Granitepost

FFH seems to have closed the day at $394.49 up $23.49 in Toronto on a volume of 213,319 shares and $364.58 in the US up $20.70 on a volume of 237,463 shares. The total volume on both exchanges is about 450,000 shares. If I remember correctly, the recent share issue by FFH was in the amount of 2,881,844 shares with most of them going to 11 institutional investors. Today's volume would be equal to a large chunk of the part of the new share issue sold to retail investors so the liquidity of FFH may not be much better now than it was before the share issue if the bulk of today's volume is going to be used for index funds reacting to the Index changes. Does anyone have a handle on the number of shares that would have been needed due to the index changes? Maybe I am off base in this line of thinking, but it seems logical to me.

One effect of FFH's proposal to buy the remining ORH shares and the issue of more FFH shares recently is that the S&P plans to increase the relative weight of FFH in the S&P/TSX Composite and Capped Composite, theS&P/TSX Completion and Equity Completion, the S&P/TSX Equity andCapped Equity and the S&P/TSX Capped Financials indices to reflect the issuance of new shares as part of the transaction, which will be effective after the close of trading on Monday, September 14, 2009. Although I do not know the extent of the increase, I would presume that this change will create an increased demand for FFH shares, probably immediately, for those who are tracking the Composite with their portfolio. Considering that a large percentage of the new FFH shares have been placed directly by FFH with a small group of institutions, there may not be a large number of shares available to satisfy the increased demand caused by this change.

See: http://ca.news.finance.yahoo.com/s/08092009/28/link-f-ccnmatthews-fairfax-raise-1-billion-equity-offering.html for details.

The article in the Globe and Mail says that BYD has not decided whether or not to issue more shares. See: http://globeinvestor.com/servlet/story/RTGAM.20090831.wbuffettchinabyd0831/GIStory/

There were several past discussion on our old board about Marvel. Today a takeover has been announced but I have not seen many details other than $30 cash plus part of a Disney share. It would appear to be a good fit and open up another related venture for Disney.

The news release is not easy to understand so I was pleased to find an article "New CEO rebuilds The Brick" at http://www.thestar.com/business/article/678204 . It seems that there was a major problem with shortage of inventory as many items were out of stock at the stores. In addition the cuts to the sales staff had left the stores with a shortage of sales staff. Only a third of the reduction in sales volume could be attributed to the recession. The message is that the new financing has allowed measures to be taken to deal with these problems by increasing staff and dealing with nervous suppliers.

There is a nice summary of FFH's investing abilities and accomplishments in TWST Investing Strategies Report, an excerpt of which is available at http://ca.us.biz.yahoo.com/twst/090720/aak506.html?.v=1 . Although I am sure most members of this Board are fully aware of this information, it is nevertheless nice to see it acknowledged.

Even Roubini is now saying that he originally predicted a 24 month downturn and that we are now at the 19 month point, so he thinks he was correct in the first place as he sees it ending in the next few months.

GE Reported $0.26 E.P.S. which beat the consensus estimate. Its revenue ($39.08 Billion) was down 17% from last year compared to a consensus expected decline of 9%. GE expects a profitable 2009 and is cutting costs. GE capital is reported to have outstanding cash flow.

The current consensus mean Q2 earnings expected by the market is $0.23 compared to 2008 Q2 of $0.54. The consensus expected 2009 full year earnings are $0.99 compared to $1.78 in 2008.

It may be less than last year but is still very respectable in this economy. This is great news for Warren's charity, the Glide Foundation, and for the Purchaser.

Fairfax has been informed by the SEC that the "investigation as to Fairfax has been completed and that it does not intend to recommend any enforcement action by the Commission" . See: http://ca.us.biz.yahoo.com/iw/090625/0514167.html?.v=1

"Battle Strikers" has the potential of being one of the big toys this year and may actually save Mega Brands, according to an article at http://ca.news.finance.yahoo.com/s/19062009/2/biz-finance-mega-brands-looks-spin-corporate-recovery-launch-battle.html . This new toy which comes out in July is basically a battery powered top that "fosters competitive, aggressive play that appeals to many young boys, aged six plus".

Bloomberg reports that BRK has doubled its stake in Municipal Bonds to $4.05 Billion by March 31 due to the high yields offered on them because of the massive underpricing of risk in Q3 of 2009 and Q1 of 2009. The timing seems to have been good as the yield on Municipal Bonds subsequently fell. See: "Berkshire Doubled Municipal Bond Stake on ‘Unthinkable’ Yields" at http://www.bloomberg.com/apps/news?pid=20601213&sid=acObar._Pgdg .

Ericopoly, I am very pleased to see you back on the board. I really enjoy your posts. Cheers, Jim

I find the ads quite distracting because they are large with vivid colours. It seems like we had one at the top of he page yesterday but today there are 2 at the top of the page and one at the bottom. We discussed earlier on the old board the idea of paying a certain amount to help defray the cost of the board. Perhaps we decided against this idea already, but I would gladly pay to avoid the distractions. Cheers, Jim

Hi Cardboard: Which Canadian broker do you utilize to be able to buy options. I do not believe that TD Waterhouse allows this to be done in a RRSP account. Cheers

Hi Norm: The 2009 Q1 results are out. Please see: http://www.intlcoal.com/pages/news/2009/20090429.pdf

Hi Partner24: I am wondering what effect the regulation of MidAmerican would have in this case. It would seem that the price charged for the electricity would be impossible to increase without the permission of the regulator. I assume that the cost of generation of electricity would increase with higher demand levels as new infrastructure would be required. Is it reasonable to assume that the price increase authorized would cover the increased cost of generation only, the cost increase plus a percent profit on the additional cost, or some price level related to what the market would bear? I guess the increased profit would relate only to the same profit margin on a greater quantity of electricity (which could be significant in itself)?

Ericopoly: I really do hope that you will reconsider your decision, given some time to think about it. I believe it to be a real disaster for the board and all the other members that this situation developed. I, for one, found the thread that upset you to be boring and hence I did not read most of it, even though I must admit I enjoy your other posts immensely and will miss your valuable contributions to this forum. I hope other board member join me in telling you how much you would be missed. Cheers, Granitepost

Hi Crip: It sounds like that address is around Yonge and College Street so it it downtown but about a half mile from the meeting location.

Today's Financial Post has an article by Diane Francis that is sure to upset a few people on this Board as she is quite negative with respect to Buffett. See: http://www.financialpost.com/opinion/story.html?id=50951c89-3692-40fb-a6c3-f49eca2627dd

March 4 article in Financial Post claims that "H&R REIT may sell assets, not finish south block of The Bow". See: http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/03/04/h-amp-r-reit-may-sell-assets-not-finish-south-block-of-the-bow.aspx

Immelt's Feb 6 letter to shareholders refers to an opportunity of a lifetime. Yesterday when GE shares reached their lowest level since May 1993, he apparently purchased 50,000 GE shares. See: http://www.bloomberg.com/apps/news?pid=20601109&sid=aMCn1opZjxQc&refer=home

The Board of Directors authorized a plan to reduce GE's quarterly dividend to $0.10 from $0.31 per outstanding share of common stock, effective for the second half of 2009. This reduction will likely not be a surprise to the market and should help it retain its AAA rating so I would expect many holders of GE shares to be pleased that the decision has been made.