Partner24

So far, so good! If it starts to get out of hand, we can always limit the number of members, so it won't be problem. Indeed. For the "old timers" here, do you remember the time when we were at MSN and lotsofcoke was talking about Marvel (he once said something like "it was ringing like a cash register"), mungerville and his very wisdom words about a lot of stuff including the naked shorters (he once said something like "my CFA analysis tell me that they are toast"), some Mohnish Pabrai posts (no, not a nickname ;-)), when Shai managed the board and met Buffett at his school, etc.? I'm glad that we have some of them still posting here like uccmal, the "they will get the cup in 2010" crip, sleeplesstwindaddy, etc. I felt that this board was the nearest thing you could find about long term fundamental value investing on the World Wide Web. I think that most of that culture is still intact, but I fear we get somewhat "intoxicated" about macro predictions and analysis these days. You can find macro predictions on every street corner...it's a commodity. But long term fundamental value investing, that IS SCARCE. I hope that we'll be able to keep that focus over time. That's one of the reasons why this board is unique. Cheers!

We have over 800 members and that will double over the next two years! Great Sanjeev! If that happens, what will be important is to try to keep the culture that we have enjoyed over the last years intact. Cheers!

smith is def an enigma. generally i prefer ceo's who are open, straight forward, & forth coming, but its hard to argue with his track record In investing, being less open can basicaly mean two things to me: 1) the guy wants to keep it's best ideas secrets to buy things cheaper and get more returns 2) the guy wants to hide stuff to shareholders because...well he has something to hide and it doesn't smell good. On surface, Mass might be very cheap, but in the end it's a "if you don't know jewelry, know the jewelrer" situation. I like the value creation ability that he has (long term track record), and if he's a crook, so still he hasn't fully realized his masterplan, so that helps. But I don't like doubts like that. I've learned to let doubts speak louder over time. On the other side, I've lost some very significant lucrative opportunities in the past because of them. I guess that's life, but I hate these dilemma >:( By the way, thanks Roger.

Ahaha good one! :)

beerbaron wrote: Why is it that the threads that people spend most time on are macro threads? Look at the amount of reply on this thread and on the Negative market sentiment thread... It's somewhat strange. I don't remember having seen something of this magnitude over the last 7 years on this message board. You don't bring food by watching The Weather Channel and make your self-made rain prediction for the next day. You bring food on the table by putting your fishing rod into the water and catching fish. Everybody should keep their eyes on opportunities , because there is some very interesting ones out there, and then keep their head cold and take the long term view. People can worry about top-down stuff, but basicaly Berkshire Hathaway business model is all about bottom up, or long term value fundamental investing if you prefer. To paraphrase a BRK Chairman letter from my memory, what matters is to build an ark, not predicting rain. You build an ark by buying quality and attractively priced stuff. Think about the BRK backed municipal bonds that FFH bought, some high quality and cheap big caps, etc. That IS building an ark.

I guess I understand deeper why a lot of investors don't buy stocks when they get historicaly cheap. Part of the reason might be because they get somewhat intoxicated with macroeconomical fear. They see with binoculars and get affected with presbyopia. When they get specifical offers that normaly someone would jump on with their two feets (some big caps, some P&C insurance companies, etc.), their fear make them ask for more because they think that it will go lower. Just a guess, but having been on this message board since more than 7 years now, I don't remember a lof ot times when people where writing about macro stuff as much as now.

Here is the Bidvest Group financial results for 2010, wich were impressive given the actual economical context, and an interview with it's CEO Brian Joffe (who's been at the helm since 1988 I think). The results: http://financialresults.co.za/2010/bidvest_audited2010/ The Brian Joffe interview: http://www.moneyweb.co.za/mw/view/mw/en/page299364?oid=503432&sn=2009+Detail&pid=287226 Like I said recently, Bidvest is one of the most uncovered and underfollowed success story that I know. I guess it might be because they mostly do not buy common stocks, but private businesses, or it's South African roots, or it's very boring industries in wich it's subsidiaries operate into. But in my book, it's in the Fairfax and Berkshire class. Some quotes from the interview: I think that the movements in markets and the opportunities and life changes more dramatically day by day, as compared to what it was two year ago. Also, two years ago, I think that many of the mistakes that were made were covered up by, obviously very buoyant, circumstances and today it's very transparent, very clear, what goes wrong. So, one has got to adapt to that and I think there are more opportunities, potentially, even now because it's a question of you versus the competitors, not necessarily you versus the market at the moment. I think we still, as I said, aren't out of the woods, from an economic point of view. I think money is still reasonably short, not that it's short, you've just got to pay the price for it. I think that we see that there are quite a lot of opportunities coming and we just thought that we should be conservative at this time. one of the things that I'm very conscious of, we could expand the business significantly in a very short period of time, if we decided to advance significant credit in our group. We haven't opted for that particular routing because at the end of the day, we want to have a good and quality, sustainable business over time. Look, certainly if I had to evaluate myself, by in large I'm a conservative manager, if you want to put it that way. For me, it's a question of finding the right opportunities and doing the right things. I think on that basis, you land up with the right result. I just think from a group perspective and I'm just repeating myself again, I think we've always been conservative. When the opportunities come, then I think people may see and evaluate us in a slightly different way because if you make an acquisition, then of course you may be perceived as being less conservative.

I wish I could find a very cheap protection against the price declines of housing price decline in Canada (like FFH bought few years ago with their CDS).

You have a beautiful family smallcap. twacowfca, keep spreading the word and sterilizing. These are wonderful tasks. Few decades of living and accumulating wealth is a tiny fraction of eternity. That's something I try to keep in mind from time to time (but should do it more frequently). Cheers!

Good thread. Family and friends dinners, work on the house, wine tastings, taking some walks, some religious social implications, read and post on this message board, playing with kids. Cheers!

Charlie wants to cut the time spent on meetings?

A value investor can have 3 or 100 stocks in it's portfolio, that doesn't change the fact that he's a value investor or not to me, but the first would prefer focused portolio management and the other would prefer diversified portfolio management. That being said, that concept goes further to me. To own Berkshire Hathaway is far different from owning a phase 2 unique product pharma company. One has very diversified streams of operational cash flows while the other is surviving on hope. And when you think about it, most of active business men have an extremely focused investment portfolio. A lot of them own only stocks in 1 company (their own) that is generating operational cash flow in just 1 industry. Cheers!

I guess this is wishful thinking, but if Wal-Mart would be 25% cheaper, I would consider it very seriously. In the meantime, I can confortably wait since what I already own is very cheap and has very favourable long term prospects. Cheers!

Hi Christopher, there is a lot of interesting "jockey stocks" in that list. I think that's the first time that I hear someone who own shares of Bidvest, one of the most undercovered success story that I know. I've owned shares of that company since a few years now. Where did you hear about that company? Cheers!

No one has influenced my life more...not a single teacher in elementary, high school or university...no one. I would bend over and kiss my own ass if Prem asked me to! But the biggest lesson I've learned from them is to be independent in your thought process. So Sanjeev, if Prem ask you to bend over to do what you wrote, please keep an independant thought process! ;) Cheers! :)

Amen.

The media reports what is happening, not where the world is going. I would add that the media report first what the people want to hear, because the more that's what they want, the more people read them, the more advertising revenues they get.

I've been wondering about that for some time. Not have any good recipe yet, but you may want to study the Shelby C. Davis family story. Also, I wonder if it would be possible to create a trust with some rules in it: - Invest in low cost indexes related funds only. - Give money to the adult heirs only if they work. If they don't, give some money to be able for them do choose any kind of daily work they love, but not enough to do nothing.

Ahah good one. Here is another one: If you want to catch fish, you have first to dip your fishing pole into the water. Watching The Weather Channel will not put food on your table. Partner24, 2010 ;) P.S.: Or you can try to shoot them in a barrel too ;D

Well Sanjeev, I remember a sentence that looked like that: "Worry top-down. Invest bottom-up".

Some Tom Gayner quotes: All across the globe, we face persistent unemployment issues, the ongoing deleveraging of the economy, increased savings rates and new labor pools from the developing world, which are creating more in the way of global supply than demand. All of these factors create pressure on prices and worries about deflation. These facts and worries can be seen clearly in the low levels of inflation expectations and interest rates. I don’t hear bondholders talking about things like the fact that Disney just raised the admission price and the tuition and medical bills among others continue to rise. The popular idea of investing in bonds today strikes me as about the same as the chance of Dow 36000 a decade ago. The arguments were well-reasoned and seemed plausible at the time. A bull market can make you believe some incredible things. Today the multi-decade bull market has been in bonds, not equities and I think that similar incredible ideas are out and about in the financial markets. I don’t think that committing our capital for returns of roughly 3% is a good idea that will stand the test of time. In 1904, the New York City subway system opened with a fare of $0.05. The fare stayed the same 44 years until 1948. Over the next 62 years, prices increased regularly and now stand at $2.15. Investing in long-term fixed income instruments at today’s interest rates makes sense if you think the coming decades will see the subway fare remain at $2.15 or thereabouts. Cheers!

Would you think Warren Buffett would do something like that? "Listen, you don't understand my very generous compensaton plan, so I'll delay the occasion for you to vote. So, listen to what I have to say again because you have to agree with it before we do the meeting". No, it's more like: Warren: "I want to be paid 100 000$ per year, and that's all". Shareholder: "That is not enough. Please increase your salary". Warren: "No. That's enough to me". Simple. Clear. Shareholder friendly.

On surface, it looks cheap. Smith long term track record seems to be very good, Mass Financial compounded book value per share figure so far have been stellar,but Smith is very secretive and don't seems to like to disclose a lot of information. Do you still have doubts? I do. That's why I did not bought a single share on Mass Financial yet. A collective search would be a good idea, since it might be a good long term investment candidate, and we like investment vehicles managed by great investors like Prem, Warren and the likes.

Can I have my brownie points? ;) Berkshire Hathaway 1999 Chairman's letter: Recently, a number of shareholders have suggested to us that Berkshire repurchase its shares. Usually the requests were rationally based, but a few leaned on spurious logic. There is only one combination of facts that makes it advisable for a company to repurchase its shares: First, the company has available funds -- cash plus sensible borrowing capacity -- beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively-calculated. To this we add a caveat: Shareholders should have been supplied all the information they need for estimating that value. Otherwise, insiders could take advantage of their uninformed partners and buy out their interests at a fraction of true worth. We have, on rare occasions, seen that happen. Usually, of course, chicanery is employed to drive stock prices up, not down. The business "needs" that I speak of are of two kinds: First, expenditures that a company must make to maintain its competitive position (e.g., the remodeling of stores at Helzberg's) and, second, optional outlays, aimed at business growth, that management expects will produce more than a dollar of value for each dollar spent (R. C. Willey's expansion into Idaho). (...) Recently, when the A shares fell below $45,000, we considered making repurchases. We decided, however, to delay buying, if indeed we elect to do any, until shareholders have had the chance to review this report. If we do find that repurchases make sense, we will only rarely place bids on the New York Stock Exchange ("NYSE"). Instead, we will respond to offers made directly to us at or below the NYSE bid. If you wish to offer stock, have your broker call Mark Millard at 402-346-1400. When a trade occurs, the broker can either record it in the "third market" or on the NYSE. We will favor purchase of the B shares if they are selling at more than a 2% discount to the A. We will not engage in transactions involving fewer than 10 shares of A or 50 shares of B.

At least they've called that a mistake. Everybody do some mistakes from time to time. Here is two main categories of people: 1- The ones that do not recognize their mistake and keep digging themselves into some holes. 2- The ones that try to recognize their mistakes and learn from them (some call this "candor"). I think that Fairfax and Leucadia managers are in the second category.