dowfin1

A new report on wealth distribution in the U.S. is out. http://epi.3cdn.net/2a7ccb3e9e618f0bbc_3nm6idnax.pdf

From Bloomberg: “Insurance penetration and density is very low when compared to leading Western markets, particularly in commercial and industrial lines,” RMS said of Japan in an e-mailed statement. “Many small- to medium-sized businesses are completely uninsured.” http://www.bloomberg.com/news/2011-03-12/global-insurers-may-sidestep-most-claims-as-earthquake-costs-stay-in-japan.html

In the interview Buffet said that $20m of capital was stuck in the textile business earning no return for many years. Assuming he took that capital and compounded at BRK's historical 20.3% since 1965, only gives us an additional BRK book value of $82B not $200B. Where did he get this figure?

some updated net worth figures. http://www.federalreserve.gov/pubs/bulletin/2009/articles/scf/default.htm#t4

From pages 9 & 11 of the 10Q, it looks like FFH is also increasing long dated US bonds as part of its deflation protection.

Ferguson gave this speech in May on what looks like the same topic. http://www.iie.com/events/event_detail.cfm?EventID=152&Media

Agree that the subscription price is the same for everybody. But oversubscribing shareholders get to by additional shares without having to purchase rights on the open market, and they get these shares before of FFH's standby purchase privilege because FFH has elected to waive its oversubscription rights. p. 19

saw this article re shopping clubs yesterday that mentions Groupon. http://www.ft.com/cms/s/0/0352462e-66cb-11df-aeb1-00144feab49a.html

The way I read the press release is: 1. No dilution to existing SH if they fully exercise their rights. For such a holder, just more invested capital for the same proportionate ownership of the corp. which should be more valuable by $40 M -- so it's a wash regardless of the subscription price for the new shares. So I am not bothered at all if the price drops because I still must pay about $.44 per sh now owned to avoid dilution. ($40M/90.5M sh out) 2. The subscription price and FFH's standby price are the same under all circumstances. Some posters seem to think that FFH will get a better price per share or that the 20% discount applies only to FFH's share bought under the standby.

Also as a follow-up to these archived posts: http://cornerofberkshireandfairfax.ca/forum/index.php?topic=2331.0 After following Biglari's career since 2003 and investing in SNS shortly after he started his position, I sold all my shares today -- disappointed but a bit wiser. In retrospect it's much easier to see clearly now that Biglari was a smooth talking Buffett wannabe charlatan who lacks integrity, especially in his shareholder communications concerning executive compensation. So sad. He could have been a contender....

Nice letter from Stan Zax to employees. http://www.sec.gov/Archives/edgar/data/109261/000110465910007750/a10-4103_1defa14a.htm

Mike Milken still had hundreds of millions of dollars after he left jail for his Drexel crimes. SAC should also.

Txlaw, While I agree with your point re effect of a lower dollar, Alice S. put it this way, implying somthing else: "There are many other motives. Burlington is well-managed. Railroads are a bet against the U.S. dollar and in favor of higher energy costs. Railroads are a play on the trade deficit because this is how we haul all those containers of stuff imported from Asia. " http://www.bloomberg.com/apps/news?pid=20601039&sid=aL9x8sp3.Nwk

There would be exceptions like MKL. So the more interestion question is why, when both FFH and FFH are in the same industry with similar business models.

So what was the justification for making this a taxable event instead of just giving ORH shareholders FFH stock? I figure that FFH wanted to sell large stock blocks to the friendly institutional investors waiting in the wings.

It's because Charlie speaks the unvarnished truth, warts and all. It's a shame that Charlie Rose hasn't interviewed him yet, even though WEB and Gates have appeared mutliple times.

Leon Cooperman got it right when he impliedly criticized FUR mgt for the Concord finance "mismatch", which gives me pause as to Ashner's investment judgment. Does he actually walk the talk about conservative investing? Why is he being given a reprieve by investors for going into CDO syndication in 2006 and 2007 at the top of a frothy debt market?

Comparing the spreads on 10 and 30 yr treasuries with the corresponding TIPS, Mr. Market says we will have very moderate inflation. The real fear is if the spread drops way futher like in December.

Can you please elaborate on how ORH shareholders can structure this as a tax free exchange for FFH shares, or have I misunderstood your comment?

The article is vague and lacks clarity in language and idea, just like Snowball. I do not know what exactly she is saying after reading it several times. She needs to improve her writing skills, but maybe she is doing this intentionally to be provcative without committing to a concrete position.

Count me in.

"He said 1025 in October. Not to split hairs but why is he dishing out different numbers?" Grantham wrote this in his October letter, so he may have been sloppy with his words in the interview: Our current fair value estimate for the S&P 500 of 975 modified by a likely overrun of 40% would yield a price of about 585 in an environment of a quite severe economic and profit recession. If the global economy surprises on the upside, however, and somehow profit margins hang in, the result would of course be far less severe. Our conclusion, though, that the S&P is likely to bottom out in the 600 to 800 range within the next two years can unfortunately be seen as not particularly pessimistic from a historical perspective. https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIBOpDzd%2fqvfmyKvO9heUp7mZr7ZNzTXElC4nL%2bbyzwsvOd2v9jLWK05D9gf1qB23jMheM%2bQ18uL1ukRpKGsyM6GsWt%2fZUVdJPU%3d

By my calculation the GDP/stock market cap ratio stands at about 64% while the record lows (post 1970) were 45% set in 2Q 1982 when when long US govt rate was almost 13%, and 3Q 1974 at 47% ratio and 7.2% interest rate. I don't have data pre-1970, but the current 30 yr. is at 3.6%, so I say we are at or have passed beyond the post-war low on an equalized basis for this specific yardstick.

"So we had 32% inflation. Greenspan - although he is a total idiot - would not have uttered those words had the market not been overvalued in 1996 by at least 30-40% one would imagine - so there goes the 32%." This means that American business has had no real growth or retained earnings for 12+ years which is hard to believe.

Also unlike FFH and MKL, WEB doesn't use CAT losses as the isolated exception. Indeed it looks like BRK suffered little CAT losses when most others did.