Parsad

Something I have been concerned about for a few years is finally coming to fruition. I believe that Chinese banks have over-expanded over the last several years and that the bad loans would eventually appear. It seems as though some of the big Chinese banks have a $70B shortfall relative to regulatory requirements...and things are still relatively good in Asia...I can only wonder what the magnitude of the shortfall could become. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=angRgjyJDhQQ&pos=6

Buy and hold works amazingly well when intrinsic value keeps growing. Everything held equal it is by far the best way to invest unless you don't pay taxes. I disagree. I think buy and hold reduces your margin of safety as valuations rise relative to intrinsic value. Buffett could have done a whole heck of alot with the cash tied up in Coke over the last twelve years...even after paying capital gains taxes! For the record Fairfax hasn't been near intrinsic value in the 4+ years I've owned it so maybe you are not selling at IV, you are trading in and out of a stock based on historic patterns. A stock doesn't need to be near intrinsic value for someone to sell it. If you buy stocks when they are less than 40% of intrinsic value, and sell when they are at 75%, is that worse than buying a stock at 60% of intrinsic value and selling it at 95% of intrinsic value? Simple mathematics would tell you that the former provides a return of almost 90%, while the latter provides a return of about 60%. Cheers!

I think some board members have a misconstrued idea of what value investing is...or at the very least value investing in terms of Ben Graham. You buy investments at a discount to intrinsic value and you sell when that margin of safety is reduced. This whole Buffett "buy" and "hold" value investing idea is something that came up because Buffett had to do so to encourage people to sell their businesses to him. Why would someone sell their life's work unless you promise not to sell it off in bits and pieces or to someone else at a profit! If you've read the early Buffett Partnership letters, and even early days of Berkshire itself, you've seen Buffett trade out of positions as the prices moved closer to intrinsic value. Mohnish is doing just that. Sardar will have to behave like modern-day Buffett, as does Prem, but Mohnish understands that the markets provide him an opportunity to exploit the folly of others. What Buffett has done with Berkshire is not only amazing, but admirable from an ethical standpoint. If Buffett behaved like young Buffett, his returns would have been better by selling certain businesses or positions as they reached intrinsic value or surpassed it. Cheers!

Excellent interview! Thanks Keerthi! The one thing I truly have admired watching Mohnish over the years is that he has become an incredible teacher and lecturer. He has a very natural fluidity to his ideas and how he gets them across to the listener. Combined with his self-deprecating sense of humor, it is always enjoyable to hear him speak. Cheers!

The Omaha World-Herald's Warren Buffett Watch: Update on Miles dividend article, DQ Mobile and a couple of other subjects. Cheers! http://www.omaha.com/article/20100411/MONEY/304119999

33 States and the Virgin Islands are now borrowing money to fund unemployment benefits. Cheers! http://money.cnn.com/2010/04/08/news/economy/state_funds_jobless_benefits/index.htm?source=cnn_bin&hpt=Sbin

I disagree. I think the company has now hit a critical mass, where the bottom line improves as they continue to increase their percentage of revenues from the fulfillment business. Depreciation is falling off and costs are under control. As long as inventory turnover remains quick, or speeds up even slightly on the direct side, they will be able to continue to generate net operating profits. Cheers!

A Forest River manager who helped form the acquisition deal of the company by Berkshire is now suing Berkshire. Cheers! http://www.bloomberg.com/apps/news?pid=20601108&sid=aLydkapMrw_k

Also check Sidestep.com or GTAhotels.com for deals. We got a really nice hotel for dirt cheap on GTA. You want to stay in the downtown Toronto area, and preferrably close to the lake...the hotels nearest to Roy Thompson Hall and Joe Badali's are the Strathcona (as mentioned), Fairmont Royal York, Intercontinental Toronto, Westin Harbour Castle, Residence Inn Toronto, Novotel, Soho Metropolitan, Radisson Admiral & Hyatt Regency Toronto. As long as you are downtown, you are still a 10-15 minute cab-ride to anywhere anyways, so don't worry too much. Cheers!

Fairfax Financial Shareholder's Dinner When we first started our annual dinner in 2006, we had nine people attend and Francis Chou was our lone representative from Fairfax. The following year, we had about 17 people and Francis brought Sam Mitchell as well. The third dinner in 2008, we had about 28 or 29 people and our guests were Sam and Francis again. The fourth dinner in 2009 had about 38 attendees and Fairfax surprised us by sending Sam Mitchell, Wayne Cadwallader and Brian Bradstreet...of course Francis was also there...he never lets us down! This year's dinner will have well over 50 attendees...probably close to 60! Don't worry, we have a mic and speaker system set up this year! ;D It's an amazing opportunity to ask questions and listen to answers from some of the best investors in North America, as well as meet with fellow Fairfax shareholders and "Corner of Berkshire & Fairfax" board members. We will also have a raffle with various prizes, including Fairfax memorabilia and books signed by Prem, and other prizes donated by Corner Market Capital. All proceeds, along with the $5 admission (and matching contribution by Corner Market Capital) will go to the Crohn's Colitis Foundation of Canada, in honor of Jo Ann Butler. With two weeks to go, if you haven't RSVP'ed me, please do so. See you all there! Joe Badali's 156 Front Street West Toronto, Ontario Drinks: 6:30pm Dinner: 7:00pm Q & A: 8:00pm-9:30pm RSVP: [email protected] Admission: $5/head with all proceeds going to the "Crohn's Colitis Foundation of Canada" in memory of Jo Ann Butler (Corner Market Capital Corporation will match all admissions).

Very interesting article on how Pimco operates. Cheers! http://articles.latimes.com/2010/apr/04/business/la-fi-pimco4-2010apr04

Will do! Cheers!

I think the low rates were needed after the Tech Wreck and 9/11, but the fact that they left them there so long was the real problem. And then all of the new mortgage products brought out due to government intervention...whether it was Greenspan, Congress, Committee on Housing, whoever...there was no regulation, no thought about what was happening. I remember in 2005, I watched a segment on CNBC where there was a panel of mortgage lender CEO's. Angelo Mozillo, CEO of Countrywide, was discussing how they just brought out a new product that allowed 110% financing with no money down! I was incredulous...how was this happening? That should have triggered warning flags with regulators, or even the parasitic ass-kissers at CNBC, but it didn't! People in the moment lose objectivity...Greenspan was as guilty as anyone else. Cheers!

Here is a chart showing Buffett's estimated dividend income from his private portfolio. Cheers! http://www.bloomberg.com/apps/news?pid=20601109&sid=aQwHfdedaxac&pos=15

AP article on Overstock and Patrick Byrne. There is also a good quote by Sam Mitchell of Hamblin-Watsa in the article. http://finance.yahoo.com/news/Overstocks-brash-CEO-delivers-apf-210153310.html?x=0&.v=4 I remember about four years ago when we asked Sam about Overstock at our annual Fairfax dinner. He was leaning up against one of the counters in Joe Badali's, as about 15 of us were gathered around him listening, and relayed a story about Patrick's tenacity and ethics. It was a story about Patrick meeting Henry Kissinger with his father Jack one day. While everyone else shook hands and nodded to the former Secretary of State, Patrick lashed out and took Kissinger to task over something...I can't remember exactly what the issue was...but he was only a teenager. I believe Kissinger was as stunned as everyone else, but it was the only way Sam could relay exactly what brews inside him. It was very funny! Cheers!

Thanks CFA! I took a look at Piccolo's menu, and it looks terrific. Looking forward to it. Cheers!

Berkshire finished number one based on Harris Interactive's survey of 30K people on their most admired company. Least admired...Freddie Mac! Cheers! http://www.reuters.com/article/idCAN0110654220100404?rpc=44

Good little article on how the quants are back in business and making tons in compensation. Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/features/taking-stock/quants-accept-no-blame-for-financial-crisis/article1522497/

Right. This is contrary to a normal investment approach or strategy. Say your investment strategy is not long-term based, or bottom up. Say it is based on a 1 to 2 yr investment time horizon, and no further. Think of this as more of a short term prediction, and not necessarily a real life strategy. For most investors, I would suggest short-term treasuries, or if they are a bit more comfortable, then cheap, solid dividend paying stocks in a portion of the portfolio. Frankly, we don't change our own behavior even if the duration is one or two years. We still invest the same way, be it our corporate or personal portfolios, or our funds. We may keep a modest amount more in cash in the corporate portfolios, since we have operating expenses, but for the most part...they follow the same philosophy...albeit even more concentrated than our funds. Cheers!

Say you couldn't invest in a stock specific, non-diversified portfolio. Say you are forced to choose the best investment category for the right now given all the current market valuations, interest rates, expectations, etc. Assume you could only invest either 100% in a single category, or 50% in one category and 50% in another. I'm curious what the general sentiment is right now on more of a macro level for this board. Which category(ies) would you choose: A)Treasuries (10 yr) B)Cash C)Corporate Bonds (b/t BBB - AAA) D)S&P500 fund E)Diversified Real Estate fund F)Emerging Markets Which would you choose? Remember, you have to invest in a diversified index type fund in either of the above categories (no other choices). What's your call? I understand "WHY" you are asking the question, but I believe the "WHY" would lead to the wrong conclusion. You are not boxed into any one category, nor do you ever have to classify yourself into one category based on economic conditions. If you are 100% cash right now, there is nothing wrong with that, as long as your end goal is to find the most undervalued assets with the largest margin of safety. If you are fully invested in the market, utilizing that same philsophy, then you are also not doing anything wrong. The only time you need to box yourself into a specific classification like that is if your time horizon or economic circumstances dictate it...you need the money in the near future (or at present) and cannot suffer any decrease in your capital base. Otherwise, don't worry...find what is cheap and buy it...or if you don't see anything, feel free to invest in short-term fixed income instruments that won't move significantly with changes in interest rates. Ideas always come and the ensuing returns will preserve your capital. Cheers!

Terrific article! Burry is one of the few people I have seen that have taken Greenspan to task. Bernanke got the brunt of the blame, but this mess was primarily Greenspan's. Cheers!

I've notice alot of bank CEO's commenting on how they regret taking TARP money...that they didn't need it. Today's CEO is Jamie Dimon of JPMorgan. http://www.bloomberg.com/apps/news?pid=20601087&sid=aGCSnkmqtuts&pos=4 Always interesting that now, when the banking system has been stabilized and returns are fruitful, CEO's forget exactly how their counterparty risks would have been guaranteed if the system was allowed to collapse without government intervention. I don't care if you were JPMorgan, Goldman Sachs or Wells Fargo...without government intervention, including providing TARP funds for the industry, they would all be in a very precarious situation. Just because you didn't partake in the industry's excesses to the extent others did, does not mean you aren't at all culpable. It's like those people who were standing on the side watching the Nazi's do what they did...not guilty, but certainly not innocent. Where were these CEO's when the excesses were out of control? Were they lobbying Congress to put in controls, or rein in loan portfolios or derivatives? Nope! So don't complain now when you've used TARP money and have the headaches to go with it. Cheers!

For those that can't get through to Gorat's, you should try Piccolo's - 402-342-9038. They are answering their phones, Buffett will be there during that night, and I hear the food is better than Gorat's...no offense to Steve and Debbie! ;D Cheers!

Anyone else getting the fax line when they call Gorat's number - 402-551-3733? Been trying for a while and I keep getting the fax. Usually they are taking calls from 9am Omaha time. Cheers!

Article on Mohish's holdings. Also congratulations to any ATSG shareholders today. Cheers! http://finance.yahoo.com/news/Eclectic-Picks-Pay-Off-For-indie-3582651746.html?x=0&.v=2