Another In The Queue

SHANGHAI, Jan 7 (Reuters) - The China Securities Regulatory Commission said on Monday it would consider on Friday a plan for a Shanghai initial public offer of shares by China Coal Energy Co (1898.HK), the country's No. 2 coal producer.

The regulator made a brief statement on its Web site (www.csrc.gov.cn). No other details were immediately available.

Following up on the news, the queue should be as follow:
1) China Mobile
2) CNOOC
3) Zijin
4) China Coal

China Coal may leapfrog Zijin and even CNOOC as it is state-controlled, while Zijin is not. The authorities may also deem CNOOc as too big a listing to attempt so soon after Petrochina. China Mobile should take the lead as it will surely be highly successful and could even be the impetus needed to rally the China share markets. A quick trade on China Coal-C1 is worthwhile if you can get in at 10 sen or even 11 sen.

p/s the photo is a famous statue in China suffering from the pollution from a nearby coal plant

Green Packet / Why Buybacks Fail

I should really consider writing as a team with Moola. He has provided a glaring example of why buybacks fail in Green Packet. It is relevant as it is current. One additional thought, I wonder if any of the company's substantial shareholders were SELLING during the period Green Packet is buying back shares.

From Moola:

Here is one GLARING "LIVE" example.

Green Packet.

1. Dec 26th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.38. Highest price paid 2.50.

2. Dec 27th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.43. Highest price paid 2.53

3. Dec 28th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.54. Highest price paid 2.80.

4. Jan 2nd 2008. Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.80. Highest price paid 2.93.

So, from Dec 26th 2007 to Jan 2nd 2008, Green Packet's share buybacks saw it paid a lowest price of 2.38 and a highest price of 2.93!

Consider the points Dali made and do put that into perspective of Green Packet's current share buybacks.

Do you like what you see?

Well for the record, Green Packet, share price has been performing terribly.Green Packet's highest traded share price was 2.94 on 31st Dec 2006. GPacket closed at 2.77 yesterday, 4th Jan 2008.

For a full version of Moola's post, please go to the link:

http://whereiszemoola.blogspot.com/

Market Mutterings

US Jobs Data - Well, it looks like the final pillar standing has finally crumbled. That has caused players to factor in even a total of 1.25% in rate cuts by the Fed by March/April. The knee jerk reaction to sell down the Dow should be just that. The Dow should regain lost ground from here on because the jobs data would definitely force the hand of Fed to lower rates by at least 1.0% in total (in two strikes) by end March/April. That will give stocks a better footing going forward.

USD - That being the case, the USD will immediately be under pressure on the lower rates scenario, thus causing funds to flow to stronger currency markets for 1Q2008 at least. The sharper gains in yuan over the last few days (following a meeting between US and China officials) would indicate that an "agreement" has been reached to have a much stronger yuan and a weaker USD.

Inflation - That's the ugly spot affecting many developing countries but will be mitigated somewhat by stronger local currency. Almost every commodity and soft commodity have gained enormously over the last 3 years. We have to factor in some of the increase has been due to the persistently weak USD as the bulk of commodities are priced in USD.

Oil - That also explains part of the higher oil prices as it is in USD. Plus the fact that OPEC has said over the weekend that they won't be raising production just yet would continue to support high oil prices. Problems in Pakistan and Nigeria continue to contribute to high oil prices. We should be wondering how oil prices at triple digit levels cannot be pushing inflation through the roof! That's because much of the increased demand for oil and other commodities are due to higher consumption and higher production efficiency. Naturally all goods and services will be priced higher but strengthening local currency helps to combat that somewhat - as the bulk of the consumption growth is in developing countries and not the US.

Globalisation - The US can still stand because many of its companies now derive almost 50% of their revenue from the rest of the world. As long as growth from overseas is strong, it can cover their dependence on US domestic economy.

Stock Prices & Liquidity - At present levels, markets pushing higher are more likely to be due to liquidity forces rather than company fundamentals. Hence one can say its bubblish area going higher. If there is a further contraction in liquidity, it could be messy. Thus investing now may bring more volatility.

H- Shares Lined Up For A Shanghai Listing

As mentioned before, those H-shares going for a Shanghai listing have a much better upside than the rest of the H-shares. However, the corrective phase in China markets over the last 2 months have caused some of them to be postponed till they get better sentiment.

Things appear to be moving again, but with some reshuffling and changes. A month ago, it was supposed to be CNOOC followed by Zijin Mining. Now, there appears to be a new frontrunner in China Mobile - possibly the best China stock to own with or without the A-share listing.

China Mobile, whose US$341 billion market value makes it the largest telephone carrier, and CNOOC Ltd, China's third-biggest oil company. China Mobile is "actively" seeking a listing on the mainland, Chairman Wang Jianzhou said recently. Hence just these two could carry and create a sentiment change, especially China Mobile.

For better choice of exposure, one should go and buy in HKSE for the covered warrants. Below are some commentary on the covereds on these 3 companies:

1) China Mobile: China Mobile- c5, c6 & c7 are fair valued and would represent good exposure into June/July, can hold for a few months. For more speculative purposes, the China Mobile-c4 looks interesting with low single digit premium and will only expire in March 28.

2) CNOOC - Just switch to CNOOC-c2.

3) Zijin - Even though I knew the stock was lined up for a Shanghai listing, the covered warrant Zijin-c1 NEVER reached even decent value, it was always traded hugely expensive, very expensive or quite expensive. Even today its premium is still above 25% with a poor gearing. Wait for a Zijin-c2 or c3.

Ah "Chua", Somebody "Soiled" My "Leg"

These things happen every now and then, to celebrities and politicians, but in actuality, it happens to be just as common among commoners. As always, there will be disgruntled groups calling for the person to resign. C'mon, for what, because he didn't fuck you as well?... or because he did? What CSL did was reprehensible to his wife and kids - its a private matter.

If what he did was wrong, he would have been in jail already. Its not against the law. Its a private matter. Why do we hold politicians or celebrities as needing to have a "higher standard of professionalism or good conduct"? Because they are leaders or people look up to them? Big BS, we all have people to lead, we all have our family to lead and care for and set good examples, we also cannot let down our family and friends.

So, NO more double standard BS. If its not against the law, its a private matter. Do not use your religious standards or moral standards to judge another person as to whether he is fit for office. Because if I cite the 10 commandments as a standard for asking CSL to resign, does it mean we can ask someone to resign if they eat beef or pork when they are neither Muslim or Hindu? That is imposing your morality on others. If something is deemed wrong, it should be made law. When it is not, and we think it should be, then do so, and UNTIL then leave CSL alone.

Just as Bill Clinton was messed up over what he did, Bill was still an effective leader, but at least CSL did not do it in his office la. Judge a job performance by the job specifications, not by unwritten rules. In any kind of relationship, when there are hidden expectations and unannounced standards of performance (including the marrying kind), you are holding a time bomb. If its not written down, its not law.

CSL at least had the grace and strength to admit, and then had the composure to let the party and people to decide his fate. Again, let the person be the first to throw stones ... If you are still keen to get rid of CSL, then we should at least make an attempt to write down the hidden fuckups that will boot you out of office: having sex with someone other than your wife or wives; kicking a dog or a cat; wearing a toupee and lying to the people that its real; etc... you can never make up such lists. You can only go by what is wrong against the law, anything else is so vague and subjective.

p/s CSL, ok now I've done the job, so how about the secret to 56 minutes ... If you lose your job, well, you can always teach classes.

Macro Predictions For 2008

Oil Prices - To rise to US$115 per barrel before settling above the US$100 for most part of 2008. This will put simmering inflationary pressures globally.

Hot Spots - China to resume its economic machinery. Stock market will retest its all time high in 2008. HK will do even better than China yuan for yuan. Western Europe to attract much of M&A limelight away from US and developed Europe. Latin America to continue on its merry ways. India's fire will dim slightly.

Lukewarm - Rest of Asia will have to come to terms with inflationary pressures as local currencies may not rise enough to counter imported inflation, thus hurting outlook for local equities.

US - Will still have to deal with fallouts from subprime and property correction. Jobs the only factor sustaining the overall economic picture as many US companies still rely more on global growth for their bottom line. US rates will not have much room to fall as defending the dollar will be more of a priority - still we are likely to see the dollar weakening by 3%-5% in 2008.

US Stocks - A lot will be riding on the recovery of financials for index to perform. Pain before pleasure, probably things will improve from 2Q onwards. Depressed dollar will see more foreign M&A buying US companies. That will be creating a lot of pressure on the Fed and related units to stem the slide in the dollar. Corporate profits growth may not be as positive as 2007 and will cap the markets for 1H2008.

Japan - Economic recovery is failing as people still refuse to spend. Carry trade to continue.

Soft Commodities - All commodities to continue to rise, though not as spectacular as 2007. Palm oil should have another 10% in 2008. Biofuels no longer viable for now. Short plantations with biodiesel for idle capacity and extended cost recovery and possible writedowns.

Bursa - Hard for locals stocks to perform with markets at all time high. Favour stocks with strong foreign expansion strategy for growth: KNM, TM International, Ranhill, UMW, Evergreen, Parkson, (not B Land though). Short property stocks as affordability issue will come into focus as well as higher inflationary pressures (interest rates). A topping of most Asian currencies will erode some of the FDI into Asian property. Selective O&G stocks: Coastal, AZRB and Sapcrest. Some high profile foreign investment funds may start exiting critical stocks thus removing part of the allure: Pelikan, B Land, Stemlife, Mah Sing, E&O Property, Uchi, you know the rest. Finally, the Chua Soi Lek Award - still going strong: KNM.

2008 will be tougher than 2007.

Hair Today .. (The Ultimate New Year Present!)

Well, you can finish the saying. As promised to a number of balding readers from Seng's chatbox, here is the so-called "best formula" for stopping hair loss and generating hair regrowth. Its not a guarantee but I have a couple of friends who have seen very significant turnarounds within 3 months. At least the formula will save you RM10,000-15,000 a month, the probable sums from visiting Svensens and the like - they will be prescribing the same stuff but charging you an arm and a few legs for the same shit. Even for those who say they practice herbal remedies, its the same shit. The formula is supposed to work very well for those with normal hair loss - due to male pattern baldness (hormonal). If you have other factors such as severe scalp problems, this may not work well.

The easiest things to sell to men have to be hair growth products. Before venturing further, I have to qualify that I do not own any pharmacy chains, or dating any pharmacists, or own shares in Merck, or have an axe to grind with hair treatment centers. Due to the fact that a couple of my friends have turned back to ape like status from using the treatment below, I have done an intense search and study, and even talked to a couple of pharmacists.

PROSCAR is indicated for the treatment of symptomatic benign prostatic hyperplasia (BPH) in men with an enlarged prostate to improve symptoms; reduce the risk of acute urinary retention (AUR); and reduce the risk of the need for surgery, including transurethral resection of the prostate (TURP) and prostatectomy. Proscar is manufactured by Merck. Similar to the discovery of Viagra (which was an unexplained side-effect as well) ..., they found the side effects of using Proscar was unexplained hair growth. Proscar comes in 5mg tablets, but their own study showed that you only need 1mg to reverse the effects for hair regrowth. Merck cleverly created new 1mg Proscar tablets and called them Propecia. The only difference is buying Proscar, you only need to cut up the tablet into 4, as that would be a lot cheaper than buying Propecia.

Apparently, there is little side effects for taking Proscar for men even if the hair thing doesn't work as it will also act as defence for future prostate problems - killing two birds with one tablet. How it works: countering male pattern baldness ( androgenetic alopecia ). Finasteride acts in the body to significantly lower levels of dihydrotestosterone ( DHT ) by inhibiting the type 2 5 Alpha Reductase enzyme which is responsible for the conversion of testosterone into DHT. High amounts of DHT contribute to prostate enlargement as well as hair loss in individuals with a genetic pre-disposition to it.

Proscar side-effects study:

http://www.rxlist.com/cgi/generic/finas_ad.htm

Propecia has been approved for treating hair loss back in 1997, and has met with varying degrees of success. Proscar and Propecia are not new. However, the key appears to be using it in combination with a few other things.

The latest small scale study using Minoxidil and Finastride:

http://www.regrowth.com/hairloss-remedy/remox/promox-study.cfm

Don't be a miser, use the 5% Minoxidil (Head Way, I believe) formula and not the 2% formula. Then supplement it with the necessary multivitamin & mineral supplement called Crowning Glory ( I know, its tacky) which contains the essential multi vitamins necessary for hair growth. Finally, supplement that with Saw Palmetto, best for absorption is the brand under Prime ProGuard. For better overall effect, use only Pregaine, clear gel shampoo. As a last ditch measure, rub your nails together for a few minutes every day - that's the yoga way, apparently.

Package Deal (btw RM450-500)

Proscar / Propecia (1mg/day is sufficient)

Minoxidil 5% ( twice daily on scalp)

Daily CG Multivitamin (Vitahealth)

Twice Daily Saw Palmetto capsules

Pregaine shampoo

If these do not show results after 3 months, then I think you should consider shaving bald or hair implants. Please consult your doctor or pharmacist before using the above, even though I have checked that it does not meddle with other medicine you might be taking. Women cannot be taking Proscar/Propecia, especially pregnant women - seriously. Please also note that some of the reputable herbal/special traditional cures are also using a combination of the above without proper labeling.

Pessimism Over B Land

I am trying to do a Moola here on B Land (lol). B Land is the kind of stock that can cause people who invested earlier to fall in love with it.

False Positives

1) Reputable foreign shareholders in UBS Ag (12%) and Goldman Sachs (8%). These lends some sort of credibility in the eyes of investors but that's because finding Vietnam plays are difficult. B Land is one convenient vehicle, and these foreign banks have allocated "infra/exotic funds" that they have to have exposure. Hence their presence is not as "qualified" as it seems. These two funds are also in B Land because of the sheer size of B Land. trying to obtain decent exposure is difficult. Now B Land has been ramped up to RM7bn in market cap - hence the reasons behind the investments may be more shallow than you think.

Caveats

1) It just signed the 8th MOU in Vietnam to develop property projects. Eight MOUs, still MOUs mind you. Talk about execution risks. Each MOU is an additional risk. If you are keen on accretive projects that depend on execution by mgmt, buy KNM, its a safer and proven bet. The numerous projects in Vietnam depends not just on execution by mgmt, but a whole host of economic and social factors, some of which are beyond the control of the company.

2) Vietnam earnings coming in only in 2009. A lot of things can happen till then. The region could have a major slowdown or even a recession.

3) The market price above RM6.00 prices in mainly Vietnam earnings in 2009. Revenue for 2006 and 2007 actual came in at RM561m and RM507m respectively. Net profit for both years came in at RM89m and RM32m respectively. The revenue for 2009 is expected to jump to RM1.49bn and net profit to rise to RM212m. At RM6.40, using 2009 earnings, the stock trades at 27x 2009 earning! If you use current earnings it trades at a higher PER than Google.

4) The most troubling part is in 2008 and 2009, the finance cost are RM280m and RM137m respectively. Comparing to net profits of RM212m for 2009, there is no room for under performance. Revenue may waver in 2009 and beyond, but funding costs are pretty much laid in cement.

5) NTA now is just slightly above RM2.00. Even in 2009, NTA will only reach RM2.90. That's a lot buyers are paying for something a few years down the road.

An Important "Inch"

"A timetable for obtaining universal suffrage has been set," Tsang said. "HK is entering a most important chapter of its constitutional history." Beijing will allow HK to directly elect its leader by 2017 and all its lawmakers by 2020, the territory's chief executive said Saturday, immediately sparking criticism from democracy activists who sought a faster timetable.

Many had feared it would stop short of allowing full democracy in the booming financial capital, and the decision caught some political observers by surprise. But the decision did not please opposition democratic leaders, who have called for direct elections in the date of the next leadership race. "We are extremely disappointed, you could say we are furious, about this decision in ruling out 2012," Democrat Party chairman Albert Ho told government-run RTHK radio station. "The wishes of the Hong Kong people have been totally ignored."

The news is likely to be greeted positively by HK stock markets. Some battles cannot be won completely, even I am flabbergasted that Beijing would even give a proper date for full democratic elections. One should be wary of how much one is asking for - giving an inch is already a big thing if one were to consider the full spectrum of things China. It could have been a lot worse, much much worse. The economy of HK over the last 5 years showed how much HK is dependent on China - think before shouting from the rooftop.

Iran Oil Deal & Malaysia

Iranian National Oil and Malaysia's SKS Ventures signed a US$6 billion contract to develop the Golshan and Ferdows offshore gas fields in Iran, which contain an estimated 60 trillion cubic feet of gas. A second part of the deal to build plants to produce liquefied natural gas worth US$10 billion would soon be ready for signing. The initial project was expected to be completed by 2014, with Golshan delivering 2.5 billion cubic feet of gas a day,and Ferdos producing more than 880 million. SKS Ventures is a privately held company of Syed Mokhtar AlBukhary. The announcement came just two weeks after China's Sinopec announced a US$2 billion contract to develop the Yadaravan oil field in south-west Iran.

The deal is not so straight forward as it seems. The US government have tried very hard to discourage foreign companies from investing in Iran over concerns that the money could be used to support a nuclear weapons program in the country. Following China, now Malaysia is thumbing their noses at the US.

Iran's oilfields are no small potato. After Russia, Iran is estimated to have the world's second-largest natural gas reserves, though due to US and United Nations-imposed sanctions, Iran has been having problems developing their oilfields.

Energy companies such as Royal Dutch Shell, France's Total and Austria's OMV, have remained involved in operations in the country despite political condemnation. Over the weekend Iran said that it was close to signing an agreement with Italian power company Edison to pump 4.5 billion cubic feet of gas to Europe. Malaysia, like China, has strong business links with Iran, including through Pertonas, which has a 10% stake in the Pars Liquified Natural gas project, led by Total.

There are two ways of looking at Iran, the more belligerent the attitudes towards a country, the less they have to lose. To engage them is a better way. Most global problems can be traced to a lack economic power. Hence helping Iran develop its economic prowess can be argued as a better long term solution. The existence of "allies" to Iran will also help in future negotiating tables. To isolate and demand changes usually backfires.

Constructing A Portfolio For Lazy Buggers

If you have a few hundred thousands, or a million or two, but don't want the hassle of monitoring the markets day in day out - and you come and ask me to construct a portfolio that would allow you to receive good dividends and one that will allow you to laze on the beach for days on or sail for a few weeks - well, here it is:

Mastercard - You know, you probably have one on you, and the number of users just jumps alongside with the rising middle class especially in Latin America, China and India. The best play for 2-5 years hold. No credit risk almost, the banks hold the bulk of the risk, everytime you go swipe, Mastercard collects, better than tolls. Profit jumped 63% for 3Q2007 to US$314.5m or US$2.31 a share. Share is trading at US$209. Ebitda margin an incredible 29%. Return on capital 25%, return on assets 13.4%. Debt/Equity 0.07x. Free cash flow per share US$5.40. Shares have surged five fold since IPO in May 2006 but will have more upside still. Dividend not exciting at just US$0.54 but you buy for capital growth. However, they have more than US$24 in cash per share. They keep the cash to invest and build to protect from Visa's incursions. However, with the listing of Visa and some of MC's subsidiaries, we may see special dividends in the near future. Valuations not expensive when you look at earnings growth 1-3 years out, should double within 3-5 years. The main reason why you still get decent valuations is because the stock has already jumped 5 fold in less than 2 years.

Visa Inc - Upcoming global IPO, the world's largest card payments processor. Will go for a US$10 billion following Mastercard's May 2006 IPO. Watch the price comparison on listing, and accumulate when valuations are not too severe.

Well, you still need some dividends to survive right. Then go for the following stock with the right currency exposure as well:

UOB-Kay Hian - Trades at just S$2.10 but you will be getting a dividend yield of 9.3%, where to find. Links within the UOB group and the UOB asset management and banking will ensure this broking unit has better quality earnings and will be more defensive than others in the industry. Sell whenever you see dividend yield dropping below 6%. You buy at 9% yield, if it falls to 6%, it means the stock price has jumped by 50%, sell la. If share price keeps dropping, then buy more as you are getting even higher yield - there is ample cash in the company and earnings is not as volatile as it seem or even cyclical as its an integrated financial unit, not just a broking house.

More stocks to retire on later ... cheerio for now.... gotta get back to the beach ... but wait, I can't afford to retire... CB!!

The Paradox Of Our Time & Then Some...

Thanks to puffeye who pointed out the wrong attribution, I only think its fair to mention that the passage was written by someone else. I know if I was the one who wrote it, I'd be pretty pissed off if it was attributed to someone else. So I did some digging, and initially it was circulated as something penned by a student who witnessed the Columbine shootings back in 1999, which was totally untrue.

Next it was attributed to the great comedian George Carlin, which was understandable because Carlin talks the same way some of the time. To be fair, Carlin has emphatically denied that he has written the passage, and true to form, he said the piece was a "sappy load of shit" (lol).

The true author was Dr Bob Moorehead, a former pastor of Seattle's Overlake Christian Church. The essay appeared as The Paradox Of Our Age in Words Aptly Spoken - which was Moorhead's 1995 collection of prayers, homilies and monologues used in his sermons and radio broadcasts.

However, one may be moved to write by the Spirit at a certain point in time but may not be at other times. Moorhead's was also accused by 17 congregation members for having sexually assaulted them. This led to his resignation as the pastor for the church in 1998. The church elders concluded later on that Moorehead was guilty as accused of the charges.

The fact that he has fallen by the wayside should not detract from the message within the essay. Christians are not people who know how not to sin. They just know they have a relationship with Jesus and have to walk close with him to stay on the path. Time and again, even Christians will stray from the path. I hope he has climbed back onto the path. You all know the "cast the first stone" passage ...

The paradox of our time in history is that we have taller buildings but shorter tempers, wider Freeways , but narrower viewpoints. We spend more, but have less, we buy more, but enjoy less. We have bigger houses and smaller families, more conveniences, but less time. We have more degrees but less sense, more knowledge, but less judgment, more experts, yet more problems, more medicine, but less wellness. We drink too much, smoke too much, spend too recklessly, laugh too little, drive too fast, get too angry, stay up too late, get up too tired, read too little, watch TV too much, and pray too seldom. We have multiplied our possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We've learned how to make a living, but not a life. We've added years to life not life to years. We've been all the way to the moon and back, but have trouble crossing the street to meet a new neighbor. We conquered outer space but not inner space. We've done larger things, but not better things. We've cleaned up the air, but polluted the soul. We've conquered the atom, but not our prejudice. We write more, but learn less. We plan more, but accomplish less. We've learned to rush, but not to wait. We build more computers to hold more information, to produce more copies than ever, but we communicate less and less. These are the times of fast foods and slow digestion, big men and small character, steep profits and shallow relationships. These are the days of two incomes but more divorce, fancier houses, but broken homes. These are days of quick trips, disposable diapers, throwaway morality, one night stands, overweight bodies, and pills that do everything from cheer, to quiet, to kill. It is a time when there is much in the showroom window and nothing in the stockroom. A time when technology can bring this letter to you, and a time when you can choose either to share this insight, or to just hit delete... Remember; spend some time with your loved ones, because they are not going to be around forever. Remember, say a kind word to someone who looks up to you in awe, because that little person soon will grow up and leave your side. Remember, to give a warm hug to the one next to you, because that is the only treasure you can give with your heart and it doesn't cost a cent. Remember, to say, "I love you" to your partner and your loved ones, but most of all mean it. A kiss and an embrace will mend hurt when it comes from deep inside of you. Remember to hold hands and cherish the moment for someday that person will not be there again. Give time to love, give time to speak! And give time to share the precious thoughts in your mind. AND ALWAYS REMEMBER: Life is not measured by the number of breaths we take, but by the moments that take our breath away.

Some Insights From Buffett's New Deal

Warren E. Buffett agreed on Tuesday to buy a 60% stake in Marmon Holdings, the industrial holding firm owned by the wealthy Pritzker family, for US$4.5 billion with the goal of eventually owning the entire firm. As part of the deal, Buffett, through his Berkshire Hathaway investment vehicle, will gradually increase his stake in Marmon over the next five or six years until he owns the firm. The final price will be determined by Marmon’s revenues.

#1 The deal represents one of the largest acquisitions Buffett has made in recent memory, especially for a non-insurance company. Buffett has been targeting only insurance and rail companies over the last 5 years, hence the purchase across a number of industries under Marmon is interesting.

#2 Maybe we all should learn from Buffett. The deal was done just the way the Pritzkers and Buffett wanted – no consultants or preliminary studies. I am all for due diligence but not market surveys, cost-benefit analysis, etc. ... you either read the industry/markets correctly or you didn't. You either overpaid or you didn't. No amount of paperwork will help to cushion your views.

#3 Berkshire has some US$47 billion, and despite the minor weakness in US equities, he has not been too eager to put the cash to work (except in his rail stocks). Hence we may expect a few more acquisitions by Buffett in the comin months, and they might not be in insurance anymore.

#4 The Pritzkers are very wealthy, however, they have been selling off their assets in recent years to settle some squabbling inheritance issues. In 2005, the family settled a lawsuit by two grandchildren of Jay Pritzker concerning their family trust. In August, the Pritzkers sold a US$1 billion stake in Global Hyatt, the hotel company they control, to a group of investors including Goldman Sachs.

#5 Who wouldn't want to sell to Buffett? If Warren wants your company, almost everyonewill think your company is grossly undervalued. Hence, you want Buffett in, but also leave some cake for yourself. Hence the 40% stake still resides with the Pritzkers.