Carvel46

I love the part where Stewart says the difference between them is that he acknowledges he's a snake oil salesman. Well said! Since Stewart is a comedian with a TV show, I don't understand the reverence people have for him? I recall a quote by Buffett (can't find it now) but paraphrasing-- that one measure of a society is the quality of financial journalism. Cramer is not a journalist, he's an an adrenaline junkie. There is no way you can call him a journalist... it's not a debate. Stewart sets him up as straw man, it's stupid. Cramer is like an alcoholic. How can you tell if an alcoholic is lying? His mouth is moving.

My biggest investment mistake is not firing a broker who had no understanding of value investing... I second the tax avoidance mistake (vs. letting the merits of the underlying investment characteristics drive my decision making).

ericd1, What's the commission structure? My understanding was that Fidelity baskets charge a commission per stock within the basket you create.

NetNet: Things are changing from my day. For textbooks, I used to order from amazon in the UK--as some texts were identical to US versions and sold 50% cheaper. Other than textbooks (and maybe "evergreen" and how to titles), I am not sure the book industry could get any worse. If you know anything about book retailers' high SKU count, how book remainders work and the book industry supply chain, the demographics of readers (and demand for eye-balls), how publishers forecast demand, and the history of book publishers pushing books for home libraries. The whole industry is mess. It's structurally very unappealing. The Kindle could really streamline the industry--from an efficiency perspective. But I'd bet most of economic benefits would accrue to consumers.

I thought I'd pass this along... I am excited to finally have access to it, since my local library "lost" their copy before I could borrow it. http://financetrends.blogspot.com/2008/08/seth-klarman-margin-of-safety-pdf.html

Worth a read.... http://brontecapital.blogspot.com/2009/02/we-are-not-close-to-being-swedish-yet.html "This is how it is – with certain rules and a process not every American bank is going to die - and possibly some or most of the big six will survive. Some will live – and they will prosper. Nationalisation with process leads to 20 baggers. Oh, and zeros - 100 percent losses. But we are here in limbo. The nationalisation meme has taken hold – and nationalisation of some banks will happen. America is a current account deficit country – and almost all American banks need wholesale funding. There is none of that since the Lehman/WaMu week – and there will not be substantial wholesale funding until the rules are clear. All banks will fail in that environment. The faster we come out with a good process – one which has nationalisation as one (but not the only) possible outcome then banks will continue to fail. And ad-hoc decisions will be made to bail them out or confiscate them. And we will be no wiser. And no closer to a solution."

Good point Watsa... although I wonder where the "stress test" will lead. Martin Wolf had an interesting piece in FT, Japan’s lessons for a world of balance-sheet deflation http://ww.ft.com/cms/s/0/774c0920-fd1d-11dd-a103-000077b07658.html "Third, recognising losses and recapitalising the financial system are vital, even if, as Mr Koo argues, the unwillingness to borrow was even more important. The Japanese lived with zombie banks for nearly a decade. The explanation was a political stand-off: public hostility to bankers rendered it impossible to inject government money on a large scale, and the power of bankers made it impossible to nationalise insolvent institutions. For years, people pretended that the problem was downward overshooting of asset price. In the end, a financial implosion forced the Japanese government’s hand. The same was true in the US last autumn, but the opportunity for a full restructuring and recapitalisation of the system was lost."

I believe Bank of America and Citi will end up being taken over by the FDIC and debt partially or in whole wiped out while depositors protected--- politically the tone to this is changing in Washington---not sure about the administration. http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ1L29.emkg0&refer=home What are possible effects of this? Up from preferred shares to "investment grade" funds and money markets funds. I'm trying to get my head around it. On the flip side, it would likely benefit the stronger banks. How are you positioned for this?

The "discipline" of economics is in crisis--whether they accept it or not. Nothing new but I like this bit. "But many in academia, too, will resist. It is important that reform plans mix moral and accounting concepts with traditional economic concepts. Many economists take fierce pride in opposing that sort of mixed reasoning. But what these economists like to think about is functionally intertwined, in complex ways, with what they don't like to think about. Those who resist the wider thinking are acting as engineers would if they rounded pi from 3.14 to an even 3 to simplify their calculations. The result is a kind of willful ignorance that fails to understand much that is important."

This was a great interview--I remember watching it at the time! How I interpreted it was that knowing yourself is required however you define your own success. His example of 10,000 hours and various factors is just to say-- a person took the time to know herself/himself and know their craft . I think any field where you age like a good wine-- not simply in monetary value but personal value, spiritually, friendships and family. It could be anything--- investing, science, art, gardening, tour guide, consultant (maybe the last one is stretching it). Whether you're an introvert or an extrovert seems to be a big factor but those three requirements (complexity, autonomy, and effort) do cut across. Certain professions, that at first glace appear to be mindless with little complexity or effort required, could be approached as a spiritual practice. A job without autonomy is tough-- if you job is boring and you have someone constantly looking over your shoulder, that stinks. I agree with you-- people are constantly underestimating the role luck plays in their lives. An echo of Buffett/Munger and Nassim Talib, I hear in all this, is to create an environment where you can be exposed to "good luck".... proper incentives and corporate culture really support this. Plus a strong ethical focus.

Author on NPR discussing all the hate mail he's receiving... and also takes calls. http://www.npr.org/templates/story/story.php?storyId=100445054

UCP -- I know it was over 8 years ago, but can you recall what turned your stomach? I love these stories... plus it would encourage me to re-read Financial Shenanigans (to brush up). They've done several acquisitions over the past few years-- acq. scare me when I don't know management. calonego --- "he [stilwell] has a lot more control than it appears." How so? Stilwell's two board members seem strong-- a board member of American Physicians Capital and a former insurance executive (Larry Swets).... Could you discuss your conviction in Stilwell influence of the board and management? I know the name has been a value trap for many BUT the company's "short tail" and Stilwell's record of good capital allocation keeps me interested.

There was a recent VIC write-up focusing on Stilwell Group's involvement in Kingsway. Stilwell seems to have a good record with many thrifts/insurance companies forcing improved capital allocation/sale of the company. For example, http://finance.yahoo.com/q/bc?s=ACAP&t=my&l=on&z=m&q=l&c= Jan 30, 2009 - A recent SCHEDULE 13D from Stilwell to KFS http://idea.sec.gov/Archives/edgar/data/1072627/000114420409004528/v138403_sc13da.htm Kingsway has accepted two of Stilwell's board members--plus Stilwell is trying to downsize the board, refocus KFS on core businesses, buyback debt and equity and cut expense. With today's announcement, the company seems to have thrown in the kitchen sink. Anyone have experience with insurance turnarounds? As Stilwell only has two seats, it seems like a lot that can continue to go wrong with the poor corporate governance and corporate culture. Also, as a Canadian company, where do I find records of Holders and Insider Buying?