Ballinvarosig Investors

Here was me thinking that the Efficient Market Hypothesis was dead in its grave. $24.50 was the original tender offer made back in December 2009.

Are you out of your mind? The initial $24.50 offer was an insult. He wasn't even offering book value for a highly profitable operation with good underwriting and prudent reserving. Even in today's market, the offer was ridiculous. Since the initial offer, the business has grown and book value has correspondingly increased; the business is clearly worth more now, than it was 9 months ago. Just because Dick Dunning is trying to save his own skin, it doesn't mean that he's incompetent or that the operation that he's running is useless.

The offer today is just a fraction under 1.1 times book value, which is probably a small premium over current valuations for similar companies. This time last year, I would have told Biglari to get stuffed. I am more inclined to accept the offer because performance in Fremont has been deteriorating.

I see that the ITEX Board have submitted their proxy statement. It's disappointing that this has come down to a proxy battle. I would still like to see Steve White coming to an agreement with Polonitza/Pagidipati, but I guess it's too late for that now. Are there many ITEX holders here, I'm assuming that you're all supporting Polonitza/Pagidipati? Will Biglari support Polonitza/Pagidipati? I would say his stake will be key in which way the vote will swing.

Have you looked at the financials? In an expanding market, revenue for Nokia fell last year and has continued to fall as of the last quarterly. Because earnings are falling, the dividend doesn't even look sustainable in the long-term. Maybe I'm wrong, but an investment in Nokia looks highly speculative at this point.

Come on don't be so shy gives us your magic number :) Just invert what he has said. If I've read correctly, he'll ride this stock until the growth slows. The beauty of his strategy is that he should be able to sell at a little below the peak price (some day a 10q will come out with numbers that aren't so hot); assuming that he has the discipline to recognise this turning point (not trivial).

Have you answered your own question?

Shorting is difficult. Shorting something with momentum is even more difficult. A fund manager friend of mine lost big when he shorted a clearly overvalued housing market in 2005. Timing is everything when shorting. Anyway, I just can't understand why anyone would want to short, you can only ever make 100%.

You are correct. Buffett has compounded returns of 61% from 1951 to 1955. When I was in college working with only a few thousand Dollars, I got close to 50% returns over three years doing odd-lot's, splits, liquidations, tender offers, etc. I personally found that when you even started working with a 5-figure sum, that the return started to decline as a lot of the special situations that I was looking at were only worth a few hundred Dollars a pop. When you move up to a 6-figure sum, the special situation stuff that I look at barely makes a scratch on your return. While I think getting a 50% return on a six-figure sum is possible, I think it requires highly concentrated and selective investing with a good measure of scuttlebutt thrown in.

Following on from China and the CCME discussion. http://www.businessinsider.com/universal-travel-group-uta I couldn't stop laughing at just how incredible the story got. Certainly paints Chinese micro-cap's in a dubious light.

The buyback could just as easily be used to buy back shares held by company insiders.

Hey Parsad, I have a question about the Polonitza group, not ITEX per se, so maybe you can answer it for me. I'm curious, did you guys know each other before you got together for ITEX? I'm just curious because it's not often that you see such a disparate group of people get together for an investment. Also, do you see such a thing becoming more common place? It's certainly something I have an interest in because there have been times I have been able to own 1-2% of a company, which is a big chunk for me, but not quite big enough to influence a board.

Japan looks incredibly interesting at the moment, not just from a real estate angle. The Yen is making record highs, Japanese businesses are basically getting roasted alive. Look at the sheer volume of government debt that's financed at pathetic rates, if people think U.S. Treasurys are cheap they ain't seen nothing. Then you've got the stock market, which has been a dog for 20 years now, but yet has some of the cheapest companies in the world. It's strange though, it's still the (real) second largest economy in the world, yet it's treated as some sort of outlier, a sort of white elephant to be ignored. Real estate aside, has anyone got any ideas for investments in Japan, particularly with inflation in mind for Japan? I'm thinking low-capital intensive businesses like Nintendo, although I would rather find lesser known companies.

I think it's amusing that Jim Rogers has been talking about agriculture and gold for years, yet some here regard him with a little derision. Michael Burry talks about the same thing, and all of a sudden there's serious debate ;D

Well, let me put it like this. People on this forum have discussed RRGB quite a lot. To me, it's quite clear that there's value here. It's a $300 million company that's generating $90 million in cash from the business, management have already started to try and turn the company around, so it's clear you already have an instant catalyst for a great turnaround here. Farmland though, I dunno, I just can't see the value.

I think there is a big difference between buying farmland and buying a house in Florida. Of course, but farm land got artificially expensive in the credit boom. http://www.bullfax.com/imgs/b44ce4470a319e04e189d9e902f1adaa8de4ae0e.jpg

Bizarre choice. Land and property were some of the assets that went to the most extreme prices during the credit bubble. When you pull trillions of dollars of credit from the system, it's extremely hard to see how prices can even remain as high as they are. Burry has either lost the plot, or he sees something that no one else does.

I see that China Marine Food have been at the same carry-on. They made a wonder acquisition in January 2010 that has led to the cash balance mushrooming in the recent quarters. The only thing I don't understand is that insiders are buying, rather than selling - http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0001099977

I just don't get it. They have a real auditor and a growing cash pile. If the company was a fraud, there is no way in hell that Deloitte and Touche would not have unearthed the inconsistency in their findings. On the otherhand, the financials look almost too good to be true. The margins are crazy high, cap-ex is tiny and the growth is unreal. I own a tiny position, although it's more to do with morbid curiosity rather than sound investment strategy. Can any experienced accounts throw any light on the legitimacy of the numbers?

What Warren Buffett might say, and what he does can be entirely different things. I personally think that Buffett does pay attention to macro factors, but he may do so without even realising it.

If you're worried about deflation, you should consider Annaly Capital Management (NLY).

My first thought was the loss of the Munger's annual meeting as opposed to what I would get for my single share of Wesco :-\

I had my wires crossed on USB, sorry. Having said that though, there are things there that would concern me. I don't trust the loans that they took over from the FDIC and I don't feel there as well capitalised as they should be. I still think BAC is a lemon though.

Very good article, I have to say. Did anyone else ever wonder why Bank of America and US Bancorp were in Buffett's portfolios? These two are not particularly good banks.

http://www.sec.gov/Archives/edgar/data/93859/000092189510001303/sc13ga107428red_08202010.htm I noticed that net income and cash flow were down quite a bit in the most recent 10Q, maybe he's decided that the business isn't so appealing, or maybe he needs the cash for something more enticing :D Then again, maybe that poison pill that the board have put into the company has turned him off.