wisdom

While, I generally would agree with Kraven and Packer, we must accept that the central banks are trying something that hasn't been tried before and the sheer size of liquidity being pumped in across the world is not the norm. Thus, I believe we must be flexible and accept that there could be risks that we might not have encountered in our recent history. This may or may not result in things playing out the way they normally do. I believe Gio is showing that flexibility in his thinking and openness to things potentially playing out a bit different to the norm. I am not saying that they have to play out differently - just that we don't know and thus, it is better to be open to that idea and take steps to cover for that eventuality. On the other hand - nothing may happen and everything goes on as it has. But, it would not imply that Gio was wrong in his decision making process is correct. The question to consider would be - how much is Gio being impacted in his thinking by the state of the Italian economy while we in Nth America seem to be more confident?

Eric, You could always look at options from BYD - they have home energy solutions that are iron based batteries http://www.byd.com/energy/hes-a100.html

Happy B'day Sanjeev Thank you for creating an awesome community.

http://www.bloomberg.com/news/2013-06-30/global-bonds-dive-for-second-month-as-stocks-lose-2-7-trillion.html There will be capital destruction if the central banks are not able to play this perfectly. Most people do not see the obvious -eg. pull back on QE until Bernanke spelt it out for them and they act as if this is something new. No one knows how this is going to play out. It is best to hedge - just in case things get a bit out of hand. It will be beneficial to have cash at that point of time. It does not have to be a replay of 2008. If this leads to deflation - you can take advantage. If things work out perfectly - well you can focus on the insurance business and other investments. This will play out well if we get inflation. The readjustment in expectations will allow them to deploy all the cash they have. The way I see it - FFH should be able to take advantage of either scenario.

Some thoughts: Education is the only way forward with all the competition in China. Add to that, the one child policy and the fact that culturally the family will try to ensure their child's success - I believe they will have no option but to educate their children. Parents need and try to provide their kids with all the advantages they can in such a competitive society. Main risks that I see: - quality of education - a temporary over-supply of such schools - if a slow down causes capital destruction and high unemployment - will parents stay home and teach kids - long run demographics - in an aging society will there be enough kids to educate in the long run

26% cash (sold MBI) 23% BAC-WTA 17% BYDDY 15% AIG-WT 10% FFH 8% SHLD 1% LUK, BRK

EVs have few moving parts as compared to ICE. All you need is electric motors and a battery to provide power. Fewer things that can go wrong or fewer things to improve on. Thus, they are very low maintenance and should not require as many replacement parts. Another pro: They are agnostic about the source of power as long as it can be converted to electricity. Thus, you effectively switch to the cheapest source of energy - whatever it maybe on the day as long as the electric utility is able to make that switch.

My portfolio seems to be going up everyday - that is not normal. I am trying to cash out of anything that is closer to fair value and potentially not a long term hold. There could be better opportunities in the future. The odds are against the market going up even though my portfolio is cheap. Thus, my portfolio could still get hit. Also, note cash amounts: Buffet - $49B FFH - 8B or 30% and hedges Klarman - 30% Chou - is about 20% and increasing Berkowitz is at 30% and you could go on. Assets are generally inflated and thus, as a disciplined value investor one needs to pull back and accept that the market could conitnue its run just like in 1999. But could present opportunities later and the dry powder will help. Need to be patient and let the herd do its thing.

Looks like Prem might have been right all along. We are in yr 5 after the crisis. He could make up for all the lost time pretty quickly if this scenario plays out. People are getting excited about mkts. Reaching for yield and income. Reality: US is slow Europe has issues BRICs are not growing as fast corporate profits are high and could contract Central banks and govts are maxed out. Cant juice markets much more. Time to be defensive.

http://www.bloomberg.com/news/2013-02-19/china-housing-slaves-helping-property-rebound-mortgages.html Just a matter of time before Prem is proven right on the Chinese RE bubble. How long can it last if an average person is spending 50-70% of their income on a mortgage payment.

thanks Sanjeev for all the work you put in!! it is appreciated

Watsa comments: http://blogs.wsj.com/canadarealtime/2013/02/15/canadas-prem-watsa-still-wary-about-stock-markets/?mod=yahoo_hs

Everyone seems to be making the assumption that BB will never open the fund back up to new investors. There are other funds that have stopped accepting new money when there is a lack of opportunities and then opened things back up when the circumstances warrant. What is to stop them from doing this?