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I think the surplus/storage has to do with specialty. Teachers are typically paid the about same for the same level of experience so you have a surplus in some areas (liberal arts) and shortage in the math/science area. Come to Rochester and you will see oversupply of teachers with wages remaining high for those who have a job. Similar to the 2-tier labor system they have in some parts of Europe. Packer

In theory he is correct but this is not Finland and in theory there is no difference between theory and practice but in practice there is. You are also dealing with real peoples lives here. I think there is a big difference between seperating gifted kids in a relatively wealth district and providing kids a chance in a failing school district. The later is what I am referring to in providing the kids a chance. Here in Rochester, our city schools are terrible. The kids in high school do not even do homework and the teachers are dealing with so many distractions from bad home lives they barely have a chance at success. As to ERICOPOLY's point about gifted kids, I am not too sure separating them into gifted classes is the best for them. I have talked with parents here where that has happens and it can cause a culture of entitlement because the kids are smart. This in part is what is causing the income inequality due to the fact that these folks will typically marry into there own group and have 2 high earners in the family. How do you handle the late bloomers? I was one of those. I had a learning disability (dyslexia) and feel behind when I started out but caught up later. Packer

Ultra Petroleum common. They just purchased some oily properties and the market does not like it. They have a low cost position in Nat's Gas. Packer

I bought some GNCMA and UPL via sale of the rest of my LIN. Packer

Does anyone know why trading has been halted? Packer

Jeremy Siegel in his book "The Future for Investors", examines the firms with largest returns in the S&P 500 going back to 1957. In the appendix he provides some details. You may want to read the book and send an e-mail to him to see if he has looked at the S&P 500 this way. I am not sure what he describes as an owner operator but with the list in the book you can test the hypothesis. Siegel also develops some rules for out performance based upon his observations. Packer

Could this be to finance the Blackberry debt? Packer

The discussion is nice to talk about the problem but what can we do about it? I think one way is to provide scholarships to students for those who are trapped in the poor education system. This provides a path to some of those who have the potential and something we as individuals can do. Although I think Buffets idea is nice in theory, in practice you run into roadblocks. Packer

I am sorry but if you want Prem to invest like MRK/BRK, invest in MRK/BRK. Although I disagree with the hedges (for the short-term they may make sense but hedging over 2 to 3 years really hurts returns - the market is just too efficient on the macro level for this work over an extended period of time), FFH provides a distressed investing/insurance option. I have no problems with the blow-ups, its to be expected. How many of us have win/loss ratios of greater than 70%? Not too many. Packer

I would say not too realistic. How are the going to increase EBITDA into a declining market? Kodak should sell at a discount to XRX as it has XRX's bad business without XRX's good business (services). Packer

I think this is going to be a Chapter 22 company. The CEO that took them into bankruptcy is still at the helm and the business they retained is a poor business. Selling printer hardware is competitive and is a declining business. They have to compete against Xerox, Xycon and HP for market share in a shrinking market with debt (yikes!). I looked at this coming out of BK because my dad received some stock from a retirement plan and told him to sell before they go bankrupt again. This may be a better short candidate than a long. Packer

Given Yactman's size and amount of capital to deploy, his set of potential buys is smaller than most of the individual folks here. I am all for using your small size as an advantage. Packer

Maybe I missed it but does Ichan have as unbalanced compensation scheme as BH does? I also think the buy insurance company and invest the float idea is also much harder than it looks. Look at all the issues that FFH and GLRE is having with it. BRK and MKL make it look easy but these guys are world class pros with lots of experience. Packer

The reason I bring it up is my understanding of your approach is to buy compounders. I think this is very good tax-efficient strategy but to be successful as Buffet has been you need businesses to buy at reasonable prices and the market a some point has to award you an at least in-line with market multiple. I see how this can occur at most of your other ideas you mentioned (Lancaster, BRK, FFH and even GLRE). But I think BH even if they can find cheap hostile takeover candidate, the market will continue to attribute an "Biglari" discount to the stock price, a big weight other compounders do not have. I could be wrong but BH is a too hard compounder for me. Just my 2 cents. Packer

Great illustration of a contrary indicator. Let hope strategists call for a decline in 2014. Packer

BH is no mini-BRK. The only part of that description that fits is mini. BRK has build a culture around treating folks fairly (the same with FFH). BH has developed a reputation for hosing folks and providing the rewards to Mr. Biglari. The BRK model is dependent upon purchasing business at or below IV in a non-combative way. Buffet and Watsa never go hostile. Who would want to sell there business to BH? No one. So if you have a choice, you go with someone else maybe even for a lower price. I think that is downside to BH and you see it in the valuation. Selling at a discount to other restaurant chains. If you want a mini-BRK I think you have to look at other firms similar cultures not just appearance and structures (smoke and mirrors in my opinion). I think an interesting question is would you Gio want to sell your business to Mr. Biglari or Mr. Watsa or Mr. Buffett? Greenlight I think has more positive attributes but I am not sure how good his underwriting is. Poor underwriting has offset investment gains since 2010. He has done OK in 2013, CR<100 but has had a really benign years for cats. We will see. I have no problem with investment side but (like FFH) it is the underwriting which cam stunt growth. Packer

I think I used the wrong word to describe KKR and Blackstone types of company, they are more akin to private equity. I think BH is more akin to private equity with Greenlight is more akin to hedge funds. I think on the scale these guys operate it is difficult to find bargains so when when you find a successful one capping the upside can be harmful for the investor. I don't see how either BH or Greenlight is that much different than an LP interest in a KKR of Blackstone fund (fees included). Packer

I think the reasons for the love is that no matter what, FFH shareholders will share in the gains and losses in a fair way like Berkshire but for BH you will share in the losses and the upside will be capped by Biglari much the way it will be for Greenlight RE as they have structured the vehicles as hedge funds. Nothing against Einhorn and Biglari and if they are successful they you will make money but how are this different than investing in a hedge fund put together by KKR or others (fees includes). FFH is like investing in hedge fund will less fees. Which one would you rather invest in? Packer

Oddballstocks, Any particular reason you have decided not to manage money versus your day job? Packer

I still don't understand the CPI hedges on top of the equity hedges. Isn't there some overlap? If you are hedged against an equity decline why do you need to be hedged against a price decline also unless you are making a bet on a CPI decline. Short monetary contraction or a depression, I don't see a CPI decline. The whole system is set up for inflation as there is no anchor asset or currency unless the Fed becomes more hawkish. Packer

I think concentration would be part of it. If you look at the highest performing Graham and Doddsville managers (Buffet, Munger and Guerin), they all were concentrators. They are willing to do what others are not - concentrate versus the "free lunch" diversification provides. I personally think the concentrators eat the diversifiers lunch. Packer

This board amongst other "cloner" sources was mentioned by Mohnish in a presentation at Columbia: http://www.valuewalk.com/2013/10/mohnish-pabrai-columbia-business-school-presentation-102713-video/ Packer

I believe the issue in 2007 was with mortgage debt not margin debt. You can make an argument that margin debt should be higher today because interest rates are lower and cheaper than other forms of debt, namely mortgage RE and other forms of unsecured debt. Packer

Unless I am missing something, $400 billion of margin compared to a US market capitalization of over $18 trillion doesn't seem to be to big of a deal. Packer

The reason is you are making factor bets which appear simple in theory but in practice are very difficult. I agree with Palantir, Buffet and Graham that spending time trying to make macro factor bets is more trouble than it is worth. Prem has also lost alot due to the hedges and is making a bet (with hedges) that the USD is not going to appreciate more than stocks, a bad bet in my opinion. What about the scenario that the market continues to go up via QE and the debt is monetized and the USD goes down - stocks have small real returns but large nominal returns versus other assets. In that case the hedge pulls down you return because the hedge is implicitly long USDs but short real assets (stocks). Packer