Buckeye

I have a question for the board regarding cash: Lets say one has 100% of their assets invested in BRK; BRK's market cap is ~ 270B and @50Bil of that (or ~ 20%) is held in cash by Warren. Would anyone look at this as "having" 20% in cash, with Mr. Buffett waiting to invest it for you? Can this act as a type of hedge? Thoughts?

Hi Max- I ordered your book a couple of days ago and should receive it any day. I am really looking forward to reading through every letter year by year! -Buckeye

Looks Like a Royalty Fee!! ;)

Thanks Oracle. Great find. It will be interesting to watch Moynihan in this format. Thanks for posting!

Loews? May have been mentioned before.

Congrats to Mr Chou! I was pretty proud to see him on the cover of the Marketplace section when I opened the paper this morning. Good for him and thanks to Sanjeev and this board for exposing me to him and the other Canadian superstars!

Parsad- Owning this could give a new meaning to putting your money where your mouth is!:)

You should read "Why democrats and republicans are bankrupting our nation," or something to that effect, by Peter Peterson. It's a great unbiased read on the situation and will leave you equally hating both parties, and probably more in the camp with Liberty. :)

Hey Guys- I came across this "Letter to the Editor" from Ben Graham's granddaughter and thought you would enjoy her take on the book! "A Soft Side of the Einstein of Money" http://online.wsj.com/article/SB10000872396390443759504577631612009640248.html enjoy

I think this would be a great experiment. As a novice investor I probably wouldn't be able to actively participate (at least in the beginning), but I know it would help me and the other rookie investors watch and learn the process of how more experienced investors go about valuing a company. I find that with myself I often start with a company name, its market value and any preconceived notions I may have about the company or the industry and work backwards through the financials. I know that my method may lead to a biased conclusion and your idea of a blind exercise may help me and others learn how to approach the valuation through the other viewpoint. -Buckeye

Hey CONeal- I am not sure what your current situation is, but you may want to consider trying to find a job in the field or type of business you are interested in purchasing. One advantage of this is that you will be getting paid to train and "learn the ropes" and will be far more knowledgeable if you decide to own that type of business. You may learn the types of things you can emulate to succeed or certain techniques that you can improve upon or practices you should avoid. Also, you may find that you don't like the type of business or industry at all and rather than already being financially committed you can quit and look for a job in another area of interest. Just my 2 cents, hope it helps.

Hey all, Has anyone been following these notes from Peter Thiel's Class? I find the lectures very interesting and thought the other board members may agree. Hope you all enjoy. http://blakemasters.tumblr.com/archive

Hey Ragu- I apologize if my comment seemed rude in any way. I did not mean to poo-poo your ideas or plans to meet up with fellow board members, as I am sure you are looking forward to the upcoming meeting. It is certainly a company and CEO that many members will continue to follow. Best Wishes Buckeye

Here's a great story for you all: After graduating college in 2000, my family friend bought me 11 shares of Steak N' Shake. It was the first stock I ever owned. I held them in certificate form and kept them in a drawer for years. You would imagine my delight when I read of this young man who was going to save SNS and return it to its glory. I then proceeded to watch, as he initiated a reverse split (to encourage "a long-term shareholder orientation") and then had to go through the pain-in-the-ass paperwork to cash my shares in, only to watch then stock proceed to rally on the surrounding optimism. We all know 11 shares is nothing, but are reminded of the story of the lady who only owned 1 share of Berkshire and asked Buffet a question at the meeting, only for him to comment about how they were partners! Guess I wasn't the type of "LONG-TERM" shareholder he was looking for as I had only owned my stock for 11 years :o What an ass!

I'm not sure if anyone on this board still owns BH ;)

Columbus, OH. Along with Stahleyp that makes 2 from Ohio :)

I couldn't resist :)

Would Loews be a good way to play this? They already own the pipeline and E&P business, but also offer the diversification through Diamond Offshore and CNA. There were some remarks on their last earnings call (also mentioned on this board) about how current Capex are greatly exceeding the current returns of many projects within the industry and they feel this should open up some acquisition opportunities in the near future. They have also recently drastically reduced their share buyback which may mean they are saving their money to take advantage of this. My thought is let them be opportunistic, while protecting shareholder wealth along with still providing a diversified income stream through their other businesses. Any thoughts?

Interesting devlopments: Sears Holdings to Separate Sears Hometown and Outlets Businesses and Certain Hardware Stores http://finance.yahoo.com/news/Sears-Holdings-Separate-Sears-prnews-1141358803.html?x=0 Sears Holdings Reaches $270 Million Deal for Sale of Eleven Sears Stores to General Growth Properties http://finance.yahoo.com/news/Sears-Holdings-Reaches-270-prnews-1646760299.html?x=0 Now, if they just had a capital allocator ;)

Hello All: Can someone help to explain how this Loss Portfolio Transfer with Berkshire works. I have read and reread it, and as a complete newbie I am trying to understand how this transfer is accounted for, how it's structured and its effects on CNA's financial statements. Below is the language from Loews annual report: On August 31, 2010, CCC together with several of CNA’s insurance subsidiaries completed a transaction with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., under which substantially all of CNA’s legacy A&EP liabilities were ceded to NICO. Under the terms of the NICO transaction, effective January 1, 2010 CNA ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4.0 billion (“Loss Portfolio Transfer”). Included in the $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves was approximately $90 million of net claim and allocated claim adjustment expense reserves relating to CNA’s discontinued operations. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO is net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts. The NICO aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities. CNA paid NICO a reinsurance premium of $2.0 billion and transferred to NICO billed third party reinsurance receivables related to A&EP claims with a net book value of $215 million (net of an allowance of $100 million for doubtful accounts on billed third party reinsurance receivables, as discussed further below). As of August 31, 2010, NICO deposited approximately $2.2 billion in a collateral trust account as security for its obligations to CNA. This $2.2 billion will be reduced by the amount of net A&EP claim and allocated claim adjustment expense payments. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the full aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third party reinsurers related to CNA’s A&EP claims. 2010 (In millions) Other operating expenses $ (529) Income tax benefit 185 Loss from continuing operations, included in the Other Insurance segment (344) Loss from discontinued operations (21) Net loss (365) Amounts attributable to noncontrolling interests 37 Net loss attributable to Loews Corporation $ (328) In connection with the transfer of billed third party reinsurance receivables related to A&EP claims and the coverage of credit risk afforded under the terms of the Loss Portfolio Transfer, CNA reduced its allowance for doubtful accounts on billed third party reinsurance receivables and ceded claim and allocated claim adjustment expense reserves by $200 million. This reduction is reflected in Other operating expenses presented above. In its most recent actuarial ground up review of pollution exposure completed in the fourth quarter of 2010, CNA noted adverse development in various pollution accounts due to increases in average account severity. As a result of this review, CNA recorded $80 million of gross unfavorable pollution-related claim and claim adjustment expense reserve development for the year ended December 31, 2010, which has been ceded under the Loss Portfolio Transfer resulting in no net prior year development. The gross A&EP claim and allocated claim adjustment expense reserves ceded under the Loss Portfolio Transfer and other existing third party reinsurance agreements were $2.5 billion at December 31, 2010. The remaining amount available under the $4.0 billion aggregate limit of the Loss Portfolio Transfer was $2.3 billion on an incurred basis at December 31, 2010. The net ultimate losses paid under the Loss Portfolio Transfer were $154 million through December 31, 2010. The Loss Portfolio Transfer is considered a retroactive reinsurance contract. In the event that the cumulative claim and allocated claim adjustment expenses ceded under the Loss Portfolio Transfer exceed the consideration paid, the resulting gain from such excess would be deferred. A cumulative amortization adjustment would be recognized in earnings in the period such excess arises so that the resulting deferred gain would reflect the balance that would have existed if the revised estimate was available at the inception date of the Loss Portfolio Transfer. Thank you to anyone who takes the time to explain this to me, I greatly appreciate it! Buckeye

No problem. I have thoroughly enjoyed these videos and figured they were old news around this group :) I am glad to be able to contribute to the forum. Also, I am in Columbus..you?

Hey Liberty- Here you go! http://www.bengrahaminvesting.ca/Resources/videos.htm Watsa, Chou, Whitman, Schloss, Kahn, Hawkins, Cundill and many more. It is probably one of the finest collections on the web, Buckeye

Hey Peter_Burke- Have you watched this video? http://www.bengrahaminvesting.ca/Resources/Video_Presentations/Guest_Speakers/2009/Klarman_2009.htm It's been a while since I watched it, but it may be more of what you are looking for. Let me know what you think.

Peter Burke, I am with you! I think one of Buffett's most impressionable statements is "thinking like a business owner." He has taught me to think about my investments as owning a piece of a business. If I own shares in Coca Cola, I am a partial owner of the business. If I think there is going to be a recession should I sell my company because profits may fall? Hell no! It seems like buying and selling businesses based upon near-term struggles is speculative at best. As a former small business owner I think back to the idea of selling my business anytime I thought there was going to be a recession, with hopes of buying it back cheaper, and it seems ludicrous. This ECRI guy may be correct in his predictions, but if he is such a phenomenal business person why hasn't he created a 200 Billion dollar company? He reminds me of the guy who sells the "How to Get Rich Book" that tells the reader the best way to do it is to write a book on how to get rich. I think part of the enjoyable thing with investing in equities is finding companies that you are willing to "ride it out" with, in good times and bad. Knowing you have selected "business partners" who you trust and admire and are willing to forge through the tough times with makes the end result that more gratifying. That's my two cents. Anyone can feel free to send me a nickel and I will send you back your three cents change.

Hey Sanj- I am going down to "Occupy" with my Levi's Blue jeans, Nike Shoes, Northface Jacket, while sipping on my Starbucks coffee. I will be sure to post some videos, pictures, and texts with my Iphone depicting my complete disgust with corporate America!!!