Eric50

Grant Thornton counter-attacks... This might get ugly... http://www.businessinsider.com/henry-blodget-overstocks-fired-accounting-firm-says-overstock-is-lying-about-everything-2009-11?utm_source=Triggermail&utm_medium=email&utm_campaign=SAI%20Select%2C%20Wednesday%2C%2011%2F25%2F09

What worries me more in that story is the implied weakness in Overstock's processes and internal controls: why did they have to wait for their business partner to notify them that they had overpaid by $700k? Isn't that something they should have found out themselves in the first place, before paying? Or even shortly after the payment> $700k is quite material for a business like OSTK... In the long term, I'd worry more about weak processes and controls than that fight with the SEC and Grant Thornton. I'm not sure either it's a good allocation of the CEO time. I've owned and made money with Overstock in the past primarily because I like Patrick Byrne's personality - he is an incredible fighter. But I'm not sure I understand what he picked that one. Would Buffett do the same thing? thanks Eric

Eye opening and really funny. From TED. Enjoy Eric

I just found the following comment from Buffett in his 1979 letter to shareholders: "One friendly but sharp-eyed commentator on Berkshire has pointed out that our book value at the end of 1964 would have bought about one-half ounce of gold and, fifteen years later, after we have plowed back all earnings along with much blood, sweat and tears, the book value produced will buy about the same half ounce. A similar comparison could be drawn with Middle Eastern oil. The rub has been that government has been exceptionally able in printing money and creating promises, but is unable to print gold or create oil." I thought that the gold investors in this board might enjoy that perspective relative to the current events. Eric

Always a good read. Enjoy! Eric http://www.trapezeasset.com/trapezeasset/newsletter/TAMI_Q3_2009.pdf

A friend of mine wants to invest in a value mutual fund. Do you guys know what are the best value funds around? The only two I can think of are the Third Avenue Funds (Martin Withman's funds) and the Fairholme Fund (Berkowitz). Is there anything else on the market with a decent track record? thanks in advance Eric

Compare Singapore with all the other countries and South-East Asia and you'll see that you'd better live there than in the other places. Singapore might not be a perfect democracy but Lee Kuan Yew is one of the smartest person I have ever heard and his baby, Singapore, is quite a success. For the history fans, I strongly recommend reading his autobiography. Quite a good read and a good way to better understand the world. For the record, I lived 2 years in Singapore in the mid-90s. Eric

Pretty funny (and, in a way, sad...) entry in Jeff Matthews' blog on the SEC. For those who don't know that blog, it's a pretty good one with sharp and ironic comments on Wall Street. Eric http://jeffmatthewsisnotmakingthisup.blogspot.com/2009/10/jim-chanos-for-sec-chairman.html

Excellent presentation of Michael Milken at a Vegas asset management gathering in May. Not really value investing, but he has lots of perspectives and covers interesting topics such as education, credit markets, real estate. http://www.skybridgealternatives.com/play.php?id=6

Management Challenges for the 21st Century is my favorite book from Drucker. A must read IMO. In my personal top 10 best business books. Actually I might re-read it soon. Thanks for bringing that up. Eric

Silver is an alternative to gold that I personally like better. It has the same store of value characteristic as gold and it also has heavy industrial usage (photographic material and electrical contacts and conductors). Silver demand has been higher than mine production for at least the past 10 years... I think Buffett has had large positions in silver in the past.

Good and balanced article from JM Eveillard below. I like his long term insights and I agree with him that the best way to protect ourselves from the coming inflation is a combination of stocks and gold. Eric http://www.firsteaglefunds.com/downloads/news/JMEatDD0609.pdf

This is the perfect storm for the US economy: - jobs creations over the past 10 years were primarily in the financial and construction sectors; - not only unemployment is rising by more than 500,000 every month but the working week is now about 33-34 hours (from 40 a couple of years ago...); - the federal government is bailing out all the weak players so the cleansing is not happening as it should be, i.e. we are not seeing any creative destruction; - US debt is out of control and I have not idea how they are going to finance their deficits. Some states (California) are also almost bankrupt. Buffett's investing philosophy implies that the US economy is strong over the long term. I'm sure he is right but I'm not very optimistic for the next couples of years... On the positive side, we'll have great opportunities to make lots of money on the coming chaos! Eric

Eric Sprott's latest letter is a must read. The coming funding crisis might be huge.... Personally I've never been so worried about the future of the US and world economies. Eric http://www.sprott.com/Docs/MarketsataGlance/June_2009.pdf

thanks guys

Any of you still hold some HNR? It's a business that was discussed on this board in the past. I think it's still one of the best oil play that I can see and I'm thinking about buying more on weakness: - Currently trades at $4.60 with $2.36 of net cash (no debt) and almost $10 of proved PV10 (with barrel at $70); - Management seems to be honest and reliable; - They are diversifying away from Venezuela but the country risk is weighting heavily on the stock price (it surged in the next couple of weeks after Obama's meeting with Chavez, but has declined since) I'd like to hear any contrarian opinions. thanks Eric http://files.shareholder.com/downloads/HNR/665602190x0x301024/193fb825-00be-437e-ba9f-25a486ac92bd/EnerCom%20London%20HNR%20Presentation%20June%2011%20%2009%20final.pdf

The Chicago Board Options Exchange now trades baby Berkshire puts and calls! http://online.barrons.com/article/SB124527593512024779.html#mod=BOL_hps_dc

For those who haven't read the snowball, there is an interesting review of that book from Michael Lewis in the New Republic. http://www.tnr.com/story_print.html?id=12ef5554-1023-4be9-ad93-681003b280ef

Dedicated account means I opened a brokerage account just for that purpose (i.e. I don't even look at the performance of that account). I'm using etrade. Brokerage fee is $9.99 per transaction. This means if I buy a penny stock, the commission is much higher than the cost base of the stock. Hence the performance comment. The purpose of that account is just to systematically get the 10Ks of the companies I follow. Eric

I have a dedicated account with one share of all the companies I follow. They send me their 10Ks every year. Eric

Awesome interview of Charlie Munger in Stanford Lawyer. Favorite quote: "Warren and I are better at tuning out the standard stupidities. We've left a lot of more talented and diligent people in the dust, just by working hard at eliminating standard error." Enjoy Eric http://www.law.stanford.edu/publications/stanford_lawyer/issues/80/

Pretty good video of Dan Ariely talking about human behavior, morality and how it applies to the stock market. A must watch in my opinion.

I think it's a buy at $300 or below, but not at current prices. Their operating expenses were out of control until last year when they hired a new CEO. For the last 2 quarters their opex have decreased in much larger proportion than the slowdown in revenue. I thought that was a very interesting trend and I was very impressed.

I'll be there.

Here is another point of view of WFC. Quite bullish this time. <http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=5683&ArticleTypeID=2>