menlo

Between Facebook and Jeremy Lin (and not necessarily in that order...), the Greater Palo Alto Area is going insane!

Looks like a perfect time to buy Seaspan.... ;)

New high in Fairfax! (At least in USD.) I expect the technicians, traders and momentum players to jump all over the stock any minute now.... ;)

Still own KINV'B. Here's the link to their Q3 report http://www.kinnevik.se/Documents/Pdf/Reports/en/Kinnevik_Q3_2011_E.pdf?epslanguage=en (Note: opens as a PDF) Taking the company's reported NAV at face value (which is probably OK given that the vast bulk of the holdings are publicly traded/valued), the Sept 30 price was at a 38% discount (62% upside) to BV/NAV. Roughly 6% of the NAV is in an online-oriented VC firm which has a position in Groupon. Probably not enough to move the dial, but depending on how the market views the IPO, it should help. Agreed that MICC and Tele2 aren't dirt cheap, but if you like the companies, it's a cheap way to access their equity. KINV'B is very easily traded, by the way, so no liquidity problems. Moderator: I found the attached report; I'm not sure what the posting/attachment policy is, but I can remove it (or feel free to remove it). kinvb.pdf

They differ in that Tesla got a $465M loan from the DOE, and, to the best of my knowledge, Apple did not. At least the loan will help provide 1500 jobs (note: sarcasm). [ftp=ftp://lpo.energy.gov/?projects=tesla-motors]https://lpo.energy.gov/?projects=tesla-motors[/ftp] That said, Musk is smart for taking "dumb" money, although I'm not happy as a taxpayer to be supporting both buyers of $100,000 cars as well as the venture firms invested in the company....

In the latest Value Investing Letter http://valueinvestingletter.com/this-months-issue.html, Marcelo Lima comments that Jeff Ubben of Value Act Capital said current insurance premiums as a percent of GDP were at/near the same level of prior market troughs (3.0% of GDP). I have no idea if this is true, where to find the data, etc. Has anyone heard or seen this before?

Latest Tilson valuation http://www.gurufocus.com/news/138662/value-investing-seminar--whitney-tilson-on-housing-and-brk-glenn-tongue-on-hughes

Another question.... I noticed in the year-end letter that "net gains on investments" are included in Fairfax's calculation of interest coverage. I'm not sure if "net gains" are realized or unrealized (or both; I unsuccessfully tried to pencil it out), but without including gains, the company didn't cover interest expense (and certainly not interest expense plus the preferred dividend). So - should I be concerned? If the expectation is that gains occur on a consistent basis and can make up the op inc shortfall, I find that mind set a bit troubling. On the other hand, I don't think FFH would have problems accessing either the debt or equity market, if needed. Any insight is greatly appreciated! PS: I normally don't use !s, but after reading Mr. Watsa's letter, I decided I need to use them more often!

Ouch. Someone out there agrees with the sky is falling premise....

Brief analysis of RNR from bankstocks.com (they state it has 70% upside): [ftp=ftp://http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=6224&ArticleTypeID=2]http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=6224&ArticleTypeID=2[/ftp] My apologies if you have to register to access the article.

Here's a link to their Q3 report (opens as a pdf): http://www.kinnevik.se/Documents/Pdf/Pressreleases/en/394278.pdf What I liked most was the ability to buy Millicom at a significant discount (admittedly, it makes MICC less of a pure play). MICC is growing nicely in LatAm and Africa, just bought back 10% debt, and is growing FCF. When added to MICC (~44% of NAV), other listed holdings make up about 90% of KINVB's NAV, so it's a pretty transparent valuation model. The remaining 10% is a pulp/paper/containerboard business (there is operational risk for management) and venture. The venture portion is particularly interesting, although I'm not sure it will really move the NAV needle (for what it's worth, they have an indirect position in Groupon, which is a big deal here in Silicon Valley, but will it make a difference?). That said, they have agriculture investments in eastern Europe and Russia, microfinance in India and Peru, private equity in Africa, and internet businesses in Europe. I view these odds and ends as the "alternative investments" part of the overall portfolio.

Another Swedish company (not sure why this is a recurring theme...) to review is Kinnevik (KINVB). It's a holding company, and if one believes their reporting (I did - I'm an owner), their 30 year annualized return is 21%. I found it while researching Millicom International - MICC is the largest holding of Kinnevik (40+%), and since KINVB trades at a discount to NAV, you get MICC pretty cheap. There are other listed holdings, a large non-listed company (pulp), and numerous venture investments. Geographically, one gets exposure to non-Asian emerging markets (Latin America, eastern Europe and Africa). The current yield is just shy of 3%. The discount to NAV is in the 30-40% range (per US and Swedish analysts; the company's Q3 report calculates the discount at 30%). Their English reporting is excellent and it's easy to buy via the local exchange.