Parsad

The Vertex guys are smart guys...Jeff's office is a block from me, as is Tim McElvaines...we're forming the area of concentration in Vancouver for value managers! ;D I've had coffee with Jeff, and they know what they are doing...good guys. I think the $75 number is at the high end, but $50+ change in book is probably accurate. Cheers!

Thanks very much for posting Norm! Cheers!

No, Norm definitely would not try to mislead in any manner. He's on here and was on our old board for a long time, and I've met him many times in Toronto, at our dinners, the Fairfax AGM and our own MPIC Funds AGM. But I think the fact that his screens are difficult to apply to a real portfolio, indicate that screens are a starting point, not a place to finish. It's the same thing with Greenblatt. The "magic formula" sounds terrific and sells plenty of books, but you still need the emotional constitution to apply it, and that's why it is exceedingly difficult to replicate. Cheers!

Volatility is less of an issue when buying options. The primary concern is always the time arbitrage and the price you pay for them. Eventually, the options are worthless if not in the money, thus understanding the actual operations of the underlying business in the relative short-term is important. There is definitely a speculative nature to it, so you have to make sure you understand that. Your batting average will be significantly lower, but the payouts are much higher if you can find inefficiencies in pricing. It's also a very good way to mitigate short-term market risk...such as you buy a basket of call options in place of a basket of equity positions in a leveraged business. You could take four or five 5-10% equity positions or four or five 1-1.5% call option positions. The maximum you have at risk is significantly smaller, but remember that if you are wrong on all five positions, your options will be worthless at maturity. Cheers!

I think you'll find more information regarding real estate if you look at stuff Munger was involved with. I think "Damn Right" has some stories and so does "The Snowball". That was Munger's primary idea on how to become financially independent until he met Buffett. He continued investing in real estate, even after starting the Munger-Wheeler partnership and Berkshire. He still dabbles to this day. Cheers!

About friggin' time! I think some of the regulation that was truly needed will finally come into place. Unfortunately, the side effect will also be unnecessary regulation that is also added. Cheers!

What else would one of the biggest fraudsters have to say on the subject? The same fellow who fed John Gwynn, Peter Eavis and Fabrice Taylor their stories and reports. The same fellow who contacted shareholders to tell them to sell their shares in Fairfax. He'll get his comeuppance eventually. Cheers!

I think this is part of the litany of protests that the public has about TARP. How can the weakest bank be provided cheaper funding than many other solid institutions, including Berkshire Hathaway? Make errors in judgement and we'll bail you out. I agree with the sentiment that when the elephant fall, all the grass around him gets crushed, but I'm not sure why we can't let small institutions fail for their own mistakes. That's capitalism! Cheers! http://www.examiner.com/x-7944-Warren-Buffett-Examiner~y2009m7d27-Weakest-bank-has-lower-funding-costs-than-Berkshire-Hathaway

I think that was a good lesson to learn when you did Stubble. There are alot of people who throw good money after bad on these types of capital-intensive businesses. I'm sure there is money to be made in the airline industry...just ask Richard Branson...but it isn't easy. The auto industry falls into this same pile, as do many other capital-intensive businesses such as energy, construction...even to a certain degree the railroad business belonged here. Buffett talks about a change in the economics of the railroad business due to double-stacked railcars, but that happens only once in a while. But when you do get a clear change in the economics of an industry, it can sometimes be sustained for a while. Or perhaps a legal precedent which allows a monopoly to form. Yet even those aren't fail-safe. Cheers!

The SEC has now made permanent their naked short-selling ban from last fall. But naked short-selling doesn't really exist, eh? ;D Cheers! http://finance.yahoo.com/news/SEC-rule-on-naked-apf-3523034809.html?x=0&sec=topStories&pos=main&asset=2b067249d4db88f3d21400ab9177d18e&ccode=1

It's a ten-foot hurdle industry. Much easier to wait and find ideas in sectors that are less capital-intensive and throw off far more cash. Cheers!

I don't like screens at all except for perhaps a starting point for what to look at. Screens do not take into account many things, such as various other important financial factors that may be precluded from the screen parameters, competitive advantages, economic circumstances, or the value of certain intangible assets. Screens also exclude other opportunities such as workouts, arbitrage, control positions or fixed income investments. Cheers!

And the PBS link: http://www.pbs.org/newshour/updates/business/july-dec09/bernanke_07-26.html Cheers!

CNN article about Ben Bernanke's town hall meeting, and how he did not want to be the Fed chief who presided over the 2nd Great Depression. Also, some comments by Buffett on Bernanke and the economy. Cheers! http://money.cnn.com/2009/07/26/news/economy/bernanke_town_hall/index.htm

I think it's too easy to be critical of Miller, or some of the other managers who got hammered last year. Munger got hammered in 1973 and 1974, yet virtually everyone on this board would invest with him based on what they know of him. He was also a Graham student, but tweaked his philosophy to encompass intangible competitive advantages. Miller is not entirely different. Miller also runs a plain old mutual fund. The fund industry operates on the premise that a manager isn't doing his job if he's holding cash, and that compounds their problems in bear markets. I think those that got hammered, simply did so because they were afraid to hold cash and they probably had some correlated risk. Whether it's luck or skill, we can't take away from his 15-year streak. Cheers!

Hi Packer, I don't live in Toronto, but I've been there enough times. These days, you can find some pretty good bargains in downtown Toronto, and you would have access to shuttles, trains, light-rail, buses, subway, etc. My favorite sites to find good hotel deals are www.sidestep.com, www.expedia.com or .ca, or hotwire.com. With sidestep.com, it will actually search through like 150 other sites looking for the cheapest price. There is plenty of variety in hotels, quality, prices and location in downtown Toronto. I'm sure others can give more ideas. Cheers!

CNBC has another interview with him and they show the cartoon. Is anyone else other than me getting sick of the CNBC anchors (other than Becky Quick) gushing over Buffett? Is that what we all sound like in Omaha? Yikes! Cheers! http://www.cnbc.com/id/32122898

Interview with Bob Shiller on residential and commercial loans. We just sent out the MPIC Fund I, LP's letter a couple of days ago, and in there we commented that we think there will continued pressure on residential home prices, but we think we will see significant pressure also from commercial loans which won't make things any easier. Cheers! http://money.cnn.com/2009/07/24/news/economy/banks.commercial.fortune/index.htm?cnn=yes

For our Canadian investors that are familiar with Loblaws grocery stores, they have purchased Asian foods supermarket chain T&T for $212M. It will be run as a seperate division. I believe the younger Weston has done a terrific job taking over for his father (including building his own public profile), along with current management. This is another smart move for them. Cheers! http://www.globeinvestor.com/servlet/story/RTGAM.20090724.wloblaw0724/GIStory/

Backlog, backlog and more backlog...no demand, no decrease in supply. Even with low rates, it will take a long time as demand is thin! Cheers! http://www.bloomberg.com/apps/news?pid=20601109&sid=aqJxfnOv5tIA

Hey Crip, Maybe a better analogy would be a large group of obese heart patients that need to lose weight. They are all trying to lose weight together. They are trying to provide support and encouragement to each other but it may not be enough. You probably will have many that succeed and put themselves in better shape...some will fall off the wagon and start putting the weight back on...sadly a couple may succumb to a heart attack or stroke while trying to reduce the weight. In the end, things will be rosy, but that doesn't mean there won't be casualties or that the weight can be lost overnight...it will take time...probably a hell of alot longer than it took to put the weight on in the first place. No cupcakes for a while, or at least in moderation. ;D Cheers!

I think they are both correct, but Sprott is probably selling it harder due to his stance. I think we are in for several tough years. We will probably see the theoretical end of the recession by year-end, but that doesn't mean the economy has recovered. It's only a statistic that it would have ended. This morning the Bank of Canada reported that the recession is over in Canada...phhhppphttt! Consumers will be strapped. The psychology will change for a while. Budgets need to be balanced, debt repaid, jobs created. We'll go through months where things will look great, and then months where we will lose ground. And it will go like this for several years. But while that is happening businesses will become healthier, economies will strengthen. We'll come out great in the future, but the heart patient now has to go on the treadmill and lose some damn weight. Cheers!

Bloomberg article on the Goldman-Sachs investment. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=aYzyTHHjhsJQ

In the webcast, Patrick takes some funny shots at Sam Antar who sent in some questions. One of the more detailed webcasts on OSTK's operations. Things are moving in the right direction. Cheers! http://seekingalpha.com/article/150637-overstock-com-inc-q2-2009-earnings-call-transcript?source=yahoo&page=1

While the size of the profit is just a baby-step, Overstock is finally moving in the right direction by reducing overhead and increasing gross margins. They also bought back about $7.2M of their debt at discounted prices this year. Shorts can kiss my derriere! ;D Cheers! http://finance.yahoo.com/news/Overstockcom-Reports-Q2-2009-prnews-2559904460.html?x=0&.v=1