Parsad

I'm sure Charlie Munger will be none too pleased with the compromises being made to toughen financial industry rules. It looks like compromises will have to be made to the Volcker Rule of forcing banks to restrict trading and investments in hedge funds. Personally I like the rule and would like it to pass as is, but that won't be the way it will go I guess. Cheers! http://www.bloomberg.com/news/2010-06-23/volcker-rule-under-attack-as-lawmakers-seek-hedge-fund-loophole.html

Andy Kilpatrick, author of the Berkshire bible "Of Permanent Value", has a new website. I love the quote by Buffett on the top of the page about Andy's tome! Cheers! http://www.andykilpatrick.net/

Berkshire had insured a client for $30M if France won the World Cup. With France out, chalk up another nice fat premium for Ajit Jain and National Indemnity! Cheers! http://www.bloomberg.com/news/2010-06-22/buffett-wins-30-million-world-cup-bet-as-france-falters-in-tournament.html

Chalk up another one of the Fairfax miscreants whose alternate career lasted but a millisecond! http://www.cnbc.com/id/15837548/cid/176746 Sweathog Herb Greenberg, who vehemently defended several hedge funds shorting Fairfax through his columns, has left the stock research firm he created two years ago. Lob Greenberg in with Fabrice Taylor's short-lived stint as chief editor of "Frank" magazine, which he ran into the ground in a year, and Pastor Peter Eavis, who left his New York church and went back to writing. These three numbnutzes were reporting everything John Gwynn and John Hempton had to say in their supposedly independent and objective articles. Karma's a bitch! Cheers!

In ICP's case, one of their traders, William Gahan, actually put up the $200K bond for Spyro Contogouris back in 2007 when he was charged. I'm not sure if Gahan is still at ICP, as alot of the key people have left. Ironic how key people have left ICP, but not a single person left Fairfax when ICP was alledging that Fairfax was involved in fraud. Cheers!

Am I wrong to believe that this one-sided charity argument is short on some facts? Buffett and Gates waited a lifetime after building giant businesses to donate. At that point they were able to donate far more than others, thus by deferring charity until they did, they were able to offer MORE charity - a net positive? Likewise, the article says that if one person had a cheaper car, a homeless person could get another meal, but what about the many indirect benefits of wealth in society? How many workers made that Mercedes and were able to eat? How much does Mercedes as a corporation donate in relation to each car purchased (I'd think the profit margins are quite large). I don't think anyone is arguing these points. The point of their actions were that anyone can make a difference. Some do it with their time (volunteers), some give back through their careers (teachers), and some can do it through charitable contributions. Cheers!

Looks like Buffett's request to some of the world's richest billionaires to donate half of their wealth, could also apply to many other people who have done well. Here's a story of a family who sold their mansion and donated half to charity: http://www.bloomberg.com/news/2010-06-21/family-sells-2-million-mansion-gives-half-to-charity-review.html Cheers!

Prem need not care -- his primary business is not that of making loans. Prem might care if he were asked to boost reserves every time the market got scared that a hurricane was imminent. Sure he cares! Fairfax has had to report under FASB 157 like everyone else. They've had to mark to market their investment portfolio for a while now. That means they have to readjust reserves if their capital ratios rise or fall. And that's what all other institutions will have to do. It will hurt in the beginning, but it will reduce the total amount of risk that institutions expose themselves to...or at the very least, you won't see risk capitulate in such a manner as the last few years, but you'll see institutions having to readjust capital levels on a regular basis. My question was.. is it a disaster waiting to happen? Will this cause all the banks to have to simultaneously have to raise capital and take huge markdowns again? If it passes my guess is it will.. Especially since they are supposedly requiring it for equities and loans this time. Not a disaster, but it could have some short-term impact on institutions as they increase their capital base. If they enact it in a draconian fashion, forcing institutions to raise huge amounts of capital immediately, then it could be a problem, but I think mark-to-market is better used as a tool to indicate current circumstances and force institutions to assess their current risk levels. Here's a good blog post article on your mortgage analogy and the way mark to market should be enforced. Cheers! http://jenniferfitz.wordpress.com/2009/03/11/warren-buffet-mark-to-market/

Might be related to the $330M in 2017 C&F notes. Cheers!

Ken Heebner's struggles at CGM continue. What's even more sad is that everytime anyone talks about an underperforming fund manager, poor old Bill Miller's picture is shown instead! ;D He's been the whipping boy for underperforming managers the last couple of years. Take a look at the article: http://www.bloomberg.com/apps/news?pid=20601108&sid=ald5h_nPY5Ro Cheers!

Mark to market did not precipitate the credit crisis. Overleveraged institutions did. Mark to market will force some accountability on the amount of risk financial institutions expose themselves to. Why is it that financial institutions feel comfortable with 20-1, 30-1 leverage? They shouldn't! Why do they believe that volatility in portfolios or pension assets should not occur? Or how they mark reserves in insurance companies? Prem has no problem with mark to market. I don't think Buffett & Munger do either. Those businesses with good underwriting practices on loans, insurance policies, etc will do fine long-term under MTM. It's those businesses that have less than stellar practices that should be worried. Cheers!

What a fantastic letter! The humility & earnestness in those words. Wow! Cheers!

Jeremy Grantham believes the Australian housing market is in a bubble. Cheers! http://www.heraldsun.com.au/money/australian-housing-market-a-time-bomb/story-e6frfh5f-1225880221197

Buffett & Bill Gates had a meeting with a number of the world's wealthiest individuals and challenged them to give away half their fortunes. Cheers! http://postcards.blogs.fortune.cnn.com/2010/06/16/billionaire-peer-pressure-behind-the-buffett-gates-challenge/?source=yahoo_quote

I really don't think that the vote on the pay package is going to be close enough to be made up by Biglari's buying... Does anyone think that a few percentage points in ownership will make a difference? You never know. Jonathan Dash had 48% of Denny's votes in his favor as a director. All he needed was a few more. Cheers!

No, nothing unusual. Fairfax has a history of rotating managers and executives. I think it's good because you have a number of people who are very capable of stepping into specific situations...very important in succession planning. The team is so deep at Fairfax, and this ensures that it remains that way. Cheers!

Canadian Fund Manager, Otto Spork, alledgedly misappropriated funds according to the OSC. Cheers! http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/fund-manager-made-millions-from-investment-fraud-osc-alleges/article1604095/

It would concern me as both a Lion Fund Partner or a Biglari Holdings shareholder. That's a lot of capital being poured into BH stock. There were a number businesses available in the open market at signficant discounts to intrinsic value over the last couple of weeks. Yet, all this capital is being poured into BH at fair prices because they need to increase their ownership stake...that's alot of lost opportunity. Cheers!

No, I'm referring to the Lion Fund partner's perspective, not BH. Most originally probably invested in the fund, assuming that they would have their capital in it for 20-30 years...an investment fund. Now, it's starting to look more like a special-purpose vehicle that is completely in BH. Cheers!

I'm not sure how happy Lion Fund partners are at this point. He's pouring everything into BH. That's $54M of BH stock already in the Lion Fund! Cheers!

Just throwing it out there...a guess! ;D It's probably wrong. Cheers!

Trian, the largest shareholder of Wendy's, said they were contacted by an interested party in taking over the company with Trian's assistance possibly. Interestingly enough, Sardar cancelled the AAP tender a week earlier. Anyone think he may be making a run at Wendy's? It's smaller than AAP. Cheers! http://www.sec.gov/Archives/edgar/data/30697/000134547110000054/wen37.htm

An internal Pentagon memo, that Afghanistan has at least $1T worth of untapped minerals deposits, including huge resources of lithium. Cheers! http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_interstitial

No, I originally bid $10, but it was rejected! ;D I would never pay that much for lunch with someone. Although I would pay that in a second if I could get five minutes with my father again! Cheers!

Another record lunch...$2.6M this year! Cheers! http://finance.yahoo.com/news/Warren-Buffett-lunch-price-apf-3339052448.html?x=0&sec=topStories&pos=3&asset=&ccode=