Uccmal

Snowball - Alice Shroeder - somewhere in the first thousand pages :-).

Charlie Munger - borrowed money back in the day when he was running his fund. 1 million to buy BC Power Bonds back in the day when 1 million was closer to 10 million. Fairfax - had GE options about a year ago according to their 10k. Buffett - has a side bet on the S&P - I wonder how that is doing? Joel Greenblatt - I cannot confirm but I seem to recall something to that effect. Thought not a super investor I use Call Leaps as a proxy for blue chips. This time of year I work out if I want to roll them out for another year as the 2014s come out. i.e) 2013s while they still have time value for 2014s. I hold nothing less than 2013s right now. Since Leaps do not count for margin you cannot get called on them. To the article - I dont know where you get 3 year Leaps unless you write your own. 2.3 years is about the max.

CONeal, I expect you have been a student where you set your own schedule. When I was a student my job was to get my work done to the best of my ability. Now, of course there were external pressures. I think what you are doing is well worth a try. You will have to figure out what works for you. If you find yourself 'hooked to the ticker' and trading frequently, then, like me, you will probably have to go back to work somewhere, in order to protect your investments. Sounds like my pal Finetrader has been down that road. NormR has his other side interests that he has cultivated such as his website, and his exceptional investment writing. He is obviously not inclined to trade much. I hear second hand that Buffett likes to read, and analyze numbers. He probably has the ideal temperment for investing as a full time job. I dont. I'd like to think it was too much testosterone, but that is probably just wishful thinking. Your question saved me from making a trade for nearly 15 minutes :P

This is what I dont get. Are people advocating paying off the house completely prior to investing in stocks? I dont think people are saying this. What I am trying to get across is that borrowing extra with the intention of making it rich is too much risk. Borrowing against your home to get 3% extra yield is what Prem refers to when he talks about reaching for yield. Many of us on this board are specialists at risk management whether we call it that or not. Lay people that the Ric Edelmens of the world, and the 'advisees' FFHWatcher is referring to, are not. I use margin. I am extremely careful and have alot of experience with it - 15 years. I no longer write puts, or write calls, or anything else that is margin intensive - just common stock. I am careful to ensure that the dividends cover the interest. The nature of margin allocation is such that it can only be used on liquid stocks above $2.00, and not on derivatives. These rules for margin were born out of experience by brokers over 100 years. It tends to keep one within reasonable boaundaries. Using a Heloc is too much like found money. As with anything else there is one rule for those who truly know what they are doing and one rule for those who do not. Munger borrowed huge amounts of money at times when he was in a sure thing (1 m once according to Alice S.). But he would be the second to tell you to not use debt. Buffett only used debt when he could sell long bonds at cheap rates.

Dumb, dumb & dumber.... Keep your home and investments separate. Our home is in my Wife's and my name. My margin accounts are in my name only. I have used substantial money from my profits to pay for a complete upgrade and addition on the home and still hold outstanding LOCs from the reno. These advisors seem always treat today as the status quo. What if there is some type of liquidity crisis and your interest rates on your Heloc go to 10 percent. At the same time all your stocks tank. Bye bye house. I Bought my first new car in 1990 and the interest rate was 10.9 and that was the Gmac deal. Then there is the temptation to borrow on margin to juice the money from one's heloc. As we have seen easy money can be a little addictive.

Oec/Eric, You are correct on the dividends. I got confused with another security. Trying to follow too much in this volatile market. The Ps return to dividend paying capacity in April, assumming they are not resuspended. They will have to start these back up before issuing new ones to re-establish trust.

Forgot Italy..... 100 million Ireland bonds, around 1 B total PIIS- already takenpartial impairment on Greek bonds. The Ulster business unit has taken most of its medicine over the last 3 years.

Alpha, I am talking about gov't bonds, not direct business. From the 20k or recent AR.

I have mentioned this before: Royal Bank of Scotland - specifically RBS preferreds - I have held since spring 09 - Gradually reduced my position until August. Have bought up a more than full position for me. 50% discounted to par value -13% yield at prevailing prices. Trade in New York. RBS has roughly 900 m Lb exposure to Greece some of which has already been written down, and about 1 B exposure to the others - S,P,and Ireland. Total losses, if they materialized can easily be soaked up. Backstopped by the UK government. Not so sure about the common RBS since it is 70% held by the government. I figure they will keep it indefinitely until they can turn a decent profit returning it to the private sector. Credit to Dcollon in 2009. Thanks for the other ideas Moore et al. I am now in the position of having to sell excellent for even better which is gettiing increasingly difficult.

The ones who are starting to look real bad through all this are the Republicans, and the Tea Party in particular. Moderate Republicans need to stand up to these buffoons and take back their party. The polls are bad for Obama, but they are real bad for the Tea Partiers, who appear to have no substance, which is probably true. The US electorate appears to be just as stupid as the Canadian electorate. Witness British Columbia, where a tea party movement of sorts took hold, and is now going to cost the province Billions. RE: the repatriation of profits. Like it or not the companies you are talking about are multinationals now. Many of them do business abroad and are not going to bring home their overseas money, regardless. Their head offices are located in the US but the majority of operations are elsewhere. Politically speaking they are under constant pressure to invest in other countries by the respective countries. The other aspect of this is foreign ownership of these companies which are all cross listed in London or Europe. So, you repatriate the cash, pay a dividend, and a chunk of the cash flows right back out of the US.

Walter Schloss sometimes held up to 200 stocks in his portfolio. His returns were around 20%/annum over his entire career. He used simple checklists that Graham had developed when he worked at Graham-Newman to vet stocks. Buffett often is cited as making fun of Walter due to the nature of his holdings. http://www.schloss-value-investing.com/2010/07/walter-schloss-presentation-at-the-benjamin-graham-center-for-value-investing/#more-70 He was 93 when that video was done 2 years ago.

A couple of comments. Skeptic magazine has a well done critique of Taubes conclusions: http://www.skeptic.com/eskeptic/11-05-04/#feature I read Good Calories/Bad Calories two years ago and took a stab at the diet. I had worked out in a gym consistently for 4-5 years but with little aerobics. It didn't really work for me that well. Perhaps I was below the line in terms of obesity. My wife got increasingly annoyed with the diet as well. She needs her carbs - she runs ~ 15 miles per week. And cooking separate meals for two fussy children and one fussy adult wore us both out. So, I was Cross Country skiing last February and realized that I had gotten really sluggish and kinda fat. To be fair part of my weight gain was attributable to lifting extremely heavy weights at the gym. I gave up the extreme lifting, and went to maintenance workouts. I got new orthotics, a new pair of running shoes, and started jogging. I have lost 20 lbs and eat mostly what I want at this point. I am no longer sore all the time from the extreme weight lifting. The running sometimes leaves me a little sore but I am careful, and use a walk/run routine from time to time. I feel fitter than I have since my early 30s (15 years) when I used to mountain bike 2 hours per day. I am probably stuck with a little middle age fat for good. I have met marathoners who still have small spare tires so it is probably just a set point that comes with age. I am of the mind that alot of the obesity issues today are caused by the Corn syrup/ and other excess processing in everything but I also disagree with Taubes Calories in Calories out argument. I think he is correct, to a point. Alot, however, has got to do with hormones and other things. Taubes book, as good as it was, is only the first step in recognition that there is alot we dont know about diet, exercise, and weight gain. The diet he espouses, which is basically the Zone, is perhaps great for diabetics, and other subgroups, but it is probably not meant for people who are mildly overwieght, and in otherwise good health. The problem I see with blindly following any diet is that none of us knows the untended consequences. Taubes did a great job researching what was wrong with the low fat/high carb diets but has missed the mark with his recommendations. There is simply not alot of long term research to back up his higher fat/ low carb option. What if its discovered in 10 years that carbs are needed to maintain key neurological functions? I also found that I was just as hungry either way, especially when I started running again.

That was probably the best article/interview I have ever seen with Prem. Adds alot of colour. thanks for the info on the Greek Debt A-Hamilton.

For me going forward this will be never more than a Walter Schloss type position - say 5% maximum at inception. For comparison FFH makes up around 25% these days.

Well, I am completely out of fbk. Too many better opportunities, and I am having trouble putting an upside stock price on fbk right now. The commodity appears to be on a downswing. I may revisit if the price backs off some more. I still have heard nothing about the power gen. project. You would think with the numbers that Mercer is getting that this would be front and center and being publicized by fbk.

The one predictable area where humans, expecially men, consistently underestimate the effect on our lives is the birth of our own child(ren). We seem to enter it with some sort of collective denial, not realizing it is going to change our lives in ways we have never even thought of. Sort of on topic, sort of off topic. I get the point though. When people collectively focus on one outcome it tends to nullify or reduce its impact. You can see the same thing in action with energy. Due to a global focus on alternative energy, and worry about fossil fuel supply, and environmental hazards, it is a reasonable assumption that our use of fossil fuels may actually start to drop over the next few years.

It is an excellent article!

None of the above. We're on the US chart, only you don't know what that chart looks like -- time will tell us. Hee, Heee.....that's great. So, what your saying is who the f. knows.

Since recessions are determined after the fact I would suggest the US is already back in a mild recession, or still in the last one. Dont worry, Obama wants to get re-elected. His speech next week is going to be full of executive decisions to spend money that can legally bypass congress. I understand there are a multitude of ways he can do this and get credit for it as well. They are timing it to get maximum benefit. Call me cynical but it is all about the votes isn't it? By next summer happy days will be here again and I will be exiting stocks for the inevitable let down when the US has to go back to paying the piper. Market timing at its best. Look for all kinds of tax incentives for companies to hire and possibly even some taxes to force them to move some of that cash off their balance sheet. The Bernanke all but telegraphed this in his Jackson Hole speech: "Its up to the government to do something this time".

parsad says: What is gold's price going to do from where it is right now? maybe down? All indicators are that gold is in a bubble. At the local old persons mall (we all have one of these near our house) I noticed a cash for gold stall set up the other day. If I owned some gold, other than my golden personality, I would be selling. I have contemplated shorting gold but figure it has a ways to run, yet. Gold does not generate cash, and having a piece of paper saying you own an ounce, or a Gold ETF defies the logic of safety. If the shit hit the fan in the worst way, your ETF will be as worthless as the electronic screen it shows up on. You actually have to hold the piece of metal in your hand to spend it for food, or gas and that assumes the owner of the gasoline even wants your gold. He may prefer your rifle or some good buckshot. Sanj., People dont get FFH. They assume that Prem is making macro calls when he isn't. He has hedged his equities 20% below market to avoid a catastrophic loss. At the same time they have hedged they have bought Rim, Dell, CWB, IRE, JNJ, MB, SD,numerous insurers, and sent capital for expansion to existing insurers. The cost of the hedges is magnitudes cheaper than the upside value of their business holdings. Some things are clearly macro bets borne out of their association with Jim Grant, Michael Burry, et al, but these are cheap bets made at a time of minimum distress, with huge potential payouts such as the CDS, or the deflation bet. To my knowledge they have not touched Gold and have stayed out of Oil, exactly as Prem has stated.

You should try procrastinators anonymous... tomorrow... okay that was cheap ::) It is about the passion. My passion ebbs and flows. Last winter I wanted to learn about US banks so I read through the 10Ks for WFC, BAC, and a few smaller banks. This summer I spent a few days working through Bank or Ireland to see if it was worthwhile. I am not particularly disciplined, but when an idea grabs me I pursue. My most recent has been Best Buy and studying free cash flow production using a book and spreadsheet system developed by George Christy. The book had sat for a year or more and I finally had an epiphany and got into it. BBY only took a few hours, and is a piece of cake to analyze compared to those banks. I figure in a year I study 30-40 companies in detail, and skim hundreds more. Over 15 years that adds up to alot of companies. Add to this my scanning reading of 3 hours or so everyday including this board, and thats alot of education. I think you just need to know your personality. I do everything in binges. When I concentrate I work quickly then I go do something else. Even Buffett does other things such as play bridge on a train for 10 days, or a barge in China. Carl Icahn has been quoted as saying that he carefully reads 2 annual reports a week (obviously not BAC). What's helpful is to download a bunch of reports and go somewhere with no cell signal or WIFI.

Eric. The long term bond yields in the 1980s forecast a long hard bear market. And that is exactly what we got 13 years later... mind you.

Welcome back Mungerville, Mungerville is one of our early and better posters. Sswan11, Reread Tom Brown's posts leading up to the original credit crisis. He is generally a little overly optimistic to say the least. I stopped reading his blog shortly after the credit crisis started. That being said they are right on BAC.

There calling QE3 operation twist. The fed is supposed to sell shorter term bonds and buy 10 and up. Dont quite know the rationale. Should bode well for FFh, No?

Funny, I was looking for the warrant prospectus, Googled it, and ended up back at an earlier thread on the board where someone had posted the link to the document. Anyway, Wells cannot force redemption. They can however buy in the warrants, and self exercise, which would add to their core one capital through the issuance of shares. Issuing common shares has the effect of revaluing the strike price on the warrants. I expect the warrants are not the target of this campaign. Should they be then the price would likely rise somewhat as they buy them in. I am unwilling to sell mine so we shall see.