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This chart along with "tipping point" suggests to me that it is a decent time to place a v. small % of portfolio on solar ETF. I agree with Voodooking that betting on an industry is NOT "value investing". However, putting a very small % into a growth strategy seems reasonable.

I share your pain. About 10 years ago I was so taken by Chou's deep value approach and intelligence/insight that I made Chou Funds (Associate, Europe and Asia) a core portfolio position along with FFH & BRK. Added more during the bad years till 2-3 years ago - slow learner :( Haven't sold. Waiting for the huge turnaround and massive gains that will make 10 year average look decent again. It's the only mutual fund I hold.

Thanks to Cigarbutt and Ourkids8 for links. Still don't understand how it played out. Press release says StoneTrust was bought by Wintaai holdings which is a "unit" of Chou Associates. A google search reveals no info on Wintaai holdings. Agree with the positive sentiments on integrity, humility, strong conviction and likability for Francis Chou. Also agree on the very subpar results of Chou Funds for past 10 years :( - wish Chou would acknowledge the subpar results, share what he has learnt from it, and what he has changed in approach in order to improve results over next 10 years. Instead, he has taken the stance of "it is what it is and stuff happens".

Learned that Pabrai's Dhandho Funds sold StoneTrust Insurance company. Reasons being competitive business, too many rules and misjudged the opportunity. Turns out the buyer of Stone Trust is Francis Chou! Don't know if he bought it as part of Chou Mutual Funds or another organization or privately. Haven't seen any announcement on Chou's website. My understanding was that Chou Funds was required to buy publicly traded securities. Is that correct? If so, Chou Associates would not be purchaser of Stone Trust. Pabrai didn't think the insurance business was a good opportunity compared to other mispriced equities, but Chou - another deep value investor - each of whom respect each other - sees worthwhile potential. Will be very interesting to see how this plays out.

Another option to invest in India is a new fund set up this month by Mohnish Pabrai : Dhandho India Zero Fee Funds. Same fee structure as Pabrai Funds: No management fees if assets return <6%. Management keeps 1/4 of profits above 6% high-water mark. 70% or more of the Fund is to be invested in India. Rationale has to do with fast growing economy, large number of companies to choose from on Bombay Stock Exchange (vs. S&P 500), & presence of mis priced assets with room to grow. All the risks of investing in emerging economies, strengthening US $ etc....plus entry point is very steep in terms of minimum investment.

Since this thread started 3 months ago, there has been positive news about First Capital sale, institutional/large investor purchases, and good results from Fairfax India. Share price rose from C$550 up to C$650. The last week has seen a drop below $600. Is this pullback due to liabilities associated with Hurricane Irma or something else...or no good reason as might often be the case.

Thank you DooDiligence for kindly sharing info on performance fee structure of FIH. Its an interesting setup. Would the performance fee be paid to FFH, thus benefitting FFH shareholders? or is it paid to management? What % of FIH.UN stock is owned by FFH? roughly 20%?

What are the "performance fees"? If it's a publicly traded stock can it have performance fees? Is it not set up like FFH where management has equity and is payed a salary for the day to day work? Thanks,

Well said again Cigarbutt. The fact that Mr. Chou has the intellect and understanding to make such brilliant bets but also lose badly on many others has been an eye-opener to me. Although I haven't seen any evidence, hopefully, he has been able to incorporate into his practice a few danger signs that will allow him to steer away from the big losses. That will result in your prediction of his returns being relatively better in the future. After 10 years am trying hard to continue to believe in his thought process and hold on.

Ourkid8 & stahleyp, I'm in the exact same boat. I have held a large position with Chou for a decade. Long history of underperforming, but one knows that he has the knowledge and skill set to excel - IF - he can avoid the losses. Was adding more during downturns (being a contrarian) but I stopped adding 2-3 years ago and have been holding/waiting for the thesis to play out. V. frustrating.

Francis Chou's semi-annual letter is out http://choufunds.com/pdf/SEMI-AR%202017%20vF%20%28with%20cover%29.pdf Review of holdings shows ability to analyze companies and buy them at deep value with numerous "winners" up > 3x (BRK, Nokia, Citi, JPM Warrants and Wells Fargo Warrants). However, the same thoughtful, erudite, value investing analytic pathway resulted in losses of >50% in Valeant & Resolute Forest Products, with Sears being down >80%! End result is 10 yr returns of 4.3%/yr and 15yr returns of 6.6%. Without a couple of the big losses, his fund would be hitting it out of the park. Is there something that Chou can (vs. will) do to avoid these huge losses? I see no evidence of change in "style" . Finally I don't agree with his "math" that 10 & 15 year returns can be skewed by one bad year and that's just the way it is. He's mentioned this before and I'm surprised to see him bring it up again. One expects there to be some bad years and some very good years. However, over any period of time, it should average out. Ten years is a good period of time.

Excellent point Cigarbutt. Very much like the analogy of combining science (calculation of metrics) and art (the story) as relates to investing. Question I have is, in a market downturn (i.e.: 2008-2009) does it matter? Everything seems correlated and the formulas break down. During a recession despite having a solid calculation of IV and story, the stock tanks - "baby gets thrown out with the bath water" phenomenon. During boom times, so much seems to do well, regardless of IV. Is Mr. Market too well correlated for us to not only identify mispriced assets but for the thesis to play out ? Despite all the science behind Value Investing is Passive Investing "winning" ?

For the average investor, Buffett would say none - put 95% in S&P index and 5% in cash. I would think that the reason to go elsewhere is if one has a desire to get extra gain - i.e.: most people on this webpage are interested in doing a little better than "average".

Thank you Cigarbutt. I'm beginning to wonder if the niche for Value Investing is actually in "good" markets - pick the undervalued companies that Mr. Market has not come to terms with yet and wait it out? During time of recession, everything seems to go on massive sale. I agree with you that I too would have a hard time selling my undervalued securities at a loss during a downturn in order to buy other equities that are selling at even more discount! Thus, currently, GMO and Howard Marks and Chou and others have all said markets are v. expensive. Yet, from what I know, I have to believe that staying fully invested (with some cash to deploy component) is the way to go. When there is a downturn, future income would have to be deployed into equities on sale. FFH tried timing the market and just got back in 9 months ago and now... Does anyone think the long term investor should be lightening up on equities and moving large % to cash because of market valuations? My money is with deep value managers and some in ETFs - I'm not selling today in anticipation of crash tomorrow.

On a valuation basis, all makes sense, but: 1) In reality does it make a difference? When there is a "correction" or "crash" seems like markets tend to be correlated. That is to say the undervalued or fairly valued companies seem to get hit just as hard as the overvalued companies. In 2008 if one owned a selection of good, productive businesses that traded at attractive P/E multiples, one's portfolio still took a 30%+ hit. The question I have is: As value investors we care about the price of a company. However, if markets are correlated (i.e.: markets don't care), then does all the theory behind valuation matter? If there were to be another financial calamity along the lines of Lehman Brothers/junk mortgage backed security, huge interest rate changes or a geo political event, I wonder if the entire market goes down regardless of valuation? 2)What would W. Buffett say to avoiding passive US equity investment? He has advocated that most individuals should put 95% of their savings in an indexed fund of US equities. I think he would still be optimistic long term on US equities.

In past periods of underperformance he has withheld his management fee - but has not done so lately. Will be interesting to see if he comments on his performance in his semi-annual letter - likely out in August. Recently, in his letters he seems defensive about his results without offering an academic explanation of 1)what happened & 2)what he has learned to prevent such outcomes. In my view, it's unfortunate that he has taken a "that's just the way it is" approach to explaining his 10 year outcomes. It's sad because I think he has a lot to offer.

If 5-10 years to tipping point, from an investment point of view, is now the time to get in? Take a broad perspective (i.e. ETF) whilst still on the ground floor? In 5-10 years, the industry will be much more mature. There will be good companies in the space - i.e.: the Apples of today - but valuations much steeper.

With recent news from Volvo (all cars to be electrified by 2019) & Tesla (Model 3 delivery) combined with govts of France, UK, & India all declaring no sales of combustion engine vehicles by 2030-2040, the horse appears to be out of the barn for electric cars. If so, how will the current worldwide electrical grid supply the energy for these cars. Given a new supply source of energy is needed, and that solar is "clean" and the cost of solar has decreased tremendously, is now the time to invest in Solar?? Realize this is a top down macro bet that would generally be frowned upon by bottom up deep value investors. TAN and KWT seem to be 2 major solar ETFs - both down some 90% since their highs in 2008. Both paying a dividend of approx 3.5%. TAN has 10x of assets under management vs. KWT. Both have a high MER for an ETF (0.71% vs. 0.65%). Am keen to hear thoughts from the Board. Is this the time to dip into solar?

It's 25% above a 6% return, resetting annually. High water mark to not allow a loss, then a performance fee because of getting back to even. The docs have a 2% fee that I waive. My attorney told me to add it initially because if I ever wanted to pivot later (charge mgmt fee) I would need new docs. Only know a few structures world wide like that. Would you provide a link?

IMO, all are too expensive. Does NOT make sense to pay BOTH a management AND a performance fee. Huge challenge for a professional manger to beat the markets over time due to a number of logistics. Challenge becomes close to insurmountable when fees are factored in. I don't know of anyone with that structure that has beaten the "best" index over a period of 10-15 years. Would suggest going with a) 0%MER and performance fee with a high water mark hurdle structure, or b) low fee manager or c)index funds. Getting into a situation with management fee and performance fee, means getting into a lot of nebulous hedge fund structures that have not made sense to me when I have tried to understand them. Look forward to hearing other opinions,

I wonder whether the "inconsistencies" you mention have to do with his entrepreneurial view of life. He doesn't seem to get burdened by his mistakes. He's good at admitting and learning from his mistakes, but is then not afraid to try new things whereas some of us might be inhibited. Recently, the idea of owning an insurance company or buying private companies has not worked out - so he has admitted it and is moving on from Dhandho Funds. The Junoon ETF idea didn't work out. A lot of effort was put into both endeavours. However, he is starting something new in India with a Dhandho India Fund... My impression is that he is a)good assessor of undervalued equity prices who keeps getting better b)serial entrepreneur - willing to explore new ideas - run with the good ones. Drop the bad ones and move on.

Regarding being misleading, isn't the 26% compounding his goal? It's good to aim for something tangible. He has NOT achieved it, but could it still not be a goal?

+1 ...yup I'm curious. What was the inciting event causing the Board to turn on Pabrai? Did it have to do with HorseHead Holdings?

Wow. Not surprising when he had AZO at double digit percentage. The algos were all looking back. AZO had a remarkable run with huge buy back. It is a shame that the algos didn't consider the slowdown in revenue growth. Pabrai has underperformed all indices last 10 years. His main fund account that has bulk of assets has underperformed all indices since inception (2003). It just goes to show how far a person can go by uttering Buffett's name and giving his quotes nonstop. A+ in marketing C- in investing. There is a recurrent sentiment on this Board re: Pabrai's "A+ marketing" skills and salesmanship that I don't understand. No denying that 10 year returns have been subpar (although YTD up 30%). However, Pabrai Funds has been mostly closed to new money for years. Why would he focus on "marketing" if he is not accepting new investors? This does not seem to be a Ponzi scheme with him getting rich off others or am I missing something?

To the experienced members on the board: I've only been following FFH since 2005'ish and have been confident in its long term prospects. Was not aware of the valuations prior to 2003. Why did FFH decrease 90% from 1999 to 2003??? Did it have to do with the shorting of the stock by a US hedge fund?? Was a $600/share "fair" value in 1999 or was it massively overvalued from a metrics point of view?? Do current investors need to be worried about a >50% correction in FFH stock price? One of the reasons I got into FFH was the fact that it is a diversified holding that should provide safety, combined with the fact that insurance float is attractive if you have folks who know how to invest $s.