Parsad

Completely off-topic, but because he was such a huge influence on pop-culture and music, I thought I would mention it. Michael Jackson has died of a heart attack at age 50. Sadly, a girl I had a crush on as a young boy, Farrah Fawcett, also passed away today. Should probably wait till CNN has said it, but these guys are pretty good when it comes to this stuff: http://www.tmz.com/

I wonder if this issue impacted any institutional investors from buying FFH or ORH? Almost certainly to a degree. I'm sure the ones who also bailed once most of the CDS gains had been reaped, paid particular attention to that paragraph. Cheers!

What is left of the thesis anyway? - Excessive leverage - Nope - Lack of Liquidity - Nope - Underreserved - Nope - Unethical Management - Nope - Offshore Accounts Hiding Problems - Nope - Investment Returns Can't Be Maintained - Nope - Debt At Subs Is High - Nope - Insurance Businesses Are Crap - Nope - Runoff Will Require Capital Over Time - Nope - SEC Investigation Into Reinsurance Activities - Nope What's left? - So-called "Warren Buffett of the North" - Well, he one-upped the master in 2008 - Jim Chanos Says "This Thing Is Going To Zero" - Priceless! Cheers!

So does the SEC now refund all of our legal costs? ;D I expect a minimum of a pint of blood when Fairfax goes to trial against the hedgies! Cheers!

Looks like everyone caught the news right away! About friggin' time. Cheers!

This story in the National Post a couple of days ago, also discusses some of the same players that Mark Mitchell covers. The SEC is investigating them. Cheers! http://www.nationalpost.com/story.html?id=1722023

How are you able to determine the reason for the withdrawal- Truth serum? No, we are a small group, so we talk to our partners regularly. You can get a pretty good idea of why a partner would want to withdraw capital if you are honest with them and ask them. If a partner is desperate to get out, they aren't going to care whether or not you let them back in, and they will just tell you flat out that they want to get out and now! Cheers!

Hi Folks, I've made a couple of changes to Corner of Berkshire & Fairfax. The first is that we have a new home page at www.cornerofberkshireandfairfax.ca. It's cleaner and less blog-like. The old link of www.cornerofberkshireandfairfax.com will now redirect to the new homepage. Basically, the new homepage is just for me to post a few key stories from time to time, as well as any interviews we do. On the right hand side of the homepage, you'll find a few links. One is to Berkshire, and another to Fairfax, since the board is named after the two of them. Another link leads to this Investor Message Board, which will continue to run exactly as it is. The new addition is the Ben Graham Exchange. After a boardmember here wanted to sell his Kindle to another value investor who would appreciate it, I thought about all the Berkshire and Fairfax memorabilia I have. That if I ever wanted to get rid of it, I would want it to go to another value investor who really cared about what it was. I thought about all the annual reports that people are always looking for, as well as various books people seek out on value investing. As such, I decided to create this free classifieds for anyone who wants to buy or sell stuff to other value investors, but I don't want those posts cluttering up this board. So if you are looking for a specific Berkshire annual report you are missing, feel free to put up an ad on there. The one request is that no photocopies of copyright material are allowed on there...so no selling copied Buffett Partnership Letters. It's still in the beta phase, so there are a bunch of kinks that probably need to be worked out. Also in the past, I've had requests from investment managers looking for analysts, or people looking for investment management positions. I thought I would add a category where these ads could go in there, which would faciliate value-minded professionals to find other value-minded professionals, as it is a very small group. Hopefully, some of our boardmembers can find industry-related work with great people. Cheers!

I have reached out to several friends, family members and co-workers to gauge interest in an investment partnership I am contemplating, similar in structure to the early Buffett Partnership. Interest has been encouraging, though more moderate than I would like with some trepidation due to our current economic malaise. A couple of the responses indicated a willingness to invest but questioned the relative lack of liquidity. “What if I really needed to access the money?” was the question asked. As it turns out, the people who inquired about this would look to have a disproportionately large percentage of the partnership’s assets. Because of this, selling to cash them out could impact the performance of the rest of the partnership. For those of you running these partnerships, is this a concern and how do you address it? You have to decide the culture of your fund. If you believe that you cannot run the fund efficiently by being liquid, then you will have to set the mandate that withdrawals are restricted (either once a year, etc.). If you believe that investors should have the right to their capital, then that should be your mandate and you will have to retain liquidity in the type and size of assets you invest in. For us it was the latter. We allow our partners to redeem their capital at any time. We have a very good relationship with each of them. The one caveat we have is that if a partner withdraws capital because of necessity, then that is fine. But if a partner withdraws capital because of fear of the markets or our investment strategy, then we won't allow that partner to return once they've withdrawn their capital. This does two things...they have access to their capital when needed (medical, debt, retirement, etc) and it automatically purges the type of investor that would not be ideal in the fund. We have not had a single redemption in the three years of operation of the MPIC Fund I, LP, during one of the worst economic periods in the last 70 years. I did have the following thought. We could have these folks establish a separate brokerage account which I would control. It would be solely individual money so if they did need to sell, there would be no impact on the others and they would absorb fully the tax ramifications (under the supposition that there would be Cap Gains and not Cap Losses!). We would institute the same 6% - 25% compensation arrangement and could create a simple contract (though simply contract in the US is rather oxy-moronic) specifying the limitations of either party’s actions. So….the question…does anyone have such an arrangement? If so, what benefits and pitfalls have you encountered in doing so? This seems to make sense but, inverting, why does this NOT make sense? We've had a few investors in the past who wanted us to do this for them. We refused their money. Again, it comes down to what is important. For us it was that all partners should be treated the same. We also wanted the simplest way to manage the total assets, and that was through one single fund, not seperate brokerage accounts. The one thing we decided from day one is that the culture won't be compromised and that all investors will be treated the same, regardless of account size or emotional constitution. Best of luck. Cheers!

Did you put that together Omagh? Nice! Cheers!

Deepcapture has started putting out a chapter a day of the new story Mark Mitchell has put together about Dendreon, Michael Milken and the network of connected hedge fund managers. Chapter 1 and 2 start off slow but don't let that stop you. Chapter 3 is when you start to hit the good stuff. The writing is average, but I'm quite impressed with the amount of detail Mitchell has put together. In fact, while some of the connections he makes might be coincidence and industry-related, much of the other connections between certain hedge fund managers and corrupt investors, including the underworld, cannot be. Mitchell could legitimately be putting his life in danger. The man has balls! Cheers! Chapter 1: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-1-of-15/ Chapter 2: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-2-of-15/ Chapter 3: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-3-of-15/

Very good interview with Buffett on CNBC. His best quote..."You can't make a baby in one month by getting nine different women pregnant!" Cheers! http://www.cnbc.com/id/31526130

This interview was from March, but I don't think it has been linked here yet. I understand Alice's points, but I think life is far more complicated than even a 500 page book could encapsulate. I was quite disappointed with "The Snowball". Often it gave off a daytime soap opera vibe, and I thought if you were the one person in the world picked to do a book on Buffett, that was probably not the way to go. Cheers! http://www.wacotrib.com/news/content/news/stories/2009/03/22/03222009wacQNAschroederWEB.html

I love it when one numbnuts after another comes out to criticize Buffett. Now its Dennis Gartman. What intrigues me is how he talks about net asset value, yet criticizes Buffett for a 45% loss in share price. Shareholder equity was down only 9.6% last year, which was nearly 28% better than the S&P500. And that's even after Buffett admits he made a couple of errors. Cheers! http://www.cnbc.com/id/31494704

...at the Washington Examiner. Apparently, they can't afford to pay for up to date news releases. They just reported that Berkshire won't be releasing its 1st Quarter report on the eve of the Berkshire AGM. :D Cheers! http://www.washingtonexaminer.com/economy/ap/48691027.html

Globe & Mail article on students from a Ben Graham value investing class provided by U of T's Rotman School of Management. The course is one of the few Canadian business classes that go and visit Buffett once a year. Cheers! http://www.globeinvestor.com/servlet/story/GAM.20090622.RINVESTINGROTMANART1823/GIStory/

NY Times has a very good article on defacto Fed Governor Bill Gross. Cheers! http://www.nytimes.com/2009/06/21/business/21gross.html?_r=1&hp=&adxnnl=1&adxnnlx=1245538946-7fOZhUVrXoA7N773UCTwgw

It's weighted, so if you have say a block of 15,000 institutional shares selling at an ask that is 5-6% lower (need to get the block sold), and the rest of the shares (remaining 3,000) average out to a ask price of just 1-2% lower, you get the 4%-5% drop that the market maker has to set the floor at. So that damn institution probably deserves most of the blame! ;D Cheers!

Charlotte Observer has an interview with Wells's Fargo CEO John Stumpf. Cheers! http://www.charlotteobserver.com/business/story/785220.html

GenRe has been dismissed from the AIG shareholder lawsuit against them. Cheers! http://www.reuters.com/article/marketsNews/idINN1944254420090619?rpc=44

Apparently, Deepcapture will be shortly releasing a lengthy new article on its website by Mark Mitchell surrounding Dendreon...www.deepcapture.com. Patrick Byrne on his site is saying that some of the stuff is mind-blowing. Anyway, please visit the site and take a look in a little while. Cheers!

The question is... did his attitude actually lower his long run returns? I would wager not. In certain circumstances, yes, and others, no. For example, he held onto things like newspaper companies, shoe companies, etc. when they probably should have been sold because of changes in the economics. But I would think that in many ways, he benefited far more than he lost...permanent capital, rather than at the mercy of limited partners emotions...enormous competitive advantage formed because business owners wanted to sell to Buffett...leverage of insurance float was huge. Overall, I not only think you are correct that it didn't hurt his results, it probaby improved them significantly. Cheers!

Most likely Sprint. They were working on some sort of deal with Sprint for their long-haul service. Funny, we never owned any LVLT over the last ten years...not even the debt. We loaded up on a ton of call options when it was in the 60-70 cent range, and now we are really starting to get interested on what could happen with this business. Sam Mitchell a couple of years ago at our FFH dinner, responded to our question of how long it would take LVLT to hit critical mass. Many of us thought it was several years away, and he said that he believed it was a couple of years away. I think he may have been correct. I can really see LVLT's margins increasing over the next five years. This will be very interesting to watch as they have so much debt. Fortunately for them that their equity and debt holders are such a tight knit group and will continue to support them. One of our fund partners has quite a bit of his net worth in LVLT. I think the tides are now slowly changing, and his patience may finally get a respite from all the pummelling this stock has taken over the years. Cheers!

For our next interview, we will be speaking to Amitabh Singhi, who runs "Surefin Investments" from New Delhi, India. I thought that with so many Asian investors, including many Indians and Indian expats on the board, combined with so much interest in Fairfax's Asian investments, it would be wise to get more views on what is going on over there and what the potential market could be. Amitabh's firm is a value shop, and he is an ardent disciple of Ben Graham who makes the pilgrimage to Omaha every year. He studied at Wharton, and worked for Credit Suisse First Boston in their Investment Banking and Advisory Divison. You can visit his site at www.surefin.com . Please submit your questions to me over the next week or so by replying to this thread, and then I'll contact him. Cheers!

Or buy a small bungalow for ten-fifteen grand and you could probably fit that on a flatbed and drive it over. ;D Cheers!