Parsad

And as we were discussing the other day on here, fullfilment and affiliate business revenue is going through the roof...pushing revenues up 27% in the 4th Q and net income was almost $13M or 55 cents a share in the quarter alone! Crazy! That line of business is where I always thought Overstock should be pushing, since margins are better there in most economic conditions and it isn't capital-intensive. The direct business should be used only opportunistically when you can find really cheap inventory at ridiculous prices. The lean years look like they are over at Overstock now as well! Cheers!

And not only that, they have $140M in cash in the bank! Yeaaahhhhhhh. Cheers! http://finance.yahoo.com/news/Overstockcom-Reports-FY-and-prnews-394678390.html?x=0

Some comments on the markets by Bill Gross and John Bogle. I think we'll be somewhere in the middle of their assessments from today's prices. But I don't ever buy the market, so it's irrelevant. Cheers! http://finance.yahoo.com/news/Stock-Bond-Returns-Will-Be-cnbc-869527788.html;_ylt=Ao_hZeM9SAyWOmnuzkV8bt27YWsA;_ylu=X3oDMTE1c2RzZDM2BHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNncm9zc3N0b2NrYm8-?x=0&sec=topStories&pos=1&asset=&ccode=

Hi Marlin, Thanks for the article! Always nice to read something about Andy...one of the greatest guys I know. By the way, to make it easier on yourself when putting in a link instead of typing the whole thing out, all you have to do is go to the address bar on your browser at the article page, copy the address by "right-clicking" your mouse" and then pasting it directly on the message board reply section by "right-clicking" again. Very easy! Cheers!

Bloomberg article on the Berkshire meeting and how airlines are now charging a premium for an airline ticket, not unlike how auto rental rates have also escalated in the last few weeks. Also a funny quote by Mohnish is in the article. Cheers! http://www.bloomberg.com/apps/news?pid=20601108&sid=ahRZ0zF6UsGg

After the recapitalization of MEGA Brands, Fairfax ends up with nearly 20% of the company in equity, plus would control 33% of the company if they exercised the warrants they received as well. Cheers! http://finance.yahoo.com/news/Fairfax-Announces-Investment-iw-3122240444.html?x=0&.v=1

In regards to reserves, Japan can sustain their debt to GDP levels for some time through domestic savings, but at some point they will not be able to. Especially in light of their underfunded retirement system, interest payments if rates rise, and a rapidly aging population. Not sustainable. You are correct on the management of a corporation though. If management is astute enough to understand what is happening, and is equally gifted in hedging for it, then you are ok...but that would be a rare gem. Cheers!

James, Japanese corporations have terrific balance sheets, and in and of themselves are very cheap. But in the context of the future likelihood of a devaluing yen, any investment in those companies would be compromised. I cannot see how the yen will not eventually collapse with any significant rise in interest rates. Cheers!

Terrific little interview with Bill Gates discussing Buffett and Berkshire. There is also an extensive article on various Berkshire-related subjects. Cheers! http://www.omaha.com/article/20100328/MONEY/703289979

Here's an article discussing some of the similar holdings between Berkshire and Fairfax. Cheers! http://www.gurufocus.com/news.php?id=88785

According to Elizabeth Warren, Chairperson for the TARP Congressional Oversight Committee, half of commercial mortgages outstanding will be underwater by the end of 2010. Cheers! http://www.cnbc.com/id/36085517

I think there were several errors in Overstock's development. Early on, they built the system to handle far more customers than actually appeared. Roughly two and a half years were lost retrenching and resizing infrastructure. The second mistake early on, and not corrected until the downsizing, is that they were trying to do too much direct business and not enough fullfilment/affiliate business. The margins are better on the latter with far less capital involved. You are now seeing cash flows hit the bottom line. They will be profitable in 2010. Is it sustainable long-term? Depends on the moat, management and the quality of people they put in place. Online retail is extremely cut-throat. Tough to maintain moats and Overstock's isn't large enough yet...but there's potential. We have owned Overstock equity three times in the last four years. We've owned Overstock debt as well in the last year. We've made money on every investment in Overstock. It's been a trading stock, because of the number of mistakes, short-selling and co-ordinated campaigns against the company. It's been very volatile for five years now. Cheers!

Always great information in Francis' letters. I encourage everyone to read them, in particular Chou Associates, Asian and Bond fund letters. Cheers!

Over half of the delinquent home owners that received loan modifications defaulted nine months later. Cheers! http://www.bloomberg.com/apps/news?pid=20601010&sid=aVYxPZ56vjys

SEC is investigating short sale trading at Appaloosa and Carlson Capital. Cheers! http://finance.yahoo.com/news/SEC-eyes-trading-in-two-hedge-rb-3092428936.html;_ylt=AraexmrGvwLLpW9mciU596i7YWsA;_ylu=X3oDMTE1OHY1MDEwBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawNzZWNleWVzdHJhZGk-?x=0&sec=topStories&pos=3&asset=&ccode=

Hi James, We do single year, and it is cheaper than comparative year. You can always send the investor previous year annual reports and they can do their own comparative. The audit is there to provide the partner with an unbiased view of the year's results and to make sure controls are in place when the accounting is done. Anything else is as Buffett and Munger say...esthetics! By the way, we don't have any pictures in the report, nor will we ever...and it's in black & white. Cheers!

Thanks Twa! But it's really the group of people we have on here that makes it. You take a look at that post by "collegeinvestor" and see how helpful people are, and you know we have a good, polite group of boardmembers. Cheers!

There are alot of strange things under GAAP accounting. Over time, the more financial statements you read, the more amazed you'll be by all the stupid things you see and the stuff people get away with. Enjoy the board! Cheers!

Don't worry about the questions. It's how we all learned. In regards to the increase in depreciation...yes it is directly correlated to the increase in PPE. Cheers!

Wednesday April 21st - Evening Fairfax Financial Shareholder's Dinner Our annual Fairfax Financial Shareholder's Dinner is coming up again. Last year, Francis Chou of the Chou Funds came...Francis has been at all of our dinners! Fairfax Financial sent Sam Mitchell, Brian Bradstreet & Wayne Cadwallader. It was an amazing opportunity to ask questions and listen to answers from some of the best investors in North America. 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). Please let me know if you are coming, so we can make appropriate preparations with Joe Badali's. So far, we have attending: Sanjeev P. Alnesh M. Andrew C. Paul R. Tarn C. Frank F. William D. Greg D. Mayur K. Stephen K. Alex K. Wayne P. William M. Ken R. Norm R. Keith S. Bryan S. Nicholas S. Bob T. Glen V. Martin V. Thanks very much! Cheers!

Hi Daniel, Just wondering if you could do me a favor. I've been receiving emails from friends and other SNS shareholders who have noticed the huge amount of garbage being spewed on the Yahoo SNS board about me. I have no idea who SNS Supertramp is, nor do I want anything to do with that person. I have nothing to do with Steak'n Shake other than as a shareholder. I run a very small fund in the U.S. and one in Canada, as well as this message board. I noticed that you use this board and that one. Could you please exclude me from any discussion you have with some of the people on there. I would hope you could do that as a member of this board. I wouldn't have asked, but I noticed that you are including me in some of your posts as well, and I thought I would just set the record straight. You've written a book on Berkshire, and as a word of advice as a fellow boardmember, you are probably better off not interacting with many of the nutjobs on that message board. I don't know any of the other people on there, other than Randall Tidd (Tiddman) who posts on there on occasion, so I thought I would ask you. Thanks very much! Sanjeev

Yup, that's correct. You can find other ways to avoid the taxes, but there is always the chance that the IRS or CRA will deny you the way you treated the income. We would rather play well within the rules, than run the risk of our partners getting reassessments years later. If you could control the emotions of the average investor and get them to invest only when markets are down, then naturally that would be to their benefit. Unfortunately, human psychology doesn't work that way and investors often want to invest after big runs in markets. The cost of doing that is they may be purchasing some unrealized gains. The corollary is that some investors who buy when the fund is down, may be benefitting from unrealized losses that actually discount their shares. Partners should contribute to their accounts somewhat regularly (monthly, semi-annually, bi-annually). That will eliminate some of that bias over time. Cheers!

I'm sure many believe he's a perennial bear, but his commentary is excellent. Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/features/experts-podium/income-still-rules-amid-credit-fears/article1508803/

Thanks very much! Cheers!

That's pretty darn good! I know Francis uses Citibank, and they charge something like 0.2-0.25%, and he's got over a billion dollars and hundreds of investors. I can understand such a low rate for a huge book of business like that, but I'm surprised by how low Commonwealth's number is for less than $10 in AUM. How late was the NAV report on a few occasions? Because we have only 15 days to file from month end, and we need everything provided to us usually in the first week of each month to file on time. Also, do they handle funds outside of Ontario? We file in BC, so I don't know if they do that. If you don't know, that's ok and I can call them. Thanks! Cheers!