Parsad

What I love is that the two guys who do more than anyone to associate their name with Buffett & Berkshire are quoted in the article...Doug Kass and Whitney Tilson! Kass always criticizes Buffett and Tilson always tells everyone how undervalued Berkshire is. The only thing missing is a quote from Alice Schroeder! ;D Cheers!

Perhaps, but Eddie Lampert was buying back Sears Holding shares in the high $100's for some time, and it has not improved the business' economics or earnings per share one iota years later. He would have been better off not listening to shareholders and just holding the cash until large opportunities came his way. That patience is what is missing from most corporate CEO's because shareholders get antsy. Cheers!

Wishing you all a Happy Thanksgiving and a wonderful Black Friday! Incidentally, our Canadian retailers have put out flyers that scream "Black Friday" deals everywhere this year...trying to keep retail dollars from travelling across the border this weekend. Cheers!

This business is all about managing risk. One can manage risk while at the same time being optimistic about individual securities. I am becoming increasingly worried about the macro environment, yet I am buying the crap out of individual securities right now. I agree fully with that sentiment. I think Libor amongst others, shouldn't misconstrue my optimism for the United States to be void and ignorant of the macro environment around me. Anyone who attended our AGM in Toronto this year back in April, heard me say clearly that we were very concerned about Europe and do not expect the European Union to look the same five years from now. We also said that we were concerned about a slowdown in China. You're more than welcome to view our powerpoint presentation on our site. But that macro view does not prevent me from buying securities. We were around 40% cash towards the end of June, and since then we've been maneuvering, buying and selling securities that we think are undervalued to try and get the largest discount to intrinsic value within our portfolio. We cannot predict, nor time what the markets will do, and neither can anyone else. The portfolio's value will fluctuate with volatility, as it always has, and our job is to select the securities we can find with the largest upside and the lowest downside by buying with a margin of safety. The more risky the balance sheet of the business, the greater the discount has to be. We cannot worry about a one in fifty year storm or a possible 17-year bull market. All we can do is buy securities that look cheap to us, and if we can't find anything, then we sit on cash until we can. Other than that, I cannot worry about what anyone says, does, or predicts, because the only thing within my control is my temperament and execution. The word "unprecedented" is bantered around for almost every event the world goes through. Remember "Y2K"...it was unprecedented. Remember the "credit crisis of 2008"...unprecedented. Remember the "Great Depression", "Oil Embargo of the 70's", World Wars I & II, or The Cold War...all unprecedented! What we are going through today is just another crisis...and this too shall pass. Cheers!

All over the place...$6M market cap all the way to $200B market cap. I go where it's cheap...doesn't matter the size. Cheers!

Libor, wouldn't that be true of the same biases you may hold...such as the widening CDS spreads on all of the banks or the recent German bond auction results. I would guess that almost everyone with any investment idea is biased to their idea to some degree. Wasn't Buffett biased on Coke when it went to $80 in 1999? The only important factor is whether you can differentiate and make the hard choice to admit when you are wrong at the end of the day, or even better, make the decision to vacate the investment when your thesis is wrong. That's all I care about and what I base my decisions on. Cheers!

I look at all, but I pay more attention to the transport of "finished goods" or Intermodal, whereas commodities can be seasonal or due to specific demand. Cheers!

Still looking good! Cheers! http://www.bloomberg.com/news/2011-11-23/u-s-rail-freight-carloads-for-week-ended-nov-19-table-.html?cmpid=yhoo

I would say that you would have roughly the same proportion saying that FFH and BRK are cheap too. Is that group think or is it because something simply becomes broadly recognized as cheap? Market prices eventually reflect intrinsic value, only once the broad consensus of investors deem it to be cheap and move from higher priced assets to the lower priced assets. A few months ago, you would have been hard-pressed to get ten people to think that BAC was cheap at the same price. Cheers!

Parsad, I admit I have no knowledge about BAC. But calling a person completely wrong is kind of overreacting. No one can be 100% right about things. The comment was made in reference to a statement that Buffett would not dare help his competition and is only interested in "sweetheart" deals. I think he's 100% wrong on this as history showed. Cheers!

Mohnish's comment said three years was the "average". How long did Fairfax's turnaround take? Five years! Could have taken 7 or 8 if it wasn't for the homerun on the credit default swaps. I think the most important aspect is to examine if things are improving or disintegrating. I think things are improving quite dramatically at BAC, stagnant at LVLT and disintegrating at RIMM. Moynihan has made huge strides in less than two years. Not sure if it is the business model or the board that is rubbish at LVLT. RIMM may need more time to turnaround, but I think things will only get tougher. At the same time, Prem has made big investments in both RIMM and LVLT and is one of the most patient guys you will ever see. So if anyone knows about the time it takes for something to turnaround, it's got to be Prem! Cheers!

Article on Berkshire, Buffett and recent deals. Cheers! http://money.msn.com/top-stocks/post.aspx?post=a85d9fef-b206-44b5-92d5-4d67ab5f7675

Stick to BAC guys or I start trimming posts. Cheers!

Carl, You are completely wrong on this. Buffett bailed out Munich Re, as well as Lloyds. Prem just bailed out Bank of Ireland. They have no problem bailing out their competitors, if it makes money for them and they restore the business. Buffett is a capitalist no doubt, but his intent is to make money, not lose money. He invested in Bank of America because he likes Moynihan...otherwise, don't you think he would have put money with Vikram Pandit if he was just interested in making a buck! He likes Moynihan's nose to the grindstone attitude. You also made another comment in another post regarding past experience with mortgage insurers. We bought mortgage insurers as you know, but we bought them through options and a basket of them in MPIC Fund I, LP. We do not trade options in MPIC Canadian LP and we unfortunately bought a basket of equity. We expected huge losses in shareholder equity when we bought them, but the magnitude that occurred was our worst case scenario. I do not have that same feeling or theories about BAC, and the margin of safety is actually significantly larger than when we bought the mortgage insurers back in 2008...double actually! Capitalization is significantly better, they are squeezing the size of their book, and they are running off poor business and writing new business that is far better...not unlike what Fairfax had to do. The earning power and reach of the business is terrific, and they've got a CEO who eats his own cooking and is a tireless worker. In this case, I'm extremely comfortable buying equity and buying one single company. I think the market reaction is incredibly wrong in BAC's case. Like with the mortgage insurers, we are buying to a level we are comfortable with, where our other holdings will offset any possible loss if they were to occur in the worst of circumstances. You calculate your odds of success versus your odds of failure, and you mitigate as much of that risk as possible. That's all you can do. Cheers!

Unfortunately, this is something that Europe has to figure out and fix. All the rest of the world can do is support their efforts, but the bulk of the reform has to come from within. Europe did not do this back in in 2008/2009 and the problem has come home to roost. They need a massive TARP program that has to go into effect, and broad regulation across Euro nations similar to what the Treasury, FDIC and SEC have done here. Only when the financial institutions are well capitalized, have proper regulation and restrictions, will confidence start to slowly come back. You cannot have a successful Euro region without a strong backbone of financial institutions. The U.S. will do far better because they took those steps to clean out and strengthen their financial system. Cheers!

That's good! As a shareholder or bank depositer, I want to know that the banks can handle such events. I welcome the tests and any improvements banks have to make to survive such circumstances...even if that means no buybacks, dividends or even dilution of my shares. Because at the end of the day, such banks should trade at no less than tangible book and close to book once they pass. Cheers!

I never understood this behavior and I still don't. I remember the general counsel for ITEX telling me that there are several studies that show share buybacks don't actually benefit shareholders signficantly in the long-run, and then I had to explain that was because most corporations paid any price for their shares, rather than only buying them back when they were well under intrinsic value. This CNBC article is the same thing. http://www.cnbc.com/id/45400632 Share buybacks historically have not worked because CEO's implement them automatically, so that their compensation bonus targets are hit based on earnings per share. If they can't think of anything to do with the cash, and don't want to face hostile proxies, they simply pay dividends which are inefficient or implement automatic stock buybacks. But there is a big difference between the prices corporations were paying in 2007 to buy back their stock and what they are buying them back at today. A good example was Teledyne, or even when Prem bought back 10% of Fairfax's stock in the early 1990's. You buy it back only if it is dirt cheap and fully accretive. Cheers!

It's funny how a headline sounds doesn't it? This sounds like it could refer to the European Union, or it could just refer to the breakup of a couple. Kind of interesting the psychology of how you felt when you read the title. Anyway, for a bit of humor, I clicked on the link to that title on Yahoo, and this is what I got: http://shine.yahoo.com/love-sex/5-signs-youre-headed-breakup-195300595.html As you can see, it has nothing to do with the European Union, but I thought the "five signs" ironically could refer to Merkel and Sarkozy. If you read them while thinking in those terms, it's quite funny...especially #4 and #5! ;D Cheers!

Has this board ever been wrong collectively since its inception? Not on anything that I have been long on and the board agreed. ;D Sino Forest the majority on this board might have been wrong. If not it was close. Did not touch Sino Forest. I also disagree with the fact that the majority liked the stock. I would say the majority did not touch the stock, and that they disliked Muddy Waters methods. It was a minority of boardmembers who actually took a solid position either long or short the stock. The majority stayed on the sidelines. I have only been following for the last 2 years and have been a member for the last few months, my take is that for the most part the board has been a very good indicator of value. You are correct on this, but this will only last for some time. Eventually, over many years, the board will get large enough where it will start to track the psychological behavior of the broader market. I would say it has shown indications of this at a lesser level in recent years actually. The board's ideas were very contrarian in the past when much smaller. Even now, some ideas like BAC had little support just a few months ago, so some broad emotional and psychological biases will appear. Cheers!

This time I expect that BAC gets the approval. They've been hitting the gym the past few months trying to get in shape for this. There were probably given a cheat sheet to study. After all, it's in everyone's interests to help them pass with flying colors. It would be a positive sign of confidence in the banking system -- help weaken some rumors. No, I don't think just yet. BAC's litigation overhang means that it has to be better capitalized than its peers to allow dividends or buybacks. I think WFC, JPM will get the greenlight. Possibly C, but their European exposure may mean a little longer. And I disagree totally with the comment by MisterStockwell that it is a total blackhole. At these prices, BAC may be one of the cheapest and misunderstood stocks I have seen since Fairfax at $57. Actually, BAC outside of the litigation, is in significantly better shape than Fairfax was at $57 with losses still ahead of them. BAC has put much of their losses behind and will drag litigation out for years if settlements aren't in their favor. As I said, I find it incredibly hard to see how BAC will not trade at a slight discount to tangible book within a year or two, and at book value at some point within the next 3-4 years. Outrageously cheap in my opinion...just plain stupid! Cheers!

Slow, but little by little, things are improving. Cheers! http://www.bloomberg.com/news/2011-11-22/payrolls-gained-in-39-u-s-states-in-october-led-by-illinois-california.html#

Interesting how retail investors are shunning stocks, while we are at near historic highs for corporate share buybacks. Cheers! http://www.cnbc.com/id/45402485

As expected, China real estate sales are slowing and that will create ripples in commodities in the future. Those long gold, I would be careful over the next couple of years. Prem's deflationary view may become reality, if and when China's real estate bubble bursts. They have the resources to prop things up for now, but if it gets too big, they might not be able. to. Cheers! http://www.cnbc.com/id/45393635

I think both products will survive and do fine. It's just valuations got way ahead of themselves. They were valued maybe 2-3 times higher than the most optimistic scenario would indicate. Opentable suffered the same. Cheers!

I'm looking forward to the day that Salesforce.com has to do the same. At some point, investors realize that they are paying up for unsustainable growth, with the biggest expenditures for these businesses being buying that growth. Cheers!