mhdousa

Mr. B or anyone else, Anyone know if there's been any progress getting these funds on Fidelity? I'm trying to invest some IRA money and so would prefer not to go through the process of transferring these assets to somewhere else. I called the fund, and the guy answering the phone had no idea when it would happen. He also told me that the funds weren't available at ANY brokerages (even though we know they're available at Schwab and Scottrade). Thanks! -M

The slide in PDF format and and full report are also available at the URL above. Mary Meeker as some of you might remember (fondly or otherwise ;D) was a "star" tech analyst at Morgan Stanley who gained fame during the run-up of the dot-com bubble. Ms. Meeker joined venture capital giant Kleiner Perkins last year and penned a WSJ editorial on the same subject, USA Inc., sometime last year. There is a reason the federal government isn't run like a business. In a recession, businesses cut costs. What do you think would happen if the government did that?

He lost me when he said: Ben Bernanke keeps saying that what we really need is a little inflation. He says we'll get 2 percent or a little bit more. You shouldn't even think that, let alone say it out loud. That's such bad luck to tempt fate by saying that you can calibrate things like that. You can't do that. Did he want Bernanke to knock on wood?

From the 5/11 SAI, Francis has between 500k-1m in each of the two funds.

Hi Eric, Sorry if this question is a little too basic, why didn't you just buy JNJ outright at $60. You save the 10% premium that you pay for the calls, and you're getting the (assumed) increase in price between now and 2013. Thanks. -M

Hi all - I'm framing this question as about JNJ, but it's really a general question about how to be contrarian while avoiding value traps. As I gain familiarity with analyzing individual companies, I have a few companies I own and follow. These are either good capital allocators (Fairfax, Markel, Leucadia) or "high-quality" large-cap companies (JNJ, ABT, MSFT, XOM) that are cheap on a relative basis. Given current valuations and my relative newness to this, this approach makes sense to me. My JNJ thesis is really about its brand: they have a history of making quality drugs, devices, and consumer goods and the current valuation is underestimating this quality. But, as everyone knows, they have had major quality-control issues. Though JNJ is still is a respected brand name, almost all brands eventually falter for some reason (exceptions: Coke, Kraft among others). At what point does enough become enough and you decide they've hit a point where they are in the decline phase? Or all of the current headlines just blips and they will continue to persevere and succeed? I hope my question makes sense. Thanks in advance. -M

This seems to have fallen through: http://www.sec.gov/Archives/edgar/data/96223/000090951811000132/mm03-3011_8k.htm

It's up the individual managers. For example, Fairholme has had the same ER (1%) since inception, despite now having assets of almost $20b. Other funds (Bridgeway is one rare example) change the ER based on performance. One of the Bridgeway funds (BRAGX) has had very poor recent performance so it actually has a -0.51% (negative 0.51%) ER right now. I believe Francis returned his fees to his clients one year when he wasn't happy with the performance.

Shane, I'm not Sanj, but I'll try to answer. I think a bigger issue for managers than number of funds is asset base. According to Morningstar, he's managing about 1.7b. I'd say that's a moderate amount of assets. It's not so much that his investment universe is hindered. He also has very low turnover in his funds (about 3% for the Canadian Chou Associates fund), so he's not trying to turn over his entire portfolio multiple times a year. Someone should correct me if I'm wrong, but I think most of his funds are variations on the same theme (some are more equity-focused and others more income-focused), so there's not a whole lot of juggling he has to do. In short, it's not something that gives me pause about investing with him. -M

I think it's unreasonable to expect concentrated value investors to outperform in every single timeframe. That's the nature of value investing - you're going to be out of step with the market at times. Look at Longleaf Partners, who are some of the most well-respected US mutual fund managers out there. Their 2007-8 performance was terrible, and their long-term trailing returns reflected this. They've since recovered, and on a rolling basis they've done fantastically. And for the people mentioning that McElvaine's only beaten the market in down years, remember that the Buffett's goal for his partnership was to match the index in up years and beat it in down years (not saying that McElvaine is Buffett, or that anyone else on the planet is).

I bring this up because you mention, on the Chou America thread, that Tim will always put his partners ahead of themselves. Did Tim change his fee structure in 2007 or so? His earlier fees look pretty high For example, in 1999, his pre-fee return was 38.5%, but after fees was 29.5. That's almost a 25% cut, and that's pretty consistent throughout all years up until 2007 (when it seems to change to a straight 1% management fee, which is what he describes in this report). Contrast that to the Buffett/Parsad/Pabrai structure of 25% after a high-water mark. Any thoughts?

I spoke with Francis a few weeks back on this issue and he told me that it would probably take between 3-6 months. My hope is that it is closer to three! Thanks! Glad to hear it's in the works.

It's been awhile since I've asked, but anyone have any idea when the funds will be available through Fidelity? Thanks.

This a**hole Cohen has given enough money that his name is now on a well-regarded children's hospital in New York. Unfortunately, money matters more than character in these kinds of things. http://www.northshorelij.com/ccmcny/home

Apparently you can add to that list Whitney Tilson, who said (to someone very close to me): "We all thought Watsa was a crook".

usual suspects

Their annual report is out: http://www.sec.gov/Archives/edgar/data/1486174/000031577411000036/dncsr.htm

Can we keep the discussion in this board to bottom up investing? My cynicism is dripping. Plan - I completely agree with you. Like I said, I was just surprised at his comments, which were a departure from his usually solid value investing framework. Apologies for bringing the macro. -M

The sudden decline in consumer activity that followed the plunges in the housing and stock markets represented a reasonable – indeed a desirable – response to overindebtedness. Yet the federal government saw this well-advised retrenchment as cataclysmic, because the national economy had grown dependent on our living beyond our means. The government’s knee-jerk response to contraction was to prop up economic activity by any and every means possible; the hole in consumer activity had to be materially repaired on the government tab. It shocks me that someone as intelligent as Klarman seems to downplay how close to the brink we were in late 2008, and suggests that no government intervention was justified.

They've covered their short position: http://www.valueinvestingletter.com/pdfs/Why-We-Covered-Our-Netflix-Short-T2%20Partners-2-9-11.pdf

Thanks for the suggestions Myth. The situation has a lot of similarities with BCIS and I discussed those with Geoff during the weekend. Very smart guy. PlanMaestro - Any updates on this situation? Thanks. -M

MrB - Any idea if there's been any progress on getting these funds onto Fidelity? Thanks to Sanj and MrB for bringing these funds to our attention. -M

Just went to the Chou America website to see if there were any more details on the funds, and found a 9/30/10 portfolio for the Equity Opportunity Fund. Looks interesting in that the amount of concentration is unlike any mutual fund I'm aware of: (sorry for the formatting) Common Stock - 60.5% Communications - 14.9% 40,000 UTStarcom, Inc. (a) $ 86,800 Consumer Discretionary - 16.2% 4,800 Office Depot, Inc. (a) 22,080 1,000 Sears Holdings Corp. (a) 72,140 Consumer Staples - 22.0% 10,000 King Pharmaceuticals, Inc. (a) 99,600 4,200 MannKind Corp. (a)(b) 28,392 Energy - 3.9% 4,000 SandRidge Energy, Inc. (a) 22,720 Information Technology - 3.5% 1,600 Dell, Inc. (a) 20,736 Total Common Stock (Cost $298,074) 352,468 Warrants - 6.7% 3,000 Bank of America Corp. (a) 19,470 2,500 Wells Fargo & Co. (a) 19,725 Total Warrants (Cost $41,810) 39,195 Total Investments in Securities - 67.2% (Cost $339,884)* 391,663 Call Options Written - (0.9)% (42) MannKind Corp. (Premiums Received $(4,873)) 10.00 02/11 (5,502) (Premiums Received $(4,873))* $ (5,502) Other Assets & Liabilities, Net – 33.7% 196,277 Net Assets – 100.0% $ 582,438

or he follows your twitter feed... ;) Nope. I own it as well, and was also wondering how to oppose the offer.

Is this CPD?