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They are currently fighting it out in the courts to not get their equity wiped out by creditors. I actually really like Pabrai, and enjoyed his two books. But

by dharmon 10y ago

They are currently fighting it out in the courts to not get their equity wiped out by creditors. I actually really like Pabrai, and enjoyed his two books. But I cannot figure out what he was doing in Horsehead. Three strikes: high debt, highly cyclical, commodity product. Any one of those would be a tough sell, but all three? I thought after 2009 he learned his lesson with high debt companies, so I was really surprised to see him at it again. Not only to invest, but putting in such a high % of assets.

johnwheeler 10y ago
I thought I read his thesis had to do with Zinc prices. I like Pabrai too, but I'm so in awe of Buffett, and I can't get over that he turned Pabrai and Spier down for employment then turned around and hired Ted and Todd on the spot at their respective luncheons. I wonder, what did Buffett see that he didn't like in the former? Probably just a stupid bias on my part, but it makes you wonder...
- dharmon 10y ago
  I think it was similar to his shipping capacity play that made him a lot of money years before, where there was going to be a shortage of production once demand turned. The part I don't get is with the debt load he was essentially betting on timing of a commodity price, and if you are going to do that you might as well just play in futures where the upside on a correct call is higher. The same setup with a lower debt load might make more sense, since there is no timeframe on the cycle turn and you can quietly wait for it (like he did with the shipping company). I don't think Spier and Pabrai were trying to get jobs with him, although it could be they pretend now like they weren't, but they both were running their respective funds at the time. My "relationship" with Buffett is like the proverbial parent / child relationship: first you think they can do anything, then you think they don't know that much, then you realize how much they really knew all along. It doesn't hurt that I made good money following him into IBM early this year after I sat down and tried putting together the pieces for myself. The guy is packing some serious horsepower that I think is underestimated, even given that everyone knows he's super smart.
  - marktangotango 10y ago
    Someone like Buffet has an information advantage that 99.999% of people don't. And I don't mean insider trading. His businesses give him A LOT of information on trends, and his personal network as well. Plus his years of experience and savy. Make no mistake, he's go advantages over nearly everyone else, and knows how to use it.

by dharmon 10y ago

johnwheeler 10y ago

I thought I read his thesis had to do with Zinc prices. I like Pabrai too, but I'm so in awe of Buffett, and I can't get over that he turned Pabrai and Spier down for employment then turned around and hired Ted and Todd on the spot at their respective luncheons. I wonder, what did Buffett see that he didn't like in the former? Probably just a stupid bias on my part, but it makes you wonder...

dharmon 10y ago
I think it was similar to his shipping capacity play that made him a lot of money years before, where there was going to be a shortage of production once demand turned. The part I don't get is with the debt load he was essentially betting on timing of a commodity price, and if you are going to do that you might as well just play in futures where the upside on a correct call is higher. The same setup with a lower debt load might make more sense, since there is no timeframe on the cycle turn and you can quietly wait for it (like he did with the shipping company). I don't think Spier and Pabrai were trying to get jobs with him, although it could be they pretend now like they weren't, but they both were running their respective funds at the time. My "relationship" with Buffett is like the proverbial parent / child relationship: first you think they can do anything, then you think they don't know that much, then you realize how much they really knew all along. It doesn't hurt that I made good money following him into IBM early this year after I sat down and tried putting together the pieces for myself. The guy is packing some serious horsepower that I think is underestimated, even given that everyone knows he's super smart.
- marktangotango 10y ago
  Someone like Buffet has an information advantage that 99.999% of people don't. And I don't mean insider trading. His businesses give him A LOT of information on trends, and his personal network as well. Plus his years of experience and savy. Make no mistake, he's go advantages over nearly everyone else, and knows how to use it.