Partner24

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.

and is open to shareholders on record as of July 12th. I wonder what would have happened if he would have done that before. I guess a lot of shareholders have already voted with their feet.

LRE seems to be a very well run insurance company on the underwriting side. On the investing side, they care about rule no. 1 (don't lose money), but even if I like their conservativeness, I also like opportunistic people like we see at Berkshire, Fairfax and others.

So what left? I'm not a bond investor, but if I would have to own bonds, I would try to search for things that are more attractive on a risk adjusted basis. When people favor something, there is something else that becomes unfavored.

Only a few points more than 150? Pfff! ;) (just kidding)

How "ironic". They were against government interventions before the 2008 crisis. They were asking for government interventions in the middle of the crisis. They are now back to "Go". It sounds like a child who wanted to play with the BBQ alone without any parent restriction, then burned himself and cried for care and now want to have full access to the /$%/% BBQ again!

If I'm asking for a loan and the institution want to know how much I'm worth, do they wish me to disclose my equities portfolio value in any other way than MTM? Ironic, isn't it? If I'm buying a new life insurance policy and I smoke, how about using a lung scan that I had 10 years ago? I mean, when I hear a bank complaining about MTM accounting, it does not sounds far more different than hearing a car driver complaining that it is because of the radar that he got a police ticket, not because he was driving too fast! Cheers!

Is Sardar is making a run at Wendy's? Well, I don't know, but if it were the case, what would you think Dave Thomas (Wendy's funder) would say if he were still alive? I'll let every one of you think about your own Thomas post mortem quote. ;)

Congragulations Stephen for that well deserved cup from your team! Our Montreal Canadiens were a very good surprise this year (their performance in the series was a "Fairfax like" turnaround if you compare it to the regular season) and here in Quebec we were delighted by them, but in the end the best must wins and this year, it's been Chicago! Hat off to them! I hope you had a nice celebration. Cheers!

you are only as good as your word, and when you take a $900K salary and then tell partners you are there to make money with them and not off of them, well...you've got to back that up! That's right. Talk is cheap. Like I said before, sometimes, what someone is speaks so loudly for itself that I can't hear what he's saying (or read what he wrote in his communications with the people's pocket where he wants to put deeply his fingers in shareholders) ;-) Cheers!

Hi accutronman, I guess you follow Michael Smith and Mass Financial. I've tried to find more information about him and the company, but Smith is a very secretive man. When you read it's letters, while it's fairly candid, he is not as comprehensive and you don't get the same feel than when you read FFH and BRK letters. Do you know him? Have you followed this company enough to share some insight with us? Thank you very much.

My concern with BP is I just have no way of assessing the current situation as there is so much yet to be understood. I second that.

Seems like a "give a great baseball player a bat" move from MKL, not really different from the one done by Fairfax recently. Cheers!

Weapons of mass destruction in fool hands is the biggest single threat that I can think of over the long haul. It will not matter that much how much Fairfax and Berkshire will be worth if we'll always being affraid of being killed by them. Just my opinion.

At the actual level (meaty enough?) ;D

Buffett does what the article describes now, but he didn't back when he was running his hedge fund. He certainly was a bit more like Biglari back in the day when he had less money bargainman, Do you have some Buffett quotes or something to show us that? I don't remember having seeing him publicaly trying to replace managers of public companies by publicaly insulting them.

P&C insurers overall are quite cheap actually, and fortunately some of the better ones too! I'm quite confident that, in a decade or two, when we'll take a look back at the present time, we'll that it was a pretty good time to invest in them. But, you know, the rear view mirror is always clearer... I'll let you guess wich ones I'm very happy to own and would like to add shares ;) Lastly, I've been quite active recently, so I took a look at new "candidates" and didn't find any that are more interesting than the ones that I actually own. If you don't find anything more interesting, there is nothing more enjoyable to just add to what you're already own. . All men's miseries derive from not being able to sit in a quiet room alone. Blaise Pascal Cheers!

I look forward to having Sanjeev as the head of a publicly traded company setting the right example like Watsa and Buffett/Munger. Shalab, I wish that too. Please take that with a pinch of salt since I use only my memory here, but I wrote that to him here a few weeks ago. He basicaly said that it was not on his plan to do that (maybe a chairman, but not a CEO). I had a sale course back in January. The teacher was a veteran salesman. One of the many things he said is that a sale begins when the person tells you "no". So Sanjeev, I'm still looking forward for you to be a top manager of a public company. You can do it! With the attitude and talent you have, I'm confident that would benefit greatly from permanent capital given by long term value investors ;D Cheers!

Well, that was clearly a mistake even without the benefit of hindsight. No. First, most of the proceeds went to FFH. I've not compared their relative performance, but anyway secondly even if I would have made more money with these stocks, I have investment principles and do not want to compromise them. Someone could have said that it would have been a brighter idea to buy Nortel than Berkshire in the tech bubble period, and then just sell just before it begun to tank, but if you get into that "what if" game, your investment framework will begin to show some cracks. What is important is to clearly define where you are competent and, more importantly where you are not competent..., what you want, and more importantly what you don't want and then keep your discipline. I do not want to invest and partner with managers that I don't trust and/or don't like and don't take the rear view mirror to check what I could have earned if I would have not respected that invesment criteria. Regarding what my friend said, he told me that in private, so I'll keep that confidential. When someone trust me, I try to do my best to deserve that trust. Suffice to say that he's been faster than me on Sardar Biglari. My friend 1 - Partner 0 (just kidding) :) Cheers!

omagh, Many, many thanks to you. I really like your determination and your character on this. If this board get shut down again, even if it's many times, I'll always be your cheerleader on this! Keep up your good work! In retrospect it's much easier to see clearly now that Biglari was a smooth talking Buffett wannabe charlatan who lacks integrity, especially in his shareholder communications concerning executive compensation. I have to give credits to one of my very good friend. I've pulled the plug in 2008, but this friend of mine never had to pull the plug, because several years ago it tooks him just a few minutes to size what was wrong about Sardar Biglari and never put a dime with him and it took me approximately 2 years. Kudos to him! I owe him a bottle of wine. Cheers! P.S.: While Fairfax case over the last few years is a gem of learning, Sardar is one too. Very different story, but as worthwile as a lesson for any student of value investing. P.P.S.: I hope that SNS shareholders will vote no on his plan to legally put his fingers deeply into the shareholder's pocket.

Overall very satisfying results! ;D I agree with most of the members that expressed their disatisfaction about the "except for" comment. While I agree it is important to put the chilean event impact in context, but to cheer up about what would have been the results without that is another thing. But I'm used to that and don't expect that attitude to change. I take a look at the big picture and I'm very satisfied with it :)

My own valuation of MKL says that price to earnings is a little bit lower than 10X normalized earnings. But I guess that the premium accorded to Markel is relative to the conservativeness of reserves (wich has a very high impact on stated book) Again, I'm just guessing here, but people might fear less the "oopps" risk of Markel reserves than FFH. Remember too well the lean years that are still not too far away in time.

The only reason why I've never own any WRB shares is because of the investment side of the business. Nothing to compare with FFH and BRK indeed. That being said, they are still disciplined capital allocators and I like the fact that they are buying shares back. Makes a lot of sense to me.

It would be really interesting to have some notes about the AGM.