Ballinvarosig Investors

This thread is no good without people suggesting a few ideas! For my part, I have recently bought a little United American Indemnity (INDM), a profitable insurer which is trading at 60% (!) of book value. http://www.sec.gov/Archives/edgar/data/1263813/000095012309059469/c92081e10vq.htm I admit I don't have the depth of knowledge that many of you would have on insurance, but surely the margin of safety (improving combined ratio and strong balance sheet) here makes this a bargain?

I don't know nearly as much about Tim McElvaine as you guys do, but it seems to me that he's simply been fishing from the same pond for too long (high concentration in small-cap equities). Nothing wrong with this per se, however if you concentrate your portfolio in one area, there will be times when you underperform the market simply because your niche is out of vogue (small-cap has been frankly a disaster in the past two years). However, because small-cap has been so lousy and looks relatively cheap these days, I think McElvaine is making a mistake by talking about moving into larger-cap equities.

Interesting that he should have pushed this on GEICO.

Can anyone tell me why BNSF is trading at $100.23?

Unusual for the Buffett of the last decade, but not so unusual for the Buffett of the partnership days.

Did you strip out goodwill when calculating book value? That should raise the ratio to 1.11, still cheap.

True, but when was the last time that Buffett bought a Dollar for 50 cents? To me at least, Buffett has been using two approaches in his investment career. The first is the pure Ben Graham approach of buying unloved stocks that are selling below book value. If Taleb refutes this approach, he clearly doesn't know what he's talking about as we have actual (Graham-Newman, Buffett Partnership, Schloss Partnership) long-term outperformance. The later approach that Buffett uses (the buying and holding of great businesses) is impossible to evaluate considering Buffett is really the only investor who has a record of long-term performance. Therefore, Taleb does actually have a point that Buffett may actually be lucky (post-Pertnership days anyway). Buffett once said he was 15% Phil Fisher and 85% Ben Graham. If you ask me, he's the other way around now. If you look at the BNSF deal, the only Ben Graham characteristic there is the margin of safety. It's certainly not cheap, not unloved, not depressed, and not a cigar butt by Graham standards. I think it's kind of funny. So many people cite Ben Graham and the demonstrable proven performance his methods bring, but yet so few actually use his method as intended. Even with you guys, from what I can see of your portfolios and the stocks you talk about, the majority of you do not invest like Ben Graham. That's not a criticism of anyone by the way, obviously Ben Graham isn't the only investment philosophy around! From what I can see though, it is wrongly cited.

http://2010.therussiaforum.com/news/video/ Taleb, Milken, Faber and quite a few others talk shop. What I find remarkable, is that a few of those chaps have no idea what they're talking about. But hey, when did being a hedge fund manager require knowing anything about investing ;D

Bought General Growth Properties at the bottom of the market, just as they were about to declare bankruptcy (not my own idea, read a Bill Ackman presentation). After they went up three times, I sold up despite still agreeing with Ackman that the company was trading well below instrinsic value. Should have been a 30-bagger >:( Bought Allied Irish Bank at just over €3 in late 2008 on the fact they hadn't been so low in 15 years and were still profitable. Share price continued to tank and ended up reaching a low of something like €0.30. Stupidly didn't do my homework (bank is probably the most insolvent bank in the Western World now). I don't feel too bad because even Warren Buffett got caught out trying to catch a falling knife with the Irish banks. Lost the most money on my Penn Traffic position, but strangely I wouldn't consider this an awful pick. When you're buying the garbage that no one wants, you're always going to get a few zero's.

I think the AXP/Salad-Oil Scandal analogy is definitely appropriate here. The financial cost of the recall to Toyota will be $2 billion - give or take a couple of hundred million. The stock on the otherhand has been cut by tens of billions. It seems the assumption of the market is that the Toyota brand has been quite severely damaged by the incident. The question here is that assumption valid?

It's funny, you guys are usually so rational when it comes to investing, but yet when Warren Buffett is mentioned, that rationality just goes straight out the door and you go into "Hero-Worship" mode. What's even worse, is that when there is criticism, it's shouted down, after all, who knows better than the "Greatest Investor of All-Time"? If you ask me, there's a lot of great material on her blog, and you guys would be for the worst if you didn't read it. For example, if you look at the NetJets posts, there's a huge amount of information and analysis that's never been written before. I know Buffett is a long-term investor, but even on that scale, NetJets has been an awful investment and all the warning signs were there from the outset. If it was so clear, why did he do it then? It has to be ego. I don't agree with everything she's written, but I think it would be foolish to dismiss her as a hysterical woman after she has had the personal access that you guys could only dream of.

I really enjoy reading the Chanticleer quarterly reports and find myself in agreement with most of their picks. However, I really don't have the foggiest why they've gotten themselves in with the Winmill's (Winmill Corp, Tuxis Corp, Bexil Corp, Foxby Corp). Gradual erosion of shareholder value (Bexil), lack of reporting (Winmill) and entrenched management (no catalyst for change). Investment Partners Asset Management have been particularily scathing about Winmill and their affiliates. They had this to say about Bexil Corp. http://www.sec.gov/Archives/edgar/data/52234/000145078909000310/exhibit.htm I've seen Matt Miller of Chanticleer posting here a few times. Maybe if he's allowed to, he can explain he's invested here ;D

BRK up 5% after shares were split today.

Can anyone hear a popping sound? [flash=200,200]

It's interesting, the price is probably going up in expectation that investors are going to pile into the B-shares once they're split. I think it might scupper a few plans if the newly split B-shares actually went down on the first few days of trading :D Good luck to anyone who thinks they'll make money out of this.

That's funny, I actually enjoyed the first 2/3's and felt the last 1/3 was a little rushed. Anyway, I don't think I would go so far as to say that she's "milking" her Buffett connection. Most of the time I read anything she writes or watch her; I learn something new. Also, I see an awful lot of comments accusing her of being "bitter" in that article. Personally, I think the Buffett-worship is going a little too far.

Absolutely.

Hugh Hendry is another hedge fund manager who says the same thing. His November 2009 commentary is available here. I highly recommend reading it. When you think about it, what the likes of Hendry and Hoisington are suggesting is incredible. Treasury markets are already at generational lows, but yet these guys have come along and suggested that they're going to go even lower.

I'm only going by his mutual fund performance as linked to above, but that to me shows that he had no divinity what was coming in 2008/2009. Don't get me wrong, I'm not saying he's a bad investor. But I sure as hell wouldn't be writing a book about a crash that I didn't see coming!

I don't know what his hedge fund returned, but his mutual fund didn't perform well. http://www.google.co.uk/finance?q=MUTF%3ATILFX

Three things annoy me about Whitney Tilson. 1. He seems to have repositioned himself as one of these people that foresaw the housing/credit market crash. Considering his two mutual funds tanked in 2009, I don't think he's in any position to be lecturing others about the subject. 2. He strikes me as another one of these people (and there are many) that think that Warren Buffett is simply infallible. Right before the construction market collapsed, he was touting USG (http://www.gurufocus.com/news.php?id=3752). Now I don't have a problem with someone making a bad call, but I do have a problem with people who simply tout stocks because Warren bought them. 3. He seems to be under the misapprehension that he's a value investor. There's a few stocks in his portfolio that definitely are value stocks (dELiAs*, etc.), but most of his stuff is anything but (nothing wrong with non-value stocks, I just don't think you should be talking about yourself as a value investor unless you have most of your investments in true value stocks). I actually like Whitney Tilson anyway. Right or wrong, he puts himself out there and shares his ideas at least!

I'm intending on doing some research into Japanese stocks, however Google isn't being too helpful. Have any of you clever folks dabbled in the Japanese stock market, and if so, what resources do you use to drum up ideas? I'd be particularly interested in getting new lows lists, some sort of filter screens and any other goodies that can help you dig out bargains. Other than cursory glances at the likes of Sony, Nintendo and Toyota; I don't have the first clue about Japanese stocks, so any thoughts/tips/advice would be great. Thanks!

Up another 30% on a takeover. I love it when a stock surpasses your wildest dreams :D

http://www.advisorperspectives.com/newsletters10/pdfs/Bruce_Berkowitz_on_the_Keys_to_Success_for_the_Fairholme_Fund.pdf Surprised that this one has been missed.

Talk about taking your toys and going home :D