Parsad

Well this is the thing. For the things Sardar did that I did not like, he did plenty of things that I really did like and that Lampert could have actually learned from. You have to move incredibly fast if you want to save a sinking ship, especially a big ship! Think about what Moynihan is doing at BAC, and you'll see the difference with which Lampert is operating relative to others. Moynihan is not spending a single second hesitating to sell assets and strengthen the core business. Sardar did the same thing at Steak'n Shake but on a much smaller scale. I think Eddie thought that the brand was strong enough to right itself with some tinkering, and that the depth of the economic problems wouldn't be quite as bad as they turned out. You combine those two misjudgements with the sheer speed that their competition, and the emergence of online shopping, and you have a perfect storm for Sears to battle through. It can be saved, but they have to move at warp speed, not tip-toeing into this thing. They are getting killed, not simply beaten! Cheers!

Both could use some lessons! But at least Overstock's revenues are still somewhat headed in the right direction. Cheers!

Bill Gates said many years ago, that they should also charge a fraction of a penny for emails. So as to truly quantify the cost of spam and probably significantly reduce the amount sent. I agree with both ideas! Cheers!

He's going to be using those assets to keep this thing afloat. Unless they control the quarterly losses at the domestic stores, all he'll be doing is eating up those assets. Cheers!

Jeremy Lin has trademarked "Linsanity" and is putting his degree to work. Good for him! Cheers! http://money.cnn.com/2012/02/23/news/companies/jeremy_lin_trademark/index.htm?source=cnn_bin

Contrary to what the market would have you believe from the recent run up in price, including today, Sears 4th quarter was absolutely atrocious! Eddie's been far too slow in making changes, and now they are quickly trying to make amends with the rights offering and sale of 11 stores. They need to close hundreds of Sears domestic stores and sell them. Kmart and Sears Canada aren't the problem...the U.S. Sears stores are the problem. Just a terrible quarter with tax asset and goodwill impairments, huge operating loss in domestic stores, and they look like they are still going to be burning cash for the next 2-3 quarters until they start to stabilize this thing. Book is nearly a third of what it was four years ago, so any of you still holding on...be careful! Cheers! http://www.sec.gov/Archives/edgar/data/1310067/000119312512073963/d304294dex991.htm

HFT are under watch. I like Mary Schapiro. I think she's one of the few people who actually knows what she's doing. Cheers! http://finance.yahoo.com/news/sec-may-ticket-speeding-traders.html;_ylt=Am2UqJgK5YUzSfd1ua5sdiKiuYdG;_ylu=X3oDMTQ0bWIwb2cwBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yeSBSaWdodARwa2cDZGM5YjUyMjctZjc0MS0zN2JjLTk2OTMtYTMwYTBkODdmYzIxBHBvcwMyBHNlYwN0b3Bfc3RvcnkEdmVyA2M4Y2ZlMzgxLTVlNDQtMTFlMS1hY2I3LWI1NzI3OGY4YWFlMQ--;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

Yankee only post on political threads which is unlike any other poster here. Even Ben Graham and that other guy post about LVLT..." Ben Graham has been banned to the abyss! The other guy knows he will get hit on the nose with a rolled up newspaper when he gets out of line. ;D I didn't realize until I attempted to ban Ben Graham, but when I looked on the "ban" administrative panel, he had some 20 IP addresses he was using to post from. I've banned them all, and will try to feret him out if he attempts to re-register. Cheers!

A pretty good read here if you have the time (I'm hoping it changes your tone): http://www.cato.org/pubs/briefs/bp87.pdf quote: On spending, both parties have blended together to form one giant Republocrat party. exactly anybody who believes the repubicans are any better at spending then demos just isn't paying attention. Yup! They all cater to their constituency and their lobbyists. Once they are out of office, who the hell is going to hire them...their constituency and their lobbyists! It's rare for a politician to actually stand up and do the right thing, rather than for those that pay or support their campaign. For example, 5 Super PAC's account for 85% of the money raised so far for the Republican party. Whose interests are these candidates representing? It's no different for the Democrats. The politician's nose is led by a fish hook! Cheers!

Article about Berkshire entering the Thai reinsurance market led by Ajit Jain. Also a small blurb near the end about Fairfax's announcement in January. Cheers! http://www.reuters.com/article/2012/02/23/berkshire-thailand-idUSL2E8D60WN20120223?type=companyNews&feedType=RSS&feedName=companyNews&rpc=43

Alice Schroeder had a column on Schloss. Cheers! http://www.aliceschroeder.com/blog/walter-schloss-what-guy

Here's why I brought it up. 1) Christie is a New Jersey official expressing displeasure with Buffett because Buffett wants to raise the Federal tax burden on the rich 2) Christie practices tax cutting that disproportionally favors the rich in New Jersey. I'm just trying to better understand the animal. I conclude that what bothers him is not just spending as you suggest, but rather he wants the rich to keep more of their winnings (which puts him at odds with Buffett). I established his desire to benefit the rich by introducing his New Jersey income tax cut (other tax cut options were available to him). Yup! Who's yer daddy? Cheers!

Because it's dumb and hypocritical. I don't support spending as much on the military than the next 6 countries combined. Does that mean I can just tell Christie to write a check out of his account for the next F-16 or nuclear submarine and shut up? +1! Cheers!

I guess remembering the obvious is hard, then, because so many people seem to forget it... Your trivial point was consistent with my argument. I was just being charitable. Are you going to offer an argument for why Christie was wrong for what he said, or why on this issue Buffett isn't more of a demagogue than Christie? What if Christie said "Buffett should shut up about corporate governance!" Or how about "Buffett should shut up about executive compensation!" Better yet, "Buffett should shut up about politics!" Christie by saying what he is saying is simply choosing to ignore the debate or dicussion. He's saying that Buffett, as a citizen of the country, should not be allowed to voice his opinion about what changes should be made to how the country is governed. He has that right, as does Christie. Whether you agree or disagree with Buffett...Christie's comment was just ridiculously stupid for someone of his position. Cheers!

Thanks very much! Free is free. I downloaded Kindle to my PC and iPhone, as well as the book. Cheers!

Wells Fargo expands their energy lending business in North America. Cheers! http://finance.yahoo.com/news/Wells-Fargo-Agrees-Acquire-bw-172784371.html?x=0

Berkshire will exclude two shareholder proposals after sending a letter to the SEC. Cheers! http://blogs.wsj.com/deals/2012/02/21/berkshire-gets-nod-from-sec-to-exclude-shareholder-proposals/?mod=yahoo_hs

I'm a firm believer that much of what pains humanity and the Earth, will be solved over time by technology...as long as we don't blow ourselves up and set us back 100 years! Here's an article that discusses how science is slowly resurrecting organisms that have been long gone. Cheers! http://www.bloomberg.com/news/2012-02-20/32-000-year-old-plant-reborn-from-ancient-fruit-found-in-siberian-ice.html

I thought Jim Cramer was one of a kind, but I guess I was wrong. Here's Jim Cramer's "Mini-Me"...another nut with a screw loose. Cheers! http://seekingalpha.com/article/376711-evidence-that-warren-buffett-manipulated-the-silver-market-in-late-1990s?source=yahoo

One of the truly great investors! Had a true passion for both the science and art of picking stocks. Cheers!

Yes, that's exactly right Mungerville. That will change going forward. In five years, investors should look at the combined ratios for companies like Zenith, and then get a better idea of how good or bad Fairfax's underwriting culture is. Take a look at all the insurance businesses, big or small, they've bought in the last five years, and you get a better idea of what is changing at Fairfax. Odyssey's underwriting historically has been one of the best in the reinsurance industry, so with Andy overseeing everything now, that standard is going to be the one going forward. 100% or better long-term combined ratios and the acquisition of good insurance businesses at fair prices, rather than poor insurance businesses at cheap prices. Cheers!

John Kinnucan, an independent technology analyst (ok sure), was arrested for insider trading. Some of his clients include Citadel, Maverick Capital, and of course SAC Capital. Cheers! http://www.cnbc.com/id/46429425

Also, I answered some questions on the investment portfolio, so here is my response from those as well: There is a real risk with the bond portfolio. If rates start to rise, their longer duration bonds will get killed. I don't see rates rising for a couple of years at best, but there is always the possibility that their bet is wrong. Buffett says it's wrong, but then Buffett may be wrong himself! :) In the worst case scenario, they would just hold the bonds to maturity, and if shareholders own it just as long, no issues. But in the meantime, the fluctuations in the bond portfolio will affect equity, and thus their ratings and statuatory capital. If it is affected enough, they could be required to add capital and naturally that would have an effect on the stock price. We will have to wait and see what happens. But view that from Prem's point of view. He's convinced that inflation is not going to be a problem, and deflation is the real culprit. That rates will be low for maybe a decade. He's preparing for the worst case scenario. That means insurance companies are going to struggle to earn income for the next decade, because the bonds they are rolling over are paying less than 1.5% now and long term bonds are paying less than 4%. Prem's roughly 7-year duration bond portfolio is paying about 6% in income! So while Fairfax may get hurt if interest rates rise, they will kill their competition with the income from their bond portfolio. That is why Prem says if rates rise, they will just hold onto the bonds till maturity, so they will suffer no loss, even though they will incur mark to market losses in the interim. Personally, I think the equity hedges were the mistake. They only needed a maximum 50% hedge, because if markets go down, the bond portfolio would be up huge. They give up any profits on the stocks presently, and I think they were wrong in their assumptions there, as soverign nations did everything they could to keep things afloat. But Prem doesn't want to give up any dividend income by selling their positions. By hedging, he kept the income and will have zero loss on the stock portfolio. What they've effectively done, is make sure they don't lose any money at all over that 7-10 year period. Equities are 100% hedged, plenty of cash and a bond portfolio paying very good income that they can hold to maturity. The stock will fluctuate with mark to market, and so will their equity and statuatory capital, but at the end of that 7 year period, they would not have lost a dime in equity. In the meantime they would have earned 6% annually on the bond portfolio, fat dividends from their stock portfolio, plus any income from insurance. When you think in terms of people who try and completely look at margin of safety in investments, I can't think of any investors who do it better than Prem and Buffett. It may just be that both are right. Buffett in the short term (< 2years) and long term (>7 years), and Prem may be right in the mid-term (>2 years and <7years). We will see...we will see! Cheers!

You guys need to compare apples to apples. A fellow boardmember contacted me yesterday, and we talked about Fairfax's underwriting. My comment's are below: I think investors have to keep a longer term view on the undewriting. Fairfax has constantly acquired poor insurance businesses, and it has taken 3-5 years to turn them around and get the underwriting culture in line with Fairfax's standards. During that time, the businesses usually have large losses due to poor past premium pricing. Outside of GenRe, Berkshire hasn't really acquired a substantial insurance business in years, and Markel's business delves into specialty lines and more short-tail business, where there is more control over premium pricing and less volatility. If you look at acquired Fairfax insurance businesses over 10-15 years, they've written at or below 100%. So some of the ratios in large insurance businesses that don't look appealing right now, will show better long-term ratios as time passes. Chubb, Markel and what have you all fall into the same category. Their insurance business is much more diversified than Fairfax's, and they don't rely so heavily on their reinsurance business. Markel's business is remarkably different than Fairfax's. Neither company also makes it a habit of acquiring poor insurance businesses and turning them around. Fairfax has changed that behavior after their experience with TIG and C&F, but what you are seeing in higher legacy combined ratios over the last decade, is a result of skewed combined ratios from higher loss years for the first few years after acquisition. If you look at the long-term performance of Fairfax acquired insurance businesses, you'll see a very distinct trend of decreasing combined ratios and reserve redundancy. Do they write business as well as Berkshire? An emphatic no! But they do write as well as most of their peers and have made the transition to acquiring better insurance businesses. The promotion of Andy Barnard to overseeing all Fairfax insurance businesses should tell you that Prem is very motivated in removing this reputation of poor underwriting that seems to have developed. The reputation wasn't from their underwriting behavior or culture, but the losses developed by acquiring poor insurance companies. That will go away, and if we are in a hard market, it will go away very quickly before this next cycle is over! Cheers!

Salary frozen and fewer restricted stock options. Always nice to see a company's board and its CEO tow the company line when it comes to compensation and expenses. Cheers! http://www.bloomberg.com/news/2012-02-17/bank-of-america-ceo-moynihan-said-to-be-denied-cash-award-in-2011-package.html