JEast

The Baltic Dry Index is a strange composition of an index. More importantly to this discussion though is it has little to do with tankers that carry oil. Just look at FRO with new 52-week lows for nearly for a year now. Some call this a failing knife, but I like FFH's entry. Cheers JEast

Given the move in the past few days and from the December 31 numbers, the 10-year has moved 75-85bp and the 30-year has moved nearly 120bp. Huge moves for the year but significant moves from the June 30 when we were in a mark-to-market loss. Another call for our friends in the front office to sell a good portion of those long-dated bonds -- and with the proceeds, do what you do best. Cheers JEast

Balance Sheet Recession is better and explains the basics of the situation. Cheers JEast

All good on the east coast. Did notice that the 'Jump To Link' function is not working on mobile iPhone.

What a difference only few trading days make. Since the end of the reported June 30 numbers, the 10-year has moved 100-110bp. Huge move in a such a short period. Some have speculated what this implies, but here is a call for our friends in the front office to sell a good portion of those long-dated bonds -- with the proceeds, do what you do best. All this good news even prior to heading into the peak hurricane season. As events play out, it would seem that our company is hitting on most, if not all, cylinders. On any general market pullback, FFH my even get back to extremely undervalued that the market is missing or doesn't care about short-term. -- Prem & Team, buy back a few shares :) Cheers JEast

Francis was adding alot of BAC - while Paulson was selling. And most likely selling more recently :) http://www.bloomberg.com/news/2011-08-15/paulson-s-hedge-fund-sold-citigroup-bofa-shares-last-quarter-amid-decline.html Cheers JEast

Bifurcation reigns! Tankers without long-term contracts are actually, in some cases, taking on trips below actual cash costs on some Asian routes. On the other hand, container shipping is holding up better than one would expect. Even more so for companies that have long-term contracts. Cheers JEast

I am of the believe that Richard Koo pointed out what was (is) going to happen to the US in his very fine 2003 book 'Balance Sheet Recession'. I also would recommend this book more than his recent 'Holy Grail' Book. Mr. Koo probably is one (of several) reasons why I have been in the deflation (or at least non-inflation) camp for so long and loved the FFH deflation derivatives. Interesting times indeed :) I am also reminded of two other books that point out that we really know nothing anyway. Who would have predicted a US downgrade and bonds having a huge rally. Board members my be interested in 'Everything Is Obvious: *Once You Know the Answer' by Duncan Watts and 'Being Wrong' by Kathryn Schulz. Cheers JEast

Looks like Fairfax is making an investment in the shipping tanker industry. http://online.wsj.com/article/SB10001424053111904292504576480523786445958.html Cheers JEast

Two (2) new vulture lawsuits filed in follow the leader law practice. This is now four (4) by my count in the last week and reminds me of during the dot com bubble when these were filed every quarter after some tech firm missed earnings. I have read that lawyers are getting squeezed as supply exceeds demand so I guess they need to find income from somewhere. Cheers JEast

Japan may not have had 20 years of essentially no growth if they were not so xenophobic. On the other hand, that is the strength of North America as immigration is relatively robust. Though there are some parts of xenophobia in the US, the current economic downturn has cleared some of the concern of the central and south american influx as many have either gone home or gone to Europe were they can make more money. I too am optimistic about the future as in a year or two. Cheers JEast

Most file right after an earnings miss, so this is intriguing that they are filing right before an earnings release. On the other hand, not really as nothing is surprising at this juncture in the saga. Cheers JEast

I attended the 8th Annual Value Investing Seminar in Trani, Italy and thought the board would be interested. The conference was, by my estimation, mostly European ideas in the theme of 70% Graham/Dodd influenced with the other 20% Buffet/Munger/Fisher and even a few shorts (10%) tossed in along with some Chinese fraud ideas. The speaker list was strong as you can see in the website as included. No need for notes as all the presentations of the speakers should be in the archive section within the next week or so. http://www.valueinvestingseminar.it/content_/index.asp?lan=eng Cheers JEast

Movie theaters sell popcorn and refreshments at their marginal costs which may (or may not) make the refreshment costs appear insignificant compared to the movie ticket price. Recognize that not all consumers are the same and some will buy popcorn and others will not. Therefore, it is best for the movie theater to price the popcorn at the marginal price, not at the highest price. In addition, many contracts to rent the movies to the theaters call specify that the price of popcorn (i.e. refreshments) can only be so much. Why? Because the movie industry knows that super high popcorn prices will keep movie goers away. Therefore, I believe Munger is correct and prices are not what they are because the theaters have a captive audience. Cheers JEast

No wonder the mortgage mess got so messy when regulators were hiding behind congressional mandates. After the fraud was discovered and Fannie Mae quit buying the fraudulent mortgages, it continued for years because Freddie Mac began picking up the fraudulent business within a week of Fannie Mae’s cutoff. http://www.bloomberg.com/news/2011-06-30/fannie-mae-silence-on-taylor-bean-mortgages-opened-way-to-3-billion-fraud.html Cheers JEast

They have both a JV and a previous $100m announced convertible preferred private placement. KW's website says the total preferred amount was $132M. The JV consists of $276M. http://www.kennedywilson.com/307-kennedy-wilson-attracts-up-to-100m-equity-investment-from-fairfax-financial Cheers JEast

At our pre-Fairfax dinner this year, we all had the opportunity to talk with William McMorrow, CEO of Kennedy Wilson. As such, they have been on a somewhat spending spree this year and Fairfax just increased their position in a private placement. http://www.kennedywilson.com/444-kennedy-wilson-enters-into-agreement-for-private-placement-of-common-stock Cheers JEast

Nice video with hiphop soundtrack called 'Fight of the Century' you can pass along to your friends that are not so economically oriented. Round one was of 'Fear the Boom and Bust'. Cheers JEast

I too find myself using Bing more. Maybe its the pretty pictures. Bing maps are a different story though. Cheers JEast

A small rebuttal: The Aggressive Conservative Investor is a book for the more serious investor as its authors clearly state. For example, "In presenting our position, considerable space is devoted to describing the real world faced by both outsiders and insiders." As such, many that like spoon feed investment advice are turned off of by the he Financial-Integrity Approach (Safe & Cheap) process. Much like value investing going on 80 years now since Security Analysis :) I read it again several years ago and thought it better the second time. IMHO, it is a top 5 investment book. Cheers JEast

Maybe it is more of just the new reduced interchange fees that are coming (i.e. reduced bank profits). Good for retailers though. Cheers JEast

Just when I thought there could not possible be another good investment book out there, along came a few books that are have merit. These recommendations come from the theme of once you think you can't learn anything else, then maybe your investing career is over. So I keep reading. `The Most Important Thing’ by Howard Marks http://www.overstock.com/Books-Movies-Music-Games/The-Most-Important-Thing-Hardcover/5603526/product.html?keywords=9780231153683&searchtype=Header ‘There's Always Something to Do’ by Peter Cundill http://www.amazon.com/Theres-Always-Something-Do-Investment/dp/0773538631/ref=cm_cr-mr-title ‘Entrepreneurial Investor’ by Paul Orfalea http://www.overstock.com/Books-Movies-Music-Games/The-Entrepreneurial-Investor-Hardcover/2588621/product.html?keywords=9780470227145&searchtype=Header Cheers JEast

Myth - did you not answer the question? If it is in runoff, run the numbers and what is your downside? If you have shareholder friendly management with share buybacks earning $2 for the next 10 years, what is the downside exactly? If something does stick, seems like more upside than downside from this board member. Cheers JEast

In engineering terms, maybe we should be using the KISS method (keep it simple stupid) type of analysis versus growth rates, market share, etc. Even after the recent purchase, they have $5 in cash with relatively little low cost debt. So for a $20 dollar stock earning $2+, what is your downside? Cheers JEast

Norm -- looks like you took the lead this year. Another pre-pre-meeting sounds good at C'est What this time. How about 5:30pm. Cheers JEast