The Guru Five

Marty Whitman Quotes (from Third Avenue's Recent Letter)

2012-01-19T10:34:00.006+07:00

Third Avenue's latest shareholder letter is a great read. At its start, Marty Whitman basically provides a condensed view of his book, Value Investing: A Balanced Approach--which serves as either a nice teaser for those who haven't read the book or a nice refresher for those who have.Throughout the letter, a number of one-liners are made. Whitman points out, for example, that "analysts really

David Sokol on Minimizing Mistakes

2011-03-08T10:04:00.000+07:00

SFGate recently reported on the management philosophy of David Sokol, one of Buffett's highly-praised business managers. While noting that details can be found in Sokol's book, Pleased but Not Satisfied, the article itself summarizes a few of the lessons. Regarding minimizing mistakes, for example, it says:In Sokol's mind, operational excellence consists of paying attention to detail and

Short Stocks Like David Einhorn?

2011-03-05T21:33:00.003+07:00

Business Insider recently linked to an interview with David Einhorn in which he lays out how he short stocks--or at least how he did it in this past financial crisis. Here's the relevant section:Interviewer: Okay. I guess I want you to continue to sort of chronologically in August of ’07, as you said you see BNP Paribas freeze redemptions and that gives concern and you’re talking to the rating

Third Avenue Discusses their Leucadia Investment

2011-01-28T18:27:00.003+07:00

In the latest annual report for Third Avenue Value, Amit Wadhwaney discusses his fund's investment in Leucadia. Here is the relevant excerpt:Leucadia National Corp. (“Leucadia”) is a NYSE-listed holding company. Run by Ian Cumming and Joe Steinberg since its founding in the late seventies, Leucadia has compounded the NAV of its portfolio by about 18.5% per annum, on average, over the last 30

Was Buffett's 1984 Prediction Proven Correct?

2010-12-04T21:00:00.005+07:00

In a speech arguing that the efficient market theory is bogus, Warren Buffett identified 9 fund managers who he said would beat the market.He claimed he didn’t pick these people because they already had an outstanding track record. He said he selected these people years ago based upon their framework for investment decision-making. Of course finance professors didn’t believe him, and many

Update: Fooling Some of the People

2010-11-26T14:43:00.004+07:00

A bit over a year ago I pointed to my review of David Einhorn's book Fooling Some of the People All the Time, saying that you could read the opening paragraphs online. Since that time, Einhorn has linked to that review from the book's website and the editor of The Objective Standard has allowed the review to be read in full online. Enjoy!

Another Buffett Lunch

2009-06-30T21:20:00.004+07:00

It's always amazing to me how much people pay for lunch with Buffett given that he is very transparent about the causes of past investment failures and successes.Yet, perhaps due to tax write-offs, really liking the work Glide is doing in the community, or advertising for one's own fund (in a way that is sure to at least have some tangible result), people continue to pay millions for a lunch with

Review of Einhorn's Book

2009-06-22T10:58:00.000+07:00

In preparation for writing a review of Fooling Some of the People All the Time, I read all 16 reviews (from mostly major publications) listed at its site, and others besides.With a few exceptions, most did not actually review the book--showing what it said and why what it says is important. I set out to write a review that did do these things. And I did. You can read the opening paragraphs of it

Re: Morningstar Conference

2009-06-09T17:15:00.003+07:00

Leading up to the Morninstar Investor Conference I had this to say about it:As fund managers trying to cope with redemptions, there is likely to be a lot of people talking their book and a bit less candor than usual can probably be expected from each manager too. That said, the other managers are likely to be less polite about their differences--in both style and positions--and that could lead to

Greenlight: History Behind the Name

2009-06-04T05:07:00.003+07:00

I previously posted the somewhat complicated history behind Leucadia's name. For the curious, the history of how Greenlight Capital got it's name is pretty simple. It was given by Einhorn's wife.As he explains it in Fooling Some of the People All The Time:"In early 1996 ... Cheryl named the firm, giving me the green light. When you leave a good job to go off on your own and don't expect to make

Recap of the Ira Sohn Research Conference

2009-06-03T10:47:00.001+07:00

Bloomberg does a good recap here of what David Sokol-- of MidAmerican Energy Holdings--and David Einhorn--of Greenlight Capital--had to say at the most recent Ira Sohn Research Conference.Sokol said, talking about the economy, that "we are not seeing any green sprouts" and that the "shadow backlog" of home foreclosures will last until 2011. Einhorn said that the Obama administration is just like

The Warren Buffett Quiz

2009-06-01T06:48:00.003+07:00

So you call yourself a Warren Buffett fan? Think you know the Oracle of Omaha like the back of your own hand? Take the below quiz, then answer the above two questions again.1. What two virtues do Warren Buffett and his business partner Charlie Munger prize most highly?a. justice and productivityb. humility and integrityc. rationality and honestyd. integrity and generosity2. Buffett routinely

Leucadia Investment in Trouble?

2009-05-28T10:01:00.003+07:00

The financial partner in The Market Common project in Myrtle Beach has defaulted on its loan agreements with a national bank and might consider filing for bankruptcy protection, according to a notice issued Tuesday.Leucadia National Corp., a financing partner with developer McCaffery Interests Inc., is contesting the defaults but said it is "exploring all options and remedies available to it

Marty Whitman on the Balanced Approach

2009-05-27T21:59:00.001+07:00

Munger likes Wisdom

2009-05-26T10:41:00.006+07:00

Another title which pretty much states the obvious for us long-time fans.This post will simply point to an article about the Oracle of Pasadena, Warren Buffett's right-hand man, Charlie Munger. The article talks about the Wesco meeting, and the man that many of the "cultists" go to hear speak.A lifetime of practicing what he preaches has made Munger a billionaire: Good businesses are ethical

Whitman Likes HK Real Estate

2009-05-25T10:52:00.004+07:00

Marty Whitman likes Hong Kong real estate? That's probably not a secret to those of us who have been following him a long time.But in Third Avenue's latest letter, Whitman presents some up-to-date information showing in numbers why he likes the great Hong Kong companies.For example, the adjusted NAV for Cheung Kong Holdings is 100.38; for Henderson Land Development Company, it is 59.21; for

Michael Lewis Likes Snowball. I Don't.

2009-05-22T08:38:00.007+07:00

The title says it all: the author of Liar's Poker and a long, critical article about Warren Buffett, likes The Snowball. And he wrote a lot about why for The New Republic. The article ends with a look back at his critical piece, along with the main reason that Lewis enjoyed the book:Even then I thought that his virtues far outweighed his vices, and felt a bit like the guy who, having grown weary

Greenlight's Q1 2009 Letter

2009-05-21T09:41:00.005+07:00

Greenlight's 2009 Q1 Letter detailed his holdings of Ford debt, as well as the common stock of Pfizer, Harman, and EMC. For example, Einhorn explains why Greenlight invested in Ford debt:Ford is the third largest auto manufacturer in the world. We bought a large amount of secured bank debt (term loan and revolver), of which there is $14.7 billion outstanding, at an average price of 37% of par,

Notes on the Notes from the Leucadia Meeting

2009-05-20T14:29:00.005+07:00

For those who haven't read the complete notes from Leucadia's shareholder meeting, Inoculated Investor has posted seven pages worth. Here are my quick notes on the notes:*The succession plan is basically to focus more on buying great (read: durable) companies, to develop capable managers, and to not die.*Jeffries shouldn't compensate young know-nothings so highly--and if they use stock as

Einhorn on the Economy

2009-05-19T09:08:00.000+07:00

David Einhorn's comments on the market,from the GLRE conference call, are excerpted below:...In the first quarter Greenlight Re’s investment portfolio had a better result than it did in the prior two quarters.There are several factors that contributed to this. First, we enter 2009 with a very conservative posture, about 80% long and 40% short or about 40% net long. Although we are holding a good

What Stock Would Buffett Put All His Wealth In?

2009-05-18T08:33:00.000+07:00

What stock would Buffett put all his wealth in, if he had to choose just one? According to a recent Bloomberg report, which details his latest investment positions, it would Wells Fargo. Banks that attract deposits at low rates were undervalued in the first quarter because investors wrongly believed that the entire industry was hobbled by risky bets and reckless lending, Buffett said at Berkshire

Einhorn Doesn't Like Bugs

2009-05-15T10:47:00.005+07:00

At least not of the Volkswagen variety. A recent article in the Wall Street Journal explains why:Numbers normally speak for themselves with investment returns. It is a rare case when no figure can portray the full impact.Hedge-fund manager David Einhorn (left), of New York’s Greenlight Capital, in a recent investor letter listed in a table the internal rate of return of 14 positions he closed in

Brokers Like Heebner

2009-05-12T10:22:00.000+07:00

For those familiar with Ken Heebner's investment style--which includes big (and frequent) movements in and out of sectors--the title of this post may not come as too much of a surprise.But just how much do brokers such as Citigroup and Merrilly Lynch like Heebner? That's impossible to tell. However, according to a recent report by Bloomberg, Heebner gave the brokers 71 million reasons to like him

Berkshire Loses $1.53 Billion

2009-05-11T09:05:00.001+07:00

Berkshire lost 1.53 billion in the first quarter of 2009 compared to earnings of 940 million in the first quarter of 2008.Is something lost, however, if you know right where it is?That may be the question some are asking about the earnings--which were hurt by large write-offs of investments that many expect to work out well over time. (This is particularly the case with Buffett's big derivative

Buffett Author Explains Derivatives

2009-05-07T17:57:00.002+07:00

Snowball: Warren Buffett and the Business of Life is a book that I definitely do not recommend. Buffett achieved success because he was focused and frugal; this biography fails because it is unfocused and verbose.(As I said in a previous post, Buffett: Making of an American Capitalist is the best biography on the great investor.)That said, The Snowball is not entirely without value. Here is