Parsad

Interesting article on Quidsi, Amazon and the online retailing arena. Cheers! http://www.businessweek.com/print/magazine/content/10_42/b4199062749187.htm

Truly amazing to see how Einhorn isn't even finished with his presentation about St. Joe and shares are down almost 10%...and it's likely that many in the audience own shares. I went to the first VIC and that was it for me. Every time someone threw out an idea, you could see all these hedge fund managers on their blackberries putting in orders...I'm assuming it was orders...either that, or they were updating their Facebook pages! ;D Speaking of Facebook, the move "The Social Network" is the best movie I've seen this year...definitely worth seeing! Cheers!

Ed Asner has been cast to play Buffett in the movie based on Andrew Ross Sorkin's book "Too Big to Fail". Cheers! http://www.cnbc.com/id/39635359/

BYD was fined and had seven factories in Shaanxi province confiscated. According to the government, they were built illegally. The government is still considering possible punishment. Cheers! http://www.bloomberg.com/news/2010-10-13/byd-factories-confiscated-after-land-ministry-fine-update1-.html

There aren't too many value managers who have made that return over the last ten years. If you include Fairholme, Yacktman, Lion Fund etc., they all would probably be in the top 1% of all investment managers over that span...that's pretty darn good. I think anyone would be happy with that. Now the question is out of all those investment managers in the top 1%, what type of parameters did they operate with...leverage, maximum 10% allocated to any investment, extreme concentration at any point (100% in one investment), lockups, no lockups, MER's or incentive fees, countries they concentrated their investments in (domestic or international investments), etc. Cheers!

Did he return about 13% over the past decade? I believe another poster on here said that. He did about 18% annualized till 2008. I don't know what he did in 2009 and 2010 so far in the Lion Fund. Even if he did 13%, that is a good 12% better annually than the S&P500 since when he started in 1999. Furthermore, I hear a lot of talk about Biglari, but if we look how BH has performed over the past 3 years (about the time he took over, from my understanding), they've underperformed the restaurant category. 3.94% vs 4.17%. To be fair, Sardar didn't get control until late 2008...roughly the bottom of the chart that you linked. Since then he's killed the restaurant industry in terms of stock price and quarterly sales. Steak'n Shake's restaurant sales are probably close to the very top of the industry. I absolutely don't like the way he enacts certain changes, but in terms of execution of the business, there are few who have done better in the last couple of years. And no, I'm not and don't plan on ever being a shareholder of BH again...unless the stock plummets to well below book! ;D Cheers!

Neither index is completely accurate. Google's excludes raw material costs, etc. It will give a pretty good idea of end product inflation or deflation...thus it would be a lagging indicator to inflationary or deflationary costs at the producer/wholesale level. Cheers!

Zeke Ashton, who runs the Tilson Dividend Fund, spoke at the VIC. One of his picks was Fairfax and he discussed BH as well. Cheers! http://blogs.barrons.com/stockstowatchtoday/2010/10/12/value-investing-congress-ffh-mvc-among-centaurs-top-picks/?mod=yahoobarrons

Excellent letter! Very smart people. The one thing I've learned is that anything is possible...no matter how smart you are, or how right or wrong you've been in the past. They are assuming that the low in bond yields is yet to come. That there has never been a "bubble" in treasuries since you can just hold them to maturity and the stream of cash is guaranteed. There is a first time for everything! I think the real concern isn't whether treasuries are in a bubble or not, but the real return of treasuries long-term relative to alternatives. In that respect, I'm in the camp that says treasuries are in a bubble by that specific definition. Cheers!

Buffett's comments on recovery. Cheers! http://www.bloomberg.com/news/2010-10-12/buffett-says-pain-will-be-felt-for-a-long-time-amid-recovery.html?cmpid=yhoo

1.1 times book is a fair value for an insurer in this market...remember, Dunning is in a low interest rate environment. Insurance isn't going to be a breeze the next few years unless you can generate investment income or underwrite more efficiently. At 1.25 times book, he would be paying up for the company and it's probably not worth it unless he can guarantee himself significant investment returns. He doesn't know what contracts they have been writing in the last year and if the premiums are adequate. There would be little margin of safety at 1.25 times book. Cheers!

Nope. Cheers!

It was so fun being there. I have attended BRK & WSC meetings, but to be in the first row 15 feet from the man was great. I know I sound weird. No, not weird at all...at least from my perspective! ;D I remember a few years back, when a friend of mine who works at the Motley Fool, gave me an extra media pass to attend Buffett & Munger's press conference in a small room in the Omaha Marriott. I sat in the first inside seat, in the first row, closest to Buffett and Munger. And on top of that, Ajit Jain was sitting in the back row of the room as well. It was fantastic...and then they were signing autographs after. There were maybe only 20-25 people there, so it was pretty amazing as most didn't go up to them afterwards either. Cheers!

New breakfast menu to be launched February 14, 2011. Cheers! http://www.nacsonline.com/NACS/News/Daily/Pages/ND1011105.aspx

This is a broken record. I would prefer if you responded within threads of individual ideas. Your thesis seems to be the market is expensive wait till its cheaper. We arent market buyers. What dont you like about the individuals ideas discussed? +2

Ersatz Munger may not realize that his box of corn flakes has been shrinking while the price has stayed the same. Yeah that's exactly right Roger! This has been happening with so many different products. In Canada, a jar of mayonnaise that used to come in a litre jar, is now coming in an 800mL jar for the same price. I've seen alot of companies do this with their products over the last year. And I think it is going to get worse. Newsprint prices have rocketed up, Starbucks is jacking up prices, everywhere I'm looking prices are rising. But we are also seeing a ton of companies offering zero interest rate loans for two, three and even five years on all sorts of things. Almost every car dealer out there is offering zero interest rate financing right now on at least some vehicles, if not their entire fleet. So the low interest rate environment is actually hiding the fact we've been experiencing relatively strong inflation. Cheers!

Please tell us what happened in the months following 1939. You had a 33% correction over the next two years and then the market doubled over the next four years. Even if you had invested in the general market at the top of 1939, you would have been ahead versus holding cash six years later. If you averaged down as the market went down, you would have done even better! In the meantime, you were also reaping dividends that would have increased your average investment return. Cheers!

This is simply the greater fool theory at work and has no relevance to value investing in the spirit of Buffett, Munger, and BG. You keep saying this, but Buffett keeps contradicting you in every presentation or interview he's given in the last six months. We have not seen any of these increases passed on to the consumer in any material way. I'm guessing you don't buy the groceries in the house. Have you seen produce prices lately? There is a lag between when raw material prices increase and then the final product prices. I expect to see some continued inflation in consumer prices in the next year. And if costs continue to rise but don't get passed on, how is that remotely good for corporate earnings? They do get passed on. And for businesses with branding power, they will be able to pass those prices on while maintaining much, if not all of their sales. I never said to buy all stocks. I said to buy high quality businesses, that had good dividend yields, and were reasonably priced at the time. They will do far better than bonds or cash over the next few years. Cheers!

Anyone seen coffee prices lately? Sugar? Gold? Steel? You name it! Other than pretty much orange juice, we've already encountered some inflation at the raw materials and commodities level, and that will probably continue for the next year. In the short-term (1-2 years out), I don't see deflation as a possible scenario. We had this discussion a month or so ago, and I mentioned that when the market turns it turns hard. September was the largest September gain since 1939! Investors are reaching for yield and they will continue to do so for the next six months to year. Is it to their detriment long-term? Probably. But the fact remains that investors are slowly piling into other assets because fixed income instrument yields are so low. Why do you think there is such a huge revival in the junk bond market? That will probably also continue for at least another year or so. Cheers!

Larry Wilcox, who played the clean-cut and absolutely morally correct police officer on "CHiPs", has been charged by the SEC for paying kickbacks on the mining company he runs. http://www.cnbc.com/id/39562699 I'm pretty sure that alot of companies do this and get away with it in Canada. Personally in my opinion, any underwriting firm getting any sort of options or shares for underwriting a company, and then selling the stock to their client accounts, is a form of a kickback and should not be allowed. It's such an incestuous relationship! Not unlike the dealer-broker network in the mutual fund industry. The incentives are completely misaligned with ethical behavior. Cheers!

Buffett speaks with Carol Loomis of Fortune. Terrific interview! Thanks to David Lau for the link. Cheers! http://money.cnn.com/video/news/2010/10/05/n_buffett_MPW.fortune/

Sanjeev, I have received a personal letter from one of the two Leucadia top managers and he wrote me that the succession issue has been a topic of every LUK board meeting over the past decade. It doesn't necessarely means that they have found a successor (?), but that means that unless that this topic is an inside joke from the board, that issue is taken very seriously by Leucadia. Hi Partner, When I meant "no real succession plan", I meant that there was no real possible successor that has been brought to light with the capabilities of Steinberg or Cummings. For example, at Berkshire you have a deep bench of very capable replacements...Ajit Jain in insurance, David Sokol in operations and the CIO candidates in investments. At Fairfax, it is the same...Mark Ram is one among other highly capable insurance executives and you have a very solid team at Hamblin-Watsa. Markel...same! At Leucadia, they specialize in distressed investments, bankruptcies, etc. You really have to have the aptitude or gift for this. I don't know of anyone who is currently a suitable successor to this type of investment philosophy. If there is anyone, they will be taking the company in a different direction...value investing perhaps, but not this deep, distressed type of structure that S & C's are so good at. Cheers!

US looking good: http://www.bloomberg.com/news/2010-10-07/north-american-rail-freight-carloads-for-oct-2-table-.html?cmpid=yhoo Canada looking pretty good: http://www.bloomberg.com/news/2010-10-07/canada-rail-freight-carloads-for-week-ended-oct-2-table-.html?cmpid=yhoo Mexico looking alright: http://www.bloomberg.com/news/2010-10-07/mexico-rail-freight-carloads-for-week-ended-oct-2-table-.html?cmpid=yhoo Cheers!

I've been following LUK for several years and still don't see what people like about this company. Like any investment, price should dictate what is cheap and isn't. Whether LUK is, was, or isn't a good investment should be evaluated by the prudent investor. Aside from that, Cummings and Steinberg are arguably the greatest investors I have ever seen or read about that specialize in distressed businesses and investments. They are damn good! So good, that they are one of the few people Buffett trusts to run distressed investments that Berkshire owns like Berkadia. Also like Buffett, they are getting older and Leucadia IS Steinberg & Cummings...when they are gone, there is no real succession plan. Cheers!

A first edition of "The Intelligent Investor" signed by Warren was sold at a charitable auction for $25,250. Cheers! http://www.bloomberg.com/news/2010-10-07/buffett-signed-copy-of-intelligent-investor-sells-for-25-250.html?cmpid=yhoo