Mark Jr.

I've been keeping an eye on Clarke for a couple years, but you should be aware, if you aren't already that George Armoyan has recently taken a step back from the business citing personal issues (his brother's marriage has broken down and his elderly father is ill). I think he's even off the Board now, but I could be wrong about that. Interestingly, I cannot find the press releases on this anymore. They are not even at Clarke Inc's website anymore. Ok, found a copy:

I did not realize anybody was actually killed by this, hence my feeling that it was all a bunch of hype. If people are dying then it may be in the realm of the Pinto fiasco, which is a whole different ballgame.

The congressional hearings (they put on a real dog and pony show today, replete with crying soccer moms, etc) and the entire saga just took on a quality of severe overreaction and hysteria. The cynic in me suspects the entire thing to be a put-up job, now that the USG owns their competition. I generally don't consider car companies because they're outside my circle of competence but I think people are just running around like chickens with their heads cut off and selling this thing out of pure emotion.

In a 13f filing is the " Shares or Prn Amount" column the book value of the shares held (what the filer paid for them?) or is it the marked-to-market amount at the time of the filing? At the risk of answering my own question....I think it looks marked-to-market now that I look at the historical pricing. Thanks.

My take on Faber is he calls it like he sees it, and if people want to listen, fine. He puts out his newsletter, interested parties buy it (like me). Contrast with (I was going to say Dent, but I can do better: Bob Prechter): People like this are "doing material". They have a schtick, they have an angle, they have a product and that product is their worldview. Their profits are derived, not from taking money out of the market, and not from owning good businesses. They make their money from "information publishing" - except what they are selling isn't really information, it's opinion. Their opinion. The truth is, information marketing done effectively is a license to print money. And if your "information" is really just your opinion dolled up to look like a thinking man's analysis then it's even better, because you can literally pull it out of your ass and sell it to credulous people for hard cash. There have been very few newsletter writers / advisors who I think are top tier: They just want to put out their coverage and do their thing. Among them I count Marc Faber, William Buckley (The Privateer) and formerly: Marc Rostenko - The Sovereign Strategist, who basically quit the business in disgust. The far more numerous circus acts include, the aforementioned Bob "Elliot Waves Rule the World" Prechter, Harry "I can predict exactly what will happen unless this other thing happens instead" Dent, Bob "you pay me and I spam you" Czeschin and then pretty well everybody who writes for Agora Publishing. How do you tell the difference? When you subscribe to the former, you never get bombarded with marketing upsells and they tend not to sell their lists (from what I can tell). The latter do, boy do they ever.

Yeah I took this course a couple years ago. It was worth it. Met a lot of great people there and keep in touch with a few of them still. Some of them are on this board. I started http://www.valuetalk.org after taking that course for the alumni, but frankly, I spend more time here myself.

I'm wondering if there are any distance-learning MBA or EMBA programs for value-investing / securities analysis. I've taken the George Athanassakos seminar at Western, I'm interested in a full-on EMBA along a similar curriculum. Western's Ivey School EMBA would be perfect, logistically, but it doesn't seem very centered on investing / analysis. The Columbia Business School EMBA looks great, but it's not a distance learning course, and living in Toronto I don't think it would feasible to fly to NYC every other friday. So what else is out there? Anything?

Totally anecdotal: back around '02 - '03 I used to hit the pawn shops to clean them out of junk silver and gold maple leafs and here in Toronto, they seemed to be for a large part dying on a vine. When I got to talking to the owners they were telling me they were getting killed by eBay. I wouldn't know how the larger chains fared as a result of this: Cash Converters, etc. But the mom-and-pops were hanging on by a thread.

As a guy in the internet industry up close and personal, I think you nailed it. Small anecdotal examples: the domain aftermarket. Fund.com spent 10 million dollars to acquire the domain name "fund.com" on it's own. Pets.com, business.com, drugs.com: cumulatively they were bought for millions upon millions of dollars (just the domain names) and either failed outright (pets.com) or never got off the ground beyond a measly pay-per-click page. I'm guessing the vast majority of the "goodwill" on any balance sheet in the internet sector is mostly worthless. Sometime this year expect the last, greatest fool to pick up Twitter for a billion and they're still "pre-revenue".

Hey Viking, apologies if I did a misread on your meaning. I think the key difference is going all-in or 50%-in on your own company vs. somebody else's. All the value-investing legends we follow here are near fully invested, with seemingly little diversification in their own companies or conglomerates, everybody else is along for the ride and taking a leap of faith, albeit a fairly well educated one in a lot of cases here. As was pointed out in another post, if BRK went to zero tomorrow, Buffet has enough outside of it to live comfortably. Same is likely true for all the rest. So yes, they are concentrated, but they are probably also diversified enough to survive a catastrophic implosion of their babies without having to get a job at Starbucks afterward. Since I took over my company one of my goals has been to diversify outside of it. I frequently ask myself if by diversifying my outside investments I have sacrificed growth within the primary company. It is possible. But my business is the internet and there is not much of a historical track record in my industry to gauge how things will go through various long economic cycles. The whole thing could blow up around noon today and civilization would somehow muddle through if nobody could send email or surf the web anymore. Most of this stuff didn't exist 15 years ago and we got this far without it. In my mind, it means the "moat" around my entire industry is pretty narrow.

Investing in stocks is business ownership, only on a fractional basis. In theory, theory and practice are the same. In practice...they aren't. -mark

So basically, you are thinking of putting half-your net-worth into a 2-4 month hold. Forget that it's FFH. You're looking to daytrade or market-time 50% of your net worth? I'm following up on this thread because I am a small business owner and you asked for our input. About four years ago I put everything I had into buying out my partners. It was the single greatest investment I've ever made. My normalized net earnings have met or exceeded my purchase price of the company every year since I bought it. I retired all the debt financing it in 16 months. I'm a happy guy. I was comfortable doing that deal because I lived and breathed my company and knew it inside out. The level of knowledge a small business owner has into his business will (or should) always exceed what any outside, passive investor could possibly gain into any public company. Even FFH, even BRK. If you aren't rich, and you want to get rich, don't put half your net worth into any public company and hope it does the work for you. Fact is very few people become wealthy from investing in stocks. The number 1 road to wealth and financial independence is business ownership. So if this is your position, I wouldn't put 50% into FFH, I'd go out and buy a business. (The other thing is this: your business can make investments! Since I bought my company I have less personal investments, just enough to max out my RRSP allowance every year. The bulk of my investment I do from within my businesses. I like to view it as my own little micro-Berkshire or Fairfax :-P ) If you are already wealthy, I wouldn't be putting 50% into a 2-4 month play in anything. Especially the months we've been having around here lately. I think FFH is a pretty good place to park a sizable chunk your wealth and have minimal downside risk from here and a lot of upside over the long hold. Also, just so I can become known on the board as "that crazy USD crash guy", you're assumptions to the downside are pretty mild. Over the next couple years I think we'll all get off very lucky if we just see a CDN at .9 USD or even a USD at .9 CDN.

First off, I have been hesitant to go bargain hunting in US equities because I'm paranoid about a catastrophic decline in the USD vs CAD. Flaherty and Crumrine operate some funds which invest in preferred shares and senior debt of US companies. For Canadians, they have a fund operated by the Brompton Group which holds these same instruments, but claims to hedge the USD exposure. http://www.bromptongroup.com/funds/ffi/overview/ Like everything else under the sun, it got smashed down during the meltdown, and as a result, these units are now yielding north of 18%. Their NAV is 6.94, they closed today at 7.05. They're maintaining a distribution, currently .11 monthly, albeit down from .125 in March. They've already announced the June distribution. Portfolio summary available here: http://easyurl.net/101 Top holdings (as % of porfolio and % of NAV) Liberty Mutual Insurance Co., 7.697% October 15, 2097 12.5% 20.1% Axis Capital Holdings Limited, 7.50% Pfd. 12.2% 19.6% Cash and short-term investments 11.3% 18.2% Southern Union Company, 8.25% November 15, 2029 8.4% 13.4% Delphi Financial Group, Inc. 7.376% May 15, 2037 6.7% 10.6% Comerica Capital Trust II, 6.576% Capital Securities 5.7% 9.1% USF&G Capital I, 8.5% December 15, 2045 Capital Security 5.3% 8.4% Dominion Resources Capital Trust I, 7.83%, December 1, 2027 4.9% 7.8% Capital One Capital III, 7.686% August 15, 2036 4.5% 7.1% Everest Reinsurance Holdings Inc., 6.6% May 15, 2067 4.3% 6.8% CIT Group, Inc. 6.1% March 15, 2067 3.7% 5.9% PartnerRe Finance II Inc., 6.44% due December 01, 2066 3.5% 5.6% First Tennessee Capital Trust I, 8.07% due January 06, 2027 3.4% 5.4% First Midwest Capital Trust I, 6.95% December 1, 2033 Capital Security 3.4% 5.4% Dominion Resources Inc., 7.5% due June 30, 2066 3.4% 5.3% Astoria Capital Trust I, 9.75% November 1, 2029 Capital Security, Series B 3.2% 5.1% Pulte Homes Inc., 7.375% June 01, 2046 2.8% 4.4% Wisconsin Energy Corp. 6.25% May 15, 2067 2.8% 4.4% RenaissanceRe Holding, 6.08% Pfd, Series C 2.5% 3.9% Corporate Backed Trust Certificates , 6.3% Series GS 2.4% 3.8% Noble Energy Inc., 7.25% August 01, 2097 2.4% 3.7% SATURNS Goldman Sachs Group, Inc. Debenture Backed Series 2004-2, 5.75% 2.1% 3.3% Realty Income Corp., 5.875% March 15, 2035, Senior Unsecured Notes 1.8% 2.8% USF & G Capital, 8.312% due July 01, 2046 1.7% 2.6% Webster Capital Trust IV 7.65% June 15, 2037 1.7% 2.5% So basically, this seems a way to get into a basket of income producing preferred shares and bond issues that normally would yield around 5% or 8% that is now seriously undervalued with a corresponding higher yield. What I'm wondering about is the USD to CAD hedging. I'm deeply suspicious that it could hold up against the kind of declines I think could be in the offering (don't laugh, but I am braced for the USD fall significantly against the CAD, let's just say I won't be surprised to see it go significantly below par) Other than that, none of the names I see in this summary ring any bells of banks receiving TARP funds or being taken over by the FDIC. Anyone else ever looked at this one?