Haryana

Warren Buffett seem to get an easy pass on his mistakes while we scrutinize Prem Watsa too much. Warren wailed and railed on how bad the airlines have been for investors and capitalism for ever. "Buffett's first investment foray into airlines began with USAir preferred stock in 1989. While Berkshire made money on the dividends, Buffett himself would lament the decision for decades, casting aspersions on the low-profit, expensive nature of the industry." https://finance.yahoo.com/news/how-warren-buffetts-airline-stocks-have-performed-since-berkshire-hathaway-sold-them-134849843.html Suddenly one day, we learn that Warren Buffett is putting billions into a bunch of airlines and just as suddenly airlines become a great investment because Warren Buffett is investing in them. "All in all, the four largest airlines in the US, which also happen to be four largest in the world, are in a good place. Which is why all four warrant the investment from the Oracle of Omaha." https://finance.yahoo.com/news/warren-buffetts-10-billion-airline-174600273.html He liked Delta so much that even his own 10% limit rule got broken and then communicated like this: "What I didn't realize was that that purchase had taken us over 10%. I was already in territory I didn't plan to get, so I just decided to buy a whole lot more stock." https://www.gurufocus.com/news/898907/warren-buffett-on-his-10-rule Then, just as suddenly, in the depths of the pandemic, AGM 2020, we learn that Warren Buffett sold all the airlines near their bottom which made those airlines stocks crash even further right after. A year later we learn that the sale of airlines was for the good of airlines themselves, a form of charity for airlines at the expense of shareholder value. A fine moment of Buffett communication? I wonder how much of our Warren Buffett mesmerizing is attributable to make-up team of Betty Quick. Not hating Buffett at all. He is a great teacher by the way, I learnt from him and still learning. However, I would be on guard being brainwashed about anyone or calling them a Prophet or an Oracle!

https://arstechnica.com/tech-policy/2020/09/revisiting-the-spectacular-failure-that-was-the-bill-gates-deposition/ During three days of intense questioning, Gates often feigned ignorance of his own company’s policies and actions. He parsed everyday words or phrases such as “concern,” “support,” and “piss on.” Gates seemed to use the strategy to evade tough questions about whether his company abused its entrenched Windows franchise to kill off emerging competitors, such as Navigator and Java. To the surprise of him and his many attorneys and image handlers, Gates came off as argumentative, petty, and someone badly losing ground to a more formidable rival.

ChatGPT Founder CEO to fund startups in India. Talking about his plan for India, Altman said that the first thing he will do in India is to fund startups. “We were always amazed and quite grateful for the quality of Indian startups,” he said, adding that he had met some startups in India. Given India’s strong IT industry and a large set of data, AI-based utilities can leverage huge potential in the country. However, AI is still in its early stages. https://theprint.in/economy/openai-chief-sam-altman-meets-pm-modi-discusses-global-regulation-for-ai/1619858/

Buffett has disclosed multiple times that he is without any defined processes or checklists for his investment decisions. Prem might be the same to some extent. When a person is working directly from the private confines of their brain and you ask them if any of those processes had changed, that might sound insulting to the person because you are actually talking about their brain. In other words, it could be asking if someone had their head fixed after losing big on the previous bets. In terms of real changes at the corporate office after lackluster stock performance, there actually was delegation of some investment power to other executives. With regards to your question going unanswered, that is nothing to be taken personally because this appears to happen with every other question. Some people insist and stick to their question and rephrase it or emphasize what their question was. Certainly, I would also dislike if that happens to my question. In comparison, Buffett also does that and in this year meeting Charlie at one point had pointed out how Buffett had likely evaded a question.

Also found this there (notice the continued growth in Cargo through the pandemic):

Buffett was also exposed to public office and politics at an early age while he campaigned for his politician father. His father was also into investment business in addition to being a senator. He has perhaps got that in his blood. Both the investment business and politics are fields that are fundamentally based on selling and communication. So, that is where Buffett is coming from. He knows the value, methods and temperament for appeasing the public. Prem Watsa may talk just as good as Bill Gates or some other tech CEOs and insurance is becoming more and more a technology business. However, you get the benefit of a diversified and decentralized structure with Fairfax that makes them immune to risks of owning an individual stock in place of a market index.

Just like beauty is in the eye of the beholder, communication could be in the ear of the listener. From my point of sound, that is what I expected him to say in full humble disclosure which I find impressive and inspirational. I speculate what happened is that they had closed most of the positions but the loss on one position might be so big that they would think of recovering that next year. However, they displayed great discipline by finally closing that as well next year even at a massive loss. I understand his explanation about the position being from the previously existing ones, instead of a new one. Maybe his communication is bit too nerdy for people. He was an engineer first, after all. Unlike, Buffett who was into businesses and stocks from the very beginning. Even Bill Gates had a hard time communicating when accused of anti-competition practices and he was world #1, instead of world #10. Personally, I find the communication of Buffett to be terrible. He makes too many loops and detours of thoughts with volatile word speed, I cannot make out anything.

Adding two more points to the list for those who disagree with the first two: 01. Chairman & CEO paid only CA$600k without bonus or stock incentive = Exceptional. 02. Chairman & CEO personally bought ~US$150 million in company stock = Exceptional.

Fairfax is a company that is run with daily effort for perpetual survival. As an insurance company they work on that survivability on a daily basis. They sacrificed short term gain for long-term survival by market shorts. They have been running strong and getting better for the last 38 years. Chairman who controls voting has told that company will never be sold. Now, I am very afraid and want a great margin of safety. So, I assume that they survive only for another 38 years. Also, they stop growing from here and make only $120/year. Using 3% as historic long-term market interest rate or cost of borrowing: Present Value = (discount @3% $120/year for 38 years) = $2700.

That is what a lot of people were saying about Warren Buffett when babbled on and on during his solo pandemic AGM. His stock was crashing and he sold all airlines at bottom.

Adani is also recovering from American short attack. This $100 billion AUM guy is bullish on Adani - https://news.yahoo.com/gqg-jain-bets-adani-group-140000198.html

I appreciate your long posts very much for their originality, rationality and freshness of outlook including different paradigms. In terms of concentration, I recently increased my FFH by 50% of existing at CAD ~960 and still cost basis is low due to buys in pandemic.

The relative returns look even better when using US FRFHF but the max data here is May 2000.

I often do this chart on Morningstar which is to compare the long term growth (incl. div.) of Fairfax with Berkshire and SP500. Currently, Fairfax is just edging past the Berkshire. The starting date is Jan95 because that is the maximum earliest data they have on Fairfax.

Thanks for that chart, they kept a relatively high fair price during the pandemic crash. Maybe our internal evaluation of intrinsic value is even lower than that of Morningstar. Many of the posters here have disclosed their cost basis to be much lower than $730-790. What is the point of pumping the prospects if we refusing to buy stock at current price?

With regards to last 9 years, this is a well-made video on infrastructure developments -

Thank you for the updated report. He seem overly academic and conservative. I will keep my cost basis below his estimate (CA$790).

Beyond the numbers, a deeper look inside BIAL.

https://www.morningstar.com/stocks/fairfax-earnings-both-sides-business-show-strength "Fairfax FFH reported a strong first quarter, with attractive results on both the underwriting and investment sides of the business. As a result, book value per share, adjusted for dividends, increased 7% from the year-end figure. However, we see nothing to alter our long-term view, and will maintain our CAD 730 per share fair value estimate for the no-moat company."

My original two cent with the Blackberry and hedging is that management looks capable of surviving exceptionally catastrophic storms. (let there be pun)

An entertaining video on the economy of India's Capital.

Quoting from that detailed post by Viking: Q1 2020 Conference Call Prem: "They are one year swaps and we've historically been able to extend it for as long as we like." ————— Amounts recorded in net realized gains (losses) include net gains (losses) on total return swaps where the counterparties are required to cash-settle monthly or quarterly the market value movement since the previous reset date notwithstanding that the total return swap positions remain open subsequent to the cash settlement. —————

"Global funds are piling into Indian stocks as a stuttering economic recovery in China has sparked a rotation. Foreign investors have added $5.7 billion worth of India stocks since the start of April, lured by a stable earnings outlook and one of the highest GDP growth rates among the world’s largest economies." https://www.bloomberg.com/news/articles/2023-05-29/record-bound-indian-stocks-reclaim-spot-as-world-s-top-5-market

India Reclaims Spot as World’s Fifth-Largest Stock Market https://www.bloomberg.com/news/articles/2023-05-29/record-bound-indian-stocks-reclaim-spot-as-world-s-top-5-market "A rebound in Adani’s stocks has gathered steam turn after a court-appointed panel said it found no conclusive evidence of stock price manipulation as alleged by US short seller Hindenburg Research."