Hektor

Yeah, this will be interesting

A Taylor Swift tour of China might spark its economy https://www.bloomberg.com/news/articles/2024-02-10/taylor-swift-wows-chinese-women-tired-of-xi-s-conservative-era Taylor Swift Wows Chinese Women Tired of Xi’s Conservative Era

What do you all think about any after effects? e.g. some regulatory body starting a review, diverting FFH time and money.

Whatever the merit of the recent short thesis, I guess it jolted many investors who knew the company’s business well to examine if there is any holes in their understanding.

My suggestion is for FFH to license some of @Viking’s writing and put it on their website for unsophisticated investors

+1

He does say they marked up, but that too is a problem in his view. See "TRSes & Digit — Overview". "We feel it is incontrovertible that Digit is worth far less today than where Fairfax ultimately marked it in 2021, which is why we adjust Fairfax's book value down by $1.1 billion, as of December 2022,for Digit. While the ultimate valuation at which Fairfax marked Digit in 2021 may have been justified at the time (discussed infra), Fairfax, in our view improperly, recognized these gains in a manner inconsistent with valuation changes in Digit by first ignoring a gain that should have been taken before the TRSes were in place, and then spreading a one-time gain out over three quarters.. We believe the inconsistent recognition, rather, was designed to provide more fuel for Fairfax's share price, which as a result of the TRSes, was now feeding directly into Fairfax's net income. Through the TRSes, this fuel had a recursive effect on Fairfax's financials by inflating income as the stock went up, leading to more share price gains and more income."

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+1 That said, Prem built up this firm to where it is today. Also, he beat back a far more vicious attack previously. I trust and the Fairfax team will handle this appropriately.

The situation sounds to me more like the Fannie/Freddie saga in the US.

“So US and European hedge funds piled into the debt, envisioning big payouts to juice their returns.” Did they not hedge?

Interesting point in the YouTube video posted by @Phoenix01. Why were these questions not raised by the short seller during one of the previous conference calls. ?May be they discovered these “issues” after the last conference call Before going public, did the short seller approach Fairfax for a response to these “findings’? What was their response?

I am too

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I hope he doesn't

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+1

Thank you @TwoCitiesCapital

IF the share price tanks, what is the impact on (of) TRS?

Apologies @Hoodlum, Did not see your post before I posted the yahoo finance link.