Parsad

Prem need not care -- his primary business is not that of making loans. Prem might care if he were asked to boost reserves every time the market got scared that a hurricane was imminent. Sure he cares! Fairfax has had to report under FASB 157 like everyone else. They've had to mark to market their investment portfolio for a while now. That means they have to readjust reserves if their capital ratios rise or fall. And that's what all other institutions will have to do. It will hurt in the beginning, but it will reduce the total amount of risk that institutions expose themselves to...or at the very least, you won't see risk capitulate in such a manner as the last few years, but you'll see institutions having to readjust capital levels on a regular basis. My question was.. is it a disaster waiting to happen? Will this cause all the banks to have to simultaneously have to raise capital and take huge markdowns again? If it passes my guess is it will.. Especially since they are supposedly requiring it for equities and loans this time. Not a disaster, but it could have some short-term impact on institutions as they increase their capital base. If they enact it in a draconian fashion, forcing institutions to raise huge amounts of capital immediately, then it could be a problem, but I think mark-to-market is better used as a tool to indicate current circumstances and force institutions to assess their current risk levels. Here's a good blog post article on your mortgage analogy and the way mark to market should be enforced. Cheers! http://jenniferfitz.wordpress.com/2009/03/11/warren-buffet-mark-to-market/

Might be related to the $330M in 2017 C&F notes. Cheers!

Ken Heebner's struggles at CGM continue. What's even more sad is that everytime anyone talks about an underperforming fund manager, poor old Bill Miller's picture is shown instead! ;D He's been the whipping boy for underperforming managers the last couple of years. Take a look at the article: http://www.bloomberg.com/apps/news?pid=20601108&sid=ald5h_nPY5Ro Cheers!

Mark to market did not precipitate the credit crisis. Overleveraged institutions did. Mark to market will force some accountability on the amount of risk financial institutions expose themselves to. Why is it that financial institutions feel comfortable with 20-1, 30-1 leverage? They shouldn't! Why do they believe that volatility in portfolios or pension assets should not occur? Or how they mark reserves in insurance companies? Prem has no problem with mark to market. I don't think Buffett & Munger do either. Those businesses with good underwriting practices on loans, insurance policies, etc will do fine long-term under MTM. It's those businesses that have less than stellar practices that should be worried. Cheers!

What a fantastic letter! The humility & earnestness in those words. Wow! Cheers!

Jeremy Grantham believes the Australian housing market is in a bubble. Cheers! http://www.heraldsun.com.au/money/australian-housing-market-a-time-bomb/story-e6frfh5f-1225880221197

Buffett & Bill Gates had a meeting with a number of the world's wealthiest individuals and challenged them to give away half their fortunes. Cheers! http://postcards.blogs.fortune.cnn.com/2010/06/16/billionaire-peer-pressure-behind-the-buffett-gates-challenge/?source=yahoo_quote

I really don't think that the vote on the pay package is going to be close enough to be made up by Biglari's buying... Does anyone think that a few percentage points in ownership will make a difference? You never know. Jonathan Dash had 48% of Denny's votes in his favor as a director. All he needed was a few more. Cheers!

No, nothing unusual. Fairfax has a history of rotating managers and executives. I think it's good because you have a number of people who are very capable of stepping into specific situations...very important in succession planning. The team is so deep at Fairfax, and this ensures that it remains that way. Cheers!

Canadian Fund Manager, Otto Spork, alledgedly misappropriated funds according to the OSC. Cheers! http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/fund-manager-made-millions-from-investment-fraud-osc-alleges/article1604095/

It would concern me as both a Lion Fund Partner or a Biglari Holdings shareholder. That's a lot of capital being poured into BH stock. There were a number businesses available in the open market at signficant discounts to intrinsic value over the last couple of weeks. Yet, all this capital is being poured into BH at fair prices because they need to increase their ownership stake...that's alot of lost opportunity. Cheers!

No, I'm referring to the Lion Fund partner's perspective, not BH. Most originally probably invested in the fund, assuming that they would have their capital in it for 20-30 years...an investment fund. Now, it's starting to look more like a special-purpose vehicle that is completely in BH. Cheers!

I'm not sure how happy Lion Fund partners are at this point. He's pouring everything into BH. That's $54M of BH stock already in the Lion Fund! Cheers!

Just throwing it out there...a guess! ;D It's probably wrong. Cheers!

Trian, the largest shareholder of Wendy's, said they were contacted by an interested party in taking over the company with Trian's assistance possibly. Interestingly enough, Sardar cancelled the AAP tender a week earlier. Anyone think he may be making a run at Wendy's? It's smaller than AAP. Cheers! http://www.sec.gov/Archives/edgar/data/30697/000134547110000054/wen37.htm

An internal Pentagon memo, that Afghanistan has at least $1T worth of untapped minerals deposits, including huge resources of lithium. Cheers! http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_interstitial

No, I originally bid $10, but it was rejected! ;D I would never pay that much for lunch with someone. Although I would pay that in a second if I could get five minutes with my father again! Cheers!

Another record lunch...$2.6M this year! Cheers! http://finance.yahoo.com/news/Warren-Buffett-lunch-price-apf-3339052448.html?x=0&sec=topStories&pos=3&asset=&ccode=

Mark Mitchell writes a sarcastic, yet very indicative story on David Einhorn. I'm sure there are people on both sides of the fence when it comes to Einhorn, especially after his book came out, but the relationships and playbook are remarkably familiar. Anyone who owned Fairfax or Overstock shares over the last 6-7 years can call out what each step of the game would be. There were days when we knew exactly what was going to be in the press, because some idiot would write it anonymously on the old MSN message board. We knew that would be the next story by Peter Eavis, or another analyst report would come out from John Gwynn. Today we know that Gwynn was corrupt and frontrunning his reports. Cheers! http://www.deepcapture.com/notes-on-david-einhorn-the-predator-in-a-cute-t-shirt/

Based on all the stuff Alice Schroeder wrote about Buffett's mother, I'm guessing he was adopted and this was his birth mother! What a fantastic lady! Cheers!

At the end of the day, I don't think that he is the type of guy that would sandbag shareholders over compensation. Perhaps, but we are officially out after today...we don't own a single share in the funds, our corporate accounts, or our personal accounts. Long-term gains rates have kicked in, there are other opportunities available, and the stock was around $309. We made plenty of money for our partners and ourselves, but money isn't everything...you are only as good as your word, and when you take a $900K salary and then tell partners you are there to make money with them and not off of them, well...you've got to back that up! And then how do you explain to your executives that their efforts are as valuable as yours, when they don't share the pot? You are creating a culture where there will be turnover in the corporate offices. At the Lion Fund, Sardar was the man. At Biglari Holdings, there are quite a few other people who are instrumental in running the business. Cheers!

And once again Vancouver loses to the team that goes on to win the Stanley Cup! We've got a friggin' drought here in Vancouver too you know! At least Philly lost. ;D Cheers!

He needs the time to prepare his defense! Fairfax's case is coming up...SEC is digging deeply...tides have turned against the naked short-selling, front-running, insider-trading crowd. Cheers!

It's funny how such stupid things get written about investing. After all these years of reading these ridiculous things, I continue to be amazed how readily it is written! http://finance.yahoo.com/news/Are-Stocks-Near-Bear-Market-cnbc-2857948061.html;_ylt=AtMkf_J2qN6OID77fnR8_hO7YWsA;_ylu=X3oDMTE5ajdtdWs0BHBvcwM0BHNlYwN0b3BTdG9yaWVzQ29rZQRzbGsDYXJld2VuZWFyYmVh?x=0&.v=1&sec=topStories&pos=2&asset=7cadc69438b0468ecb3beafb6413a7fd&ccode=rd What's also so amusing is how David Rosenberg can write such great articles at times, but then say the dumbest things in the world. I've decided that I will now use the word "Fibonacci" as my preferred curse word. If someone cuts me off while driving...Fibonacci! If I run into Herb Greenberg...you damn sweaty Fibonacci! If I see Jim Chanos...you dirty Fibonacci! Or I see Abby Joseph Cohen on tv again talking about how the S&P will hit 1,900 by year-end...you crazy Fibonacci! It's completely universal. Cheers!

Hi Folks, The site was down temporarily, but it has been fixed. According to my internet service provider, there was a vulnerability in the PHP scripting code that the site runs on, and a malicious code was inserted directly into the files. It wasn't only our site, but thousands of sites that were under attack due to the weakness in PHP itself. The malicious code itself doesn't do any harm to your computers, but only redirects the user. The code was removed by my ISP, and the system is fine. If you feel unsure, then I would suggest that users run their normal anti-virus scans, but there was no virus present. Thanks very much! Sanjeev