wabuffo

Sorry don't know any sources for Canadian court filings. wabuffo

what's the company name? wabuffo

Get a PACER account. You can access court dockets for the US Federal Court system (though you sometimes pay a per-page download fee). Its vital if you are following companies in Chapter 11 or even locating civil cases (ie, lawsuits). For example, one of my micro-caps (ECRO) was involved in a lawsuit with Bear Stearns but issued very little info via their financials. With PACER, I could follow the cases via the ongoing legal filings and judges' rulings over time. (the good news is that ECRO won a 15-cent per share cash settlement and are distributing 12-cents this month -- not bad for a 4-5 cent stock!) http://pacer.psc.uscourts.gov/ wabuffo

The Wilshire Equal-Weight 5000 index was up 15.8% in September and 36.0% in Q3. This is an equal-weight index of ~7000 public stocks that gets re-weighted monthly IIRC -- so its an indicator of how the average stock is performing. Since most stocks are small caps/microcaps/nanocaps -- I use it as a short-hand indicator of how one would do just throwing proverbial darts at the stock pages. (ie, the famous Forbes magazine dart-throwing monkeys from the late 60s). http://www.wilshire.com/Indexes/calculator/ Year-to-date this index is up a whopping 83%. From March thru Sept, the average stock as measured by this index is up 113.1%. If you exclude the top 500 mkt cap stocks (via the Wilshire Equal Weight 4500 Index) -- you're looking at +120% from March to Sept 2009. So anyone who basically went all in with a basket of 8-10 micro-caps during the early March lows is probably showing 90-130% y-t-d returns and is thinking they're a stock market genius when in reality they're just a dart-throwing monkey. ;D In reality, most small caps got crushed in the credit panic of late 2008 and thus were the ones mostly like to bounce back strongly once that credit crunch eased. I think these results just show that most investors who panicked in late 2008 or late Feb/early March 2009 did exactly the wrong thing by getting out. Those investors who stayed the course are now glad they did -- and any investors who were fortunate and wise enough to put money to work in the early part of this year are really glad they did! wabuffo

Actually it looks like he bought WFC during the early March lows (Buffett was also quoted on CNBC that if he could have put 100% of his money on one stock it would have been WFC at that point in time). Cost basis.........$15,501 m (intra-quarter) Mar 31 mark......$24,713 m (+59% gain from cost) Jun 30 mark.......$41,126 m (+66% gain from end of Q1) WFC at $ 9.00 in early March bank stock panic WFC at $14.24 at the end of Q1 (+58% from $9) WFC at $24.26 at the end of Q2 (+70% from end of Q1) I've run screens and can't find any stocks that would match both the Q1 intra-quarter gain from the low for each stock in Q1 PLUS the Q1 to Q2 gain. No way of knowing for sure until DJCO discloses what it owns, but it sure looks like it could be that Munger loaded the boat on WFC at the March lows. If true, then there's a further 12% gain in this Q so far at current prices for WFC. wabuffo

I think this book provides a good history of Singleton/Teledyne: http://www.amazon.com/Distant-Force-Teledyne-Corporation-Created/dp/097913630X/ref=sr_1_1?ie=UTF8&s=books&qid=1240868683&sr=8-1 IMHO, one of the greatest titans of American business (yet least well-known) was Henry Singleton of Teledyne. He was an engineer by training and had several patents so he was self-taught when it came to business and capital allocation. Growing up he won the 1939 Putnam Intercollegiate Mathematics Competition Award (folks who win this thing are off the charts in terms of IQ and smarts). What made his operating style exceptional was that he ran hundreds of companies under the Teledyne conglomerate structure -- many of which were industrial companies -- yet Teledyne was extremely stingy with capital spending. His approach was to tax subsidiaries for their capital at high rates. Yet Singleton's industrial group often earned 60-90% returns on net assets employed. I truly believe this operating model can be very successful and yet is almost completely ignored in the corporate world. From what I've seen the impulse/desire to grow is too strong to be overcome by business managers (no matter how poor the returns delivered on incremental capital spending turn out to be). Buffett admired him a lot and declared that Singleton had the best operating record in American business at the time. Its unfortunate that Henry Singleton is so misunderstood, is not followed widely and the only reference in modern business literature is in the "Good to Great" book as an example of "bad business leadership" due to the issues Teledyne had after Singleton stepped down. Not only was Singleton an excellent operational executive, he was a self-taught capital allocator (Buffett's methods weren't widely known and he hadn't started to write his letters to shareholders). He wisely used his high-flying stock in the go-go sixties as currency to make hundreds of acquisitions before turning around in the 1970s and buying insurance companies for their investable float (sound familiar?). When conglomerates like his sold at a huge discount to tangible equity value, he dumped bonds from his insurance companies and tendered multiple times to buyback his stock. I can't remember the exact percentage but I think he bought back something like 80% of Teledyne's common stock outstanding from 1974 through the mid-1980s via serial share repurchases/tenders often borrowing money when the tenders to sell to him were oversubscribed heavily. I wish business schools would study Henry Singleton a lot more and Jack Welch a lot less.... wabuffo

Go back further -- Teledyne's Henry Singleton had one of the very best capital allocation/operating records in American business history in the 1960s, 1970s and 1980s with the stock price appreciation to go with it. Like Berkshire, Singleton's Teledyne was a comglomerate of hundreds of operating businesses. Teledyne also had several big insurance operations at its hub providing float for Singleton's passive investments in other stocks. And it also could not survive when Singleton stepped down and ultimately broke apart. Harold Geneen and ITT may be a similar example though I'm not as familiar with that one. This is not a prediction about Berkshire, post-Buffett, but the history here of success beyond an iconic leader for comglomerates is not great. wabuffo

In reality Buffett has made more than 40% since in addition to the intrinsic value of GS warrants (market price of common = $165 in excess of strike price of warrants = $115), the warrants also contain a time value component of value (even when the underlying common stock trades below the strike). The interesting thing is that Wesco Financial also owns $205 million of these convertible preferreds and this investment is big enough that Charlie breaks out the fair value of it with each 10-Q/10-K (though you have to back out the value of other non-listed equity investments like AXP, JNJ) that WSC owns. At year end 2008, the fair value of the GS preferreds was listed at $209,510. This means the warrants were given a value of $4.510 million while the underlying GS common was trading at $84.39. Since WSC owns 1.78 million warrants, this means they were given a value of $2.53 per warrant. At 3/31/2009, using the same methodology the warrants were valued at $32.577 million ($18.30 per warrant) while the underlying GS common was at $106.02. So it looks like time value which decays over time are probably worth around $20 per warrant now if I just swag it. Add in $50.84 of intrinsic value per warrant as I write this -- and I get an approx. total value per warrant of over $70.80 per warrant. BRK owns a total of 43.478 million GS warrants for a total market value of around $ 3 billion+. That's more like a 60% return (not including the straight 10% annual dividend return on the preferreds). Not bad for the old man who supposedly lost it when he bought the GS preferreds, eh? wabuffo

Well one reason could be that in WFC's case, BRK and its affilates are approaching ownership of 8% of the Company. At a 10% ownership level, BRK would have to register with the Federal Reserve as a bank holding company -- something Buffett definitely does not want to do. Once WFC pays back TARP and resumes share buybacks, it would put BRK in a position of having to sell WFC shares to avoid the 10% threshold if BRK was already close to 10%. Charlie Munger's WSC falls into BRK's share limits since its 80% owned by BRK's subsidiary Blue Chip Stamps -- so Charlie can't buy WFC for WSC either probably for the same reason. Still, Charlie also is Chairman of DJCO, which most definitely is not owned by BRK, and I believe its recent purchases of common stock in the March Q and registering a quick intra-quarter 60% gain means that Charlie probably bought both WFC and USB during their early March lows since the math works to a 60% gain for both of them. Of course, we can't know for sure until DJCO discloses what it purchased and now owns. wabuffo

I agree with this estimate. wabuffo

I think they will. The Company and its transfer agent can't keep the market-makers on the OTC markets from accepting trades in the stock. The changes in ownership may not be tracked by the transfer agent, but the OTC market makers will redirect any further distributions to the correct owners based on subsequent trades. I'm seeing this with another similar situation -- MAIR.PK. They closed their shareholder rolls last summer after shareholders approved their plan for liquidation/dissolution and made an initial $3 per share distribution. Even though I purchased more shares after the close date, I've received both of the two subsequent distributions. At some point, MAIR just stopped trading. Same thing will happen with FTAR -- but until then I think any new owners you mention will be fine. wabuffo

How is that possible. Inflation/deflation is a strictly monetary phenomenon and is all about the value of the US dollar as medium of exchange. You can't have both -- just like one can't be fat and skinny at the same time. wabuffo

well - one point of view would be that the 10-year and 30-year yields on 12/31/08 were outliers and we are now moving back to a more normal (in terms of recent history) yield on the long-end of the Tsy yield curve. A 2% 10-year and 2.5% 30-year might have been fear of holding any debt other than US Treasury debt in the Oct 2008-Feb 2009 credit freeze. I think we are just seeing the effects of the credit freeze now thawing -- a positive sign for the US economy. In addition, a hugely positively sloping yield curve (as measured by the 2yr vs 10yr yield) is very positive for the US banking sector. wabuffo

USB was pretty big too - they had negligible holdings prior to this Q and it looks like Watsa bought 15.8m shares (vs 16.5m shares of WFC). If he was buying during the quarter lows in early March (which Buffett also referenced as a great time to buy these two banks), he would have put about equal amounts in both US banks (probably a bit more in WFC but pretty close). wabuffo

USB (like WFC) has a business model that emphasizes non-interest income (WFC through cross-selling to their bank customers stuff like insurance and USB through its payments business which generates transaction income - eg trusts, debit cards, etc). So, in addition to strong deposit gathering and conservative credit underwriting, USB generates a significant amount of non-lending related income. In USB's case, they are growing this business rapidly and it creates a positive cycle as they can afford to be more choosy on their lending (which further reduces loan losses and gives them better lending returns as seen in the recent TARP results). This business model tends to give USB a higher ROA and ROE in comparison to other banks and makes them a bit less reliant on pure lending. There's only a few non-investment-bank banks that do this. I would recommend you examine and compare a few of the big regional "pure" banks' income statements and try to see the difference (eg compare USB vs MTB, BBT, or PNC). Hope this helps. wabuffo

the author clearly hasn't even done any research on BRK's equity put sales. He is very confused because: 1) he doesn't apparently understand that these are European-style put options (exercisable only on the day of expiry) vs. American-style put options (exercisable anytime they are in the money). Since the expiry of these equity-index puts is more than a decade away -- short-term movements in the indices shouldn't be a cause for concern. 2) he keeps insinuating that BRK/Buffett is facing margin calls when Buffett has been explicit on these particular put options. The 10-Qs explicitly state that BRK does not have to post collateral against these puts even if Berkshire Hathaway is downgraded and loses its AAA rating. The article and author can be ignored. wabuffo

I would echo Ben's assertion that the Morningstar "burn-down" analysis was plagarized from another public board. Its shameful that the Morningstar "analyst" didn't acknowledge his source. Very un-cool. wabuffo