Parsad

I thought that the reading would somehow get better this week, but it is just the opposite. There is nothing perfect out there, but this index has never failed matching a recession since the early 70's at such declining rate. I think these types of statistical tools are almost useless. Common sense dictates that when rates are near zero or at least extremely low, that generally is a good thing for corporations as their cost of capital is also lower. Take a look at spreads for financial institutions...they are fantastic still. You also have many businesses that have already reduced their debt loads, now they can finance debt that is coming due at very good rates. While a recession may be on the horizon, I'm not sure that should dictate how you invest. We should always buy cheap and sell dear...simple! Forget the statistics and technical analysis. Cheers!

They've got a pretty nice cash pile in Jefferies too! All depends what they find and where they want to deploy it. Although the cash from GM doesn't arrive till sometime in the forth quarter. Cheers!

A friend of mine who is a businessman said of Biglari - he will be very confident in his talk and won't mind if he ends up in jail. He said this before the name change and the compensation package came out. While I don't like what Sardar and the board did, I think your friend's opinion may be a bit extreme. Cheers!

The couple who provided information to the SEC against Pequot received $1M in reward. Cheers! http://www.bloomberg.com/news/2010-07-23/sec-pays-1-million-for-information-given-in-pequot-insider-trading-case.html

That was pretty damn funny Dorsia! ;D At least so far, Sardar's gains will be completely in line with shareholders. It's just that he's changing the original agreement. If shareholders came into this knowing what they were now getting, that would be fine, but the ethics of changing mid-stream is what irks me. Cheers!

Don't you like working, Bronco? If I wasn't working, what the hell would I be doing...even if I was 65? Oh, I guess I would be responding to posts like I am! ;D Frankly, I think working is better for your long-term health as well. Look at Rose Blumkin or Buffett. Cheers!

Magna's shareholders approved the buyout. How stupid are these shareholders? Cheers! http://www.theglobeandmail.com/globe-investor/magna-shareholders-approve-stronach-buyout/article1649493/

Parsad - I agree overall, but don't you feel the extension of life (thru medical advances) will cause more and more economic trouble for the U.S. government (through higher social security, medicare and other costs)? I think they'll have to increase the qualification age for many social benefits. Thirty-forty years ago, 65 year old people were physically ready for retirement at 65...that is, if they were fortunate enough to make it to that age. We were a manufacturing country...plenty of hard labor. Medicine, technology, industy & labor in general have changed that in America. A 65 year old today is likely to live to 85-95, especially as medical science and technology advance. Also, how many people now operate small, home businesses...the landscape is changing. I see no reason why maximum retirement benefits should be reached only at 75, with penalties applying for each early year you take...resulting in a minimal retirement benefit at 65. Perhaps, we may need to modify benefits and eligibility based on years of service in a specific industry: If your line of work is physically enduring, then your pension kicks in at 65 depending on years of service, but for people who sit at an office desk, your eligibility kicks in at 75. Whether we like it or not, qualifying ages will have to change simply based on demographics...not unlike Japan. If we're going to change them, let's make them effective. So, if you choose skilled-labor, where we are going to have a shortage, then you have better and earlier benefits. If you choose an office job based on higher education, where your body isn't exposed to as much abuse, then your benefits kick in later. The end result is that people have to be partly responsible for their own well-being...whether that is your health, savings, or pension. And the social benefits we provide should be incentive-based and reasonable. Cheers!

While many think the best days of the U.S. are behind them, I'm in complete disagreement. I think the future, not only for the U.S., but the rest of the world over the next fifty years looks amazing! As I'm getting older, I'm marvelling at what technology is doing to our planet. I'm very much in the Charlie Munger camp, that many of our current ills will be solved by humanity's ability to adapt and advance technology. The fruition of free market economics in countries like China, South America and many other parts of the world, will help further the process. I remember when I was about 11, my father brought home the first computer-based system I had ever encountered...it was the Pong videogame, which we attached to an old black and white tv we had. I had a blast moving these little round knobs to move the line up and down the screen, hitting this little "square" ball that was moving around. Then over time we advanced to an Atari video game system, an Atari computer where I learned to program in BASIC, a Commodore 64, a big-ass portable PC which looked like a gigantic sewing machine case, and then finally an IBM PC XT. Today, my little Iphone allows me to do things that the old XT could only dream about. I run our funds from my laptop and cellphone. Amazing! And then think about science, about identifying genomes, biotechnology...nanotechnology! It's all coming. Our ability to harness the full capacity of our brains will make the world a better place. Why am I talking about all of this? Well, I remember about 6-7 years ago, Bill Gates talked about how he would like to supply the world's underpriviliged children with cheap laptops...that a $100 laptop was possible: http://www.cnn.com/2010/WORLD/asiapcf/07/23/india.thirty.five.dollar.laptop/index.html?npt=NP1&hpt=Sbin The best days for all of us are ahead of us...not behind! And the U.S. is leading the charge...passing knowledge, wealth and prosperity to the rest of the world. The era of India and China isn't the U.S.' demise...quite the contrary! Cheers!

I don't agree with everything Miller said, and I don't think it's once in a lifetime (that may have been February/March 2009 for my lifetime), but quality, large-cap stocks are very cheap relative to alternatives. Cheers!

Article discussing how certain aspects of the economy are definitely getting a bit better. Cheers! http://finance.yahoo.com/news/Hope-for-economy-in-strong-apf-273025228.html?x=0&sec=topStories&pos=1&asset=&ccode=

Always a good read! Cheers!

While I couldn't care one iota about analyst reports or estimates, it is interesting to see Union Pacific's numbers increase dramatically. I sure would like to see how the other railroads are doing and the number of carloads they are carrying...methinks things are starting to pick up slowly. Cheers! http://blogs.barrons.com/stockstowatchtoday/2010/07/22/union-pacific-q2-eps-blows-away-estimates-longbow-raises-target/?mod=yahoobarrons

We bought alot of LUK in the last few weeks. We're happy! Cheers!

I am also confused by Sanjeev. Unless I am mistaken Sanjeev, you sounded anyway quite bearish earlier this year and late last year at about the same level for the S&P. What has changed? I'm still bearish about specific governments, and I have no doubts or misconceptions about how long it will take the U.S. itself to get its fiscal house in order. But I'm not investing in the United States government...I'm investing in corporations, many that are premier global corporations with diverse currency bases in their revenue stream, with little to no debt, that utilize miminmal leverage. We thought markets had gotten ahead of themselves when they hit 1200 in April, so we built up our cash levels. Then the markets started to correct, but they corrected significantly within many quality companies that weren't this cheap for a prolonged period even during late 2008 and early 2009. And guess what? Their earnings quality has improved since 2008 and early 2009. Revenues may be stagnant, but they are making more with the same amount of cash coming through the doors. I think this will continue to happen and they may get cheaper, but we are starting to stake our claim: We gained enormously from the low prices placed on many equities and businesses in the 1970s and 1980s. Markets that then were hostile to investment transients were friendly to those taking up permanent residence. In recent years, the actions we took in those decades have been validated, but we have found few new opportunities. In its role as a corporate "saver," Berkshire continually looks for ways to sensibly deploy capital, but it may be some time before we find opportunities that get us truly excited. - Berkshire 1997 Letter We were 50% cash in March and April, and we have started to slowly deploy that cash, with more coming in. Our funds are finding very high quality businesses to invest in now, rather than just the distressed or battered. Like I said, they are getting cheaper, but in a zero-rate environment, there are some decent deals available. Cheers!

I am not that optimistic. Overall corporate earnings are good but what percentage of the increase in corporate earnings is non-financial? Crunch those numbers and then let's talk about whether corporate earnings are good. I think if you look at virtually any company in the S&P500 or the Dow, their balance sheet and quality of earnings has improved over the last year and a half. Revenues may not have increased because demand is still low, but operationally most companies are operating at much more efficient levels. The heart attack patient is now walking 3-5 miles a day, but not running yet! The biggest thing I can point out to is that corporate balance sheets now have a higher percentage in liquid assets than at anytime since the 1960's. With zero or near-zero interest rates, where is all that money going to go? Dividends, share buybacks, debt reduction, acquisitions and eventually operations as demand ramps up over time. Private equity and hedge funds are also holding a ton of cash. Pension plans, endowment plans, financial institutions, you name it...the world is awash with cash in a zero-interest rate environment. When that sentiment turns, and it may be 6 months or 2 years, who knows...but it will turn hard! It always does. Cheers!

I think everytime we have a period of economic stagnation, investors always say its different this time. During the credit crisis as everything seized up, the severity was far worse than many other such periods, but I think we are definitely moving in the right direction and things are improving...albeit slowly...not unlike a waterbuffalo squeezing through the belly of a python. Jobs won't be created overnight, debts won't be paid overnight, but the U.S. continues to own the best educational systems, free market system, and entrepreneurs in the world. The engine is flooded, but it will slowly start to sputter over time. Stronger balance sheets in the private sector will spur more jobs. Unfortunately, as things stagnate for a while, the pessimism will become more frothy. Nonetheless, investors uncertainty is, as always, is creating undervalued securities which will be missed by many. Cheers!

Very interesting how virtually every investment manager and every investor has become their own little macroeconomic forecaster, while one company after another continues to indicate improved earnings, reduced operational costs, and decreasing leverage. There is a very real disconnect between what is happening within corporations and actual market sentiment. As fear of the global economy, the boogy-men of inflation & deflation, and the demise of a multitude of currencies permeate investor's minds, we have a very real cash hoard growing around the world with fundamentals moving strongly in favor of equities for the long-term. Methinks we are closer to 1982 than 1977. Perhaps a couple more years of a stagnant market, while market valutions for many quality companies get better and better. And for bond, treasury and gold investors...well! Cheers!

Article on Red Robin, Clinton Group and Biglari Holdings. Cheers! http://finance.yahoo.com/news/The-Plot-Thickens-at-Red-tsmp-2264533653.html?x=0&.v=1

As mentioned in the past, we won't be discussing ITEX much on this board as we continue to move forward with the company. Not sure if some of you have seen our press release from Monday or the most recent 13-D/A filing by our group: http://www.reuters.com/article/idUS194645+19-Jul-2010+BW20100719 http://www.sec.gov/Archives/edgar/data/860518/000138515210000013/0001385152-10-000013-index.htm This post will be locked. If you have any queries, please contact Dave directly at 502-460-3141 or polonitza@enhanceitex.com. Cheers!

Article on Sardar and BH. Cheers! http://www.indystar.com/article/20100718/BUSINESS/7180362/1003/BUSINESS/The-water-cooler

Interview with Roger Lowenstein on Buffett. Cheers! http://www.fool.com/investing/general/2010/07/19/the-most-underrated-part-of-warren-buffetts-succes.aspx

Article on Tilson Fund's portfolio for you Whitney fans. Cheers! http://seekingalpha.com/article/215316-reviewing-the-tilson-fund-portfolio?source=yahoo

I don't like the recent behavior of either CEO...Sardar's name change & compensation package, along with the little "notation" that a shareholder vote is simply a formality to sanction the package for tax reasons...nor Dunning's disgusting personal use of a senator to block anyone from removing him from his position...not to mention the senator whose ethics are equally compromised! All completely unethical! I don't think anyone is better or worse than the other here. Cheers!

Paul Allen will donate the majority of his money to charity after his death. Cheers! http://www.bloomberg.com/news/2010-07-15/paul-allen-microsoft-s-co-founder-pledges-most-of-his-wealth-to-charity.html