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Updated June 1, 2026 An update of my book/collection of posts on Fairfax is attached below. New posts have been added. The book now has ~950 pages of material on Fairfax. My goal is not size - but I will continue to add material that I think adds value for those interested in learning more about Fairfax. I don't re-read the entire document when I post updated versions. If you see any big errors please let me know. Please note, not everything in the book has been brought up to date. That would have required a couple of months of work… and by the time it was done, much of it would be out of date again. My current plan is to keep updating parts of the document as time goes by. Bottom line, this document should be a much better resource for board members / investors than what existed before. I hope you find it useful. --------- For members who enjoy reading my posts on Fairfax I have attached at the bottom of this post two documents: Fairfax - The Emergence of a Wonderful Company: PDF file contains more than 100 of my best posts on Fairfax from over the past 2 years, organized into 20 chapters. Excel workbook: Companion document to the PDF file, contains 14 worksheets (see below for details). Sanjeev, thanks for everything you do running this board. For all the members on this investing forum, ‘thank you’ for breaking bread on a daily basis and sharing your thoughts on investing and life. Over the years, it has been a life changing experience for me and my family. What is contained in this document is the collective wisdom of this group. Let’s hope i have captured it reasonably well. A message from the legal department: Both documents are incomplete and contain errors. What is contained in the attached documents is not intended to be investing/financial advice. Its purpose is to educate and entertain. ----------- The Excel file contains 14 worksheets: FFH-24: lists and tracks many of Fairfax's equity holdings in real time Size: ranking of Fairfax's equity holdings by size Moves: detailed compilation of many on Fairfax's transactions going back to 2010 - organized by year Earnings Estimate: 2025 and 2026 Premiums: the build for 'underwriting profit' Interest: the build for 'interest and dividend income' Associate Equities: the build for 'share of profit of associates' Consolidated Equities: Non-insurance Consolidated Companies Investments: the build to calculate the return on the total investment portfolio Shares: reviews 'effective shares outstanding' Excess of Fair Value over Carrying Value: for the non-insurance associate and consolidated holdings Float: the build for float 13yr View: A 13 year view of many key metrics for Fairfax IFRS 17: Effects of discounting and risk adjustment - quarterly summary of historical numbers used in earnings forecast Fairfax May 2026 -compressed.pdf Fairfax May 2026.xlsx

Every month I get with my wife to review our financial situation. This month the of Crip-Family net worth was not impressive, and when returns are compared against the S&P, it looks even worse. I gave her the low down, specifically, that Fairfax really killed our returns YTD and in May especially. She asked "What happened with Fairfax?"...response was "Not a damn thing, literally no bad news". This is instructive...company moves notably lower with, from what I can see, zero reason. Yes, it is frustrating to see the impact on the net worth, this is the kind of thing we live for...company getting better and price getting cheaper. We have been buying on the way down, but hindsight says we should have waited a little longer. -Crip

We need to change the title to ‘Fairfax Stock - New 52-week Low’

Thanks for the advice. I do have fond memories of camping with my Dad. I remember once while camping he wanted to listen to a soccer match and took out his Grundig short wave, looked at the specs in the manual and figured out that he needed a 20 foot antennae to get the game. He attached wire to the antennae and attached it to a couple of trees that my brother and I climbed up to get it high enough.

Check out my most recent article for the Globe and Mail about Fairfax. This is a gift article. https://www.theglobeandmail.com/gift/b04eb1bcd666173196423362ad31a8785d529ba1ad1cee14b25891c6ca2ccfbf/AKS47ZLUWZFSXEKQVGUNGOWYCU/

Good question, @Viking…and the answer has to be that it is much better for Fairfax to buy out minority owners of the high quality insurers they already know and trust than to pay higher multiples for partial or total ownership of insurers that might be acquisition targets in external markets, but of whose management and reserving practices they are not as familiar with. Think back to when Buffett owned half of GEICO’s common stock, and had to pay a market price plus a premium to gain full ownership of the company whose reserving practices and operational and investment management were all known and trusted by him. Fairfax is in an even better position than Buffett was given the prices at which they are able to take out their trusted minority partners. And if for some reason Fairfax stock looks to be an even better investment than buying out minority partners, we can trust that Fairfax will find a way to balance their reinvestment opportunities as they did when they sold 10% of Odyssey to enable a Fairfax stock buyback. I think we can all agree that doing that was better for us as remaining shareholders than if they had borrowed funds externally (probably at an even higher cost?) and used it to take out some minority interests instead. Bottom line, I don’t need Fairfax to make the exact reinvestments that I, with my lack of direct knowledge of their opportunity set, think they should make. They have more than earned my trust that they will continue to treat me as a partner and that the reinvestment decisions they make in the future will be those that are likely to benefit us both.

Met Ben Watsa at a Europe value investor conference. Asked him why Fairfax was short duration at high rates. Mostly comes down to protecting the downside as they see potential for an inflationary spike.

Fairfax Q2-2025 Earning Results - 7 High-Level Thoughts I thought this would be a good time to get out of the weeds. Instead, with our review of Q2 results at Fairfax, we are going to zoom out today and look at the big picture. What did we learn about Fairfax from their Q2, 2025 results? Let me know if you agree/disagree with my list. What did I miss? 1.) Fairfax has a very good P/C insurance business Combined ratio = 93.3% Underwriting profit = $427 million Net premiums written growth = 4.8% Yes, the hard market is slowing. Top line growth in insurance is slowing. Nice to see that Fairfax is being disciplined (although Mr. Market will probably not like it). However, Fairfax will be able to continue to grow their P/C insurance business at above average rates - in addition to growth of NPW - by taking out their minority partners (see comment 5 below). 2.) Fairfax’s most important income stream spiked higher in Q2 Interest and dividend income = $666 million (was $606.5 million in Q1) Increasing by 10% in one quarter is a big deal. This puts the annual number at about $2.6 billion. It increased because the total investment portfolio continues to grow in size. And Fairfax continues to invest it very well. Yield of fixed income portfolio = 5.1% (same as Q1) Average duration of fixed income portfolio = 2.4 years (down from 3.3 in Q1) Fairfax also reduced the average duration of its fixed income portfolio from 3.3 to 2.4 years. They sold U.S. treasury bonds with maturities principally between 28 to 30 years for net proceeds of $1,129.2. Why? Probably because investors are not being compensated appropriately for the inflation risk on long dated US Treasuries. This is prudent risk management on the part of Fairfax - protect the balance sheet. Will analysts hate this move - because it reduces ‘visibility’? Probably. But analysts are focussed on the short term. Fairfax is running the business for the long term - and shareholders should applaud that. 3.) A new income stream is breaking out for Fairfax Fairfax already has 4 large income streams: underwriting profit, interest and dividend income, share of profit of associates and investment gains. The fifth income stream is non-insurance consolidated equity holdings. In recent years Fairfax has been investing heavily in this bucket of equity holdings. Since 2022, it has added Recipe, Grivalia Hospitality, Sleep Country, Meadow Foods and Peak Achievements. To go with legacy holdings AGT Food Ingredients, Dexterra and Sporting Life. I have been (impatiently) waiting 2 years for this bucket of equities to start delivering bottom line results that are in line with its potential - and it appears we might be there. Q2 = $126 million This puts the annual number at about $500 million. This is an important emerging income stream for Fairfax. My guess is it will be Fairfax’s fastest growing income stream moving forward - especially with the hard market in insurance slowing (capital will go to where it earns the best return). And yes, results for this group will have some volatility. 4.) Fairfax (and the team at Hamblin Watsa) continues to invest exceptionally well We got two important updates on the conference call today regarding a couple of Fairfax’s largest investments in recent years. PacWest construction loan portfolio In June of 2023, Kennedy Wilson and Fairfax purchased a $4 billion construction loan portfolio from PacWest. PacWest was caught in the regional bank crisis and they were forced to sell their best assets at a discount. (Of note, Kennedy Wilson also got the loan platform from Pac West - the 40 people who were running the loan portfolio also moved over the Kennedy Wilson.) We got an update today on how this investment has been performing for Fairfax over the past three years. Wade Burton, CIO and VP of Hamblin Watsa on the Fairfax conference call today: “Within the fixed income portfolio, our mortgages continue to perform well. We have been repaid on $1.8 of mortgages from the Pacific Western Bank transaction, where we purchased approximately $4 billion in commitments at 95% of par in 2023. The IRR on the loans repaid thus far is 14.7%. Thanks to the outstanding work of Bill McMorrow, Matt Windisch and their team at Kennedy Wilson, these mortgages are proving to be a fantastic investment for Fairfax.” Blizzard Vacatia (Berkley Group) One of Fairfax’s largest investments in 2025 (January) was the purchase of the Berkley Group, one of the largest independent timeshare companies in the US. With this deal, Fairfax partnered with Caroline Shin and her team at Vacatia. The partnership is called Blizzard Vacatia. Fairfax invested $810 million in various fixed income instruments (with an average yield of 8.6%) and $25 million in equity (50% ownership position). We got an update today on how this investment has been performing for Fairfax YTD. Wade Burton, CIO and VP of Hamblin Watsa on the Fairfax conference call today: “It’s early days in the timeshare investment, Berkeley, run by Caroline Shin, but so far, it has exceeded expectations. Berkeley has approximately 125,000 available room nights per month. They started the year at virtually nil occupancy for overnight stays. In month one, Caroline brought that number to 10%, the next month 20%, and the third month 35%. I’m happy to report year to date operating income has already reached our full year expectations. Again, outstanding and capable partners doing an excellent job for Fairfax shareholders.” 5.) Fairfax telegraphed how it will continue to grow its P/C insurance business - even as the hard market slows Minority interests own stakes in Fairfax’s two largest P/C insurance companies: Allied World = 16.6% Odyssey Re = 9.9% As a result, not all of the earnings from these two companies are accruing to Fairfax common shareholders. Taking out the minority shareholders will be an easy way for Fairfax to grow its P/C insurance business - it will boost the total amount of earnings that accrue to its common shareholders. On the Q2 conference call Fairfax confirmed that it would like to take out its minority partners in its two insurance businesses. They will likely to this in two steps: Allied World later this year (my best guess) and Odyssey in 2026 (or perhaps 2027). The timing will likely be determined by the opportunity set that exists in financial markets in general. If a better capital allocation opportunity comes along, perhaps they will delay taking out minority partners. Because of the call option feature (put in place when the deals were initially struck), Fairfax is able to buy out the minority partners at a very favourable price. As a result, these transactions are high certainty, solid return uses of capital for Fairfax. Taking out minority partners will be a way for Fairfax to grow its bottom line (the part that accrues to its common shareholders) even if the hard market slows further in the coming years. Brilliant planning and execution on the part of Fairfax. 6.) Economic results are much better than accounting results Excess of fair value over carrying value for associate and consolidated holdings increased from $1.4 billion to $2.4 billion, or $111/FFH share (pre-tax). The increase in the quarter was $1 billion, or $46/share pre-tax. This amount is not captured in Fairfax’s reported results (EPS, BV or ROE). This puts the economic value created by Fairfax in Q2 at about $97 share (EPS of $62 plus excess of FV over CV of $35). 7.) Fairfax is exceptionally well positioned today With $3 billion in cash to the holding company, Fairfax is all cashed up. The insurance subs are also overcapitalized (by about $3 billion) - with the hard market slowing, this is another chunk of money that could be sent as a dividend to Fairfax to be redeployed elsewhere. Fairfax is also generating about $1 billion in earnings each quarter. Fairfax has built an earnings juggernaut. Importantly, it is just getting started. Compounding is just starting to kick in… This is resulting in exponential growth. This is very hard for investors to grasp (humans think linearly). This will likely cause investors to underestimate future earnings - and that is what we have seen in each of the past 4 years (like a dog chasing its tail, earnings estimates for Fairfax have consistently been too low and subsequently keep getting revised higher). Fairfax has spent the last 39 years building out its investment management business. It has an amazing range of internal capabilities. This will allow the company to be very nimble and opportunistic moving forward. At the same time, Fairfax has developed a large number of relationships with external capital allocators. Fairfax is viewed as being trustworthy and desirable partner. This is resulting in deal flow - Fairfax’s phone is ringing. Volatility is back. Interest rates have normalized. The macro environment is highly uncertain (tariffs being just one factor). Volatility is a wonderful thing for a value investor like Fairfax - it gives them the opportunity to deploy capital at very attractive rates of return. And Fairfax is on a ‘hot streak’ (a reference to Stanley Druckenmiller). For the past 5 years the team at Fairfax has been executing exceptionally well. ‘They are seeing the ball really well…’

I went on a podcast and spoke mostly about Fairfax. https://t.co/x7v5g2OvGf

This is one of my favorite things to rant about so let me apologize in advance. This isn't a comment about Brett Horn in particular - I don't know him, and maybe he's great. But what I strongly recommend is to look to the broker analysts as a gauge of popular sentiment (if even that) or to understand how brokers drum up business. Nothing more. It is not a coincidence that companies reliant on capital raising tend to get the widest coverage and the best ratings. But since the ostensible separation of research from investment banking (and the removal of skin in the game - analysts ability to actually buy stocks in their coverage universe - in the name of removing conflicts of interest), the job is basically a glorified sales job for trading volumes. And many of them, if they do get a real nugget of information or have an actual insight, share it behind closed doors with whichever client trades the most through their bank. In other words... I wouldn't think that hard about it. The analyst incentive is to not stand out in a bad way and keep making ~$1-2mm/year to keep their kids in fancy schools. Even if one is actually bearish, he/she almost certainly won't stick his/her neck out and risk embarrassment and losing that cushy gig. Sorry, I've done that job as a bright eyed and bushy tailed junior analyst and unfortunately saw how the sausage is made, so maybe I'm too cynical now. Maybe the general takeaway is to keep your expectations low and allow yourself be pleasantly surprised, but the clear and simple fact is that @Viking and others with real insight and skin in the game do a 10x better job than any broker analyst. Maybe this wasn't the case in Lee Cooperman's days at GS (though it was probably even sketchier then) but it is now. At the bare minimum, the pay and prestige aren't what they used to be. The real talent is elsewhere. Expect the sell side estimates to keep climbing higher as Fairfax executes.

I once saw a cheers-less post. Gregmal was being disciplined over in the Disney thread…

@newtovalue you are welcome. Nice to hear that others find value in some of the posts. I use writing as a way to get my thoughts in order. And i love it when people take the other side as i spend a fair bit of time trying to figure out why i am wrong. I think my track record is pretty decent figuring out the earnings part of the equation. I am pretty terrible at figuring out the multiple expansion part of the equation (i tend to sell my big positions too early).

The key is a management team that takes advantage of the opportunity. Fortunately for us, unlike a lot of management teams, Prem, won’t take the company private and keep the opportunity for themselves which is a big risk in this market structure. Please see KW.

https://www.sedarplus.ca/csa-party/records/document.html?id=9110d1b9853338bf296dd4d6977cb4a0b7b006301ac7e35a931836ed5cfa3da1 Interesting investment in the commodities/cleantech royalty space, one of the directors is the FNV founder

He's not spewing terrorism...he's trying to provide a perspective from the Iranian side...the Iranian people. Contrary to popular sentiment, the world doesn't revolve around the U.S...most people are not the U.S.' enemy...like fucking Canada or NATO! Yet, there is this growing hostility to U.S. allies, let alone actual enemies! There are extremist groups and leaders, who illegally control sovereign states or have access to resources, that target Western society or other groups. Most people in Iran have no interest in their current regime, let alone war...they just want a happy life! Ourkid8 has to watch it with the "Zionist" shit, but that's emotionally charged discharge similar to the Muslim's only believe in "jihad" or "fatwa" sentiment! Doesn't anyone on here actually have both Jewish and Muslim close friends? Am the only fucking one? What about Chinese, Vietnamese, Black, Punjabi, Greek, Hispanic, Filipino, Italian, French, German, English, Australian, Kiwi, etc? Do you guys all just hang around your own clique or ethnic group? I not only have close friends from each of those groups, I have in-laws, nieces, nephews, etc who are half of one or the other! My family is like the fucking United Nations! People are people...most are the same everywhere around the world. They are proud of their culture and heritage, no matter how barbaric or uncouth others may perceive them to be. Debate is a good thing...but making it personal is not appropriate. Everyone should keep it to just debating! Cheers!

The (Great Canadian) Globe and Mail thinks Fairfax India is bubble of hot air out of Fairfax, they are calling it "Airfax India". Check it out - https://www.theglobeandmail.com/investing/markets/stocks/FFXDF/profile/

Outstanding year. Best in company's history. Reported diluted EPS was a strong $214 per share. The number that matters much more - economic EPS - was $269 per share ($214 + $55, from change in excess of FV over CV). BVPS is now $1,260. Q1 is shaping up to be a strong start to 2026: $350 million gain from pending sale of Eurolife's life insurance business in Greece Equities are up ~$1.3B (as of Feb 18) 'Normal' (solid) quarter for insurance

My pick is oils sands producer GFR.TO GFR.N. WEF III controls 71%, FFH owns 77.5% of WEF III. Their cost base is just over C$8. Buying the public shares allows minority investors to sidecar for free and at a ~20% discount. Fairfax India shareholders might appreciate riding on FFH’s dime for a change. The company completed a rights issue last week which has the effect of clearing out the weakest hands. The oil price is low and GFR trades at a big discount to peers including sister company SCR so any strength in oil prices is likely to lead to inflows. SCR also completed its C$2.1b dividend/distribution which is likely to hit accounts of shareholders next week (mine hit Christmas Eve after the close) who may also decide to pick up GFR shares. GFR’s entire float cap is C$350m. The company used the rights issue to pay off expensive debt with restrictive covenants. It’s going to outspend cash flow next year to grow production as 95% of its cost base is fixed. A production increase of 25%+ will have a dramatic increase in cash flow given the operating leverage. To me the best case scenario is that the shares quickly rerate and they use the paper to consolidate the region where a few private oil sands companies may be open to all stock deals. These deals will probably be accretive and increase the float enough to get into a few benchmarks which should further help with multiple expansion. Fairfax India could also have a great year if they are able to buy IDBI in a creative way and/or if they are able to IPO Anchorage, a holding company which owns part of BIAL.

Nice to be in good company. I added some FFH yesterday. On top of all of the positives that Viking listed, I expect reserve releases over the next few years will help the combined ratio beat expectations. This started last year and my theory is that releases will ramp as premium growth 4 years ago was a lot faster than it is now. I also like that Fairfax is built to buy the dip if there is a broader market sell off.

Fairfax’s stock did terribly from 2010 to 2020 for one big reason: the equity hedges. The short positions were a second smaller factor. Everything after this pales in comparison - I.E. excluding these two factors, Fairfax’s performance would have likely been ok (including lower interest income from how defensive they were with the duration of their fixed income portfolio beginning at the end of 2016). Fairfax booked about $250 million in realized gains when they sold off their corporate bond portfolio in 2021 (at a yield of 1%). And in 2002/03, Fairfax avoided billions in losses in their fixed income portfolio because of how defensive they were positioned. And because they were so short duration, in 2022/23 the earn through from much higher rates (much higher interest income) was very quick. When you add up all the puts and takes, Fairfax likely did very well with the total return they earned on their fixed income portfolio from late 2016 to 2023.

Fairfax's Q2, 2025 earnings results are in... diluted EPS came in at $61.61/share. I would have to give the 'mob' at Corner of Berkshire and Fairfax a solid A- for their collective forecast (I am ignoring the +$100 votes because I think some of these included excess of FV over CV). Those who voted '$50 to $59' were super close. And those who voted '$60 to $69' hit the bulls-eye. Overall, it looks to me like this crowd is not mad... actually pretty rational. Well done! And thanks for participating and commenting.

I see we hit $2400cdn this morning. The gains on the TRS are going to look great for this qtr. Sing Re (Fairfax Asia) is now licensed to sell reinsurance in India. I guess the regulator had no concerns with Fairfax owning both Go Digit and Sing Re? https://www.lifeinsuranceinternational.com/news/sing-re-reinsurance-licence-india/ The regulatory approval enables the company to establish an IFSC Insurance Office (IIO) in Gujarat International Finance Tec-City (GIFT City). The move authorises Sing Re to conduct property & casualty (P&C) reinsurance as a Category – 2 reinsurer within the Order of Preference framework. The new IIO is expected to facilitate Sing Re’s access to the Indian reinsurance market.

Fairfax's equity portfolio continues to perform very well in QTD-Q2. The equities I track are up $1.6 billion or $73 per Fairfax share (pre-tax). The mark-to-market increase is about $700m or $32 per Fairfax share. This doesn't include mark-to-market gains from Digit (perhaps another $150 million?). Currency is a tailwind.

Like Quincy Lee (Ancient Art/ Teton Capital) https://www.valueinvestorsclub.com/idea/Eurobank/7301771925 "In the two years since my last Eurobank writeup, the stock has doubled while the Nasdaq is down 8%. The same thing will probably happen again the next two years to be quite honest. Probably none of you bought it, and probably won’t this time either. Anyway, I still like it today and haven’t sold a single share."

Four Nations USA vs Canada on right now. Probably some of best hockey you’ll ever see.

I first bought FFH in 1993-94 at about $40 and sold at about $400 around 1998. Got back in around 2002 at about $165 and still own most of those shares.

Just emailed you, thank you so much and very thoughtful of you.

First shares purchased in 2007 @ $217. Still have them.

FFH bought 1% back Dec 31, 2024 ($564,186,805.95)

Well, days like Friday just don't come along often (if ever) and I have to admit that I am still somewhat in shock. I am just a little guy who doesn't profess to really know much stocks and essentially I just buy a few and rarely sell. My portfolio has just 19 stocks and Fairfax represents slightly over 50% of my holdings so a jump of 9% yesterday certainly made for a very good day. But my third largest holding after Fairfax and Royal Bank is Aecon Construction (ARE). Yesterday Aecon jumped 18.7%. Further contributing to a great day, were five of my other stocks that each gained in excess of 2% on a day when when the Toronto Stock Exchange was up less than half of one percent. So with a lot of good luck and much help from this board through the years, (Thank you all!!), I am up 46.25% so far in 2024. Fairfax is still looking pretty good and I have yet to sell a share since I made my initial purchase in 2007 at around $215. (Yes capital gains is going to kill me.) But what I don't understand is seeing board members share their portfolios here and notice some where Fairfax is not listed among their holdings. I mean not only does the name "Fairfax' appear in the very title of the board, but COBF must contain the most detailed and thorough examination of any company listed on the TSX. PS. In 2006 I had never bought a stock. But in looking for an investment, I stumbled on one of the predecessors of this board set up by Sanjeev. Followed it daily for about a year and by late 2007 jumped into Fairfax with both feet, so I owe a big, big Thank You to Sanjeev and fellow members here.

For me, one very interesting comment was that even if CAT 4 hit Tampa directly, Fairfax would still have an underwriting profit for the year. Another was that interest and dividend income are running at $2.5bn per annum, vs $2.2bn previously stated.

Just did a sports weekend trifecta! Flew with my brother and cousin-in-law to San Francisco and caught 3 games: Lakers versus Golden State...while Lebron and Steph were there, they didn't play...last preseason game. Chiefs versus 49'ers...fantastic game...the pomp, pageantry and noise at an NFL game is unparalleled! San Jose versus the Colorado Avalanche...got to see McKinnon and Cale Makar live. Cheers!

A couple of thoughts: (1) Brian Bradstreet you absolute legend. (2) Did any of their competitors reach for yield? This may be the underpinning of a continuation of the hard market regardless of the cats. Taken together it must be a very high probability, even for the worst possible reasons.

I am assuming the CEO owned the company? If not, contacting majority shareholders would do the trick here. If it is, well he's just stealing from himself so...

Alright, I know most of you guys are probably way too polite to point this out but I’m not, so here goes.... I am sure that some here noticed a sudden influx of new posters on this board immediately after Carson Block came out with his ill-informed garbage about Fairfax. Seemed like these new posters just couldn’t restrain themselves in pointing out that Muddy Waters / Carson Block had confirmed and exposed their ‘suspicions’ that obviously there was something shifty about Fairfax. Carson Block was beyond reproach and a force to be reckoned with. Some suggested that the $160 share price drop was only just the beginning. One even suggested he wanted nothing to do with FFH as the price drop had a ways to go yet. Well, if their appearance was driven by jealousy from not buying FFH sooner, it seems their error was compounded by not taking advantage of that substantial and very temporary dip. Unfortunately, as Fairfax once again set new highs, the rest of us will just have to bite the bullet and put up with the fact that ... well ... we will have to pay more income tax on our Fairfax profits. Meanwhile Mr. Block's insights remain ... let's say, Muddy.

I think it is all about Mag7 and the rest. NO-LANDING: Mag 7 will do badly and the rest will do well (except for interest rate sensitive sectors e.g. financials). S&P 500 will probably go sideways. SOFT-LANDING: everything will do well with Mag7 probably leading the pack. S&P 500 might go up 10-20% or something. HARD-LANDING: everything will do badly with Mag7 outperforming as its earnings are more resilient than more cyclical sectors and lower interest rates are very bullish for long duration stocks. And so long as AI hype continues investors will probably look through any cyclical weakness in Mag7 earnings. S&P 500 might go down 10-20% or something. Possibly more if something majorly breaks. But I think that the Fed put will limit the damage. What I have observed is that since COVID investors have been treating Mag7 as a safe haven. And because growth has been scarce and Mag7 are the only companies growing their earnings it is understandable investors are willing to pay a big premium for their earnings. The wild card is AI. If it becomes clear that a wave of lawsuits and regulation are going to stall progress then that could dampen enthusiasm for Mag7. Tech earnings expectations are pretty ambitious with AI presumably expected to contribute and if it does then we could be in for a mid 90s melt up and an even more two tiered market.

Kyoto’s amazing, my favourite place to visit in the world. If you’re into food, try to find a kaiseki restaurant in Kyoto. It’s a real experience and Kyoto takes it to the next level. You might need to have your hotel book since most are reservations only. https://en.m.wikipedia.org/wiki/Kaiseki Renting a kimono for a day is kind of fun given the historical backdrop. All the Japanese gardens are incredible. The Philosopher’s Walk is a nice less touristy area to go for a walk. There’s an incredible robata (梨門邸) that we accidentally wandered into for lunch that I still reminisce about. https://www.japan-guide.com/e/e3906.html

Trade war getting serious - Cognac. They cleverly target French goods since French politicians were behind the EU antitrust/ dumping claim for Chinese EV sales in Europe. https://www.reuters.com/world/china/china-launches-anti-dumping-investigation-brandy-imported-european-union-2024-01-05/ Porsche/ LVMH etc also have a lot to lose here.

Cramers done better than the recession bros this year. So theres that.

Found it. Morningstar-MKL9.23.pdf

I watch sometimes WION and it does feel like government propaganda. This is not the case with Al Jazeera, even though Al Jazeera is controlled by Qatari government. On another note, I am also surprised that some people here think it's a good thing that the Indian government would sent out kill squads to Canadian citizens in Canada because they are accused of terrorism in India. Personally, I would be distraught if the German government sent out a hit men to Canada to kill a Canadian citizen of German origin (or even German citizen). Such a government should be fired in my opinion, doesn't even matter if the accusation is true or not.

https://www.bloomberg.com/news/articles/2023-08-23/china-real-estate-market-crisis-is-another-mess-for-xi-jinping?srnd=premium-europe Three years ago, China cracked down on a booming real estate sector to reduce risk and make homes more affordable—part of President Xi Jinping’s “common prosperity” drive. Beijing may have gone too far, it now seems. Country Garden Holdings Co., a developer that was once a pillar of the industry, is on the verge of default, suggesting no company is too big to fail. There are signs the situation is spiraling, too. More developers are on the brink, home prices are collapsing in smaller cities, and fears of contagion have spread to the nation’s $60 trillion financial system. When shadow bank Zhongrong International Trust Co. missed payments on dozens of high-yield investment products this month, investors protested outside its headquarters in the Chinese capital. “Property booms and busts are typically extreme but especially in China’s case,” says George Magnus, author of Red Flags: Why Xi’s China Is in Jeopardy. “The sector is so big in relation to the economy and so significant in terms of household savings and confidence.” ... While the property woes have spread to China’s giant commercial banks—the amount of soured real estate loans at the 10 biggest lenders will likely soar to $120 billion next year assuming the rate of nonperforming loans triples from 2022, according to Bloomberg Intelligence—the bigger concern is falling home prices. Official statistics show a steady drip of monthly declines of less than 1%; reports on the ground from agents show drops of 15% or more in some areas over the last two years. Even though it helps Beijing’s affordability push, the dropping home values have shattered consumer confidence. After years of price gains, Chinese consumers had come to see real estate as a can’t-miss investment, prompting some to buy multiple apartments to profit from the rally. For those who borrowed to do so, paying their expensive mortgages will make less and less sense the lower property values go. ... “With luck, and robust policymaking, China might transition to a less real-estate-dependent economy in the coming decade,” says Red Flags author Magnus. “But it could also be a very messy process and entail financial instability and economic and social disruption.”

Agree re the quality. But given the size they are now are growth prospects over the next 5, 10, 20 years that great? And is it reasonable to pay at the low end 30-40x earnings and at the high end 60-70x earnings when interest rates are 5%. Companies are usually judged to be great businesses with the benefit of hindsight and there is no question that they've eaten the world over the last decade and done amazingly well. And a lot of Nifty Fifty businesses remained great businesses but their stock price performance disappointed due to multiple compression and earnings growth that was impressive but reflected their maturity. I would say though they have a lot more durability and resilience than the tech companies of the 90s and consumers and businesses cannot function without them which should still make them very valuable even if they cannot maintain double digit growth rates going forward.

@Luca On the Chubb call yesterday Evan Greenberg sounded pretty confident that 2023 would be another solid year in terms of top line growth (high single digit). This suggests to me that that the hard market is slowing - but we are still in a hard market. What comes next? Looking at history i think it is normal after the hard market to get a couple of sideway years (not hard or soft). And then a soft market. No one really knows… so we take it one quarter at a time.

I used to read ZH and John Mauldins newsletter starting in 2008 or so. They both sound clever, but if you go down these rabbit holes they are digging you end up wasting a lot of time and even worse, probably lose a lot of money just through opportunity cost if you actually start to believe the financial doomsday porn they are writing. In my opinion, it's important to have some basic media hygiene in terms of what you are consuming. While it is probably a good idea to look at some alternative news sources from time to time, but if you start to dig into these fringe newsources there is a good chance you start to convert your thinking into conspiracy mush where Occam's razor has no chance to cut through any more.

@WayWardCloud, From the "no kids" I perceceive it as if you have a siginificant other. Please accept my deepest and sincere sympathy for living a life with 4 rulers, among them 3 owners of you.

Berkshire does have women and minorities on the board, but rather than insult them by treating these highly accomplished individuals as props to generate a checkmark on some diversity grid, the proxy emphasizes that they were selected due to what they bring to the table in terms of experience and ownership. In response to a shareholder proposal that is intended to force Berkshire into the practices of most other large companies, the proxy responds with the following statement: Readers of the biographies covering Mr. Buffett’s life know that he was an advocate for civil rights from the earliest days of the civil rights movement of the 1960s. He has also made numerous comments over the years about the loss to individual businesses and to society as a whole when women are discriminated against in employment markets. None of this seems to matter to politically driven pressure campaigns intended to intimidate businesses to elevate skin color, gender, and sexual orientation over ownership and business acumen when it comes to corporate governance. I am in tears, if only.. if only all companies had this policy, a lot of good people would have their share. DEI recruitment is even worse. I don't know where the world is going, there is now a filter in school admissions and after being admitted there is a filter in employment, this double filtering is nothing but insult. Thank you Berkshire for being the voice of reason in today's world, or whatever it is.

Don't short Warren, the last time someone tried to chisel him for an eighth of a point he took over their entire company. Berkshire's check today was $210,578,888.

I agree and I dont get it either. People talking out of both sides of their mouth and its a waste of time. You hear about impending recessions that the market "just hasnt realized yet" and then in the next breathe complaints that there are no value opportunities because "efficient market theory" has priced everything in. Humans have bias and naturally want to look for confirmation, reading tea leaves to paint a narrative that they either want...or fear. Its much less stressful to play the ball as it lays. Take what is presented. To your point, markets are gonna market. These guys should WANT volatility! Why wouldnt you? I dont understand why someone that wasnt say, 5 years from retirement, WANT another recession, and view it as a once in a decade or more OPPURTUNITY to make some serious money. And honestly if you are close to retirement you should be positioned as such anyway, so even then it shouldnt be catastrophic. The manic Mr Market analogy shouting crazy price offerings. Literally ANY other item goes on ridiculous discount...70" Sony flatscreen TV normally $1500 at the store, you walk buy and they have it on clearance for $100 or a $400 Xbox for $50 because some kid at the store made a mistake with the barcode scanner or read the pricing sheet wrong, nobody would assume the item was junk, they would just quietly fill a cart up and make their way to the checkout line, but when it comes to solid businesses that they have held or are looking to take a position in, they freak out. WHAT $400 XBOX is now worth $50?! I better go home, kick my kid off his game, and throw that thing on Craigslist while I still can!! LOL New BMW on the lot for $5000 anyone? Rolex in the display case for $300? Philosophically I sometimes think of this like Walt Whitmans writings: "Do I contradict myself? Very well then, I contradict myself, I am large, I contain multitudes". He is embracing something seen as a shortcoming (seeming unreliable), into a positive. The idea that a person has to adhere to hard principles all the time , but doesnt acknowledge that principles can change. We want consistency all the time or risk appearing weak or unreliable. Whitman says the person who never contradicts himself doesnt think deeply enough or is too simple minded. Applied to the market. If you are thinking enough, your strategies should change as opportunities present, rather than wishing for (or expecting) slow and steady increases in the market that allow cookie cutter DCF projections, accept, expect, and embrace volatility. Acknowledge that the market doesnt always stick to hard principles and you dont have to either. Continuing with your analogies, the ship is most safe in the harbor, but thats not what ships are made for. Safe space for investors does not present the best opportunity for investors. AND when you buy solid companies, for instance BRK (obviously) and COST, I think of the WB's analogy, to focus most on picking the right person to marry, and then not worry if you paid a little too much for the ring. What a horrible way to live, constantly trying to predict things that are nearly impossible, stress when things are good because something MIGHT happen, stress when those fears become REALITY, stress when things happen that you didnt see coming. Just roll with it.

Powell !! Did someone said Colin Powell. it is a joke folks. No need to get all worked up.