watsa_is_a_randian_hero

I don't mean to sound like a crank or unappreciative of parsads work, but I really think people have been taking too many liberties with posting anything and everything lately. This is supposed to be a board with a specific purpose. If I wanted to go to a board with posts "about anything and everything", I'd go to reddit or 4chan. This board completely losses all value as posts about "anything and everything" crowd out actual discussion on specified investment ideas with no ability to filter through the randomness.

Perhaps that is poor design. Or perhaps, as I've suggested, tools could be added (and I and other members have offered to pay a subscription fee to fund this) to enhance the ability for members to follow other posters or filter what is seen on the main window when logged in. My argument still stands, the value of this board has been diminished as the main board has become littered with non investment related discussion.

What happened to this board? It used to be a useful forum predominately for the discussion of BRK, FFH, and presentation and debate value stock ideas. More and more over the last few years the board seems to be predominately a forum for discussing topics such as the following (actual threads posted in over the last month). Some of these may be tangentially related to stock at some level (? mostly macro), but many are re-posts of whatever the yahoo finance headline of the day is (there is no need to re-post here for discussion...), most are unrelated to investments in any way and none deal with actual investment ideas. Summary: this board has become very littered and weeding through all posts to find those of value has become harder and harder. In my opinion, the place used to be better when it was a forum predominately for the discussion and debate of specific trade ideas. SILK ROAD Creator's Plea for Leniency How do you internalize what you read? Rooftop solar vs utility solar Dimon calls shareholders lazy What’s the best way to advertise your product in foreign countries? Fishing in BC Fusion Pension funds with unfunded liabilities - you gotta be kidding John and Alicia Nash killed in car accident Name one product/service that you love and one that you hate Do you think Bitcoin is a safe store of value? very strong el Nino perhaps? Looking for some input Alfalfa and Almonds! WTF! Rubio cashed out his IRA to pay for appliances (and college) Mayweather - Pacquiao Harley down 4.5% Practical Currency Hedging Question with Options Currency fluctuations Tom Brady sacked (suspended) for four games Dan Loeb Slams Warren Buffett Janet Yellen says equity market valuations are quite high Setting up brokerage account for another Tax Question Okay, this is Nuts

This was my posting 6 years ago. after it reached my fv in the 2010 to 2012 timeframe i sold most of my holdings - it had approached my FV estimate and also my expectations for the future had soured based on Prem's 100% hedging of the equity portfolio and RIMM investments. I did by the FFH long-dated bonds though with some of the proceeds - my IRR on the bonds has been 13.75% since that time period, exceeding that of the stock. (in USD terms). I recently sold some more stock near $700 CAD. Its at a fairly rich P/B multiplle given the returns we've seen the past few years (Since dec 2010, over 4.25 years, BV is only up about 18% adjusted for dividends).

They are not mutually exclusive. Why not try the CFA, or try both? There is little downside risk to CFA...worst case is what, you fail? In the process you at least might learn something, and figure out what you dont know. There is a lot of risk to MBA (debt and opportunity cost). MBA is different as it is more about networking, case studies, broader managerial learning, etc. If you tell me you have a Harvard MBA I know that you are well connected, driven individual and must have had a (somewhat) impressive start to your career. It doesnt necessarily mean you know jack about finance though (I am friends with many). A CFA on the otherhand tells me you are knowledgeable in a very specific body of knowledge (finance, accounting, etc). However, conversely to the above, it doesn't necessarily mean that you know jack about how to apply this knowledge in the real world (I am friends with many of these as well). Also, in my opinion, an MBA is not very valuable unless it is from a top tier school. For a career in investments, or consulting around investments to other professionals I have the following view: CFA> MBA from non top 5 school MBA from top 5 school > CFA Having a MBA from top 5 school + CFA is best Disclosure: I have CFA, not MBA, and work in investment consulting for hedge funds / PE funds.

On global warming...I would like to point out that its possible to agree that the earth may be in fact warming, but disagree on the causes (there have previously been large changes in temperature; was the ice age caused by greenhouse gases?). I think its also worth pointing out that its possible to agree the earth may be warming, but disagree on the rate/speed of change and the level of concern needed. I really dislike how anyone who doesn't agree with the elitist agenda is painted by media with one brushstroke (all as idiots). On Detroit/Michigan, I will argue the source of its economic plight is similar to Cleveland (where I was born). It is both a function of changing economy, unions overplaying their hand (not willing to make concessions or not making them at a fast enough pace), and anti-business/anti-growth political policies. The changing economy part is tough. The value of labor has fallen significantly on a relative basis because of global competition; the value of a college education, and experience in areas such as management, finance, and consulting has risen as a result of the same factors. The population in areas like Detroit (similar to cleveland where I grew up) is not as educated and is experiencing a huge brain drain from the portion that is educated or on the higher education path. Part of this is driven by lack of opportunity (driven by the factors above), part driven by self-reinforcing trends (if you are young and smart, and you see large pools of other young and smart people moving to east coast, west coast, chicago, and texas, where do you move?). The shitty weather doesn't help, but I would point to Chicago as a midwest city that has remained vibrant despite the forces going against it. Generally my advice would be to invest in real estate in areas with positive economic trends, positive population trends, freer economies, well-funded stable governments, and rule of law/crime enforcement. Detroit doesn't fit this bill. I don't even own my current residence in Chicago (despite the fact I could pay cash for it if I wanted to) because of worries about the long-term funding of the city/state. I would invest in real estate in the east coast, florida, texas, and west coast.

market multiples is a function of 1/K-G. K is affected by interest rates and inflation, but so is G. So inflation shouldn't affect the market multiple to much. I think low interest rates in the current environment are more driven by a low REAL rate of interest. Real rates of interest on the short end of the curve have been negative for several years now. I think this is reflective of (1) anti-business/anti-growth political environment and (2) extreme risk aversion on the part of some investors.

"Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. Active trading, attempts to “time” market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisors, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy. Indeed, borrowed money has no place in the investor’s tool kit: Anything can happen anytime in markets." [Page 18] This seems to contradict with Buffett's own history of actively investing his entire career & using a bank loan for leverage in his early career. Thoughts? Is this a matter of preaching advise to the general public and average investor? I know there have been several threads over the past 10 years on this board and its predecessor MSN board debating the merits of use of leverage (I say this to stress the mere discussion of leverage at this time should not be construed as a contrarian indication, as has been argued on other threads). I am of the opinion that it is risky, but that risk is mitigated to varying degrees if (a) you are buying earnings power at cheap prices and/or the relevant market in general is cheap, (b) you are young and have high earnings power (and therefore can reasonably expect to continue funding deposits to your investment accounts) and © use of non-recourse leverage (such as mortgage loans for real estate, bank loans, LEAP options, etc).

I think that's probably the best course of action. However, I think that the same arrogance and hubris that made them sell those contracts is now telling them that they can probably beat this and keep their franchise as well... or something along those lines. this would not be allowed google the term fraudulent conveyance.

Or he needed a cool 4b for the big elephant. ;D or he decided XOM was not the best value in the industry, and he is buying something else in the industry (undisclosed with SEC waiver, which is not unprecedented for him). personally I think XOM has been trading very expensive relative to other opportunities in energy right now.

the peer-to-peer/online direct lending space is rapidly growing. I would look there.

less far-fetched then this...what is happening today in real estate? technology is driving lower demand for RE we can more efficiently use RE with use of technology technology generally enhances productivity...enhancing productivity means generally doing more with less productivity increases are deflationary 3 examples: -Internet transformed the travel agency and booking business. this is all done electronically now. No longer do you have local travel agents across the country. The aggregate demand for real estate from the likes of expedia is lower than the prior aggregate demand for real estate from travel agents. -Electronic storage of documents is both cheaper and more efficient (can more easily search and more quickly recall documents). One of the reasons it is cheaper is less use of real estate. One of the implications of companies transitioning to electronic document retention policies is less use of real estate. -Advances in communication have made it easier and cheaper for workers to telecommute. It is now much more common than ever for individuals to work from home or occasionally use "shared space" in the office. The aggregate result of this is less demand for real estate. The three above examples are examples that have happened in the real world that have reduced demand for real estate. These are history...but the general trend of technology reducing demand for real estate will continue. Will this mean a long-term decline for real estate? No...or this would have already happened. Countering this trend above are increases in demand for real estate due to increases in population, and increases in the training/education levels of individuals, and increases in the demand for real estate in other areas (leisure).

i sold some today

Mere months ago this list would have also included LRE. :) I half say this in jest...I agree with oddballstocks...I think I would be very careful about picking a stock(s) to hold if I were to be restricted from selling for 10 years.

You brought this up on the FFH board on a different thread...I thought it was interesting and took the time to pull as many of the company's returns as possible. I dividend adjusted, split-adjusted, and parent-co M&A adjusted the returns history to follow the company's returns that owned the brand at any given time throughout the time period. I had returns for 85 of the 100 companies; some were private; some had too many M&A transactions to get historical stock data. The findings: the S&P 500 had a total return of 136%; the top brands had a total return on average of 272%. Interesting notes: -If you remove apple, the returns of the brands drops to 197% -Apple's returns (6580%) dominated and skewed the group so much so that Apple's stock combined with any other portfolio mix of the 85 (for instance the worst 10, the worst 20, etc) would have still outperformed the S&P 500. -The next highest return aside from apple was Philip Morris (for Marlboro brand) -If you remove the top 10, the rest of the pack performed average in-line with the S&P 500 -The top 10 consisted of Apple, Philip Morris, Volkswagon, Nike, Amazon, Hermes, Budweiser, Starbucks, Mcdonalds, & Brown-forman (Jack Daniels).

This is wrong. See photo attached.

lifelock does not cover brokerage i too use IB and appreciate extra security (though I viewed as hassle at first) I have wondered if you can buy insurance (similar to lifelock) to cover large financial theft...like how does someone with 100mm protect themselves? I'm guessing now with lifelock.

+1

This is my first post to this thread. A pool/fund of investments can be worth more that their current market value to the extent (a) their is an expectation the manager will generate alpha, (b) the manager's fees are low enough that their is an expectation that the investor will enjoy the alpha generated on a "net of fees" basis, © the pool/fund of investments is closed to new investment (ie, not an open-ended mutual fund), and (d) the specific investments in the pool/fund are not disclosed and therefore cannot be replicated. With regard to Fairfax: A - Over the long term, the manager will likely generate alpha; however, over the short term this is uncertain (I happen to personally not believe in the hedges and sold off the majority of my equity position years ago because of this) B - Fairfax management "fees" are below market for their services. I would say this condition is satisfied. C - Fairfax is technically closed for new investment on a day-to-day basis. That said, the management has a history of frequently issuing new stock and it would not surprise me to see this done if a significant P/B multiple occurred. D - Only the stocks are disclosed, and this only occurs on a quarterly basis; therefore this condition is partially satisfied. Considering all of the above, I would say there is not much reason that FFH should trade at a significant P/TBV based on its asset management track record alone. Additionally, combining this with their track record on underwriting, a multiple of 1.1x to 1.25x on tangible book is the most I would pay until they remove their hedges or some other significant event happens.

I second what eric said...this is useless information. A few more reasons in addition to what eric pointed out: 1. It will depend on what option strikes are offered. For any given underlying stock, there could be more selection available, and that selection could be skewed to more in-the-money or more out-of-the money strikes. Obviously of there is a selection bias at purchase, it will effect the results at expiration. 2. It would depend upon what option strikes are purchased. On any given underlying stock and for any given expiry month, market participants may have purchased more in-the-money ore more out-of-the money strikes. Obviously of there is a selection bias at purchase, it will effect the results at expiration. (This is what eric pointed out) 3. Options are created out of thin air, and can be settled out of thin air before expiration. A long could have been open, could have an in-the-money contract, and can close prior to expiration. You would never close a worthless contract (it would be a waste of a commission). However, for all sorts of reasons, you may want to trade a in-the-money contract prior to expiration. This reduces the open interest of in-the-money contracts, and would skew the data you are looking for. For these reasons, and others, the data you are looking for would have no value.

I think they had good intentions (they own both), and in fairness to minority shareholders of both co's they designed it to be an exchange at roughly equal P/TBV ratios. That said, FCBN's recent ROE has been much better than FCNCA's, and FCBN's long-term average ROE track record is much better than FCNCA's. So, while the proposed transaction was certainly good in terms of boosting the stock price, I think FCNCA shareholders are getting a better deal than FCBN's. This conclusion came about to me after much thought over the last couple months. While the proposal boosted the stock price to higher levels, I ultimately concluded I'd be better off to vote against the deal. I also don't think it will matter what I vote, as I control a small number of shares (a few hundred shares between my own accounts and accounts I advise on), but nonetheless I wanted my vote heard.

I subscribe to the motto of happy wife, happy life. I wanted to know this with a certainty given the potential situation to arise with clients.

I did not know this -- does anyone have a source or other material to read on that? I'm looking at Pub. 590 and there's no mention of Roth splits in divorce automatically being considered taxable withdrawals, which I imagine is a relatively common issue. Can the ex-wife not simply rollover the Roth "distribution" to her own Roth and not trigger the tax? I could not find any support for this either. Ericopoly, are you sure this information you gave for a divorce scenario is correct? I believe both traditional and roth assets can be transferred tax free under a Transfers Incident To Divorce (I am not a tax professional though).

I am seeing 213 companies with >20% ROE & <20 PE with US traded stock. A few large caps that fit the bill: AAPL MSFT WMT IBM ORCL UTX MCD BA MO DEO LMT ACN I am using CapitalIq

I assume the liquidity is pretty good for this 2097 bond? What would you do if the liquidity is very low? For a short dated bond, at least I can wait until it expires and pay me the par. For a long dated bond, maybe I have no choice but to hold it for the next 20 years? I purchased a par amount in the 5 digits...if you need liquidity for a multimillion trade you may want to look at it closer Also my 2 largest holdings over the last 2 years representing over 30% of my portfolio were in stocks where I owned over 100% of the average daily volume...so I am not stranger to liquidity and it is not large concern of mine. There was enough liquidity that the bid/ask wasn't super-wide and I could get my trade through at my limit price though.