biaggio

That's unbelievable. Hard to believe a world class company such as V would have such a product. I would be embarrassed. My kids got those cards for their birthday...I can see giving to a kid (they got a kick out of having a credit card), but what a rip off if they take $2.50 every month after 7 m

http://online.wsj.com/article/SB10001424052748704055204576068273518378108.html?mod=WSJ_Markets_LEFTTopStories I would have never guessed something like this could happen

" Since inception on December 29, 1999 and through December 31, 2010, The Fairholme Fund earned 342.9% versus a 5.0% gain for the S&P 500 Index." Wow. The power of compounding. I new BB was good, but didn t think it would be 342% to 5%

Is there a network effect? Once it is making $5 per customer per year and neting $5 billion I am sure that there will be competitors coming out of the woodwork. What would stop Google or other competitors?

"it has acquired for a purchase price of approximately $8.7 million the 118,000 square foot Crossroads I office building located in Englewood, Colorado. The property is adjacent to the previously acquired 118,000 square foot Crossroads II office building and collectively, the two properties are 56.2% occupied and were developed in 2000 and 2001." ~$74 per square foot I was trying to find info on property and I noticed in my search that they are asking for rent of $17-20/sq ft. That is a good great return if they can eventually get it.

recent deals http://www.bloomberg.com/news/2011-01-07/paulson-lending-group-said-to-seize-cnl-hotels-from-morgan-stanley-funds.html?cmpid=yhoo http://www.thestreet.com/story/10964312/1/winthrop-realty-trust-announces-acquisition-of-office-building-and-rake-bond.html Appears to be buying at 60% of face value though with risk attached (buildings are half vacant).

Interesting for those of us who played as youngsters. http://www.theglobeandmail.com/globe-investor/investor-education/investor-clinic/what-monopoly-can-teach-you-about-investing/article1857743/ http://www.amnesta.net/other/monopoly/

Exactly. Most do a "cash-on-cash" calculation because there is almost no money to be made in real estate without the use of massive amounts of leverage. If you are doing all cash purchases, you'd be insane to deal with the headaches of real estate when bonds/equities offer similar returns but are 100% passive. I understand your points. I think most RE investors look at cap rate to judge if price is reasonable. To me minimum cap rate has to be close to 10%. With low interest rates you can otherwise fool yourself into thinking you re getting a great a deal. Best point IMO is that "you'd be insane to deal with the headaches of real estate when bonds/equities offer similar returns but are 100% passive."

http://www.google.ca/search?client=safari&rls=en&q=The+Charms+of+Cash&ie=UTF-8&oe=UTF-8&redir_esc=&ei=xloeTbW8ONaJnAe8uNSfDg "The charms of cash" Wishing all great returns in the future, but most of all good health + happiness.

I am just finishing the "Davis Dynasty" book as well. Excellent book. I think many board members here would really like it. Excellent chapter on the history of insurance industry. I didn t know that insurance is the second oldest industry in history

"The p/l and roi obviously depends on the size of the mortgage! " I think one should look at ROI by dividing net by cost of condo...in this case return could be $7500 divided by $323000. I think you should make decision on the total cost + how much return you will get I would have a cut off of 10%. In other words I would demand at least 10% return before tax or $32000 after expenses you mentioned. Even with a 10% return, you have to think about the odd headache when the roof leaks, dishwasher breaks down etc...I have been there + I did not think it was worth it. Oh, you can also expect your condo fee/associate fee to grow in the future as well

Good thread. No right or wrong way. I would take 15% as noted above. At some valuation, they will not yield 15%(i.e. they will be overvalued), then you'll have to make a decision. The problem is you might trade into something worse. I am trying to take the emotion out of it and trying to stick with my top 10 ideas or less (it should possibly be less than 10 ideas, but some of my ideas I have had for 10+ years)--stick with the highest quality businesses, selling at the largest discount to fair value, and enough cash (20% ??) to sleep at night and be able to take advantage of any bargains or market corrections.

"I have no objection to Mr. Buffett's endorsement of farmland and stocks like Exxon Mobil. They represent ideal investments in the world I see unfolding. Unfortunately, there are tens of trillions worth of paper money out there and more is being created everyday and, unfortunately, there are a very finite number of hard assets of the type cited by Mr. Buffett available for purchase." I think we all agree that our cash will buy us less in the future. What are good buys out there today that will protect us from less valuable paper money in the future?

"I was referring to when Buffett said the Berkshire buyback offer came in short. That pissed him off and he bought the company primarily to fire Management. Funny story." Could you imagine what he d be worth if he didn t do this? I am in awe of his humility in going public with the story. It goes to show you again, that it is not what happens to you or in this case what happens to you when you make a poor choice but how you respond (learn from your mistake + in this case to always buy quality businesses with sustainable competitive edge at a discount i.e. with a margin of safety)

Agree. But what would stop multiple other competitors? It would be hard to bet against Walmart, Target, Sear/Kmart, etc all going after same dollars...will there be any profit left?

http://seekingalpha.com/article/243850-sears-kmart-to-launch-netflix-competitor?source=hp_latest_articles "Sears, Kmart to Launch Netflix Competitor... A number of Sears’ competitors including Walmart (WMT) have already started to dabble in the online movies space. Walmart recently bought Vudu, a service that streams movies to internet-connected TVs. BestBuy teamed up with Sonic to put its movie library in all of the Web-connected devices the company sells at its stores."

Kaminsky's Call: Muni Market May Be Great Buy Opportunity http://www.cnbc.com/id/40764687?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo Just so we don t get too depressed.

Thanks bmichaud, we should conclude then that we should look at book value as the proper metric for AXP as we do for banks & insurance companies. Then AXP does not look to be bargain. "Still, on a 10-year historical free cash flow average of around $7 billion a year, a $50 billion market cap just seems... wrong" -it would appear that you right as the $7 billion does not include reserves for bad loans...

I am not an expert by any means. A great name. A great franchise. Owned by WEB I am just reading thru latest 10Q, trying to understand the company Is there not a lot of balance sheet risk? Balance sheet looks more like a bank's. They have made a lot of loans (card member loans), and ~ $35 billion in cardholder receivables offsetting~ $68 billion in long term debt, versus shareholder equity of only~$15-16 billion. AXP at risk of credit card defaults Different model then V or MA. Also can someone have a look at the following summary of AXP http://www.gurufocus.com/financials.php?symbol=AXP and explain how company can have $3-almost $7 in free cash flow per year, dividend out <$1 per year yet BV has risen from $8.70 in 2000 to only $13.23 in most recent quarter. Does that make sense?

60 minute presentation on http://streetcapitalist.com/

I was just thinking, if we re going to have a lot of deflation, what is wrong with just holding cash? As time goes by you ll be able to buy more with each dollar. I think it is crazy to buy any bonds at such low yields.

"Does BH have management that is trustworthy? I don't think so." I feel that this trumps all the other positives noted.

http://can-turtles-fly.blogspot.com/2010/12/john-maynard-keynes-great-investor.html#more Good website sited in article http://www.maynardkeynes.org/keynes-the-speculator.html

I think you should get at least 10% return . I am surprised with all the uncertainty + negative sediment that they are being valued so highly.

"shalab: I think Fairfax over reserves which provides opportunity to buy." Also, I think FFH is not writing as much business as the average insurance company for the amount of capital they have i.e fixed costs are spread over smaller amount of revenue. I was also thinking that if FFH grows BV a lumpy 15%, then in 5 years they will have a BV of ~$800...and if by chance it is selling at 1.5 x BV then it could be worth $1200...so is it is a buy at $400 i.e will it matter if you but at $390 with or without the dividend