Parsad

Hi Al, He may speak Chinese. Not sure though. I do know he speaks Hindi, and of course English. ;D Cheers!

In retrospect when I owned Sino 4-5 years ago I never really understood what was going on. It was purely a numbers play. Now I know why Francis never held it, and he has a language advantage over me. Actually, Francis grew up in India, and he can speak and understand Hindi. I'm not sure how much Chinese he can actually speak! ;D Cheers!

I think that is definitely a step in the right direction. It's not going to solve everything, but selling some of their core brands through other distributors is the right thing to do. They should start selling Kenmore through there too! It's funny, I mentioned this in the discussion we had about value traps two weeks ago: http://www.cornerofberkshireandfairfax.ca/forum/index.php?action=profile;u=1;area=showposts;start=90 They've spent $1.6B over the last three years on capex, so if he's not pouring it into the stores, where is it going? Sears Canada was better off than Sears USA, but it is going to run up against stiff competiton for the forseeable future. Buying Sears Canada may prove to be a poor decision, when that cash could have been invested elsewhere. Instead, they're burning through the cash in Sears Canada too! Revenues keep dropping, shareholder equity keeps dropping, debt has increased dramatically...slow burn! My opinion remains: Pour money into investment ideas or other businesses; runoff the underperforming stores; sell off properties in bulk as values stabilize or start to increase; license core brands to other retailers (Craftsmen, Kenmore, etc); eliminate paper catalog business and move everything online; decrease store footprint and reduce number of inventory items; reduce operating expenses to the bone. Cheers! Hopefully they make some other big changes. Cheers!

In other words, what is the best way to determine cigarette butt value in bonds of fraudulent companies? I wouldn't touch them. You have incalcuable risk from class-action litigation, fines, etc and in many circumstances have no idea what the actual value of the underlying assets legitimately are, so you cannot come to any reasonable estimation of what the bondholders may walk away with. On top of that, fraudulent companies obviously have an impaired corporate culture that would be difficult to change. It's tough enough changing the culture at companies that just need to be turned around, but the culture at a company that perpetrated fraud could be damn near impossible to improve without ripping it apart. Unless you can either come to a reasonable estimate of what the assets are worth, or see someone walk in who is going to change everything about the company, it's just simpler to move on to something much easier to define and value. Cheers!

That is exactly the impression I get. I wondered about it whenever I hear his comments on BYD. He clearly seems to distance himself and associate BYD to Charlie. I get the same feeling about Li Lu as well. But not Todd Combs. I think Buffett hand-picked Combs. Cheers!

This writer does a terrific job breaking down the various companies, entities and spinoffs that have evolved from MFC Bancorp, as well as establishing the long-term track record for Michael Smith. Cheers! http://seekingalpha.com/article/290755-15-for-15-years-michael-j-smith-s-outstanding-track-record?source=yahoo

That was pretty funny! ;D My question would be: Aren't there easier ways to make money than companies that are implicated in fraud? If we cannot put any guarantees or even estimates on what the assets are worth, then how can you come to any real margin of safety for equity or bonds? I wouldn't touch it with a ten foot pole. Cheers!

That's actually a terrific little interview. I love his comment about electricity and natural gas. Cheers!

Hi Gopi, Go to the 10-K for each year and see how much was spent on retiring shares, and how much was spent issuing shares, including through options and warrants. If a corporation spends plenty of money buying back shares, but either pays too much for those shares or issues as many shares through grants, then it really isn't getting anywhere. Not sure if that was the case with the Gap, but the filings will give you the correct numbers. Cheers!

Some people just have too much time on their hands. This writer came up with "81 Reasons We Love Warren Buffett". Cheers! http://finance.yahoo.com/news/81-Reasons-We-Love-Warren-fool-1638791010.html?x=0&.v=2

I always thought this was because it's very difficult to afford a Vancouver mortgage without renting out a part of your house. That's partly become the reason now, but there have been multi-generational homes in Vancouver for the last 30 years. It really took off in the 80's and 90's with the large Punjabi population in Surrey and the enormous inflow of Hong Kong immigrants. Now we have new "laneway" homes, similar to residences in London or San Francisco...small footprint homes where normally a driveway or garage might have been. These are often used as mortgage helpers or in-law residences. They design of many are very nice actually. Cheers!

I think CCB is a strategic partner for them long-term. BAC looks like they want to focus on the core banking / wealth management business, and they want to be the global leader in the future. They could sell more, but that may hurt their alliance in any future endeavors together. Cheers!

Happy Birthday Smallcap! Are you 81 too? ;D Cheers!

Here's a short interview with the CEO of Dickey's BBQ Pit. I always enjoy reading about CEO's who find ways to cut costs for their business or their franchisees. Cheers! http://www.businessweek.com/small-business/from-local-hot-spot-to-national-chain-08302011.html

Short article on Wilbur Ross' views. Cheers! http://www.bloomberg.com/news/2011-08-30/wilbur-ross-sees-u-s-economy-entering-subpression-with-limited-new-jobs.html

one serious option for them is to focus on battery and technology, leaving car making to more established players. Yes, this would make more sense. Less capital intensive and they would have a much larger universe of customers. Cheers!

While this was primarily a cultural issue for many immigrants, I suspect that as the Boomers get older, multi-generational housing will be more common so that children can take care of their parents as they age. Already there are many homes built in Vancouver with in-law suites, even though the in-laws still live in their own home and are perfectly healthy. I don't think there will be enough retirement homes for the wave of seniors that will come. Cheers!

Happy 81st Birthday to one who inspired many! Cheers!

I've never understood this investment and I don't think this is going to help either. BYD is cutting their salesforce by about 70%. From 2,600 down to 800! Either they never needed 2,600 sales people in the first place, or they are going to kill their level of customer service when compared to their competitors. It doesn't make management look good whatever way you cut it. Cheers! http://www.reuters.com/article/2011/08/30/byd-idUSL4E7JU0RW20110830?feedType=RSS&feedName=financialsSector&rpc=43

JGBRK, What type of phone are you using, and did the old site show up properly on there? Thanks!

Because under Basel III, their stake in CCB would be penalized as it is over 10% of the outstanding shares. They are well-capitalized based on current circumstances, but they need to increase their capital due to the eventual future settlements on mortgage litigation and legacy loan losses from Countrywide. Some of this will be offset solely by their regular cash flows, but they aren't trying to run a bank with adequate capitalization. I think Moynihan's goal is to eventually compete with the best banks in the world head-on, and that means focusing BAC on its core business and jettisoning non-core assets to bolster the balance sheet. So far, so good! Cheers!

Here is one issue that was emailed to me. Please let me know if you are having a similar problem or if you've experienced the same issue and found a solution. Cheers! Ever since the "Corner of Berkshire and Fairfax" domain (http://www.cornerofberkshireandfairfax.ca) was migrated to its new hosting provider, I have been periodically blocked from accessing the site. When that happens, I get the following error message: Your connection to this server has been blocked by a firewall device. You need to contact your service provider support (at) watermelonwebworks.com with the information below in order to restore your connection. Please include the information below in your message. My blocked IP address is 173.???.???.??? The blocked access will typically last for a few hours at a time, and then I'm able to access the site without any issues. It doesn't seem to matter what IP address I'm accessing from... I periodically get this message when trying to access the site from home, from the office, and when traveling out of country. It also occurs on multiple browsers (both Chrome and IE9). Do you know if I am the only person reporting this issue? Is there something I need to do on my end to fix it, or is it a server-side issue?

Hi Folks, Watermelon Webworks upgraded our server on Saturday night, so things should be even faster than when we first migrated over. Also, please let me know if you are having any particular issues with the site that may be common to other board members. I will forward those concerns to Watermelon Webworks. Some issues may just be due to settings on your own browsers or security software. Cheers!

I expect them to continue to sell non-core assets, and combined with cash flows, they should be able to easily maintain Basel III standards. I see them hitting 9% Tier 1 Capital by the end of the year, if not sooner. I also would like to see them set up a litigation trust at some point, probably in co-operation with the government, to settle long-term mortgage lawsuits...not unlike the tobacco companies. Once they do all of that, they can move forward with a much leaner and focused enterprise. Cheers!

Calonego is also very much a part of YAK, but I doubt if he's going to answer any questions here. You guys are welcome to ask him about the company at our next Fairfax Dinner which he's attended since day one. I'm sure he'll be happy to entertain any questions. Cheers!