Chou Funds 2013 Semi-Annual Report

[Parsad]

Candid comments about OSTK, which may be applied to Fairfax's purchase of BBRY, as well as rational comments about estimating market valuations using artificially depressed discount rates.  Cheers!

 

http://www.choufunds.com/pdf/Semi-AR13.pdf

[Liberty]

Thanks Sanjeev!  :)

[bookie71]

Thanks

[Guest hellsten]

Thank you. Very interesting to hear his thoughts.

 

According to Whale Wisdom they have sold 52% of their OSTK holding.

 

In general, we are not that bullish on the stock market. Aside from a couple of industries like the

financial institutions in the U.S. and companies in the retail sector, we are not that comfortable with

the prices of many stocks.

 

It is likely that the Fund will have more cash/cash equivalents in its

portfolio than equities. But if a true bargain arises, I will not hesitate to buy it.

 

Cash and BRK is pretty close to 50%…

 

I don't blame him for not mentioning Sears, there's not much more to be said about the stock :) Sears is 5.8% of Chou Associates' portfolio, or ~12.6% of the equity portfolio, but they haven't added since Q4 2011 as far as I can tell. Their average cost seems to be pretty close to the current price, so maybe they are waiting for better prices. Maybe Chou thinks Sears is a bargain below $40 (Q4 2011)?

 

It would have been nice to hear their thoughts on RadioShack. I recall Francis saying RSH is lost money, or something similar. Chou Management sold 38% of RSH recently, so it looks like the shorts are right for now (~43% short interest), or maybe Chou found a better stock (RFP, SHLD)?

 

One thing RSH is missing is someone similar to Patrick Byrne and Eddie Lampert, in other words a crazy CEO that doesn't listen to Wall Street ;D Or maybe they have one?

 

This is also an interesting comment:

In general, we are wary of investing in Asia. Our cash balance of 38.9% of net assets as of August

16, 2013 reflects our concerns.