beerbaron

In a letter to Paulson he state that 100M is 20% of it's net worth outside BRK... so I guess he's in the 500M. BeerBaron

It's quite hard to calculate the IRR with cash inflows and outflows. It's great that fidelity offers it. Since my broker does no provide me with such a great feature I'm forced to use a simpler solution. Which is (NAV Dec 31st - NAV of Jan 1st - Cash Inflows + Cash Outflows), the problem with this apporach is that it does not count the time value of the inflows/outflows during the year. Since I'm a net contributor to my stock accounts then it slightly understates my real returns... still better then Dealraker's friend. By the way Eric... did you start reducing the leverage quite a bit or are you still very agressive? BeerBaron

I remembered a post from Eric saying that in 1998 he started with 800$ and that he is now retired. I didn't understand how 800$ could compound to enough $ to retire. Now seiing the numbers I understand. I respect you Eric, you have done an extraordinary job with your portfolio. I guess a lot of people are going to go to bed tonight swearing about their crappy 75% return in 2009. ;) BeerBaron

I agree with you Scorpion, ELF has been trading between around 0.55 BV to 1.3 BV over the last 10 year. You still benefit from the leverage you get from buying 75 cents on the dollar, not a bad deal... I would be a buyer at 65 cents on the dollar. BeerBaron

Pretty much all asset values are inversly correlated to interests rate... It seems to me like a run-off on the CHMC by the banks, Canadian taxpayers avoided it in 2009 but they will get their bailout in 201x. BeerBaron

Here is another sign... In French http://lapresseaffaires.cyberpresse.ca/economie/immobilier/201003/21/01-4262868-immobilier-la-surenchere-explose-a-montreal.php Google Translated http://translate.google.com/translate?js=y&prev=_t&hl=en&ie=UTF-8&layout=1&eotf=1&u=http%3A%2F%2Flapresseaffaires.cyberpresse.ca%2Feconomie%2Fimmobilier%2F201003%2F21%2F01-4262868-immobilier-la-surenchere-explose-a-montreal.php&sl=fr&tl=en BeerBaron

Yep, the margin of safety just dissapeared there. BeerBaron

I just spent a few hours researching a company called China Sky One Medical (CSKI) and on many metrics it highly undervalued. It is currently trading at a PE of 7.3. Current assets of 75M and no debt. Market cap of 250M. 52M of cash on hands.. Positive FCF is in the same range as earnings. This is totally a growth stock, if it follows China GDP growth it is still an 8% grower. It's most likely going to be a 15% grower with reinvested capital. Pros Positive demographic and economics. No debt. Very cheap under lots of metrics. Invests in diagnostics kits, which I believe is a great idea for a Country without the medical infrastructure for professionnal disgnostics. (Maybe even a great idea for all of us as well) Lots of revenues comes from patch, ointment and sprays. Which are non-prescriptions drugs. Understandeable financial statements. Seems to have a great pipeline. Cons It's China... how accurate can we trust the reporting? Out of my circle of competence. Subject to China's regulations changes. Under a 8% growth (discounted cash flow 5%), 5 year outlook scenario and a change of PE from 7 to 15 this stock is worth about 35$. (18% CAGR Return) Under a more optimistic 12% scenario, 5 year outlook, and a change from PE of 7 to 20 this stock is worth about 60$. (31% CAGR return) 12% growth is still conservative considering China's economy... So what am I not seeing here? BeerBaron

Yep, there is most likely a bubble. Here are some quotes from people around me in Montreal. Sister: "My coworker has been searching for a house since a year, the prices of the same Condo's is 50k more today then 6 months ago. They finally decided to buy because they did not want to wait more and see the prices inflate even more." Coworker 1: "Real estate prices only go up, surely you should know that BeerBaron" Coworker 2 (knowledgeable) seeking for additional rental properties: "It's crazy all I can find is properties with a Price/Earning above 16... why should I want a spread so thin?" Coworker 3 (single mother earning about 40k) : "Yeah I just bough a Condo, I didn't had enough cash down but the bank let me put the difference on my credit card." Real estate agent ad in my mail: "How much longer prices will stay at those levels? You should think about selling now." I had an interest in CWA.UN, which is a Wholeseller of home appliances that sells mainly to contractor. I sold it all because I figured this could be a 0 if the bubble goes out. Too bad, because at the prices it is currently trading it would have been a great 15% return stock. BeerBaron

I think that Baoxiaodao is betting that the moat is it operating efficiency and that no competitors would likely match it's low cost operation. That is a big IF! Anybody seen how efficient Amazon or Mouser (TTL) are... these operations are impressive. Still Baoxiaodao, on pure metrics the stock look 30-40% undervalued. It's not a bad investment at all but with those stocks with potential short term competition increase you gotta be a lot more active to pull the trigger and sell as permanent impairement is more likely to happen then with say Wal-Mart. BeerBaron

Journalists are always claiming that Twitter or Blogs are not reliable sources of informations because the people in those blogs don't do Due Diligence. I can give about 100 examples of mass journalistic events where no journalists did due diligence. That's why I don't listen to journalist anymore, ESPECIALLY not the economic ones! Makes me wanna puke every time. BeerBaron

George Armoyan seems to be on the payroll of Clarke. Under the latest SEDI release he bought 363 shares under a purchase ownership plan. He is also listed as Director or Senior Officer of 10% Security Holder. BeerBaron

Lol, I have absolutely no idea if it's 100% of GDP or 1000% of GDP. Usually the more variables are included in an equation and the more range you need to give yourself to include errors. That is what most analyst fail to understand, we never deal with exact numbers when we make projections/predictions. There is hundreds of variables in there, and most of them are rather linked to perception then facts so why even bother... give yourself a range that you consider dangerous and be caution when we are in it.... Whatever the number, a country has no advantage to explore into unknown areas, all empires fail one day or another and it would suck to be part of one. BeerBaron

NOLs? BeerBaron

Good article ValueCarl, I do have some comments about it tough. He should have stated that the debt to GDP only decreased 10% of GDP in the Clinton era. Nothing compared to the other depressions which state 30% and more. From reading it's stats it seems that the depressions follows right after, NOT 10 years after. So yes, we are in a deleveraging process, and yes the government will have to borrow the extra money. But it has nothing to do with the Clinton's debt repayment. I believe debt should be in a specific range (depending on the amount of foreign debt) and that getting out of that range could do greater damage then 20% unemployment. You don't want the IMF to come down to the US!!! BeerBaron

Is'n it the article Munger gave 20K to the author because he liked it a lot? BeerBaron

Sorry fat thumbs again . Viking , My basic arguement is margin of saftey this is trading @ .65 BV the discount to BV is not readily apparent because the number of shares outstanding is overstated. They are a very conservatively managed and structured company. They are controlled by the Jackman family which has been involved in the longest running creeping take over in history. I do not for a second believe that this company has become permanently stupid on the underwriting side, on the investment side they in fact farm out the investment management of some of their float and two non arms length investment trusts. Viking why do you say they shares outstanding is overstated? Is it because their subsidies own shares of EL? I have setup table here with historical BV for EL Year BV Stock Price Outstanding Market Value Price/BV 1997 $667,634,000 $228.50 3840233.00 $877,493,241 1.31 1998 $951,114,000 $215.00 3840248.00 $825,653,320 0.87 1999 $1,001,548,000 $140.00 3840248.00 $537,634,720 0.54 2000 $1,139,691,000 $200.00 3840240.00 $768,048,000 0.67 2001 $1,250,974,000 $202.53 3840248.00 $777,765,427 0.62 2002 $1,267,385,000 $225.00 3840248.00 $864,055,800 0.68 2003 $1,375,394,000 $305.00 3840248.00 $1,171,275,640 0.85 2004 $1,682,143,000 $337.77 4019409.00 $1,357,635,778 0.81 2005 $1,915,670,000 $535.00 3870887.00 $2,070,924,545 1.08 2006 $2,397,721,000 $638.00 4019409.00 $2,564,382,942 1.07 2007 $2,700,446,000 $565.00 4019409.00 $2,270,966,085 0.84 2008 $2,217,199,000 $450.00 4019409.00 $1,808,734,050 0.82 2009 $2,430,110,000 $460.00 4019409.00 $1,848,928,140 0.76 ---- Estimated Current P/BV 0.71 Average P/BV 0.84 Median P/BV .82 Min P/BV 0.54 Max P/BV 1.31 So from this table it is about 15% below it's historical P/BV, not crazy cheap but ok. So if you care to expand on the overstating of shares outstanding I would be happy to add another column called corrected shares outstanding. BeerBaron

Guys, most insurers are good buy right now. I don't see why anybody is complainning... what happened to buy low sell high? If I can buy a quality business like FFH under BV that is a steal in my opinion. It's a cyclical company and you should embrace it, it's not like the insurance business is going away. If you used a 5% BV appreciation for the next 10 years and in that period the P/BV should get aound 1.5 once then that gives us the following return depending on when it reaches it's 1.5 BV trigger. Years to reach 1.5BV Amount invested 1 2 3 4 5 6 7 8 9 10 1000 1575 1653.75 1736.4375 1823.259375 1914.422344 2010.143461 2110.650634 2216.183166 2326.992324 2443.34194 CAGR 58% 29% 20% 16% 14% 12% 11% 10% 10% 9% Sorry for the table formatting, I didn't know how to put it formatted. So, from my point of view this is more then adequate investment. BeerBaron

The run-up of BRK just before the closing of the deal did help reduce the dilution by about 15%. BeerBaron

Well, I bough about 10% of my portfolio in BRK at 98k. But I didn't buy more because it was a situation with low downside and good upside. It was a good investment, but it was not screaming 10% over S&P return for the next 10 years. Still, I love BRK it's one of those investment where you can buy and forget it's even in your portfolio... it just grows slowly and steadily. About SNS...there was plenny of occasions to buy BRK at around BV in the last 40 years so SNS will give us some opportunities if the kid does half as good as what this board is expecting. We don't have to be there for the first inning to make money. I believe that in the end, it's all about asymetric risk/reward, the more asymetric it is, the most attractive it must be for us. So, the smaller the manager's portfolio the more reward there is. BeerBaron

Maybe someone should verify my statement but that is what I understood from reading various financial reports. It hink it depends on the on the % of ownership Berkshire owns. Passed 50% and BRK would have to account it on the balance sheet, with minority interest as a liability. Passed 80%, the income gets sent to BRK and the taxes are paid on the holding level. BeerBaron

How come Ridley does not appear in the 13-F? BeerBaron

I would be interested to see the impact of the S&L crisis on Canada. Anybody has some data to show? BeerBaron

Where did you get the supplement, it's not on SEDAR or their web site... BeerBaron

Pretty good documentary. I'm excited to see the rest of the story unravel in the next years! BeerBaron