible in a safe way without anyone robbing me of my value investor spread (that spread being the spread between the growth of the value of my portfolio measured against both i) the stock market performance, and ii) cash) by inflicting on my portfolio either 1) significantly higher price levels, or 2) a depression. And if we see deflation, which is also one of Prem's hedges? What is gold's price going to do from where it is right now? Macroeconomic forecasting is a very dangerous thing for the average investor. If the best economists in the world can never get it right, what advantage do we have? The only advantage the value investor has is the intellectual framework that allows us to come to some estimate of an investment's intrinsic value, and then apply a margin of safety before buying. That's the single greatest advantage we have. I do not know of any other aspect of finance where we have such opportunity or probabilities. Cheers!

They were relatively stiff softcover books. Cheers!

Harry, I only have unaudited Contrarian Partners LP returns you sent me in the past from August 2009 to May 2010. How have the systems been working for you since? Better or worse? Cheers!

PStahley, I don't think Harry is hard of hearing. Just averse to disclosing his actual returns. ;D Cheers!

I was short, I covered. How did you like the "short" thread? Geez Harry, not sure because it might have been one of the threads and posts you asked me to delete under threat of libel and slander against people who posted comments you did not like. Cheers!

I agree with Fritz...I mean Fred...no, Harry! Geez Kraven, you've got me all confused. Now what was Fritz...er, Harry saying? Cheers!

Hi Folks, No, the auction has not happened yet. It is scheduled for sometime in October, as Mohnish will be auctioning both the book and a lunch with him simultaneously. He'll give me the heads up when everything is set to go, and I'll post the link on here. Cheers!

That's fantastic! Great to see, and what else would you expect from Fairfax and its executives. Cheers!

Actually, according to the letter Cracker Barrel sent to Sardar, I think they were more than fair. If he's not agreeable to what they offered, I too would tell him to go to hell. Woodhouse was much more polite! ;D http://finance.yahoo.com/news/Cracker-Barrel-Responds-to-bw-2034856243.html?x=0&.v=1 Also, they've done their homework on him by the looks of it. Cheers!

Hi RJ, Good books, but I need each of them in the format of: "Title" - "Author(s)" That way we have a running dialogue on a specific book, so if someone wants to know about that one book, they can read the thread and find out if it would be a good choice for them. Cheers!

My friend, Guy Spiers of the Aquamarine Fund, was on Bloomberg last night. He had some terrific comments about the current economic malaise, financials and Japanese stocks. He's also one of the nicest guys you will meet in this business. Cheers! http://www.bloomberg.com/video/74680581/

That only makes sense...the FFH position strategy, not the dislike Tilson part. ;D Cheers!

I suspect they sold FFH simply because there were bargains to be had and Fairfax's stock didn't move around much at the time. I think Zerohedge is blowing the loss out of proportion. It's not any worse than Berkowitz, and they got pummelled because they probably had little cash as they short. The T2 fund actually has a pretty good record, so I suspect if any of their partners pull capital, it will probably be a mistake. There doesn't seem to be anything in their portfolio that looks worrisome. Cheers!

Totally agree. There is alot that Google Docs still can't do. It may be fine for students, non-business users, etc. But the software does not have the capabilites for business users. Yeah, the problem is that it will only work if you use Chrome. And there was something else that was silly...I believe you have to toggle between two platforms or something to be able to use it offline, if you were already using it online. You do not have to do that when using 365, which is probably what I'll switch to when the next Office versions are released. Cheers!

Your broker should have sent you the information regarding the rights offering if you are a shareholder. You should have told them that you want to purchase the warrants at $0.04 each. I think you may be out of luck now. Contact Chanticleer and see if there is anything they can do, but I believe it may be too late. They were being offered only to existing shareholders. Cheers!

Yup, and Chanticleer will own half of that new location. Cheers!

One of the greatest businessmen and executives in the U.S. is stepping down January 1st. Costco CEO, Jim Sinegal, will be replaced by COO Craig Jelinek. Cheers! http://www.cnbc.com/id/44350592

It's almost uncanny watching what Europe is going through. You have 17 countries that are trying to come to some consensus, yet they probably won't until things get worse. They could easily fix much of the financial institution pains by simply implementing a TARP program and recapitalizing the banks with the same type of warrants the government bought here. Otherwise I suspect you are going to see more articles such as this: http://www.cnbc.com/id/44335728 Undoubtedly, credit is going to tighten in Europe as foreign institutions withdraw their capital. Cheers!

[amazonsearch]Of Permanent Value - Andrew Kilpatrick[/amazonsearch] This was the first book on Buffett I read many years ago, and Andy's book gets better year after year. Every long-term Berkshire shareholder should definitely have a copy. Full of wonderful, insightful stories on Berkshire and Buffett, and how he influenced so many others. The book is also full of hundreds and hunderds of pictures. Cheers!

Incidentally, she also won a public service announcement contest which is as good, if not better, than the BusinessWire video. This girl is very talented! Cheers! http://www.freedomofspeechpsa.org/winners.asp

Here are the ten college finalists for the BusinessWire contest to meet Warren Buffett. You can watch their videos here: https://www.facebook.com/BusinessWire?sk=app_2392950137 Hands-down the winner should be Jenna Marie James: https://www.facebook.com/video/video.php?v=10150340201769276 Quite an extraordinary video for someone in college. Any marketing or advertising company should snap her up now. Cheers!

Paul from Watermelon Webworks suggested that I add a "Books" board, that would operate similar to the "Investment Ideas" board, where we can build up a library of information. When you post about a new book, just like on the "Investment ideas" board, make sure there isn't already a post regarding the same book. The format should be: "Title of Book" - "Name of Author(s)" That is probably the last category I add now to the board. I don't want it to become cluttered on the index page. Cheers!