Kraven

The one on Ebay went last night for an unbelievable $1,026.99. Schloss fans are waving the flag. I would still love to read it someday.

No worries Ben. I think $10b now is prob unlikely I am trying to get more info to get a #. What denominations do CDSs come in? Bc if they come in $100k units of $1m, we would know he at least made $65,-$650m No denominations. They are individual contracts. Theoretically they could be in any amount.

It would not be.

The only reference to an ISBN from a website lists it as "null". I don't believe it is actually a "published" book. As I mentioned above, I am pretty sure it was written specifically for the Schloss family. Obviously some copies got out somehow, but it wasn't intended to be distributed to the public and thus no ISBN number and why it isn't at the Library of Congress. I would love to read it though.

May I ask where you found a copy of it? I have looked everywhere for it and have not been able to find it. My understanding is that it was published just for the family although some copies have gotten out. I would love to read it.

Chris Christie?

NY Times obituary - Obituary - New York Times, Feb 20, 2012 WALTER J. SCHLOSS SCHLOSS--Walter J., of Manhattan and New Canaan, CT, a renowned value investor, died on February 19, 2012 at the age of 95, surrounded by his family. Born on August 28, 1916, he was the son of Jerome H. Schloss and Evelyn Gomprecht Schloss. Beloved husband of Ann (Pearson) Schloss and the late Louise (Filer) Schloss, father of Edwin Walter Schloss, Stephanie Schloss Scott and Samuel Wennberg. He was the brother of Marjorie Isaac, grandfather of Katie and Emily Schloss; James Scott; Claire, Lenna, and Maren Wennberg. Mr. Schloss grew up in Manhattan, attended Franklin School and the New York Stock Exchange Institute, where he studied under Benjamin Graham. He enlisted in the Army on December 8, 1942, rising to the rank of Second Lieutenant. He served in Iran as part of the US Signal Corps, finishing out his wartime service at the Pentagon. At the end of WWII, he was invited by Benjamin Graham to join the firm of Graham Newman as a securities analyst. In 1955 Mr. Schloss set up his own investment management partnership, Walter J. Schloss Associates. His son, Edwin, joined the company in 1973. Walter managed investments with utmost integrity and a commitment to his clients. He retired in 2002 at the age of 87. Warren Buffett referred to Walter as a "super investor". In his 2006 Letter to Shareholders, Buffet said: "Let me end this section by telling you about one of the good guys of Wall Street, my long-time friend Walter Schloss, who last year turned 90. From 1956 to 2002, Walter managed a remarkably successful investment partnership, from which he took not a dime unless his investors made money. My admiration for Walter, it should be noted, is not based on hindsight. A full fifty years ago, Walter was my sole recommendation to a St. Louis family who wanted an honest and able investment manager." Mr. Schloss has been profiled in numerous financial journals including Barrons, Forbes, and Fortune. His investment archive is housed at Columbia University. He served as Treasurer of Freedom House. Walter Schloss had an insatiable curiosity about the world. His business and personal integrity is legendary. He was a proud New Yorker, an inveterate NY Yankees fan, a bird watcher in his beloved Central Park, and excelled at bridge. In 2000, while on a tour of France, he met Ann Pearson, whom he married in 2001. Their shared enjoyment of travel, theater, and family get-togethers brought them a decade of happiness. Above all, he was dedicated to his family. A private service will be held for the family. A reception for family and friends will be scheduled at a later date. Memorial contributions may be sent to Central Park Conservancy, Public Broadcasting System (PBS) or Freedom House, Washington DC.

I suspect that this is the way he would want it. While his passing is incredibly sad for those of us who idolized him, he was a quiet family man and did not seek out or relish any publicity. It would have been great to a lot of media attention, but I doubt that this is anything he or the family would want unfortunately for us.

It was good. I've a paper copy but no scanner. I expect that someone else will provide :D I would love to see it too if someone could post it. I had looked everywhere for it and never was able to find more than an excerpt.

Obviously free is free, but I don't know. Maybe it's just me, but I find Janet Tavakoli impossible to read. She is a self-proclaimed expert in structured finance and her books are all over the place and don't make a ton of sense. Her book on Warrent Buffett (I forget the title) was such a scam. She met him once, although they have corresponded a few times, and she writes an entire book about "what Warren would do" in various situations. It was one of the few books that I just couldn't get past around 40-50 pages and wished I could return it and get my money back.

Sadly, another of the "Buffett Group" (formerly "Graham Group"), Ed Anderson of Tweedy Browne, passed away on Feb 9. Sorry for the duplication is this was already posted.

Walter Schloss passes at 95. He was one of my investing heroes and will be truly missed. RIP Walter. http://mobile.bloomberg.com/news/2012-02-20/walter-schloss-superinvestor-who-earned-buffett-s-praise-dies-at-95.html

RIP Kid. I loved watching you when I was younger. One of the all time best.

I think too there are tons of biases at work here. BAC is currently hated while WFC is more or less loved. It hasn't always been that way, although people think it is. It's amusing to see the projection of the past 3-4 years on both the time prior to the financial crisis and the future. In fact, the banks are not even anywhere close to the institutions they were even 10 years ago. WFC is essentially Norwest and isn't the same bank it was when Berkowitz and Buffett first invested almost 20 years ago. BAC is too many different things to count, although it's bones are probably the old Nationsbank. There is almost no reason why looking forward some period of time WFC should be worth a higher multiple than BAC. Some day BAC will clean itself up and will then follow the "best practices" that arguably WFC at least tries to do. If so, dollars are fungible and there's only so much one can do with them.

Your assumptions for WFC as opposed to BAC are a bit on the rosy side in my view. Maybe it will happen, but a lot would need to work out right for WFC as opposed to BAC simply keeping a pulse. Just as an aside, I believe that people overstate the competitive advantages that WFC actually has. Call it falling into the Buffett trap if you will. Don't get me wrong, it's a fine bank, but banking is a commodity. What can be done better than someone else in the banking world is at the margins. For the regular customer, they couldn't give a crap whether they use BAC, WFC, SunTrust or whatever. They want low (no) fees, easy access branches, etc. If they get pissed off enough, they will withdraw their $2800 from their savings and checking and move it to the bank across the street. Someone could have their money at WFC and if BAC offers them a loan at 5 bp cheaper, they will take it. The only thing slowing people down is some inertia. Additionally, WFC's squeaky clean image is a bit overstated as well. They didn't fall into the mud the way some of the others did, but I have to laugh when I see it said that all they do is take deposits and make loans. That would be news to the traders there, the bankers pumping out structured products and the teams in Charlotte and San Fran doing whatever they can to make a buck.

Phil Falcone has done extremely well . . . for Phil Falcone.

Did he give his reasoning? Or is he just talking his book (i.e. buy his funds, not some individual security)? Gundlach is a very smart guy though. He is out there of course as anyone who knows about his "divorce" from TCW is aware. He has his personal quirks (that's putting it mildly). But he is an independent thinker and you really can't find a smarter guy. I wouldn't immediately dismiss a thougtful argument from him. I'm just wondering if in this case, there is a well thought out argument or just "raising funds".

How about the fact there is no one right answer and that each family should do what is best for themselves? Everyone wants to say "do this" or "no, that's wrong, do that instead". In my life I have known plenty of F ups who came from wealthy families and plenty that came from poorer families. Likewise, I know plenty of hard working, solid people that come from either extreme as well. Not 100%, but most of it comes down to parenting. There can be extenuating circumstances, but that's a wildcard in any case.

+1

I presume it would just come out of reserves. Would it? My understanding is that reserves are put up based on current NOL and past default rate. If you refinance users that are not classified in NOL then you take a direct hit. Maybe someone with more bank accounting knowledge could help... BeerBaron Reserves for losses are fungible. That is, it's just a pool of money that's been put aside to cover charge offs. It doesn't matter whether a dollar in reserves was put aside 5 years ago and is being used for a charge off today or whether current earnings need to be provisioned to cover losses.

For years investing with Phil Falcone has brought to my mind the old saying, "how do you make a small fortune? Start with a large fortune."

It's probably just you. I mean it's crazy, right? Berkowitz has books, don't tell anyone. It's a generational thing that many of them are leather bound. Lots of guys in their 40s/50s and older have them. Back when people could actually write "you" instead of "u", a nice bookshelf was something everyone wanted. Deal books were leather bound and companies/banks used to actually pay for that for everyone. Berkowitz comes out of that culture. Sure, he's trying to make a certain impression, but I see nothing wrong with it.

I like Berkowitz a lot as well. I think in the past he viewed the excess cash as enabling him to do "special" deals, kind of like Buffett gets. That is, he wanted to be the guy who can swoop in and pick up a special AIG preferred or something at outrageous levels when they need "help". In addition, I think there was an implication that he wanted to engage in more principal like activity, kind of like what he did with JOE. All of this was a tall order for an open ended mutual fund and probably once again emphasizes why this may not have been the proper vehicle for him. But all will turn out well for Bruce in the end methinks.

I am not disagreeing that these things aren't used appropriately in many situations, but the same can be said for many things in life. One of the things we used to say was don't blame the lion for killing it's prey. It's the lion's nature. It doesn't make it right, but it is what it is. Regulators and such are great at regulating and preventing the last crisis. Get rid of one thing and something else will take it's place. Wall Street really isn't a den of thieves, it's a misnomer. There have been dens of thieves of course, but Wall Street itself is simply a bunch of people who are made up of about 99% greed and 1% water. Greed is as greed does (to adapt Forest Gump's famous line). Most of these things serve a purpose, not all, but most. Wall Street would serve itself better if it simply took things to the line instead of always going over the line and causing the rubber band to snap back. But again, the lion and all that. Again, as disciples of Graham & Dodd and Buffett, I believe we are all held to a different standard around here. Kraven can it be argued that was Paulson did was on the right side of the law, probably, maybe. Does it pass the front page of the newspaper test no, not at all. Relating to synthetics I stick to my position that they serve no purpose. An analog would be, say you wanted to buy 50,000,000 shares of BAC right now at 7.39, and yet you can only buy around 1,000,000 on the ask. Well you call up your prime broker, in my case Scotia, and I ask them to find me some german fund who is willing to take the other side, at 7.39 right this instance, and to sell me 50,000,000. Well they don't own that 50,000,000 so instead they will create a new security that now tracks the price of BAC and take the other side. Well lets see what happened here, instead of buying those 50,000,000 shares in the market, and getting filled based on the laws of supply and demand, I coerced, or through my fees, convinced my prime broker to convince their clients to take the other side of this "gamble". That is what Abacus was, Paulson could not get filled on enough mortgage securities, so he decided to create a tracking security, and paid his brokers to coerce idiots into taking the other side. For this reason it does not pass the front page of the newspaper test, and it should be outlawed. You can argue otherwise, but I stand firm on this point. Moore, we will have to agree to disagree I guess. No harm in that. But just to respond, fwiw. Paulson didn't do anything illegal as far as I can tell. He went to to Goldman (actually went around to all the IBs) and proposed a trade. Everyone could have said no. You want to say that because of his fees he held them over a barrel, but I can't agree with that. He wasn't anyone way back in 2007. The fees he was paying on these things were no more or less than anyone else was paying. The CDO machine was in full gear. The banks could have said no. But they never do. Your examples use inflammatory images to suit your argument. You say you could go to Scotia and force them to stuff some German investor. Why would you care who the investor is in this kind of product? It would never play out this way. You'd go to Scotia and say I want to do this BAC trade, find a way to do it. They either would or wouldn't. You might not even know until much later who was taking the other side of it. You wouldn't dictate who the investor is. Would it be different if Scotia warehoused it? The thing is that the Scotias of the world generally didn't get in trouble because they were inherently conservative on these things. Part of it was being last guy at the party and trying to figure out where the beer keg is. It isn't necessarily that they were teetotalers, but that they were a bit slow on the draw, but that served them well. I think too you are mixing up synthetics with synthetic ABS CDOs. What's wrong with going to your IB and saying I want to go long (or short) a particular hard to find bond. But you don't have to worry on this front. I suspect we won't see synthetic ABS CDOs for a very long time (essentially never). Just a different viewpoint than yours. I don't like the result any more than you do, but it's hard to always judge based on current facts. I didn't see anyone speaking out about any of this in 2006-2007 (I am not talking about the overheated market generally, but synthetic ABS CDOs).

I am not disagreeing that these things aren't used appropriately in many situations, but the same can be said for many things in life. One of the things we used to say was don't blame the lion for killing it's prey. It's the lion's nature. It doesn't make it right, but it is what it is. Regulators and such are great at regulating and preventing the last crisis. Get rid of one thing and something else will take it's place. Wall Street really isn't a den of thieves, it's a misnomer. There have been dens of thieves of course, but Wall Street itself is simply a bunch of people who are made up of about 99% greed and 1% water. Greed is as greed does (to adapt Forest Gump's famous line). Most of these things serve a purpose, not all, but most. Wall Street would serve itself better if it simply took things to the line instead of always going over the line and causing the rubber band to snap back. But again, the lion and all that.