The old man gets it right, yet again

Remember the dot com bubble? One of the very few to come out of it unscathed was Warren Buffet - because he never got in. He said he never understood the business and so did not invest a cent. He was the lone wise voice then.

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The lone noise that isn’t a wail from amongst all of subprime clamor is from – you guessed it – Buffet's stable again.

“"I don't want to sound holier-than-thou, but it was irritating when there were all kinds of players out there in the market offering all kinds of products that were questionable," says Ron Peltier, CEO of HomeServices of America, the real estate arm of Berkshire Hathaway (BRKA, BRKB) and the nation's second-largest residential brokerage firm.

So what’s keeping Peltier busy now that the market has tanked? Again, no marks for guessing it right. It's Peltier's task to scope out deals with high-quality, but beaten-down, realty firms that might be ripe for acquisition.

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It reinforces my faith in common sense over sophisticated financial modeling anyday.

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Steakhouse opulence

In what could probably go down in history as one of the most extravagant dinner at a New York steakhouse, two investors (Mohnish “who” Pabrai and Guy “who” Spier of Aquamarine “what” Capital Management LLC) blew everyone else out of water in a charity auction and put in the winning bid of $650,100 to break bread with billionaire Warren Buffett. By the time they finish that dinner, the “who” and “what” would be long gone.

Frankly, when I had earlier felt auctioning to be the ultimate acid test and the best valuation model, I never expected it to be endorsed so quickly by these star fund managers.

Pabrai will pay two-thirds of the winning bid — about $433,000 — while Spier will pay the other third, about $217,000. His *investment* rationale (you can call that!) - Pabrai attributes much of his own investment success to learning from Buffett and a few other investors. He is the author of the book “The Dhando Investor”.

Another way of looking at it is a beneficiary who chose to repay a debt of generous gratitude for having immensely gained from Buffet logic. [Pabrai manages about $600 million for Pabrai Investment Funds in Irvine, Calif., which follows value investing approach]

Not everyday that you get to dine with a Warren Buffet, a man so rich, he had to hire world’s richest man to spend his money.

Buffett once said “I was wired at birth to do something that pays like crazy.” To dine with someone like that, you ought to do crazy things too….

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