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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.

Wow much kudos to Israel….best I can tell from reports their missile defense systems pretty much bested these attacks . It’s embarrassing for Iran how little by way of damage they were able to inflict here…..and quite foolish in a way to reveal how weak they are relative to Israel’s military capability….hopefully this reality seeps through to the Iranian people so that they might constrain their leaders….it would be insane for that countries leadership to pursue a straight out conflict with Israel….but these sectarian regimes don’t live in anything approximating the real world…they hear god whispering in their ear.

Watsco !!! lol

I think Fairfax will take FIH private. If they took their performance fee in shares, FIH would have to issue those shares increasing the float. FFH took cash to buy shares in the open market and reduce the available share count...I suspect they will continue to take cash going forward. At some point, they will offer to take FIH completely private. FFH is generally happier when they own the whole pizza, rather than a few slices. In the meantime, they will bring in outside investors including some of their friends to fund the purchase of IDBI. Let's see where this $1B goes that they just raised. I suspect they will inject it into FIH, increasing their percent ownership dramatically! Fairfax will be one of the largest foreign institutional investors in India in 20 years...outside of nation-state owned entities. Full disclosure: I own zero FIH. I just let FFH handle the investments in India. I don't have the time, expertise or access they do to know the Indian market nearly as well as they do. Cheers!

Every powerful nation with significant regional muscle likes a buffer zone around it (Monroe Doctrine anybody?) - in fact as I've argued the Russian invasion of Ukraine was principally triggered by its slow slide from a kind of ambiguous buffer zone (providing both NATO countries & Russia comfort)......into something much more akin to a US/EU client state....ya know the type of place where the US Vice President's son is on the board of the largest company there.....and where a current US sitting president is so secure in his leverage over a sitting Ukrainian president (due to aid payments) that he can instruct him on a phone call to investigate a domestic political rival. The great tragedy of Ukraine - is that we in the West put it so firmly 'in play' with our hubristic liberal democratic nation building dreams and superior economic resources vs. Russia....to be clear I'm not advocating for some kind of past Ukraine abandonment strategy where we ceded the country to Putin to become a Russian vassal state....I'm advocating for a Kissenger-esque balance of power strategy for Ukraine in the 2000's one where it was neither fully a Russian nor USA vaseel state......a strategic approach that never put it firmly in the Russian column or the West's column......put more crudely....just because you can afford to pump billions more of aid/economic investment into Ukraine than Russia could in the 2000's to buy their allegiance doesn't mean you should have. We failed at this game in Belarus might I add....seems all our love and attention was spent on Ukraine in this period. That's ancient history - the correct strategy moving forward is to give Ukraine exactly what it needs to regain most of the territory lost with the highest priority placed on the economically important regions which allow Ukraine in the longer term to be somewhat self-sustaining economically and militarily. Some landlocked Oblasts in the East are not hugely important economically and due to Ukrainian populations fleeing there are no longer ethnically hybrid regions...they are simply now edge outs of Russia...pragmatism would suggest that these regions form the basis of concessions to Russia in the future.

Well finally somebody lays it out in a way I can understand it

Hi folks. Longtime lurker, first-time poster here. Just wanted to chime in with a few comments, some general, some related to the topic of this thread. First, I want to echo those who have highlighted @gfp's contributions to this board over the years. Thank you for your thoughtful posts—I hang on every word. (I'm grateful to all the members of this forum, I should add!) Re: the topic of this thread, a comment that Seth Klarman made in an old issue of Outstanding Investors Digest (at least, I think that's where I found it) comes to mind. An interviewer asked Klarman about his hurdle rate, clearly expecting his answer to be some crazy nominal figure like 20%/yr. Klarman emphatically replied that he never targets nominal returns, only risk-adjusted returns. I agree that that's the metric to target. I would hazard that Berkshire has pretty much always (and maybe literally always, but I won't go that far) offered at least plausible risk-adjusted returns, including over the past two decades. As gfp mentioned, the key is not to interrupt quality compounding, and the easiest way to avoid interruption is to own low-risk assets that you know intimately. The stock's decent risk-adjusted prospects hold even today. Compare owning (an admittedly slightly pricey) Berkshire now with owning the S&P 500 at a Shiller P/E of 34 and with after-tax corporate profits/GDP near all-time highs, not to mention a degree of concentration that Ben Inker of GMO argues all but ensures underperformance in megacap stocks. So, has Berkshire "killed it" since 2000? On a risk-adjusted basis, yes, and it has a good shot of continuing to do so for the next ten+ years, especially if its dividend policy holds. My 1991 shares have done 14.46% p.a. for 33 years, my 2011 shares have done 15.04% for 12 years, and my 2020 shares have done 25% for four years. If you bought conservatively over the past three decades, you probably killed it in non-risk-adjusted terms, too. Anyway! Nice to meet all of you. Looking forward to many exchanges on this forum.

Jen Allen giving a MasterClass in Insurance accounting. "If you come for the king - you best not miss"

"We maintain our C$1,600.00 target price based on 1.1x but see potential upside should FFH begin to be valued off of earnings, where the peer group median is ~12x in 2024 vs. FFH currently below 8x."

The reason many of these short sellers play the "accounting" angle is because most folks arent well versed in complex accounting and when they hear someone is an "expert", often just take what the "expert" says in good faith. Which gives some smash and grabber a whole lotta leeway to manufacture rhetoric.

Culture - I mean at its core the US culture is an immigrant culture - one ultimately ever evolving shaped by successive waves of immigration since its founding but underpinned by an idea - all men are created equal, individual liberty etc. etc. The US 'culture', the US nation - the thing that makes it different from every other nation state or kingdom that's practically ever existed ever - is that its based not on tribalism ( which is a derivative of DNA/ethnicity) or based on some religious fanaticism - but rather its based on an idea......the idea of individual liberty, freedom & the pursuit of happiness What makes America dynamic.... is its very lack of reverence for the past...for old cultures, stale ideas...its unwillingness to "keep" a static US culture....America's ability to reinvent itself is its secret sauce I would posit....and that re-invention is no small part driven by the immigrant culture and the drive to reinvent oneself that immigrants have in abundance....to drive forward, to do things differently, boldy, take risks and ignore the old ways of doing things. Tinkering with this uniquencess IMO is akin to Coke suggesting they should tweak the recipe.....immigration is the USA's secret recipe.

Adding to eBay then going to the gym to decide how to size it. Seems unreasonably cheap at 40.

@Luca before we did anything with the kids we talked to them first and got an agreement - any money they get from us is permanent savings. Not for spending - vehicles, vacations, wedding etc. The one exception might be a house. Yes, there is a risk that something could go wrong. But i am not worried (i think i know my kids and their attitude about financial literacy and money habits). As a family, we have been talking about financial topics their whole life (I ran a financial literacy club at their high school). Since we joined the real world (opened their TFSA’s about 18 months ago) the benefits far exceed anything i imagined. The kids are learning in small, slow increments. They are now able to help each other (setting up accounts, how the accounts work etc). Most importantly, they are starting to understand the power of compounding. And i am able to mentor them. Seeing how well everything has been going, we made all three of our kids an offer. After they graduate from university and get their first job we will match (100%) whatever they are able to save in their first year of working. No limit. The goal here is to help in-still the habits of thrift, live below your means and pay yourself first. My oldest graduated from university in 2023. She landed her first ‘big girl’ job. The day after she signed her offer letter she came to me with her savings plan and financial goals for the next year (on her own… not me badgering her). Her plan is to save about $25,000 in her first year. If she can do this, she will have $50,000 (in addition to TFSA and FHSA). To do this she is living at home (i called her a room mate and my wife almost killed me). We rent a big house (4 bedroom, 2,300sq ft with two living levels) so it is not a problem for my wife and me. There is also an estate planning / wealth transfer aspect to all of this. My wife and i have more than we will ever need. Shifting a small amount of our estate into tax free accounts (or index funds that they never sell in taxable accounts) to our kids - when they are very young - in a thoughtful, methodical, educational, habit building way is looking like a really good idea right now. I think each of my 3 kids could have $200,000 each, largely socked away in tax free accounts, by the time they are 25 years old. That is crazy. At the same time, they will understand most of the important building blocks of personal finance. And they will hopefully be developing good financial habits. The early results have been very positive. But it is a work in progress.

On Youtube, there are several very good interviews with Oriana Skylar Mastro explaining the situation and the calculation involved. I would encourage anyone interested in this question to watch these videos. Taiwanese stock market closed near its all time high on Friday, January 12th. Both the TPP and th DPP candidates said that they would follow Ms. Tsai's foreign policy. If KMT were to win the election, the tension probably will be lowered somwhat in the short term. After the election, I doubt the new administraion will do anything. Certainly, anything but starting a war. China probably will rattle its sabre like it always do over the past 70 years. This, of course, can increase the probabilities of an accidental conflict due to increased military activities. But probably not a planned invasion right now. Whether and when an invasion would occur in the next few years is not so related to the election today. It depends more on who win the US election on Nov. 5th, in my opinion.

My fam are mostly vegetarian/pescatarian (I'm not). But Kyotofu Fujino was completely amazing: https://maps.app.goo.gl/hF8b7VPdotVbGPzM7 It's a tofu specialty restaurant that we went for lunch before taking train back to Tokyo. This place had long been recommended to me and now I totally regret not going there during my previous visits there. Not a specific recommendation but we've always found really worthwhile izakaya, yakitori, soba, etc places near our lodging. And as much as the temple/shrine/institution is the attraction, the supporting snack/restaurant/trinket shops surrounding the attraction are worth wandering around in, Arashiyama, Kiyomizu-dera, etc have fun supporting food/shopping areas. And if you don't have time to go to a hot spring, a local bath house is fun too.

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

Shiller PE is 32 and has been 25+ for almost the last entire decade. https://www.multpl.com/shiller-pe I prefer it to using raw PE from TTM because it should smooth out cyclicality. But as I said it doesn't adjust for changes in risk free interest and tax rates (but claims to adjust for inflation). I've always wanted to take the time to try to make those adjustments to see if with those adjustments match market prices to valuation better, but I suspect it won't make a huge difference as the market is a very complex beast that defies description by formula. Momentum is just one example. Let's assume the markets fair value PE should always be 19. But anyone who bought and held in the period from 2009 to 2022 made out like bandits from increasing PE ratios. So even if they now think it is overvalued at a 26 PE, why would they sell and abandon what has worked so well? Who is to say it won't trade well above a 30 PE in a few years? And if the overwhelming sentiment remains to buy dips and hold, no matter what a DCF valuation says, then this pattern can't break until a long bear market. Nine months in 2022 wasn't enough to break the majority belief built over the previous 144 months that dip buying will always pay. Its exactly why Ben Graham told that old joke to describe how powerful momentum is in the market:

US Small Value Energy Utilities Berkshire

Barron's turning extremely long term here : Berkshire now included third year in row!

Canada has been taking a hard turn left under the federal Liberals… entrepreneurs are exploiters… businesses exist to pay taxes. Government regulation of the economy is increasing. Not a model, IMHO, that will surpass the US. The Liberal ‘experiment’ of ramping immigration/foreign workers/international students boosted Canada’s population by over 1 million last year. Total population of Canada is 40 million. The problem? We have a severe shortage of housing. And the economy here is slowing more than in the US (the Canadian mortgage market resembles that of the US in 2006 - and the low teaser rates are now expiring - so higher interest rates are slowing aggregate demand). The severe housing shortage looks like it is becoming THE political issue. It will take +5 years for the supply problem to be addressed. The crazy high number of newcomers is spiking demand. Many Canadians (who are pro immigration) are questioning if this is the right time to be bringing in record numbers of people into the country. We will see. I don’t think any of this affects Fairfax. If Fairfax grows insurance it will likely be outside of Canada. Given Canadas hard move left (and attitude towards businesses), I am not sure it is a great place to invest in today. There will be a Federal election in 2025 - if the Conservatives are elected we would see a shift to the right.

@vinod1 with earnings growth of 5% are you not essentially saying Fairfax’s capital allocation will be poor moving forward? Part of the reason I am so optimistic on Fairfax today is: 1.) the cash flows are front loaded. We know with a fairly high confidence level that they are going to deliver record operating earnings 2023-2025. Buffett teaches us when valuing a company the TIMING of future cash flows is exceptionally important (the sooner the better - the higher the valuation a company should get). 2.) the opportunity set to deploy capital is very good today and i suspect is about to get even better: and Fairfax has +$3.5 billion that will be re-invested each year moving forward in a very good investment environment. Bond yields are at 15 year highs. Small cap stocks are trading at bear market lows. If we get a recession all equities will go on sale (and already cheap equities will get stupid cheap). When it comes to capital allocation today, Fairfax is like a major league hitter getting lobbed softballs. As a result, I will be surprised if earnings growth is 5% per year moving forward. You also bring up ‘one time’ losses. Fairfax’s results will be volatile. Especially if we get a recession (no idea if this happens). My view is volatility is a good thing for Fairfax - smoothing results out over a couple of years. The TRS-FFH purchase in late 2020/early 2021 is a great example. They masterfully took advantage of extreme volatility in Fairfax shares - extreme pessimism. Another great example was selling corporate bonds and shifting to government bonds and shortening duration to 1.2 years in late 2021. They sold at the top of the fixed income bubble. The extension of their fixed income portfolio to 3.1 years in October looks exceptionally well timed. Selling Resolute at the top of the lumber cycle? Brilliant. Selling pet insurance for $1.4 billion…. Nuts. Lots of these decisions are $1 billion decisions… they are ‘needle movers’ for Fairfax and its shareholders. Fairfax investors fear volatility. I think they might have it backwards. Especially given how Fairfax is positioned today (strong balance sheet and record operating earnings). Investors in Fairfax should be praying for volatility. With both insurance and financial markets. Thriving in volatile markets - this looks to me like it is likely a significant competitive advantage for Fairfax today compared to peers.

Investors are in this because they are expecting 15%+ returns. Prem himself mentioned I think they would not be investing in India if they did not think they can make 20% (OK, that is Prem being Prem ). Paying 1.5% + 20% performance over 5%, would seem perfectly reasonable for most of these investors when returns are north of 15%. Realized returns are 8.5%. Worse, these are investors who went to emerging markets seeking higher returns and they find S&P 500 had much higher returns. Now, they feel stupid for paying the performance fee. So they are going to capitalize the costs and discount it. Hence, the discount to BV. I dont think the discount would close unless 1) Fairfax India starts generating 15% annual returns, or 2) Fairfax India vastly outperforms US stocks, even if absolute performance does not reach 15%. Investors would be flocking to these non-US alternatives in that case. Vinod

So Brett does not understand people can learn and grow from their mistakes. I’m talking about Prem as well as Brett himself here. Oh well, it’s his grave…

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.

Our tax dollars aren't going to Wagner, they're going to our politicians and to Ukraine. Why shouldn't it be a problem if these folks end up supporting extremists? The longer this war drags on the more Ukrainians & Russians will die. Why aren't we trying to get Ukraine to negotiate for peace? France brokered a ceasefire between Georgia and Russia after 7 days, saving countless lives, why can't that happen here? Does the West really care about Ukrainians or are we using them to give the finger to Russia? If we cared so much about Ukrainian lives, why don't we send our own troops instead?

It's less timing and more systematic. I sell a small portion of each position at it rises by 10-20% pending it's historical volatility and where it's RSI is at. I've been trimming Fairfax ever since we passed $650 USD. Haven't had much opportunity to repurchase it yet so maybe this one is a bust that doesn't work out. But I trimmed Altius at various points all the way up to $20 USD and have purchased nearly all of those shares back. Have pulled thousands out of the position while retaining similar ownership. Eurobank has been trimmed by ~25% over the last year - I have just successfully bought the tranche of shares I sold for ~0.85/share for ~0.75/share. I have other limit orders out to buy more back if the price keeps falling to rebuild that 25%. I've been systematically trading Whitecap Resources a ton since 2021. There have been probably a have dozen opportunities to sell shares between $10-12 and repurchase them back between $8-9 over the last 18-24 months. I've done this with nearly every position I own or sold covered calls against them with premiums going into fixed income. The name of the game is to compound as quickly and as much as possible. I'm not afraid of stocks - I think my returns will be better in fixed income. I'm motivated by greed- not fear. I'm the same guy who owns sizable portfolio allocations to Bitcoin, was buying Sberbank after the sanctions, and has been sitting on Fannie Mae preferreds for a decade. I'm comfortable with high risk. I'm comfortable with high drawdowns. But only when I feel I'm being compensated for it via the potential upside. Point is, volatility doesn't scare me - I just want to get paid for accepting it. Im buying bonds because they pay well for the the downside potential I expect. Stocks, on average, pay poorly for the downside potential I expect. Outside of a handful of individual equities, I expect bonds to outperform.

I think his task as future Chairman will be to maintain Fairfax’s culture and having grown up in it, he’s probably best suited to do so. Hopefully Prem still has a long tenure and it’s not a role, Ben, will have to takeover any time soon giving him that much more experience when he does.

Fairfax's equity holdings (that I track) are up about $597 million so far in Q3 (9 of 13 weeks = 69%). Shaping up to be another quarter of solid performance. Split by accounting treatment can be seen below. I have attached my Excel file if you want a closer look. Top Movers? All up this quarter: Thomas Cook India = $156 million FFH TRS = $154 million Eurobank = $110 Broad based gains: 6 different equities are up more than $20 million Stelco = ($43) million: the largest decliner Fairfax Sept 1 2023.xlsx

20B @15% = 1T in 28 years.

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.”

Luca, I definitely agree with you on contrarian situation here and big excitement on a micro level/valuations, especially on Prosus/Tencent. But it seems to me that all political/geopolitical/macro situation just continues to go to the wrong direction. And in order to succeed just beeing contrarian is not enought. But I hope things still could change and you will also be right in the end.

Agreed about the S&P, but it's small ($30m), I wonder if they acquired it somehow and haven't gotten rid of it yet. Seems contrary to everything they usually say and do. As for Occidental, at $354m it may be #1 in the 13-F, but it's really small potatoes compared to the huge bond portfolio, the big private companies they own, notably Eurobank and Atlas/Poseidon (each about $2b). Even Thomas Cook is bigger (about $400m), and Mytilineos is about the same size as the Occidental bet. And of course, the dreaded Blackberry is even smaller, fading into obscurity (thankfully!)

I've been thinking a lot about longterm holdings. Besides the advantage of not paying taxes, if you are still in your working life, there is no reason that you have to sell to invest in something else. You just keep investing paycheck to paycheck in whatever is available at the time. Three examples recently got me thinking about this. Buffett talks about Citi Services preferred, which he sold shortly after he bought it, for a small profit and it went on to be a multibagger. He did fine, but if he held onto it, it would've worked out fine too. Munger's mention last year of the oil royalty that he bought for himself for $1,000 in the 1960s and it still pays him $70k a year even decades later. Joel Tillinghast still has the first stock he bought when he was a child (!), which went through several mergers, but currently pays a dividend that is much higher than his original purchase price. And one of his 1000 baggers was Hansen's Natural, which later became Monster Beverage. At times it got pricey, but he just had the patience to sit on it because the company was getting better. If the company isn't in decline, and you have capital available to buy the other things you see, why sell when the compounders are so few and far between? Some of Peter Lynch's best returns came from things like Dunkin Donuts which he held for years, not ones that he sold after a quick pop. Even Phil Fisher's record wouldn't be worthy of talking about if he didn't hold Motorola until the day he died. I can understand dancing in and out if you're going to invest in a cyclical business like energy or shipping, but I definitely think that there is something to deciding which stocks are Tinder dates and which ones are marriage material. If you are getting a deal in a cheap stock, in an industry with bad economics, then it's a trading sardine. But if you managed to get into something with a long runway and in a business with a higher than average return on invested capital, then as Munger said, over time your return should match the returns on the business. If those businesses are rare, then why sell and pay taxes to look for quick hits when these businesses come up so rarely?

I'd Like this if I could.

2023 Invesco Global Sovereign Asset Management Study https://www.fundresearch.de/Invesco-Global-Sovereign-Asset-Management-Study-2023-FINAL.pdf "India exemplifies the attributes sought by sovereign investors. Viewed increasingly positively for its improved business and political stability, favourable demographics, regulatory initiatives, and a friendly environment for sovereign investors, India has now overtaken China as the most attractive Emerging Market for investing in Emerging Market debt"

Other than inputing individual trades into a spread sheet to figure out my rate of return, I didn't know how to see if I was doing better than passive investing and by how much. My brokerage shows you cumulative time weighted returns, which would give me an accurate answer only if I didn't make any additions or withdrawls to the account. So I don't have a good estimate for returns in my taxable account. BUT I just realized that my ROTH IRA hasn't had any additions in a while (I converted some of my traditional IRA to a Roth IRA during the temporary tax cut year, but haven't added since because taxes went back up). So when I used the tool, it's comforting to see that all my efforts aren't producing a result that is worse than passive investing. I have no desire to ever manage money for anyone, and honestly if someone was looking over my shoulder and questioning some of the dumpster dive stocks, I might be tempted to hug the index and underperform just like the pros. But I do think individual investors can play a different game than the pros and part of the positive returns are due to this website. The signal to noise ratio is very good here and reading up on a thread here is part of my process (along with 10-ks, investor presentation, trade mags, interviews with the CEO etc). I definitely make fewer errors by being able to bounce ideas off of smart people here and get their feedback. And talking with people with compounder mindsets is helping me look for more of them and avoid quick pops in commodity shitcos. So thanks to everyone on here for your help. I appreciate the culture of sharing and generosity on here. From July 1, 2020 to July 6, 2023 Showing prior-day close of business data Select to view help about how often this performance data is calculated Cumulative time weighted return 93.99% Select to view help aboutHow is this cumulative time weighted returnvalue calculated? S&P 500 TR View selected benchmark index help 49.23% Select a benchmark indexto compare with your historical performance from the dropdown menu in the layer

“Janet Yellen concerned about Chinas new export controls”….. Think Janet is equally “concerned” about any of the US policy directed towards China or Russia? Even Canadian tariffs? Nah bro. https://www.cnbc.com/2023/07/07/yellen-says-shes-concerned-about-chinas-new-export-controls.html

Fairfax's equity holdings (that I track) finished Q2 up $766 million or about $33/share. mark to market = +$275 million associates = +$364 million consolidated = +$127 million This does not include the $260 million pre-tax gain from the sale of Ambridge which closed in Q2. Including Ambridge, that puts it over $1 billion in gains for the quarter from equities and realized gains. I do not track lots of Fairfax's holdings so the gain in equities is likely a little higher. The rub, of course, will be the bond portfolio. Interest rates spiked in Q2. And we have IFRS 17. So my guess is these two items will result in a sizeable unrealized loss. How much? Not sure; I need to give it more thought. Do others have an estimate? Bottom line, I love that interest rates are motoring higher. Fairfax still has a very short 2.5 year average duration with their fixed income portfolio. I wonder if they are using the current spike in bond yields to move the average duration even further out. ---------- Back to the equity holdings. Below were the biggest movers in Q2: Eurobank +$378 million FFH TRS +$165 million Thomas Cook India +$84 million Stelco -$78 million ---------- I have attached my Excel spreadsheet if board members want a closer look. Fairfax Equity Holdings June 30 2023.xlsx

Luca. By now you should know that whenever West does something stupid (coup d’état, invasions, etc) the next generation in the West usually has a hard time remembering. They “file it” under “ohh that was the Cold War so it was ok” and move on some other fun things. Don’t fight it. There is no use.

check out Lauren Templeton comments on Fairfax culture from 16 min 20 s mark

Excellent news. Digit has become the 26th Life Insurer in India https://irdai.gov.in/document-detail?documentId=3491346

Plugging my nose and adding to csu

Peter Zeihan Uber bearish on China as usual Demographics, poor geostrategic location , Leadership with personality cult etc. I don’t think he quite gets the advantage China has in manufacturing stuff. Mexicos population is not too skilled to take on Chinese manufacturing . They may have different skilled but what China is doing manufacturing electronics like Apples iPhone and many other things is very very complex. It’s not just many workers, these workers are very very skilled at what they are doing and it’s hard to automize (fine motor skills, complexity , tight tolerances. You just can’t hire the same sort of workers anywhere but perhaps in Vietnam or Indonesia (which has Chinese population as well). Anyways, worth listening to, but you need to take some of Zeihans statements with a grain of salt. I do think he gets the broad picture right , after all he is a big picture guy.

Morningstar has a fair value for Fairfax of C$730 = US$537/share. Fairfax shares are trading today at US$714. What can we learn from Morningstar's report on Fairfax? Unfortunately, I think we learn much more about Morningstar from this 'report' than we do about Fairfax. And it does not inspire confidence. If this organization can be so out of touch on Fairfax - is this representative of the quality of rest of their research? ---------- Why am I so bullish on Fairfax? Because I am focussed on the present and the future. Graham (the guy who taught Buffett) teaches us a stock is simply worth the present value of its future cash flows. Yes, the past matters... but what matters much more is the future. The Morningstar report is focussed pretty much solely on the past. 2008. And 2010-2016. And this might generally be ok for most companies. But it does not work for companies where important things have changed. Turnarounds. And lots of important things have changed at Fairfax over the past few years. Things that already had a big, positive impact on earnings in 2021 and 2022. With much more to come 2023, 2024 and 2025. This explains, at least partially, why it takes turnaround type stocks like Fairfax so long to re-rate. It takes years of better/excellent results before analysts and investors get comfortable that things have indeed changed in a sustainable way for the better. Only after the new and improved financial results are embedded in historical results for years does the ‘narrative’ change. This actually makes sense for a company like Fairfax that was so out of favor. ————— What is Morningstar missing in their report? An analysis of Fairfax as it exists today: a company that is earning: 1.) record underwriting profit 2.) record interest and dividend income 3.) record share of profit of associates 4.) solid investment gains While also reducing their share count. They do not provide any detailed forward looking information and estimates. No detail of the important building blocks. No math. In sort, their analysis is exclusively backward looking. And as a result, worse that useless for a company like Fairfax (a turnaround). ---------- Conclusion: Fairfax, as it exists today, is misunderstood. Lots of analysts and investors are stuck in the past. So what is an investor to do? Patience and time. Fairfax needs to deliver results. The narrative will slowly change and reflect the current reality. And Fairfax shareholders should be rewarded handsomely.

Overall Luca I think you are a great poster, but on China you are on a different planet from me.

I think China would be the one in the meat grinder if Taiwan puts up even a mediocre defense. Beach landings are archaic, and honestly I think China is smarter than that. IMO China is probably discussing how they can get Taiwan to WANT to re-unite. How to they make it in Taiwan's best interest to WANT to come back under Chinese umbrella. Brute force wont work here IMO, just like Russia would never be successful in holding Ukraine, just like the US in the middle east, you can come in and turn the place into a pile a rubble, sure, beat them into submission, but then spend the next several decades occupying with military and dealing with uprisings, guerilla tactics etc, just not a reasonable or desirable long term plan if the people dont WANT to be occupied. Also, if you're the smallest kid on the playground and getting picked on by the bully, you dont have to start lifting weights and taking karate classes, you just have to be friends with a kid that is as big or bigger/tougher than the bully. This is more Taiwans strategy I think. They would have support of the US and other neighboring countries. China knows this also and thats why I say the brute force tactic seems unlikely, sure threaten it to keep them on their toes and test defenses but the reality is China would get closer to their goal using sugar rather than salt. If there is any possibility at all. I thought Ray Dalio article was interesting and probably accurate on many points. Both sides dont want war and not in best interests, but both sides unwilling to back down, being spurred on by comments it almost becomes a self=fulfilling prophecy and can itself lead to war. both sides should be spending more effort on avoiding conflict and working together rather than posturing and preparing for what the other could do. the best offense is defense they say, pray for peace, prepare for war and all that, but I also worry that once the snowball takes off down the hill, building along the way (and arguably the snowball is already rolling) it can be very very hard to stop. You make a goo point though as to elements that may be there that havent been taken into consideration, in addition to the Taiwanese resolve to fight, the inverse of that is the Chinese will to fight and suffer tremendous casualties as well as those not fighting, dealing with sanctions etc. Xi wants common prosperity and a strong Chinese economy is how he gets that, is the juice worth the squeeze, is the cost of getting Taiwan back worth setting the avg mainlanders life back a decade, upsetting everything else. Dunno, tough to say. How important is Taiwan. Maybe there is a different way to approach it. China plays the long game, chipping away at the US, positioning themselves to control resources around the world until its in the best interests of Taiwan to WANT to join China, and they remove the teeth from the Lion (US) so that Taiwan doesn't have the big/tough friend on the playground. China is much better playing the long game and has the "advantage" of long term leadership that can implement a plan and spend a decade working it without a los in continuity from changing leadership.

Just completed Everest Base Camp and Island Peak in Nepal. 1000m of vert to get to Island Peak(6160m) was one of the most physically demanding days of my life. So grateful to the Nepalese climbing guides for providing me the opportunity. They are superstars. IMG_5491.dng

@rkbabangyeah thats an interesting thought and IMO makes perfect sense...potential for behaviors/traits to develop and pass along through the generations that are not necessarily a positive contributing to advancement and "selected" to lead and continue...but also not bad enough to be weeded out. Interesting to think about where that "line" might be and maybe those things/traits that arent a hard NO for advancement, but also arent a strong YES will eventually fall off, but maybe it just takes longer to weed out. I dont know if you are familiar with the Russian farm fox experiment, I first read about it in a big article in National Geographic many years ago. The interesting thing to me, and what made me think about and remember this was what you said about insignificant side effects or unintended results that arent a game changer either way...showing up. And thats exactly what has happened with these fox. Breeding based ONLY on level of tameness, and the continuation and encouragement of that trait alone. But other traits that were "insignificant" but shared with current domesticated dogs started showing up. Changes in color of the coat, ears started drooping, tails started curling, craniofacial morphology, the face of the fox started to change to a more juvenile look. -For the last 59 years (2018) a team of Russian geneticists led by Lyudmila Trut have been running one of the most important biology experiments of the 20th, and now 21st, century. The experiment was the brainchild of Trut’s mentor, Dmitri Belyaev, who, in 1959, began an experiment to study the process of domestication -Every generation he and his team would test hundreds of foxes, and the top 10% of the tamest would be selected to parent the next generation. They developed a scale for scoring tameness, and how a fox scored on this scale was the sole criteria for selecting foxes to parent the next generation. -Belyaev knew that many domesticated species share a suite of characteristics including floppy ears, short, curly tails, juvenilized facial and body features, reduced stress hormone levels, mottled fur, and relatively long reproductive seasons. Today this suite of traits is known as the domestication syndrome. Belyaev found this perplexing. Our ancestors had domesticated species for a plethora of reasons—including transportation (e.g., horses), food (e.g., cattle) and protection (e.g., dogs)—yet regardless of what they were selected for, domesticated species, over time, begin to display traits in the domestication syndrome. Why? Belyaev hypothesized that the one thing our ancestors always needed in a species they were domesticating was an animal that interacted prosocially with humans. We can’t have our domesticates-to-be trying to bite our heads off. And so he hypothesized that the early stages of all animal domestication events involved choosing the calmest, most prosocial-toward-human animals: I will refer to this trait as tameness, though that term is used in many different ways in the literature. Belyaev further hypothesized that all of the traits in the domestication syndrome were somehow or another, though he didn’t know how or why, genetically linked to genes associated with tameness. -Belyaev was correct that selection on tameness alone leads to the emergence of traits in the domestication syndrome. In less than a decade, some of the domesticated foxes had floppy ears and curly tails (Fig. 2). Their stress hormone levels by generation 15 were about half the stress hormone (glucocorticoid) levels of wild foxes. Over generations, their adrenal gland became smaller and smaller. Serotonin levels also increased, producing “happier” animals. Over the course of the experiment, researchers also found the domesticated foxes displayed mottled “mutt-like” fur patterns, and they had more juvenilized facial features (shorter, rounder, more dog-like snouts) and body shapes (chunkier, rather than gracile limbs) (Fig. 3). Domesticated foxes like many domesticated animals, have longer reproductive periods than their wild progenitors. Anyway, some of that is basically what I was trying to say regarding horses. And the insignificant traits in the fox could also have similarities in humans. If you understand these basics, the concept that the SAME thing is/has happened to humans over thousands of years, IMO it makes more sense. The article goes into more detail regarding explanation of genetics, brain chemistry if you want to look into it further. I find it really fascinating. https://evolution-outreach.biomedcentral.com/articles/10.1186/s12052-018-0090-x

I think if you believe in God, you may as well believe in Santa Claus. You don't need god for anything - how life started out, to explain the Universe, or the foundation of ethics. Santa Claus is a convenient and comfortable belief for 4 year old and god or religion is convenient and comforting belief for adults. I also think ethics are developed evolutionary both on a biological as well as on a societal level. For example it is human (or mamal) instinct to care for our young, because it makes evolutionary sense to do so. If we would be a species that is programmed (by evolution) to eat the weak younglings to let the strong survive, the ethics of a society that this species develops, would likely indeed condone and reward this practice.