Munger_Disciple

Ericopoly, I believe that your math on tax reserve for regular IRA is wrong for the following reason. The tax reserve is inside the regular IRA, not outside in a taxable account. Therefore it compounds tax free until withdrawals are made.

It seems to me that conversion makes sense only if the income tax rates in the future for regular IRAs are worse than they are now for Roth conversion. Moreover, there is a non-zero probability that Roth IRA will be taxed in the future in the name of making the "rich" (defined as anybody that can be taxed) pay their fair share. So, whether to convert or not is non-obvious to me. I may take the guaranteed tax deferral of regular IRA and let the chips fall where they may in the future. Besides, if you have future philanthropy in mind, you can always fund those efforts with IRA distributions effectively making the distribution tax-free. If there is a genius on this board who can tell us how to legally do Roth conversion non-taxable, then it would be a slam dunk to convert.

The article by Robert Miles does not make sense. Buffett says that over 98% of his net worth is in Berkshire (in 2009 annual report, released March 1st). It is impossible that <2% of Buffett's assets are worth $1.8B, because this would mean that Buffett's Berkshire holdings should be $90B, which is obviously wrong.

Hyten1, You are missing the point I was making regarding the 11th partner in the example. If realized gains are assigned to him, he owes taxes even if his total account value may not have increased. As Parsad rightly pointed out, these effects (positive or negative) average out over the longer term.

For example, income from March 1st to March 31st: 10 Partners each have $100K invested: Dividends $10K Interest $10K ST Gains $20K LT Gains $50K Unrealized Gains $100K Simply divide the income totals by 10 and allocate. April 1st...new partner puts in $100K...distributable income is now divided by 11 partners. Does not partake in any of the previous income except for the unrealized gains when realized. Yes, NAV is inflated by unrealized gains, but it does not impact investor unless realized or fund liquidated. Over a long-period of time, the effect is relatively negligible. Cheers! Parsad, In your example, if you realize the $100K gain (that was unrealized on April 1st) in April, 11th partner will be allocated a portion of the realized gain even thought his investment may not have gone up in value (i.e., similar to mutual fund situation). Is this correct? I do agree that over a longer period of time, this effect is negligible. And you are doing it way better than mutual funds anyhow.

Parsad and other managers, What is the annual cost (as a % of your net asset size) of audit, legal, book-keeping and accounting for your fund? If you can share the approximate fund size also (for example, a range like $1-3M would be ok if you don't want to share the exact fund size), that would be very useful to me and perhaps others. Thank you.

It seems to me that having the IT gene is a necessary condition, but not sufficient. If you don't have the IT gene, then forget about investing the funds yourself. Assuming one has the IT gene, he or she needs to grow up in an environment that exposes them to finance, markets and investing (As Buffett said many times having the IT gene a few thousand years ago would not have saved him from lions). And then that person has to work very hard to succeed.

Munger's views appear to be more pessimistic than Buffett's. I don't know if they are unusually more pessimistic or not. I am also curious what the board member think.

Looks like they have a 30% stake in a private insurance company Plymouth Rock. Does anyone have any information on Plymouth Rock?

The S&P 500 total return in 2009 is 26.5%, not 23.5%.

I don't understand why some of the message board members are excited about FFH dividend declaration. Why on earth did FFH sell more shares a few weeks ago and then declare a dividend now? It makes no sense whatsoever. Assuming they needed to sell stock to complete the purchases of subsidiaries, they could have sold less stock had they not foolishly declared dividends. This would have resulted in less share dilution to existing shareholders. And by the way, shareholders would have saved taxes (on dividends) had FFH retained the earnings.

Wabuffo, Can you recommend some resources for someone trying to learn how to analyze banks? Thanks in advance.

Packer16, His book is probably one of the best personal finance and money management I have ever read. His idea of keeping 3 years of expenses and putting the rest in stocks is probably one of the best ideas I have read about in this area. Are you referring to the Little Book on Value Investing? I did not read the book, but I thought it was about value investing rather than personal finance. I am now thinking of buying it after your post.

Thanks to biaggio and woodstove for the Canadian Sedar info. I look forward to checking out ELF.

Does ELF have a web site? I googled it, but could not find any. Also, what is the equivalent of SEC in Canada where I can access 10-Qs and 10-Ks? Thx.

Thanks, TariqAli.

Charlie Rose web site is really lame. I tried to watch the Buffett interview again and it seems to always stop at the 4min19s mark. It also seems to happen with other video archives (Freeman Dyson interview in Aug 2009 at a different time marker). I tried different browsers with the same result. I live in San Diego and unfortunately our local PBS station does not seem to have a re-run of this interview. Does anyone know how to obtain a transcript? Thx in advance.

Did anyone else have problems watching the Charlie Rose interview with Buffet? It seems to stop after about 6min into the interview.

Parsad, How did you calculate Bershire's leverage (Assets/Equity) to be 3:1? I get a much lower number. If you consider their insurance ops, it is very small (222B assets, 62B float). I agree with you that one of Fairfax's problems is too much leverage in the insurance ops. Your comparison however implies it is closer to Berkshire's leverage when it is not.

Thanks for the great post, Parsad.

Wow! $2100 is pretty rich.

These numbers are for A shares: BV ~ $85K, IV ~ $125K

Given that "regime changes" in volatility/severity are almost impossible to detect, it seems that it is unlikely that one can successfully predict reliably with this fractal theory.

Can you explain how the fractal pattern theory predict the severity of hurricanes?

Parsad, I heard that Pabrai was down 70% last year, so it implies that he needs a gain of over 200% to break-even when compared to Jan 2008 results (which is probably why he is still under the high water mark). You mentioned all his funds were up > 3% when compared to S&P 500. Is the 3% annualized or total? Also, how many years are his funds in business? Thanks in advance for your comments.