Liberty

Very interesting, thanks for posting.

Congrats to Francis! :)

Thanks for posting! :)

http://www.weku.fm/post/why-coke-cost-nickel-70-years I think they probably should also have mentioned the inflation during the period, but it's still an interesting bit of historical trivia.

http://www.bloomberg.com/news/2012-11-14/berkshire-cuts-105-jobs-shuts-paper-bought-by-buffett.html

I think RR is EBIX's biggest asset. The whole thing is his brainchild, he engineered a very unique software company with very high margins, very low customer concentration, highly recurring revenues, pricing power, and an infrastructure/picks&shovels kind of position in a greenfield market with secular tailwinds (paper is going away in insurance/finance, and SaaS will replace perpetual licenses in most enterprise software), etc.. He is unconventional and unpolished compared to the 'suits' that run most businesses, which is partly why the shorts have such an easy time making him look bad (heck, he even looks like a movie villain), but I believe he's honest and talented. As I wrote elsewhere, the dividend isn't my favorite thing, but merely because it's not optimal, not because it's bad per se (returning money to shareholders isn't the worst thing in the world). It's a relatively small percentage of FCF and leaves them apparently more than enough to reinvest and do buybacks. I think that after a few years of being attacked and publicly dragged through the mud by powerful shorts, it's just human nature to want to make life harder for them, so I don't hold it too much against him. Not sure what I'd do in his position...

Thanks for posting :) Is this all there is to it or is there a longer interview coming out at some point?

It's definitely something I often ask myself (I always hear that quote in my head said in Munger's voice). I think it applies when you realize you've made a mistake and what you are holding isn't worth or doesn't have the potential to be worth what you expected. In that case, I'd definitely sell. In cases where the drop in price is due to Mr. Market overreacting or other non-fundamentals-related or temporary problems, I think it's fine to hold and ride out the storm, or even average down. On EBIX, I totally disagree with the short thesis and it seems to be pretty much the only thing keeping that stock down, so I'm not selling a share. On FTP, like all shareholders I'm disappointed with the delays and cost overruns, and the macro environment certainly isn't cooperating, but I still think that once all its assets are online it will have enough earning power to provide me with a nice return (and maybe more if the macro improves). Hindsight is 20/20 and had I known things would look like this, I would certainly have waited to build my stake, but as things stand, I still am confident in the business, it just needs some time to play things out.

The past week has been a bloodbath for me (EBIX, FTP), and I wasn't even around to see it happen in real time. It's at times like these that I have to go back to first principles and remind myself of Mr. Market, and go back over my analysis, and remember that fundamentals are what matters in the long run, etc.. But even knowing all that, it's still not fun to see your portfolio go off a cliff. :-\

They did... and then wrote them off.

All right, just bought my ticket for the Fairfax dinner. Sanjeev, would love if you could confirm via PM or here that you got the order (I left a "note to the vendor" to say it was me). I guess you guys will be stuck with me this year! :) edit: Wow, I found a hotel room across the street for 69$ CAD for one night. Who can beat that? It's about as big as a broom closet, which is probably the way a young Buffett would have liked it 8)

I've loaded up the iPad with books and PDFs... But even so, the withdrawal might be too much. If I don't come back in 3 weeks, you'll know what happened... :-\

Thanks. Going mostly to Spain. Guess that's the bargain-hunter in me ;) Then taking a trans-Atlantic ship and landing back in Florida.

Hey, I just wanted to point out that Friday I'm leaving for a 3-week vacation and likely won't have much internet access. So if you don't hear from me here for 3 weeks, it's not because something terrible happened :) Not that most people here would notice, but I figure that in every community there's always one person who keeps track of everybody and who would notice and go "where the heck is that guy who usually posts everyday?" and then 2 weeks later would go "oh shit, I know, he's dead in a ditch somewhere!" I just want to avoid that :D

Thanks guys, sounds good! I think I'll come to the Dinner, AGM, and then Corner Capital AGM. Will buy my tickets and make reservations very soon. Should be fun! :)

Thanks for the details, Sanjeev. Is the Corner Capital AGM only for investors in Corner Capital, or is it open to everybody?

A bit of an under count :-) There's also the pre-dinner event, the Corner Capital annual meeting afterwards, and perhaps a Ben Graham Center conference ($$$) before hand. Oh, tell me more. I'm planning my trip.. Any of those open to a nobody like me?

elltel,... actually it's very easy,... you just show up, on Thursday morning, April 11, 2013 at 9:30 a.m., Toronto time at Roy Thomson Hall, 60 Simcoe Street, Toronto, Ontario, Canada. There is NO need for a ticket. But it's better to come 1 hour earlier. In the lobby of the Roy Thomson Hall are for the Fairfax AGM some registration desks where you show them some ID card or passport,... nothing more. Or you might want to show them your proxy letter,... but that isn't necessary. You get at the desk some badge for your shirt with the name "Fairfax Financial AGM for shareholders" and that's it. How long does the official AGM the next day usually last and what is it like? Does all the fun stuff happen at the dinner the day before and the AGM is more of the 'dry procedural business' stuff, or is the official AGM also full of goodness with presentations, Q&As, and guests making speeches and such?

Heh, just saw this on Bloomberg: http://www.bloomberg.com/news/2012-10-16/ex-banker-girlfriends-doubled-money-on-insider-trading-fsa-says.html

Maxprogram, Absolutely. I'm not naïve enough to think that the current system is perfect. But as with murder, you have to do your best to reduce it and catch those who do it, but it doesn't mean you'll eliminate the crime just by making it illegal. Still, that's probably better than if it wasn't. Most people do their best to play by the rules. That's why human civilization even exists, because if everybody suddenly decided to go smash car windows with crowbars, there wouldn't be much to stop them. Right now, I think that the vast majorities of CEOs wouldn't even come close to doing insider trading, not anymore than they'd do other kinds of fraud. And then there's a marginal group who would like to do it, but they don't feel it's worth the risk of being found out, and so they don't... But if we lived in a world where it was absolutely legal, with no mechanisms to check for it and no penalties if it comes to light, I bet you that almost all of them would do it. Not just the marginal group, but the whole gang. Most people follow rules, and there would be no rule against it, and the potential upside would be big while the downside non-existent. Yeah, I think they would all do it... So those two worlds seem very different to me, and as a non-insider, I'd rather be in world #1 than in #2. I don't know about you...

I'll do my best to come this year. But I don't want to drive to and in Toronto... A quick look at Google maps shows this is right next to a train station (is that Union Station?)... I guess it should be pretty easy to take the train from Ottawa into toronto, get to a hotel right next to the station, and then walk to the reception, right? Can anyone confirm that this is a possibility, or am I missing something? What hotels are recommended near the venue and the station? btw, I first read this: "Buffet Dinner Tickets $150 No Buffet Tickets $75" As this: "Buffett Dinner tickets" And for half a second my brain was like, whoa, Warren's going to be there! Who could be foolish enough not to pay the extra 75$ to have dinner with him! ;) edit: After a bit of digging I found that the http://www.thestrathconahotel.com/ has some rooms for about 90$/night. The Fairmount where the AGM takes place is closer to 200$/night, so not very frugal :)

I disagree, and I'll illustrate why with an analogy: Suppose you go on a TV gameshow like Jeopardy. There's a big difference between asking questions to which the answers are publicly available and questions to which the answers are simply not available regardless of how much digging you do. Some participants will always be better than others - having read more encyclopedia articles and scientific papers and books and such - and they'll have an edge. Maybe even a big edge. Nobody's saying that everybody's going to be as good, there will be champions and fast losers. But all participants had the opportunity to read these papers/books/etc and work to get better. There's a meritocratic aspect to it. But if there are questions with answers that aren't publicly available, then only those who have access to that private information can win, and that's a qualitatively different game (and if it's advertised as such, some will simply decide not to play). I believe it's a similar thing with markets. Maybe some super-investor is better informed than you, but at least he earned it, and if you work hard, you can potentially get there too. But if some insider knows in advance about some material event that will tank the stock or make it go multi-bagger in a hurry and they trade on that, how are you supposed to even want to play with people like that? Two wrongs don't make a right. And I don't believe that insider selling (and buying) that is publicly reported is the same thing as buying/selling by insiders that isn't reported. Can you imagine how different things would be if one day you learned that over the past 2 years the CEO of one of the companies that you hold has sold all of his stock and nobody ever knew about it? Is that the reason why it was legal? Or was it because markets were not very regulated overall and they were mostly run by insiders who benefited from that state of affairs? It's only later that small retail investors joined in and pressure built up for a fairer system, afaik. It's not because something was common in the past and not seen as a bad thing (mostly by those who benefited) that it actually was a good thing. Slavery comes to mind... I think fairness is important in public markets. If there's no minimum level of trust, there's no point in investing your hard-earned money. So either make it clear that it's a free for all and buyer beware, or make it clear that it's illegal to trade on insider information and enforce those rules as much as possible. But the worst way to do things is to pretend that you have the latter when you actually have the former. My 2 cents.

It seems like the housing bubble has already started to burst, but since house prices are so sticky on the downside, and since the realtor numbers are more cooked than refried beans, it'll take a little bit of time to really show. I do feel a change of sentiment in the media, though.. For the past few months, negative articles on RE have started to appear, while before then it was all sunny all the time. In any case, I sure am glad we're renting...

It depends on the industry, though.. Lots of software companies will be sold higher than book value because so much of their value is in intangibles, so you'll see more goodwill on the balance sheet of companies that acquire software companies than, say, on the balance sheet of companies that acquire financials. edit: to be clear, I wouldn't evaluate a software company on book value anyway, so it doesn't change much, but this should still be kept in mind. Some business by definition will be acquired above book if they are good, it doesn't mean the acquirer has overpaid.

Sentencing is complex and there are many variables that must be taken into account. For example, if someone spies on your country and sells information to another country, but it doesn't end up with anyone being killed in the end, should they just get a slap on the wrist, or something harsher to discourage such things because of the value of the system that is being protected? Why is stealing fruit from an apple cart treated differently from stealing state secrets? I'm not saying I know what I would pick as a sentence if I were a legislator or judge, but I can understand how - because of the importance of public markets for billions of people, even those who don't invest/trade - the sentencing should try to dissuade attacks on that system, especially because that system runs on public trust. Same with counterfeiters; they are attacking a system that requires public trust, and if that trust isn't maintained, the system stops working, so sentencing will be harsher than with attacks on a system that only has very contained/localized ramifications. Lots of insider trading is probably never found out. So if the equation was something like: "don't get caught and make millions, or get caught and find yourself a new job" there would be a lot more of it because for many it would be worth the risk. But if the equation is "don't get caught, make millions, or get caught and go to prison", suddenly that's qualitatively different. It's a bit like insurance math: penalty * chances of being found out = dissuasiveness. (of course this must be counter-balanced by other factors, but that's a whole other discussion). Humans suffer from a cognitive bias called scope insensitivity: http://en.wikipedia.org/wiki/Scope_neglect It might be a lot more emotionally charged and vivid to think about a child being attacked, but some of these white collar crimes harm, and sometimes ruin, the lives of thousands if not millions of people, and they should be punished accordingly. Insider trading might not be as vivid as Enron employees and investors losing their life's savings, but it is a similar kind of fraud, subverting the rules of the game to transfer wealth from people who play by the rules to those who don't (it's a zero sum game), and in the process making the whole system less credible and effective. Maybe if the music industry was a foundational block of the world economy and it ran on trust, you could argue for similar penalties to financial fraud... But it doesn't, and copying a digital file isn't a zero sum event.