Carvel46

The metaphors that the USA is like company or household are tiring. What business can require/force consumers (citizens) to purchase its "products" (taxes) and pay and, hence, earn in the currency of the business, create its own business currency (coins, paper or keystroke), and denominate liabilities in the currency of the business (issue debt)? Not even ITEX! :D Riddle me this, why doesn't ITEX have inflation or debasement of ITEX dollars?

Thank you SharperDingaan! Twacowfca: How do you tell if a capital-intensive business is under-investing? Look at deprec/maintenance capex ratio? You trust management, while looking at incentives? For example, SHLD ("under-investment" at Sears has been widely debated, although I'm not sure it's the best example). It seems SharperDingaan's reasoning includes industry structure and dynamics not present in Penn Central's time--like higher pricing due better fuel efficiency vs. alternative transport. Understanding industry structure and dynamics seems very important and also takes the most time. I love reading Ruane, Cunniff & Goldfarb annual meeting transcripts because it's full of discussions about each company's position and strategy within an industry! I suppose labor-intensive business like technology stocks have cultural risks in a changing industry and world---cultural DNA as they say.

SharperDingaan: What's your reasoning behind "industry's with very high depreciation (railroads) & long-lived assets are probably good" with low real GDP growth? Do you like the inflation optionality? Is your reasoning that these companies have assets to backstop valuation/buyback? Personally, I want good capital allocation by management--implicitly means a competitive advantage--and good valuation. Teledyne seemed to be able to buyback stock effectively because it was misunderstood/neglected by the market and had good capital allocation. In the '60 and '70, buybacks were viewed negatively by the market in the US... Anyone know why?

There is some mixing of metaphors going on (checklist vs filter). Pabrai talks about a checklist helping him remember to think through the risk areas that all investments have. An investment checklist seems more qualitative and less binary than a flight checklist or a medical checklist--more judgement seems involved (although maybe I'm wrong). For me, an investment checklist reduces biases: helps me slow down (think fully, rather than act quickly) and helps me invert. It's an exercise in humility. “I liked and admired Ed Colodny, the company's then-CEO, and I still do. But my analysis of USAir's business was both superficial and wrong. I was so beguiled by the company's long history of profitable operations, and by the protection that ownership of a senior security seemingly offered me, that I overlooked the crucial point: USAir's revenues would increasingly feel the effects of an unregulated, fiercely-competitive market whereas its cost structure was a holdover from the days when regulation protected profits. These costs, if left unchecked, portended disaster, however reassuring the airline's past record might be.” ~ Warren Buffett, 1996 Letter to Shareholders c/o Pabrai, The Checklist

"The State We're In" is my favorite podcast--excellent interviews and global stories. It's produced by Radio Netherlands. http://www.rnw.nl/english/dossier/thestatewerein Recent episodes and segments... William Browder managed the biggest investment fund in Russian history and it was stolen from him by corrupt government officials. The lawyer for his firm, Sergei Magnitsky, was imprisoned, tortured, and died after one year in custody. Now William is taking up the fight in honour of Sergei’s belief that justice will eventually prevail. http://www.rnw.nl/english/radioshow/seeking-justice When Gary Aguirre took on insider trading in Heller Financial stock shortly after he joined the Securities and Exchange Commission, his investigation was shut down and he was fired. http://www.rnw.nl/english/article/keeping-watch-wall-street

Some brief notes from Distressed-Debt-Investing.com: http://www.distressed-debt-investing.com/2011/04/michael-burry-notes-from-vanderbilt.html

In the 1970s, Dave Kestenbaum's cousin Dan Weiss got promoted from stocker to gift shop manager at the Kennedy Center for the Performing Arts in Washington DC. It was a good job... except for the fact that the place was bleeding cash because of apparent embezzlement. The gift shop staff? Almost all senior citizen volunteers. Dave is a reporter with NPR's Planet Money. Cue up minute 45 (runtime=10 minutes): http://podcast.thisamericanlife.org/podcast/431.mp3

Excellent point mloub! I wonder how Sokol felt about his total pay in relation to his responsibility.

Obviously, frontrunning doesn't pass the NYT front page test--for good reputation. Consciously and subconsciously, it seems, he wanted out.

Great quote Myth465. Buffett also often waxes poetic about the importance of the Munger partnership. In terms of investment ideas... What about BYD? Wasn't that idea presented to him by Munger?

Yes...and Buffett has Munger to bounce ideas off of. Buffett also has talent below him, operationally at least.

"I want it to be a metropolis. I'm not just talking about a vacation community," Berkowitz said last month in an interview. "When industry comes, which it will…because the area is in an aerospace corridor, it's going to be one of the best places to live and work in Florida." I don't know enough to have an opinion on JOE, except that Berkowitz is telling a beautiful story! He seems to have been trapped by a narrative and is now saving face by taking control and trying to dig himself out (as anyone would with 30% ownership). In a recent interview, he alluded to not enjoying managing analysts at Fairholme (can't find article) and letting go of his analyst team. Does anyone know about this? His analysts are now opening a new shop. http://online.wsj.com/article/SB10001424052748704678004576090363448990754.html. He seems to work mainly alone (except Charles M. Fernandez), through consultants and industry experts, a la leaning heavily on the model of Gerson Lehrman. This is all well and good--he's talented. If he closed his shop to new investors and limited size, I wouldn't care if he works alone. He has a great record! He has healthy experience! He seems to have a good process. But how can he scale the fund working alone? Managing other people is required for running a big shop. Big shops are built on hiring quality people and building a good culture--from Berkshire to Fairfax to big shops on either coast. Maybe it's hubris? Maybe Fernandez is a Munger type? If this is the case, maybe I'm wrong. Anyhow, I recently sold my FAIRX.

I used World Nomads for travel in Asia a few years ago. http://worldnomads.com/travel-insurance/ It was simple to get and affordable. Luckily, I never had to use the insurance. I'm sure you can look up reviews for customer experiences.

Parsad, you've positively influenced a lot of folks. You keep the board civil and facing in the right direction. Congrats!

farnamstreet: What boards do you follow at fool.com? Are they RSS enabled?

I bought a small tech company with good ROIC...and with a history of acquisitions . CEO was buying large amounts of stock. Four months later, a large fraud was uncovered and the company went bankrupt. Acquisitions can hide many sins, in the short-term! Buying a small bank stock, even though I only had a weak understanding of key variables. Plus, the company had horrible corporate governance--I was a minority shareholder. Lost 50% on a small position. Other mistakes include not selling cyclical, asset plays after big moves.

I'm glad Chanticleer doesn't seem to be levering up. They are minority shareholders in the deal. I wonder what type of store count the PE shops are modeling over the next few years? I'm very impressed that Mike Pruitt got a right of refusal on such a small loan ($5) in relation to the size of Hooters of America in 2006. Anyone know the back story on this? It seems Brooks had liquidity problems... Were Brooks and Pruitt friends? "I am pleased to finally complete this transaction and fulfill the vision I discussed many times with Mr. Brooks," said Mike Pruitt, president and chief executive of Chanticleer. "The management team has done an amazing job of building the company and the brand despite limited resources." Maybe Brooks connected with the name--Chanticleer? Chanticleer (SHON-ti-clear) comes from Chaucer's Canterbury Tales. More specifically, he comes from the Nun's Priest Tale, a story within Canterbury Tales. The Chanticleer is a proud and fierce rooster who dominates the barnyard. As Geoffrey Chaucer described him: "For crowing there was not his equal in all the land. His voice was merrier than the merry organ that plays in church, and his crowing from his resting place was more trustworthy than a clock. His comb was redder than fine coral and turreted like a castle wall, his bill was black and shone like a jet, and his legs and toes were like azure. His nails were whiter than the lily and his feathers were like burnished gold." With all of his splendor and great looks, Chanticleer is also greatly feared and mightily respected by all.

I'm looking forward to some PR or the upcoming Q for more details. Eyeballing this, the total deal is $350 mil + and the rights offering is only raising $12.5 million or so (if all rights are exercised).

I haven't received a mailing on the Rights Offering, but my understanding from the online filing is that there has NOT been a date disclosed for when the Rights will hit account holders of CCLR. What is a subscription right? A: Each subscription right entitles the holder of the subscription right the opportunity to purchase one Class A Offered Warrant and one Class B Offered Warrant at the exercise price of $0.04. The Class A Offered Warrant entitles the holder to purchase one share of our common stock at $5.50, for a period of 5 years following __________, 2011. The Class B Offered Warrant entitles the holder to purchase one share of our common stock at $7.00, for a period of 5 years following __________, 2011. The subscription rights are non-transferable. The Offered Warrants to be issued pursuant to this offering are non-transferable following their issuance and through their expiration date. A holder may exercise any number of his subscription rights or he may choose not to exercise any subscription rights at all. For example, if you own 1,000 shares of our common stock on the Record Date, you will be granted one subscription right for every share of our common stock you own at that time, representing the right to subscribe for Class A Offered Warrants to purchase up to an aggregate of 1,000 shares of our common stock and Class B Offered Warrants to purchase up to an aggregate of 1,000 shares of our common stock. If you hold your shares in the name of a broker dealer, custodian bank, trustee or other nominee who uses the services of the Depository Trust Company, or DTC, then DTC will issue one right to the nominee for every share of our common stock you own at the Record Date.

Parsad: Awesome story about Monish!! Here's a great audio interview with Dr. Robert Stickgold, Associate Professor of Psychiatry at the Center for Sleep and Cognition at Harvard Medical School about sleep. http://www.wgbh.org/programs/episode.cfm?featureid=21307 (22 minutes) Goodnight

http://www.sec.gov/Archives/edgar/data/1106838/000114420411001019/v207394_s1.htm

Parsad: Thank you for discussing Chanticleer on the board! Any ideas who is in the investor group? Other than the Rights Offering, how is Chanticleer funding this? http://www.ajc.com/business/hooters-sold-to-chanticleer-814326.html

Schin: Spot on comments. Sav-A-Lot is great format. It's in the vein of Aldi, but the ship is not run as tightly. The Albrecht family owns Aldi and also Trader Joe's, which Buffett has public salivated over, on numerous occasions. Here's a short article about Aldi--originally ran in Bloomberg Magazine 2004. http://www.businessweek.com/magazine/content/04_17/b3880010.htm

Why do Closed End Funds with leverage trade premiums to NAV? For example: http://www.cefconnect.com/Details/Summary.aspx?ticker=PMX

Great article on Gold and the marketing of Gold ETFs: http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aTiDUAOynrT8