Parsad

Yup, this was the interview. Something to the effect, these women have big lungs, and so they have big chests and can dive for long periods to put a grain of sand in the oyster. Cheers! Big-lunged, au naturelle women! Maybe I'll start an oyster farm. :o Cheers! Interestingly, the women have big lungs because they dive for pearls not vice versa. In the beginning the men dove for pearls and the women helped. Then it was discovered that the women had greater capacity to tolerate the cold water because of their extra body fat, so the roles reversed. In the early days the women dove pretty much au naturelle in the Japanese fashion. :)

While I wouldn't want to see a full-stop, but a slowing China...could it actually be good for the rest of the world? Lower commodity prices, lower-priced finished goods for consumers as inventories stack up, continued repatriation of manufacturing to the United States...could it actually prove to be beneficial? Cheers! http://www.cnbc.com/id/48773431

I think it was both...Mohnish's mic and Guy's speaker...as there was a delay in the echo. It was funny to watch them fiddle with it, especially when Guy went right up to the screen. Great presentation by two very good speakers...both could be professors! Cheers!

Yup, this was the interview. Something to the effect, these women have big lungs, and so they have big chests and can dive for long periods to put a grain of sand in the oyster. Cheers!

I love Irving continually bluntly telling Tom (his son) that "There's five guys waiting to ask questions...give them all a chance!" And then Tom laughing and obliging like a good son. Good interview! Cheers!

Just finished...terrific presentation! Even the technical difficulties were fun. I encourage boardmembers to listen to it. Cheers!

Here is a presentation Mohnish and Guy did for students at UC Davis last night. Enjoy! Cheers!

Couldn't it be that corporations are waiting for the impending win8 release before they upgrade their machines? Along the same line, I wouldn't buy a iphone 4S now knowing that iphone 5 is coming out next month. I doubt it. Unlike consumers, the enterprise goes through a long cycle of evaluation, testing, planning for a new rollout. Most major rollouts will be at least a year after the initial release. Unlike consumers who eagerly await new versions, upgrade is a pain for the enterprise. I think you're both correct. It is a pain for enterprise users, but at the same time, they don't want to have to run through the whole thing again, so they will plan their upgrades around new releases. By the way, I'm waiting for the iPhone 5, but if the screen isn't somewhat bigger, I won't be buying it. Cheers!

Bloomberg article on Chuck's passing. I didn't realize he was from Vancouver! Cheers! http://www.bloomberg.com/news/2012-08-22/huggins-who-built-candy-business-for-buffett-dies-at-87.html?cmpid=yhoo

I'm not too keen on the company's plan to expand widely relatively quickly. You diminish the brand a bit that way, especially in a highly competitive and somewhat localized industry. I remember speaking to Chuck in the past, and he said it was incredibly important to See's to maintain the quality of their chocolates from location to location. You add days to delivery and that reduces the quality. You then have to open more and more factories or warehouses, and that adds business risk. The industry is very fractured from city to city. There is always a hometown favorite that is dominant, and has significant history and nostalgia behind the brand. So See's had deliberately chosen to grow slowly, allowing the brand to organically enter other markets as residents in those regions became more and more familiar to the brand by visiting stores just outside their area. It's why I will drive two hours to Seattle to buy chocolates at Christmas instead of buying boxes at hometown favorites Purdy's or Rogers Chocolates. You plop one down in Miami and it just isn't going to do that well. Cheers!

Chuck Huggins, CEO of See's Candies, has passed away at the age of 87. I met and spoke to Chuck and his wife a few times in Omaha at Andy's party. He was as gracious and humble a person you will ever meet. He was always more than happy to engage any Berkshire shareholder and discuss See's and the chocolate industry. All the best to his family and everyone at See's! Cheers! http://www.bizjournals.com/sanfrancisco/blog/2012/08/chuck-huggins-obit-sees-buffett-munger.html?ana=yfcpc

That was quite funny! No, I don't think I want to fly with them...it would be a fun trip until we died in the crash. Cheers!

Hi Meiroy, that's what I thought happened. That's why I posted the CNBC article because it didn't quite make sense to me. Cheers!

CDS insuring municipal debt was cancelled five years ago. Cheers! http://www.cnbc.com/id/48733981

My choice for flying is called "Aeroplan points!" ;D Cheers!

What I'd like to see is what stories we tell when Prem is 80 years old, Fairfax is a $50B company, and Prem's investing prowess continues to gain notoriety. Old men with scratchy voices and painful bunions..."Remember Al, when we saved Prem and Fairfax with our six-shooters! We took Chanos and Cohen down. God-awful shorts! Cardboard and LotsofCoke teamed up with Bsilly and walloped Brolgaboy and Peter Eavis. Those were the days. A man could make a fortune by betting it all on LEAPS and spitting with one eye closed!" As you can see, I like Westerns! Cheers!

For those inquiring about what transpired on our old message board back in 2003 when Fairfax was attacked, you can read it all on the old MSN Board archive. Go to: http://msnbrkboardarchive.multiply.com/ Click "Blog" on the left hand side. Then click "Last" on the page numbers at the bottom. Work your way back up to Page 468...that's where it all started shortly after the U.S. listing on the NYSE. Cheers!

Article on private jets, in particular Netjets. Cheers! http://www.nytimes.com/2012/08/21/business/private-jet-industry-recovering-among-business-travelers.html?partner=yahoofinance

Terrific post Ubuy2wron! Cheers!

Article on Buffett and Berkshire. Cheers! http://www.chicagotribune.com/business/sns-201208091800--tms--kplngmpctnkm-a20120820-20120820,0,271930.story

The goal of becoming lean, mean, efficient and customer-centric...with a rock-solid balance sheet to boot! As loan losses and litigation evaporate, the markets will rationalize the business. Cheers!

Sanjeev, We will agree to disagree. We owned Fairfax when their leveraged investment portfolio moved....and that was related to their large U.S treasury holdings....it later moved to their CDs portfolio...a liquidation would given great results. Bank of America assets are impossible to quantify...their derivative portfolio and corporate structure make Fairfax look like kindergarden work. Hi Dazel, not quite true. The net derivatives risk at BAC is quantifiable and relative to the deposit and lending base, or even shareholder equity, is relatively small. It's not nominal we are worried about, but net exposure. For Fairfax when the market saw the earnings that were produced by investments the stock moved... but we already knew what the investments did from the bond yields. We would sell at that point. Fairfax business is and was tough. You say Prem...but our hero was Brian Bradstreet. Of course Prem was the leader we agree. We hope to once again get a chance to own Fairfax as it was the team that produced the results. Yes, definitely it was a team effort. But the credit for the CDS idea belongs to Brian and Francis...but no one really knows that. Francis came up with the original idea, but Brian was the one who brought it up in the committee meeting when Prem was asking the team for good ideas. And then it had to be a unanimous decision for the committee to approve it. Interestingly enough, Francis owns alot of BAC warrants and he's never sold a single Fairfax share. It will be the brand that wins out for Bank of America if it is to once again flourish. If they are modelling themselves after Wells Fargo, then I'm guessing it will be good business sense as well. The reduction in leverage, shrinking of their book of business, and focus on basic banking seem to suggest that it is occurring. Cheers!

I think Fairfax was actually much harder to analyze than Bank of America...smaller company, fewer analysts, lesser known company, complicated subsidiary structure, huge runoff business and recoverables relative to book...it was very difficult. The only reason that many people held the stock was because of their trust in Prem and our message board. I think alot of people that ultimately held the stock, would have sold without both. When you have a leader with trust, and a community to vent and talk to, it helps alot. Fairfax's decision to listen to shareholders and decide what information they needed was also crucial. With Fairfax, you were truly relying on their numbers being correct and that the reported exposures were accurate. With Bank of America, and many other large financial institutions, there has been so much scrutiny, on so many levels, that you have some more trust in the reported numbers. There is no industry in the United States, that receives as much regulatory guidance or provides as much detail, as the financial industry presently...other than perhaps the Department of National Security. And when things do show up like at JPM, every level of government jumps on them to explain and make changes. Remember, at the worst point in Fairfax's 7 years, they had leverage of about 11-1...for an insurance company! Today that leverage is less than 5-1. BAC today has leverage of about 9-1, down from about 12-1, and I expect that to creep down to about 8-1. In a business that is a heck of alot more transparent and simple when examining long-tail risk. In fact, I dare say that both businesses look very similar in the way their CEO's went about repairing the company and reducing leverage, while opening up the books to their shareholders to give them more comfort. I can't say with certainty what will happen, but my bet is obviously that this is another significant case of mispriced valuation due to an overabundance of fear relative to the actual underlying risk. Cheers!

With FFH you had a relatively defined catalyst holding the stock down - i.e. a coordinated short attack - whereas BAC is simply depressed due to a horrendous operating environment. Perhaps Parsad's theory of TBV by FYE 2012 due to litigation risk retrenchment is a form of catalyst, and he's probably right, but still who knows... We own no BAC LEAPS...just common and the A warrants. Even though I believe that BAC should trade at tangible book, you have to be absolutely right on the timing buying LEAPS. We're far more comfortable with a six-year time horizon, $13 strike and adjustable strike price than buying two year, no-benefit LEAPS. It certainly took alot of balls for those guys to buy FFH LEAPS back then, but at the same time, they were using their own money. It would have been painful to lose that capital, but it would be harder to explain it to partners in a fund. We had no fund back in 2003, and I did buy quite a few LEAPS as well in my personal portfolio...not as many as Ericopoly, Uccmal or Indirect...but quite a bit. We only put a small amount of the portfolio in SNS LEAPS...about 6%...we made a killing in them. Anyone who bought OSTK LEAPS a couple of months ago would have done quite nicely too. But getting the timing right has a bit of luck involved, so you should be careful. Cheers!

http://financialsector.blogspot.com/2006/01/prem-watsa-fairfax-financial.html There are two quotes in the article that are very interesting when viewed over 6 years later! The first: In its rebuttal volley, Fairfax charged that short sellers were trying to manipulate its stock. Short sellers attempt to profit from share price declines by "borrowing" stock. The lender may be a brokerage or a shareholder, and typically takes a commission. The short sells the stock, hoping a wave of selling will drive down the price so he can purchase shares later at lower prices. The short returns the shares to the lender once he's taken a profit. Naturally, the shorts try hard to talk the stock price down. Morgan Keegan analyst John Gwynn, one of the authors of the damning report, responded angrily to Fairfax's accusation. "We're not in cahoots with the shorts," he said. We subsequently now know that Gwynn released his report ahead of time to a number of hedge funds...Kynikos was one of them. Spoken as only a diehard conservative investor can. For a sunny forecast from Watsa, one has to turn the subject to the only sort of event that will bring the long war with the shorts to an end. "Once we perform, once we make a lot of dough, believe me, the stock's going up." Say no more! Cheers!