merkhet

A few running notes: Scenario A: I would agree with most of this -- except I have no idea where you get an expected return of 24% per annum. If the government preferred goes back to a 10% rate, then the preferreds basically go to par with the possibility of a discount based on whether there's an immediate appeal. Same thought on the common stock -- though the equity build might put a slight hamper on the common. Scenario B: Basically agree though I think it's less likely they go this route. Scenario C: Same thought as Scenario A. Additional Notes: Let's not forget that Fannie has about $45 billion in DTAs that they might be able to strike a deal on w/ Treasury to further reduce the government preferreds. Any such deal would accrue directly to the common stockholders. An extra $3.5 billion a year is a 35% increase to the market cap. Alternatively, let's remember they have pre-tax income of around $22.5 billion a year @ current g-fees, so the payback on the government preferred could be quite a bit faster than you think. (If they increased that by 20 bps, they'd have $30 billion in pre-tax income per year.) Ackman's involvement here gives me a considerable amount of comfort since, as a 10% holder, my guess is that he's going to try and get on the board and make capital allocation decisions of this nature.

Cool. Thanks for the recommendations and the advice!

reddogg66 I tried calling to add another person on the reservation to Mr. Mulliner, but they told me that there's no reservations that night under that name. This is the Nickel Diner, right? I've put down a reservation for 6 people @ 7pm on September 9th, 2014 under the last name King. If anyone would like to join me, please let me know.

Received. Thanks!

Anyone have a recommendation on a good fund lawyer/firm? I'm thinking about replacing my current guys.

Congrats!

"In Dare to Be Great II, I described the time I spent advising a sovereign wealth fund about how to organize for the next thirty years. My presentation was built significantly around my conviction that risk can’t be quantified a priori. Another of their advisors, a professor from a business school north of New York, insisted it can. This is something I prefer not to debate, especially with people who’re sure they have the answer but haven’t bet much money on it." Love it.

+1

I wonder if people ever think about the public and private divide in terms of size. People say all the time that the government is bureaucratic and wasteful and attribute that to the fact that it's the government. Institutionalization and bureaucracy might be an issue of size rather than the nature of the entity. Also, your answer seems to presuppose that having a wealthy group is better than not having one. That may or may not be the case. Spending, destroying and investing wealth exists independent of the distribution of wealth.

More than $500K is wealthy, but I doubt it's what most people are talking about when they talk about the wealthy. I'd be curious about the north of $100 million set. Also, think about the following. Assume 6% inheritances. Now assume a completely new cohort of recent entrepreneurs. Prior to them, that 6% was 100% of the wealthy. Now it's 6%. Does this prove anything? Not necessarily. Why? Because the other 94% haven't died yet. Two things we don't know: (1) What happened to past inheritances. (2) What will happen to the families of the currently wealthy.

I'm not sure I would count the Rockefellers as being "recent" entrepreneurs. There's something to that "all generalizations are false [including this one]" quote.

That's a significant cash position.

Same here. I've always found him to be a thorough and intellectually honest thinker. I'm also looking forward to the book.

There is also a list on the front page of each of the 10-Ks

Those could both be right -- he could have initially allocated 50% of his net worth into GEICO in 1951, but the company could have appreciated in value by a little over 30% by the end of the year so that it is 66% in the letter.

When I first started, I used to think this all the time too!

Yea, they do. I just found the concept of denying Pershing access to the books to be funny. Maybe it's because it brought up thoughts of Valeant and Allergan. Ackman just can't catch a break as a shareholder, lol. In any case, Ackman brings up some interesting points regarding the case that haven't been mentioned before in the other cases.

My favorite part of the Ackman complaint is the following: It's funny when you deny a 10% holder the right to inspect books and records. The Ackman complaint is actually very, very good. If you guys haven't read it yet, I would highly recommend it. (Attached.) 2014-08-15_Pershing_Square_Complaint.pdf

^ Well, you get paid twice if you're doing it through a fund vehicle. So that's one important difference. I agree largely with ScottHall & Parsad on this one. It's a great idea because of the possibility of permanent capital and a steady influx of additional capital to allocate, but you have to be damn sure that everything you think is there is there.

Thanks for this! I'm looking forward to reading it.

^ +1

Just to clarify -- there's no need to be a shareholder to attend the DJCO Annual Meeting, right?

Looks like my e-mails to them worked. Francis Chou is now being followed by dataroma. http://www.dataroma.com/m/holdings.php?m=ca

I don't think that's the real issue. Religious people have no solid evidence, and the burden of proof is on them. To me it's about how to think, which is a more interesting and broadly applicable thing. If people used even just the standard of evidence required to build a bridge to their beliefs about the universe, the world would be very different. But people are brought up to believe that religion is a kind of separate thing, and the normal rules of thinking shouldn't apply to it, which is BS. Virgins births and drinking some dude's blood in transmutated wine? Don't ask. I'll phrase it another way -- assume you are talking to someone who is rather religious -- in that they believe the things that you laid forth above. How likely do you think it is for you to "logic" them out of that belief? The following article comes to mind... http://www.newyorker.com/magazine/2014/03/31/sacred-and-profane-4

Keep going guys. I feel like we are only five or six posts (tops) away from definitively proving or disproving the existence of an Almighty.