biaggio

" if the consumer is 2/3 complete with consumer debt reduction (as Jamie Dimon says)" is there a way to measure or verify this? or was that just Jamie Dimon s experience with his customers which may stilll be valid. sure would be reassuring to know that debt clensing would be done in 1-2 years. I have thought that it would be >10 years...maybe others are thinking that too + hence all the fear + "irrational" selling

ubuy, what do you mean by "outside day to me"? I was busy working, was surprised to see market up so suddenly in the last hr of the day. Would it be naive to think there could be folks manipulating market (is it possible?) or is market a coiled spring(from being oversold) just waiting for any excuse to go up. Who knows + I know it does not matter, just buy undervalued mispriced assets, but interesting none the less.

what's up today? Up 12 % at lunch time

How about BPO below $12 (~ 10 x FFO, get a dividend, BV:$22, hedge against inflation)

2 more announcements today DieHard®, America's Most Trusted and Recognized Auto Battery, Now Available at 194 Meijer Stores http://www.prnewswire.com/news-releases/diehard-americas-most-trusted-and-recognized-auto-battery-now-available-at-194-meijer-stores-130770598.html Sears, Kmart subleasing space in 28 St. Louis properties http://www.bizjournals.com/stlouis/news/2011/09/28/sears-kmart-subleasing-space-in-28.html?ana=yfcpc

" How do I incorporate your post in my reply for reference? Thanks." click on the "quote": upper right corner of which ever quote you wanted to incorporate in your post

Thanks dwy000. Do you think the insiders/CEO's of these organizations have a feel for the risks? i.e. can we take a lazy approach and follow the management when they invest their own money especially when they appear to be trading so cheaply? Banks seem to get into bad situations regularily- South American Debt Crisis, S& L crisis, sub prime crisis etc over the years, yet they seem to be able to grow/work their way out of them/ Thanks again

some say that WEB has announced buybacks before but not has purchased a single share thus far. I accumulated BRK.B to a good portion of my holdings (3rd highest) during the downturn since August + hope everyone is right about this putting a floor under the stock. At the same time I hope the stock drops further at least temporarily so that I can buy some more + have WEB buy at lower prices. (This has got to be some sort of psychological defense mechanism).

Thanks Packer. Do you think it will work still if we have a "balance sheet recession" or a decade like in Japan(Japan's assets were very expensive back then) or the 1930's(would the 1930's be the wide scale deflation you were thinking of)? I am hoping that if you buy quality, cheap i.e. with a large MOS that we willl be ok. I think I have been reading too much macro stuff as I am starting to feel psyched out (i.e fearful...probably a good sign?).

so what does one do? -cash?-buying power will be decreased by inflation -bonds?- very low yield + will be effected by inflation -hard assets/commodities? -real estate? Farm land? -stocks?

Oh yeh, Loews...picked up some of this as well recently

own LUK, BRK/B,FFH have been adding BRK/B and LUK over last several weeks which is cheaper now - brk, msft, frfhf or luk? considering the market decrease since Aug Shalab, I like the idea you mentioned: if one bought brk, frfhf or luk when they were underpriced in the last decade, that is all it took to do well. Lowest risk with extremely able capital allocators at the helm. Also own ALS.TO, smaller amount of FUR. I know FTP liked by board members as well. Any other owner managers one would buy now.

I think you re right. Cramer doesn t like SHLD anymore, LOL Still interesting to follow.

Yah that was the old thesis. He has been so busy buying back his own stock that I am not sure he is able to buy stock in others i.e. running low on cash that he is starting to finally monetize his assets (real estate, brands) which is maybe a good thing. Maybe if he gets good cash coming in + his own stock becomes more expensive he will stop buying back his shares and start buying others with the cash coming in or with overvalued stock. With the way things are macro wise I am not holding my breath.

Are you guys buying/looking at SHLD, its on sale? I have a small holding that I probably should not have bought last year. This + other recent news in line with underlying thesis that was talked about last year.

all the commodities have been going down? same reasons? +/- fear of recession/decrease in demand/fear of slow down in China

"It's difficult to get a quantitative measure of complacency. However, qualitatively, I don't feel it out there." Other then the financial networks + press I have not heard anyone concerned out in the real world, except for the fact that the sports radio show I was listening to on the way home last night were talking about economy + the market fall.

What's the easiest to solve sovereign debt problem? I think default and devaluing their own currency is the easiest way to solve a sovereign debt problem. I normally try to ignore the macro stuff. Agree with above. Good article/summary of a model of what may be going on + what may happen(posted elsewhere): http://www.hedgefundletters.com/wp-content/uploads/2011/03/a-template-for-understanding.pdf "What determines whether deleveragings are deflationary or inflationary is the extent to which central banks create money to negate the effects of contracting credit." I think we all agree that the current contraction(falling financial asset prices, falling commodity prices recently) is secondary to deleveraging. If governments (as well as people + companies that are over extended) default then I think we will have deflation. It feels like we re having this this week. If government prints money then we will have inflation. I think they will do this (at least try to inflate their way out). I am thinking we should be holding high quality businesses (owner manager types with cash + good balance sheets) and some cash to put in things that will go on sale which will protect our purchasing power-hard assets,real estate, great businesses that can raise prices, dividend paying businesses that we can t do without (utilities). Timing is always a problem for me, but I am thinking we should average in slowly, buy cheap, sell dear as Parsad says.

I would keep it in cash. Money markets you get 0 but there maybe some risk there (was it Klarman who said that many hold sovereign debt)...even if there is no risk why keep it there you are basically getting nil. Govt guarantee does not cover investment loss I do not believe,

http://myinvestingnotebook.blogspot.com/2011/09/discussion-of-real-estate-with-ackman.html from Farnam Street's web site. They believe that REITS of commercial/large shopping malls (super centers) are a good buy, even at 4% you beat what is available in fixed assets plus you have inflation hedge (they are not building new malls + their rental agreements usually have inflation protector so they will be able to raise their prices.)

Maybe another step in the right direction Sears Sells Self As Place For Other Retailers To Set Up Shop --Sears has signed deals with Western Athletic Clubs Inc. and Gonzalez Grocery Store to lease space --Retailer is making hundreds of thousands of square feet available --Company aims to add more retailers (Updates paragraphs two through seven with information about the deals Sears signed with health club and grocery store and the closing of several golf shops.) NEW YORK (Dow Jones)--Sears Holdings Corp. (SHLD), whose sprawling stores are laden with extra space, is aggressively marketing itself as the place for other retailers to set up shop. Sears, through its real estate arm, has listed on its website nearly 4,000 namesake ... http://online.wsj.com/article/0,,BT-CO-20110922-711872,00.html?mod=wsjportfolio

"FFH is still my largest holding by far and for that I am grateful. For this climate they are much better investors than I am proving to be, so far." Don t be too hard on yourself. You re probably going to do better than you think. At least you have a lot of FFH. I wish FFH was my largest holding.

LUK or CLF under$20

http://www.marketwatch.com/story/grantham-no-market-for-young-men-2011-09-21 “If we adjust earnings to normal and apply an average P/E, you can finally build a decent portfolio today of global equities at a respectable long-term return,” he said. The potential for gains is “modestly higher” outside of the U.S., he added, other than “high-quality blue-chips.” Mostly, he said he prefers discounted plays that are surfacing in Europe and emerging markets. “In stocks you will eventually do OK at these prices,” Grantham said. “The real danger is one or two of these building blocks falling over,” Grantham said. “You can buy a whole portfolio of slightly cheap global stocks, and the risk you take is that you get sandbagged by some of these major problems.” Indeed, Grantham said that since there’s a “decent chance” of stocks becoming even cheaper, GMO is positioned slightly below normal in equities “because the risk profile of the world is way over normal.” ...He’s not a big fan of gold. “I own some myself as a pure speculation,” Grantham said — “just enough to mute the irritation of watching gold [prices] rise.”

The consequences you outline makes sense, but I don think the other governments will let it happen if it has a chance to spread to their own economies. Some how they will print money, "extend + pretend" to these sovereigns I think what Kyle Bass said may occur. Sovereigns will promise to cut expenses and pay back what they owe, but will come up short and process starts over.