biaggio

BeerBaron, "Dodd is good if you have a small capitalization and Fisher is better with large capitalization" Does that mean if you have small amount of capital to invest or is it the capitalization of the investment in question i.e. use Graham + Dodd for small caps and Fischer for large caps? Thanks

Thanks oec2000 Appreciate your comments. "Read the sections on risk mgmt in their AR and see if you come to the same conclusion as I did. Heavy on words but light on substance! Then, compare that with WEB's remarks on risk, especially his comments on the equity puts BRK sold. BRK and MFC took on similar equity risks - unfortunately, their understanding was far from similar!" I think actions speak louder than words(I skimmed thru the AR section on risk management-they say all the right things). I suspect they were probably not thinking along the same lines. Probably not fair to compare WEB to MFC management. But is it possible that they were thinking along the same lines? Did the just take too much risk relative to their balance sheet? Something happened while they were trying to hedge? The risks do appear similar. If I recall, BRK's price got hammered as a result during the market cash as well. (It was a good thing, it allowed me to buy in at a great price. I am wondering if I am seeing the same patter here?) If price gets low enough I am thinking that it would compensate the uncertainty of these un-hedged positions, especially IF one thinks that you have honest and able management. I have no position.

Financial -BRKB, FFH, ORHA Health care - UNH, FRX, MYL, LLY, AET, CLC.UN.TO Energy - PEY.UN.TO SU.TO Real Estate - FUR JOE Retail - NWF.UN.TO Cash - 35%

Is this not like the end of a game of monopoly (the game we used to play as kids) when all the players are mortgaged up, except for one player. In the game, the game soon ends and we have to start over if we want to continue to play---this would not be good-----would alternative be to give everyone more capital (you would have to create more properties as well?) and continue to play

Normally I really try to ignore trying to predict market or economy as I have done/tried it and am terrible at it. So it may be good to invert whatever I say. Combine: Another market crash + resulting financial instability would be the last thing governments around the world , especially the U.S. would want.(motivation) + We have the benefit of history(knowledge?)-1907 crash, the great depression, Japan the last 20 years + the ability of government and large financial organizations to manipulate our markets. Could we not have US treasury either directly buy in falling market to stabilize or influence one of the large financial institutions to buy into a market slide to stabilize. That being said I think there could always be a 10-20% correction. I think we may some further deflation in the short term but then the governments of the world have to inflate there way out of the problems you outline above,which could cause a market melt up in he market (with all the money flowing)

to add to above, I am interested in SHLD, as Fairholme owns 8.7% of the company for a number of years- I believe he purchased holdings at a higher price. Mind you I realize he can change his mind any time, but his comments seem to indicate that it is a long term holding

Myth, I don't own any SHLD My take (probably not worth more than 2cents) is: i. retail in runoff (stores are terrible, probably a good idea not to try to blow brain out competing against WMT or target) ii. at the end of the day SHLD will be left with Craftsman, Diehard, Lands end brands + will somehow monetize the real estate. While waiting generating free cash flow yield of ~11%(not bad). Using cash to buy in shares. Real estate may only be worth half as much as it did 2-3 years ago (did B Berkowitz not say at one pt that real estate itself is worth $100 per share) -so maybe it is worth only $50 per share today. In 3 years once we get thru the deflation fear maybe it will be worth ~$100 or more. At some point perhaps one of the big retailers may want to buy some of their store. Also I would think it is a good idea not to blab your big plan if you want to sell...If everybody thinks you want to sell your real estate it will be hard to get the price you want. Myth is there any specific examples of Eddie not caring for the shareholders other than withholding info, just in case I decide to take the plunge? Am I oversimplifying a more complicated scenerio? I believe that share cut in half over the last few months because of the scare of deflation (which would not be good for SHLD)

http://www.canadianinsider.com/coReport/allTransactions.php?ticker=MFC -tiny amount of recent insider buying. $36,000 by a director

Devon Energy CEO Expects Consolidation Of Independent Natural Gas Producers – And Higher Gas Prices In 2011 http://www.gurufocus.com/news.php?id=105169 -a contrarian view from an insider? Or wishful thinking. -I have read elsewhere the same theories re low nat gas prices , that is lots of supply due to shale gas which is easy + cheap to find but depletes quickly + the fact that producers leasing land in 2008 have to drill or they will lose right to drill

Thanks Viking, Agree re Buffett holding it as one of his larger holdings (as well as Prem, no?) is a good validation. Seems like ABT would have a larger MOS. I will have a look at that. Looking to develop more my shopping list in case Canadian $$ strengthens to par.

I always remember Peter Lynch's view to invest in companies that use technology to make more money e.g. insurance companies, maybe HMO's use of IT, instead of buying the actual tech companies.

Agree with above. Will turn current problem around and turn lemon into lemonade. I am getting a fair value of $65/share. Am I in the right ballpark? I like the dividend + love the consumer products but is it selling with enough MOS.

http://www.fairholmefunds.com/2010semi.pdf

I am starting to look at JNJ in more detail. Came across this interesting article at http://money.cnn.com/2010/08/18/news/companies/jnj_drug_recalls.fortune/index.htm Do folks think that items noted in article is priced into the price of JNJ. My initial impression is that it is selling below fair value. Obviously a lot of smart people feel that price is attractive.

http://www.gurufocus.com/news.php?id=105074 I thought this was a good article. Interesting how he values pharma co. Discounts current value of current products till their patent expires (taking 85% margin on there revenue) -wanting to buy below this value so that one gets the pipeline for free.

Looks like a lot of fun. I am jealous. "On the way to the office in the morning on my IPhone: - USA Today Online - NYTimes.com - Bloomberg.com" I hope that is while you re walking to work, or better yet have someone driving you in to work.

"Reality is that people read what they want to believe and hear what they want to hear. And no one wants to hear that their life will soon get a lot worse." Agree. Personally I am always fighting that. Sometimes it is hard to see what is the actual fact and what is our or other's imagination i.e, their opinion

thanks enjoyed video on Jim Tisch according to interview: Loews =16% annual compound return for the last 50 years! He attributes 50% of that return to buyback program. Over the last 50 years they have purchased 25% of their shares every decade. Good capital allocation eh?

Booming Brazil Is Like the 'US in the 1950s': Sam Zell http://www.cnbc.com/id/38758907 Sam Zell is bullish on NY residential real estate. I always enjoy listening to interviews with this person. Have not heard his name on this site. Seems like great investor when he sticks to his circle of competence.

Is a Crash Coming? Ten Reasons to Be Cautious http://online.wsj.com/article/SB10001424052748703723504575425723973560744.html?mod=WSJ_PersonalFinance_PF5 Good summary. To me there seems to be a lot of bearish sentiment in everything I read. Maybe it is the stuff I choose to read. It feels reassuring to read those types of headlines, as we never get a warning of an impending crash ie nobody rings a bell just before a crash.

'Atlas Shrugged': The CliffsNotes Today http://www.investors.com/NewsAndAnalysis/Article/544033/201008171834/Atlas-Shrugged-The-CliffsNotes-Today.aspx Has anyone read this book which was written in the 50's. Apparently quite popular lately as it describes what is going on out there.

http://dealbook.blogs.nytimes.com/2010/08/13/ackman-lays-out-his-plan-for-stuyvesant-town/?partner=rss&emc=rss Ackman Lays Out His Plan for Stuyvesant Town

If compensation is settled with something acceptable would you be still be willing to invest in the company knowing what Bigliari is like? Can you trust him to look after your best interest?

"Incentive fees payable are 10% of any return in the past year above the hurdle rate (90% remains with the client) up to a maximum of 1.75% of assets" I think having a maximum level (% of assets) makes sense.

Thanks Uccmal, I have always appreciated your various insights. Don't a lot of companies have black boxes. We just don t realize it. Are these not the so called black swans. I have not followed MFC to any extent in the past. It seems that MFC management got overconfident. This has to be humbling for them. The new CEO has been on the job for only the last year but I have to believe he was very involved with the current unhedged positions. What is the old saying about a bad business + a good manager? Is this the reverse, a good business + bad management? Reminds me of the saying that a good business is one that any idiot can run, because eventually...well you know the rest. Does anyone feel that this experience will have a positive effect on management? Is this an honest + able management? Are they unlikely to repeat the mistakes of the past? If price gets low enough would be people be willing to buy with current management? Is there any hope for these guys? Does anyone know how much skin current CEO has in company?