A_Hamilton

Figure out who has a consensus opinion and who doesn't. I'm going to say Prem is the contrarian here.

Ick. Having covered french regional banks in a past life...seemingly no price is low enough for these institutions. Maybe Ile De France in Paris...but most of the management teams at these insitutions make US community bankers look like brilliant capital allocators. Also, while they are kind of like MHC's here, there is no real way to demutualize these things. And spot on with CA...what happens to the regionals when CA has a trading blow up on their trading desk? The regionals get diluted in the cap raise.

Sorry for asking, but did you mean STRA as in Strayer Education, i.e. this: http://www.shareholder.com/visitors/DynamicDoc/document.cfm?DocumentID=3006&CompanyID=STRA&zid=e1f0bfae APOL looks cheap, but something Charlie Munger said about being on the wrong side of a trend (or something similar) has kept me from looking in more detail at the for-profit education companies. I try to read letters and reports from LUK, Y, MKL, BRK, SHLD, DJCO and BAM. Yes, meant Strayer. Different companies in the for-profit segment are positioned very differently.

When was the last time they provided any value?

Brk/a, FFH, MTB, JPM, STRA, WRB, MKL, Y.

I think you should download the 2012 AGM presentation from Fairfax website. Then, read all Mr. Watsa’s letters to shareholders: they are great, full of a lot of information both on Fairfax and on the insurance industry and the investment world in general. :) giofranchi Yes, the slide presentation @ the AGM from 2012 is as good a primer on FFH as any. If I had to tell the FFH story in a few words, the following "scream" from the presentation: Long term focus, Totally risk averse, Against-the-herd, International (emerging markets ie non-USA) insurance growth focus and investor friendliness(Like few others!). One fact included in the presentation that blows me away is their bond portfolio performance (5 year- 13.3%; 10 year - 12.5%; 15 Years - 10.4%)! Shareholders need to appreciate the bond team lead by Brian Bradstreet for this, given the challenges faced by FFH especially during the last 10- and 15- year periods! IMO, this is unprecedented. Remember that >80% of the investment portfolio was invested in Fixed Income over this period, Equities have increased only since 2008. This defines the investment mindset @ FFH better than anything else. See if you can't find a copy of the First 25 years of Fairfax.

Al Friedberg. http://friedberg.ca/content/resources/quarterly/filelist.html

[amazonsearch]Change.edu[/amazonsearch] Andrew Rosen's (CEO of Kaplan) book on higher education. The book provided a number of insights into the higher level education system that had not occurred to me before. In particular, I appreciated the depth of statistics around community college graduation rates and how they compared to online education, as statistics indicating how difficult it is to go to a community college and be able to obtain a full course load in order to graduate “on time.” I also appreciated the insights that the book gave on Strayer University, which shed some light on Washington Post's recent purchase of shares in that company.

The theory is simple. Buyback at 1.2xBV on a stock that has a daily volume of about 300 Millions $/day. The company has about 20 Billions of extra money in the bank and generates about 10B a year. If it ever goes under 1.2xBV BRK can therefore buy substantial amount of it's own stock and sustain it's price. BeerBaron I understand that....but why is that a "put"? Because you can always sell your shares (put them) back to Berkshire at ~1.2x BV.

Wood-Panel Rally Seen Fizzling Amid Increasing Supply http://www.bloomberg.com/news/2012-12-27/wood-panel-rally-seen-fizzling-amid-increasing-supply.html

Did he say this on CNBC this morning? Would love to get footage of this.

Yeah, but I'd prefer you have to go to the black market to get your cocaine. In the same way, I'd prefer that a guy who failed to take his psych meds couldn't walk into the local Walmart/Dick's/Bass Pro and pick up an AR15 and would have to go through some more difficult channels.

Agreed. Gun control, kicking out Reagan's religious right (and I'm a republican), coming up with a tax system that is progressive rather than the absurdly regressive one that has lead to no growth in median incomes in a decade, coming up with some kind of limits on how much the government will spend on your medical care through our new universal healthcare system...the U.S. has its work cut out for itself.

Interesting question as one here who is going to law school at night while working full time during the day. At $35,000 per year for tuition I believe that there are two intelligent ways to go about this mess. Either 1.) Don't work and make sure you are a Straight A student as this leads to scholarships to retain you at your current law school (or undergrad), cutting future student loan payments and leading to some probability of a job or 2.) Work full time during the day (as I do) and make sure you make enough that you are covering your room/board and books/and getting healthcare coverage (at least). In any case, from what I have seen in peers at my mid-tier law school, I wouldn't be suprised that a low double digit percentage of them default. Facing $165,000 (tuition + room and board + accumulated interest on student loan debt while in school) in student loan debt at graduation at a blended rate of 7%+ (stafford loans + plus loans, and, virtually none of this is tax deductible) with job prospects providing a median salary of $65,000 at graduation (only 90% in current economy will get a job coming out to begin with), defaults are going to be very high. If my peers worked through school and were a middling student, maybe they get this $165,000 down by $50k, but still who knows. Massive education cost bubble.

Thanks. It seems like at this point there's two options: 1) They did have ownership but were very close to the line, hence this paper (presumably the case given the previous audits); or 2) They are about to get the case opened again. Sounds like they were quite desperate at the time. I have a bias for FFH since I own a lot of it, but other than blasting her character, I haven't seen any indication of factual mistakes in the article. I'm not positive, but I believe there is a third option. Suppose FFH was in the wrong with this transaction, and, after the fact due to the whistleblower and normal IRS audits the IRS went to the company about this issue. FFH along with PWC and BofA described the transaction in detail to the IRS (honestly disclosing all information and providing their opinion of the transaction), the IRS agents handling the matter listened to FFH and wrongly allowed FFH to tie out those 2003-2006 tax years through closing agreements. The IRS now (in 2012) issues guidance to IRS agents so that no one tries one of these transactions ever again. IRS doesn't go back to FFH to try to reopen those tax years, as FFH was completely honest about what happened/disclosed everything, the IRS just made a horrible call. Any thoughts on this? Separately, I hope (and believe) this is/was an isolated incident for the company and was a hail mary to save the company when its capital position was significantly weaker.

Morgenson article in the NY Times. http://nyti.ms/UPURVh

Going sideways has not looked like such a bad thing, in the last couple of weeks! Pretty amazing to see such a big drop for what seems like such a technicality. Do we get to go back up when the company is readmitted to the MSCI club? Anyways, it' a good example of the virtues of having a little extra cash (do as I say, not as I do); I hope FFH is taking some advantage, while it lasts. I don't know how bad insurance hit will be (I'm thinking at least $300 million pre-tax), but FFH will also have sizeable gains on Cunningham Lindsey sale/The Brick sale and it looks like for the first time in what seems like a long time, the company's public equities are outperforming the indices that FFH's hedges them with.

You can also roll your traditional 401k into a traditional IRA and then do partial transfers (or full) into a Roth IRA. I planned mine out so that I dumped a lot of money into a regular 401k right out of college, and then in the year I went back to school I converted everything to a Roth so the tax bill would be substantially lower. I fully intend for my Roth account to create truly dynastic wealth for my family.

Sanjeev, Just bought a ticket, can you confirm order, also I can PM you with personal contact info if need be. This will be my first time to the dinner and AGM. Looking very much forward to it!

Agree on that. Actually looking at the LP's that invest in commodity futures. They don't make distributions to holders.

Hello, Has anyone ever shorted a U.S. listed publicly traded limited partnership? I am wondering what the tax implications of this are. Do you receive something like a k-1? I just don't know how you'd adjust your basis each year (assuming I believe my short candidate is a terminal short). Thank you for any thoughts that you may have.

I think he is the real deal, in spades. Separately, Fairfax has been shorting FCX and RIO in decent dollar amounts in recent quarters. Additionally, they now are substantially short the Canadian dollar with their large canadian dollar debt and preferreds outstanding relative to their capital base there.

Look at how underlevered their insurance operations are. Several combined ratio points can come out from there. Deflation hedges are effectively free at this point as FFH has written them down to near 0. Massive optionality potential in several equity positions...ICICI Lombard,RFP,LVLT, IRE...each of which should more than outperform the Russell 2000 at 25x trailing earnings for the forseeable future.

I don't know what to think. I want to know 1.) How much FFH spent on this endeavour, 2.) Whether it was poor maneuvering at Kasowitz to have FFH file in NJ instead of New York, and 3.) Whether there is any way to ever recover money when a fraud like this is put on your company. How can you not look at the facts of what Gwynn and Sender did and not think that they meant to publicly disparage and harm the company, and that the subsequent fall in the stock price/ blow out in credit spreads did actually harm the company? What a mess.

Tombgrt, I don't know if you are a shareholder or not, but for what its worth I about jumped thru the phone at DELL IR the day of the announcement. I'm sure Longleaf was just in pure shock. Longleaf can just use it's dividend to buy more shares. It should make little difference to them mathematically in terms of the compounding record of their fund. I hope their thinking is more complex than that. The dividend has to come from repatriated USD (as do share repurchases), and so the dividend has an impact on taxes Dell pays today and whether it acquires companies with foreign or domestic cash. Additionally, now there is the lame institutional imperative to pay a dividend when it may make sense to do a larger acquisition, pay down debt etc. Additionally, with one of your largest holdings you would think that you would want them to maximize the cash usage through their own repurchase of shares/invest in the business decisions.