Parsad

Their margins are lower than Amazon's and their customer satisfaction scores are on par or better. Overstock's affiliate business is where the money is on a consistent basis. The direct business was giving them some problems earlier because it accounted for too much of their business when the economy was humming...direct inventory prices provided lower profit margins in a good economic environment, while in a depressed economy overstock inventory prices are cheaper and negotiable...companies want to unload excess inventory. The business now runs on a profitable 1st Q, break-even 2nd Q where they start to ramp up inventory and infrastructure, slightly profitable 3rd Q as they continue to ramp up, and then a massive swing in operating cash flow during the big 4th Q...similar to See's ramp up where they generate most of their revenues and profits in the 4th Q. So far, we are seeing huge spikes in Overstock's revenue growth...30%+ growth quarter over quarter, year over year...I expect that trend to continue through the 3rd and 4th Q's. They have a long way to go to make a dent in Amazon's business, but that's not really the point. Kind of like Walmart and Costco...they aren't necessarily competing with each other, but stealing market share away from Krogers, BJ's, Safeway, etc. where they are less competitive on cost and do less volume. Overstock's long-term rival may be Amazon, but right now their primary rival are all the other online retailers with less competitive business models. That's who they are going to take share away from. Cheers!

I've been waiting a long-time for Mozilo to get his comeuppance. The case is set for October and the "man with the permanent tan" is in for a doozy! Now when is Einhorn going to actually go on the record and talk about what happened to New Century? Cheers! http://www.cnbc.com/id/38881849

Not really a war yet, but Nick Nejad writes an interesting article on Overstock.com's future...will they be the low-cost retailer for overstock goods or will they disappear into the sunset. http://www.fool.com/investing/general/2010/08/27/overstock-declares-war-on-online-retail.aspx While we're still five months out, I will go on the record and make a little bet...I think Overstock.com is going to make a substantial profit this 4th Q in 2010. I think people will be surprised by the swing in operating cash flow. Cheers!

Stick to your circle of competence Sanjeev, Lakers don't stand a chance against a healthy Lebron If LeBron manages to win a championship, it will only be because he was riding the coat-tails of a healthy Dwayne Wade! ;D That's the one snag with LeBron's move to Miami...it's a lose-lose proposition. If he loses, they'll say he chokes. If he wins, they'll say it was because of Dwayne Wade and his leadership. LeBron may get a championship, but the respect won't come until he wins one on his own. Kobe's won two now without Shaq...yes he has Gasol and Odom, but they're not a Wade, LeBron, Garnett or Pierce. Kobe really carried that team to two championships. LeBron's going to have to really lead his team to get any respect. Now about that Tiger Woods...looking pretty good this week! Cheers!

Either way this has to be one of the most brilliant trades inside of a public company ever! Yup, it was pretty brilliant! I would say Fairfax's shift from treasuries/CDS to municipals/corporates/equities was equally fantastic. They were pretty much 90%+ out of the CDS' at the bottom, and bought $6B of Berkshire-guaranteed, tax-free munis paying on average about 5.5-6%. They also closed their S&P500 and other basket hedges right at the bottom, while snapping up WFC, GE, JNJ at or near the bottom...as well as many of the preferred deals Berkshire got...other than Goldman. Cheers!

I like you guys, but Hockey just isnt a real sport below the Mason–Dixon line. I'm a nut when it comes to my Canucks and I understand you can't relate. I'm also a Peyton Manning fan and don't miss any of the Colts games either. I use to be a huge Tiger Woods and Kobe Bryant fan, but their respective infidelities kind of peeved me. Nonetheless, I would like nothing better than to see Tiger win Barclays and keep Mickelson from being #1, and as far as I'm concerned LeBron is going to have to get through Boston, just to end up losing to Kobe and the Lakers anyway! Cheers!

Hi Indirect, I totally agree with you. WFC's management is better, and their cross-selling success with their customers is probably the best. It's just that the exercise price with BAC, combined with the low dividend requirement before it impacts the exercise price, was an intriguing combination. Cheers!

Hmmm, what else do I do besides investing: - I work for Quantum Advisory Partners as a consultant and do contract work...pays the bills while the funds grow. - As you know, I really enjoy running The Corner of Berkshire & Fairfax Message Board. - I like to watch hockey...I'm a die-hard Canucks fan! I don't miss a single game. I'm a big tennis fan as well. - I like to play floor hockey...a bunch of us rent a gym and play every Tuesday night from the middle of September to the end of April. - I like cooking...what they call "food porn" these days...I enjoy watching cooking shows on the weekend and then making something on the spur. - Believe it or not, one of my favourite things to do every weekend is grocery shopping. I try to get as many deals as possible...value investing affects every aspect of my life. I dig through the flyers and find the best prices. It's been a habit ever since my Dad died and I started doing all the grocery shopping for the family 20 years ago! - I love to travel and see new places. - Family dinners...we throw big family dinners with all of the cousins, nieces & nephews, etc...love it! But hands down, there is nothing, absolutely nothing, that I enjoy more than pouring through 10-Q's and 10-K's looking for investments. My whole life and ego are intricately tied to Corner Market Capital and the MPIC Funds. Cheers!

Incidentally, here is the original Class A warrant prospectus. Cheers! http://www.sec.gov/Archives/edgar/data/70858/000119312510044940/d424b7.htm

Incidentally, Francis' thought process is about as close as you can get to the team at Hamblin-Watsa, and there are very few people who know Prem better than Francis. Guess what Francis thinks is relatively cheap..."financial, retail and pharmaceutical sectors are undervalued". I read his semi-annual report about two hours ago when it was first posted, but resisted putting it on here, as I was doing further research on one of his best ideas in the report. Now that Omagh went and took the cat out of the bag, I might as well mention it as well. The Bank of America Class A Warrants look enticingly cheap! I'm still revisiting the prospectus, but if I have it correct, at today's $6.59 closing price...you can buy the 2018 Class A warrants which give you the right to buy one share of BAC at $13.30. If you assume that BAC doubles book value over the next 8 years in this environment and it's market price is at book value then, you would achieve a return of roughly 15.5-16% annualized on your $6.59 investment. On top of that, and this is the clincher, if they pay any dividends over four cents annually, the strike price is adjusted for the decrease in capital, thus you could reasonably expect a 20% annualized return on the investment. Now as Francis lists in his semi-annual report, there are alot of risks, so take it with a grain of salt. But I think it would be reasonable to assume that BAC would trade at book 8 years from now, and that in this type of environment they should be able to double book over the next eight years. Love to hear everyone's feedback, now that the idea is out! ;D Cheers!

Fairfax through units and warrants controls almost 60% of the Brick Income Fund. I wonder if Prem was invited to Mike Comrie's and Hillary Duff's wedding! ;D Cheers! http://www.fairfax.ca/Assets/Downloads/Press/fpr2010-08-26.pdf

Sorry Watsa, don't know how I missed dividends...as well as special dividends which may be very likely. Cheers!

My first thought was the loss of the Munger's annual meeting as opposed to what I would get for my single share of Wesco Yes Ballin, you are correct on what is key and important here. Not only for Charlie, but it also reflects on the mortality of Warren as well. They are getting older...how many more years will we be fortunate enough to hear them or read their words. Cheers!

I'm noticing alot of companies are starting to hunt for higher interest income from their large cash piles. I think this is just the beginning as the yield curve in the US is flattening. They can only do a few things...sit on it at low rates, pay down debt, buy back shares, acquire other businesses, expand their existing business, or start to reach for yield. - sit on it...not a great alternative - pay down debt...good idea, but rates on debt are also at historic lows - buy back shares...good idea if the shares are undervalued - acquire other businesses...only if it makes sense, but as you know CEO's get bored fast, thus the huge spike in M&A's this year - expand their existing business...sure, but only if demand is there...for many, the demand is still muted - reach for yield...corporate spreads from treasuries are nearly as low as they were back in early 2007...not much yield. Where else...equities, real estate, commodities? Cheers!

I've got a very funny story about Larry. When I first entered the financial industry, I was a mutual fund and insurance dealer, and I was selected by AIC Funds to go to Omaha with them, including Michael Lee Chin. The morning of the Berkshire AGM, AIC had set up a fantastic buffet breakfast, with just about anything you would want to eat. They even had a chef making fresh omlettes with whatever you wanted, pancakes, crepes, etc. Everyone had been there for an hour or so, enjoying breakfast and talking, including all of AIC's investment managers. Towards the end of the breakfast, Larry walks in and everyone is clamoring for him. He had predicted the demise of tech stocks, was 90% cash before the market fell, and now everyone was interested in what he had to say. He walked over to the breakfast buffet, had the chef make him a crepe, and then he topped it off with four scoops of strawberry ice cream. He just walked over to an empty seat on my table, sat down and started to eat his breakfast...er dessert. He quietly ate it, and then got up to leave for the AGM. All these advisors and other managers at AIC started yelling to him "Hey Larry, wait for us, we want to sit with you." He just quietly responded "I want a good seat and you guys are going to take too long" and he left. I spoke to him on several occasions, did an interview with him for our predecessor board, and have followed him over the years. He's always been somewhat of a maverick in the Canadian mutual fund business. He parted ways with Investor's Group because he held so much cash, then he parted ways with AIC for similar reasons. He then started his own fund, but hated the administrative side...he just loves to invest and run a portfolio. So he sold it to Clarington. A very, very nice guy...a loner who trusts his instincts completely and will preserve his investor's capital. Cheers!

Parsad calling Sprott "nuts" (tongue in cheek or not) just because "he does the opposite of what I do" (Buffett bought silver once and the Br Real another time - did you call him "nuts"? C'mon.) Methinks thou dost protest too much! Oec, do you know Sprott? Do you believe I offended Sprott? If I said something like that to someone on this board, that would be one thing...and a God-awful thing to do...but we aren't are we. How many people here have been critical of Mohnish during 2008...and he's a good friend of mine...who reads the board. There have been people who have taken shots at Francis or Tim McElvaine as well...also friends...who also read the board. I think the outcry over the Sprott comment, is like the over-reaction to Professor Greenwald when he said that Buffett "has lost his mind" regarding the price paid for Burlington Northern. Do you think Greenwald actually meant that Buffett was nuts? Of course not Here I'll demonstrate...Buffett is nuts...Prem is nuts...Mohnish is nuts...I'm nuts! I don't know Buffett but do you think he's offended? How about Prem, or do you think he would understand that this was tongue in cheek as well? I'm sure Mohnish is going to clobber me in the head when I get to Chicago next month. ;D Lighten up guys...life is too short! Cheers!

Yeah, unfortunately if you don't have an invite to the Pabrai Funds meeting you're out of luck. You could write to Mohnish and see if it is possible to attend, but he gets a ton of requests now. Cheers!

I think the stuff about Susan Buffett and the kids really sparked it. From what I understand from people close to the situation, Buffett was not pleased at all about the shots at his family. Other authors I spoke to in Omaha were also very shocked by some of the stuff she put in there about his family and their personal life. Shots at him, that's one thing, but shots at the people who had no choice in his celebrity...he was really put off. Mind you, have you heard Buffett say a single thing about the situation? Nope, but you hear Schroeder spouting off everywhere. Cheers!

Jim Tisch, CEO of Loews, says they are buying some quality large-cap stocks. I'm guessing there are some posters who may think that Tisch is also subscribing to the "greater fool theory". ;D Cheers! http://www.bloomberg.com/news/2010-08-25/loews-chief-tisch-says-buy-exxon-mobil-j-j-stock-as-bond-yields-decline.html

The team at Hamblin-Watsa have always been very diligent about counterparties...I wonder who is on the other end of this trade! ;D Cheap hedge they bought to protect a gigantic portfolio. Cheers!

Here's a direct link without having to register. Cheers! http://online.wsj.com/article/SB10001424052748704540904575451910642552160.html?mod=googlenews_wsj

I think you guys are arguing about semantics. I'm guessing that Watsa meant that quantitative easing generally leads to elevated levels of inflation and thus a redistribution of wealth, but Munger and Ophi are saying that it is not definitive and there are exceptions to the rule. Sort of the same as some guy named Carl telling me to eat more fiber because it makes you less hungry, yet I'm completely fibered out and can use a nice Steakburger! ;D Cheers!

Article on the Pittsburgh Penguins and how players are clamoring to play for them, not unlike how managers want to work for Buffett and Berkshire. By the way, it will be the Penguins versus my Vancouver Canucks this year for the Stanley Cup. You heard it here first! ;D Cheers! http://blogs.forbes.com/sportsmoney/2010/08/25/the-pittsburgh-penguins-dividend-a-franchise-in-the-mold-of-berkshire-hathaway/?partner=yahootix

Generally, quantitative easing does lead to elevated levels of inflation. Japan's experience, and what could be our experience of a non-inflationary environment, occur because lenders are afraid to distribute the cash they are sitting on and thus the normal multiplier effect in the monetary system doesn't occur. They just have excess reserves that they cannot utilize. Cheers! http://en.wikipedia.org/wiki/Quantitative_easing

It would be Saturday, September 25th...around 1:30pm. I think the bar in the Marriott is called Allie's American Bar & Grill. Cheers!