enoch01

Their reserve revisions are pretty ugly. I think book value is overstated right now.

Here's a piece of good news: http://finance.yahoo.com/news/Fund-Withdrawals-Top-Lehman-bloomberg-4228473188.html?x=0 “When we’re getting close to a market bottom, the phone starts ringing off the hook and our clients want us to sell everything,” Bruce McCain, who helps manage $22 billion as chief investment strategist at the private-banking unit of KeyCorp, said in a phone interview on Sept. 14. “Market bottoms are less about an improvement in the fundamental situation, whether the economy or outlook for earnings, and a lot more about getting rid of all the anxious investors.” I know many on this board, myself included, have been providing liquidity to such investors recently. We'll see where we are a year or two from now.

A basic knowledge of baseball is helpful, but it's not essential to understand the thesis. I highly recommend the book.

Dell shares: get 'em before they're all gone. http://finance.yahoo.com/news/Dell-Board-Authorizes-bw-3282358519.html?x=0&.v=1

I respectfully request that conversations about the origins of life draw to a close. There's lots of places on the web to discuss such topics. Let's not make this site an also-ran in a subject that is both heated and unrelated to the site's mission.

The 10 year yield is shocking :o If the world doesn't end, there are going to be some springs uncoiling in a hurry.

Thanks for the article! Some things are crazy cheap these days...

Proposition I is superfluous to your argument. In fact, Proposition I is consistent with your conclusion and its contrary. You don't even mention what the probability is. Part of me is eager to see you prevail in getting people to ignore undervalued large caps, Harry. That way I'll be able to buy more of them. I just wanted to point out the irrelevance of Proposition I to your argument.

Agree 100%. I continually underestimate Buffett's value to Berkshire. Disclosure: I'm long both, about equally.

Ben, Hard to disagree with what you said. I think partly they are willing to pay Buffett because they want the regulators' confidence. That could be of decent value to BAC.

What an utterly rational move by Buffett. Not surprising at all.

Great job guys - the new site looks and works great.

Very well said. Berkshire and Burlington Northern eagerly issuing debt currently is another data point worth pondering.

Microsoft has gotten some press lately, since Einhorn and Klarman have filed their holdings. If it isn't a fat pitch right now, I don't know what is. For perspective, I think it's worthwhile to revisit Viking's post that kicked off this thread. From a mere 15 months ago: As of today's close, the price is virtually unchanged, down a hair. TTM EPS is $2.69, an increase of 31%. P/E just under 10. Net cash per share is basically unchanged. Margins are holding. Here's Value Line's current report: http://www3.valueline.com/dow30/f5905.pdf Will they increase TTM EPS another 30% 15 months from now? If they do, where will the price be? If it remains unchanged, that will be a P/E of 7.4. Either the company is winding down (they don't appear to be), or they are about to execute a huge, horrendous, value-destroying acquisition (certainly a risk), or Mr. Market is off his rocker. Any other guesses? I'm long, of course.

I think there's an easier to let HFT go down the tubes: don't cancel the trades when the robots go haywire.

Now all we need is the ability to call the top in Gold.

Right, good point. To clarify, I actually bought the common and the calls today, partly for that reason.

Down to about 30% cash now. BAC and AIG prices got a little crazy today, no? If somebody only wants $1.10 for me to be able to take their BAC from them over the next year and a half at $10, it's a bet I can take. Also liking the IBKR position with VIX and volume spiking. They must be minting money these days...

Indeed. Put a decent chunk to work today...a real puke fest.

First, maybe that's because the sensible thing is to not have Washington do too much. Or it's because they realized, after being careful students of history and governance generally, that if it's too easy to get "sensible" things done, then it's too easy to get "un-sensible" things done as well. The easy slide therefrom into tyranny was, and is, well-documented throughout history.

Maybe. But then it seems like Pabrai's either didn't mention the salient point from Buffett, or isn't aware of it. It has nothing to do with specific time periods; the symmetry Buffett noted was simply a way of bringing attention to the underlying forces at work. Here's Buffett: http://money.cnn.com/magazines/fortune/fortune_archive/2001/12/10/314691/ "I concluded that the market's contrasting moves were caused by extraordinary changes in two critical economic variables--and by a related psychological force that eventually came into play." The first variable he mentions is interest rates: Interest rates, Long-term government bonds • Dec. 31, 1964: 4.20% • Dec. 31, 1981: 13.65% • Dec. 31, 1998: 5.09% The second economic variable he mentions is corporate profitability. Finally, the "psychological force" was speculative trading that gained popularity. So to talk as if there is some kind of predictive power to the 17 year time frame (and it sure sounded like that is what Pabrai is doing) is to confuse the causes of market returns. He's either being obtuse or coy, I can't tell which.

No. It's like saying that if the same process followed to correctly give the death penalty to 30 convicts also resulted in the conviction of the 31st, then chances are the 31st was correctly convicted. All else being equal. Nothing is said about it being "ok". Anyway, thanks for the information. I enjoy John's blog, and he has absolutely nailed some recent frauds. I was just looking for an explanation of the "other" view of him.

Could someone enlighten me on what makes Hempton such a miscreant? I don't want to go too far OT, but this is about the fifth or sixth thread here where I've seen him referred to like this. Thanks in advance.

Why do you think that?

Bingo. Well said.