txlaw

Gio, no worries. You did not upset me. I was merely pointing out that we probably shouldn't assume that people bought at the prices available last week only because it has now met their price target for buying and selling within a short period, although I will admit that I often do sell within short time frames as I reallocate for various reasons (better opportunities, tax loss harvesting, portfolio re-balancing, etc.). I'm sure a number of people who bought last week -- like Sanjeev, for example -- felt that they finally got an acceptable price for FFH, given other available opportunities (e.g., various FFH investee companies). As to valuation, if you believe that FFH is as undervalued as, say, a BAC, then I agree that the recent price action doesn't matter. But I view FFH as a great company now selling at a cheap but not crazy cheap price, and I tend to prefer the crazy cheap investments. Just my style of investing, and I have a certain hurdle rate that must be met before I buy into an investment. I believe that seeking a very large MOS -- while fully taking into account how business prospects could be affected by macroeconomic factors -- is all the hedge one needs, unless one is concerned about monthly, quarterly, or even yearly NAV marks. For example, one can see that many of FFH's investee companies have been affected by the global economic slowdown (DELL, LVLT, RFP), but I think that this is more than baked into their prices and that there is a very large MOS in those stocks.

I suspect that the reason is that not everybody wishes to hold FFH for a decade like you and me. Some people are more active investors and want to pick up a 50-cent dollar and then turn around and sell it for 80-cents in a year or two. People who are able to do that reliably can have a better return than just holding FFH or BRK for lengthy periods. I suspect that people are now looking at FFH as an opportunity to buy very cheap and sell a little bit less cheap sometime during 2013 for a quick 20%. As an observation, back when ORH was still publicly traded, many of us made good money by flipping back and forth between FFH and ORH depending on which looked more attractive. For whatever reason, the relative valuation of the parent and subsidiary would swing perhaps 30% back and forth a couple of times per year so you could play the relative valuation while retaining a long-term exposure to the basic P&C business and to the investing prowess of Prem et al. Too bad we can't do that anymore! SJ Or it could be that FFH at the current price meets these investors' hurdle rates for investing. I can tell you that I don't just go by the rule of thumb that FFH will increase BV by 15% and, therefore, I will get a 15% return over time if I buy at BV. I have my own assessment of when I think FFH is cheap, and it's not dependent on nominal IV (i.e., BV).

I bought myself a bit of FFH today.

LMAO

Ha, and we come back full circle to the discussion on franking we had over two years ago. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/future-dividend-taxes/msg18332/#msg18332 Myth, what was that you said about this being debated ad nauseam in the past?

It would be way too difficult to go into a detailed analysis of SHLD in one post, but if you look at all the posts in this thread, as well as other SHLD-related posts (just do a search for SHLD), you'll see that most of us are focused on a liquidation/run-off analysis. For the asset side, you should focus on inventory, real estate (both owned and leased), IP (think KCD IP), and other intangibles (existing customer base and value to potential acquirors). Essentially, you can think of SHLD as two parts: an asset-lite side and a runoff/liquidation side that will generate capital that can be deployed by ESL over time. This is a complicated investment for sure. Probably should read everything that Berkowitz has said on Sears.

Except for the fact that their actual business is pretty awful. I wish they'd complete dump K-Mart and try to liquidate some of the real estate. Don't own any currently. My point is/was that a 'perfect value trading stock' would be a strong business at a cheap price. Re-reading txlaw's post, I think I missed the word trading. In that case, yeah, SHLD does seem to trade in a consistent range. There are a lot of risks to the underlying business though. And regarding the 2nd part of my post, I have some faith in the Sears Business (and portfolio or brands), but think K-Mart is a dead business not worth keeping. I would like SHLD more as a much leaner company with a focus on its strong brands and what I view as its core business - tools, hardware & appliances. Yes, when I referred to "value trading stock", I was referring to the ability for investors to buy at $40, sell at $80, buy at $40, sell at $80, etc. Must be a function of the short interest on such a small percentage of non-ESL/Fairholme shares. I would agree that K-Mart should really be sold in its entirety -- they should be Walmarts or Costcos or Dollar Stores or something else. And I agree with focus on SHLD's core biz of tools, hardware, and appliances. That's why I want them to sell Land's End and close more stores.

http://www.gurufocus.com/news/199277/bruce-berkowitz-talks-about-investing-at-university-of-miami Found off of Gurufocus.

The media blitz continues. http://www.cnbc.com/id/15840232?video=3000131277&play=1 http://www.cnbc.com/id/15840232?video=3000132012&play=1 Love the timing of this. Let's hope this is helping with the fiscal cliff compromise that needs to get done.

Except for the fact that their actual business is pretty awful. I wish they'd complete dump K-Mart and try to liquidate some of the real estate. So not attractive at this price? Do you own SHLD? If so, why? Sorry for all the questions, but I'm trying to understand your post.

I hope they keep monetizing stores. I also hope they sell Lands' End -- to close after the holiday season, of course.

SHLD getting very attractive again. This appears to be the perfect "value trading" stock.

Are you Fake Mohnish Pabrai? Or the real deal? Cause that's a pretty convincing post. ;D I love Marketplace and have been listening to it since the David Brown days -- started listening when I lived in Cali. Haven't been listening for 15 years though.

http://www.thedailyshow.com/full-episodes/tue-november-27-2012-warren-buffett---carol-loomis

WEB was on a radio show/podcast I listen to: http://www.marketplace.org/topics/business/big-book/warren-buffett-jamie-dimon-treasury-secretary-fiscal-cliff-and-taxes There is an extended version of the interview, but I can't find it on the website at the moment.

http://www.charlierose.com/view/interview/12656 Fortune article on Bezos: http://management.fortune.cnn.com/2012/11/16/jeff-bezos-amazon/

A thought just occurred to me. Maybe the company Pabrai was referring to was LUK? That would make sense to me.

Yes, congrats.

http://www.tedxbrussels.eu/2012/speakers/steve_wozniak.php

"Natural Phenomena"

Article from Geoff Gannon on DaVita. http://www.gurufocus.com/news/196687/why-ted-weschler-keeps-buying-davita-dva

LOL! Nice. By the way, I don't think it's DELL either, because he told me I'm going to take it up the butt on that one...to put it nicely! ;D Cheers! Haha, that's interesting. Don't worry, we'll prove him wrong! It may take a while, though. ;D Seriously, though, if I were in Pabrai's position, the only place I would put 90% of my non-LP net worth would be BRK or FFH. And only BRK at this point in time, given the market pricing.

I'm guess it's AAPL.

I have no plans on putting any money into DaVita, but I'm interested in seeing if any board members have a thesis on why BRK is so interested in the company. Anyone want to provide such a thesis? I know very little about the company.

WEB's explanation of his call to Jack Welch on CNBC: Jack Welch and I are both good friends of Frank Rooney, Chairman of H. H. Brown. Frank had his 90th birthday about a year ago and Jack told a story about how he started at a Thom McAn shoe store. He had everybody roaring with laughter as he described how he sold the shoes with the highest commission. Jack did not realize I was referencing that story when I called in on the phone – I'm sure my call hit him by surprise. Jack called me after the show as he then realized what I had been referencing. It's too bad Jack didn't get a chance to tell the story on CNBC, as he would have had everybody rolling in the aisles. He was one helluva shoe salesman (particularly the purple variety). Warren Buffett Source: http://buzz.money.cnn.com/2012/11/06/warren-buffett-purple-shoes-jack-welch/?source=yahoo_quote Munger on selling investment product: I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, “My God, they’re purple and green. Do fish really take these lures?” And he said, “Mister, I don’t sell to fish.” -------- Replace "investment management" with "political punditry/commentary," and I think that gets to what WEB was slyly trying to say, given Jack Welch's comments about the administration cooking the books to win the election.