73 Reds

I'm afraid if it were that easy, it would already have been done. And if you think Western public opinion is bad now, just wait. Then there is the issue that NO OTHER COUNTRY wants these people and you can't force anyone to take them.

Agreed that Israel needs to wipe out all of these threats but precisely how do you propose that they do it?

Is debt the issue or is it something else? I haven't been following this; why would activist investors want to push out American management of an American subsidiary?

This discussion demonstrates some of the issues involved with "value investing". As prior posters have mentioned, proper sizing is important, along with properly discounting management that may have a history of not always acting in the best interests of minority shareholders and/or failing to unlock value. Personally, I own shares of Fairfax India but few enough shares that capital allocation by management or the timing of an IPO is not terribly important. For me, there are times when parking money in these types of investments is superior to riskier investments where there is a significant opportunity for loss and capital impairment.

Yep, but an interesting prospect nonetheless. In any event Ajit certainly advised Buffett of the sale in advance.

The far more interesting question would be if Berkshire was the buyer of Ajit's shares.

Agreed. Not sure why so many folks pay so little attention to the legislative branch when it comes to new tax legislation. Odds are slim to none unless one party sweeps Executive and Legislative branches of Congress. And it really doesn't take the geniuses on this board to recognize that Berkshire is trading at a price above its historical valuation. So what? Ajit Jain sold a block of Berkshire - capital gains taxes and all - that represents a significant portion of his net worth for one or more purposes that he chooses to remain private. Personally, I believe that this does have something to do with estate planning, i.e., ultimately reducing the size of his taxable estate but otherwise, it really doesn't matter and it says nothing whatsoever about the long term prospects of Berkshire going forward.

Back in the day OTC stock commissions were hidden in the "spread". And frankly, its not that different than going to your doctor and then getting a bill for the "uninsured" portion.

I'd take the other side of that bet. He knows Berkshire as well as anyone and unless he is planning on retiring (or even if he is), doesn't believe that Berkshire will not be more valuable in the future.

Selling stock to then give the proceeds away to charities makes no sense. He may want to start giving away his fortune to individuals/non-charities in increments less than the equivalent of an A share. Does he have a large family or non-charitable (501c) causes that he supports? Estate planning = reducing the size of your taxable estate.

But then why sell the stock and pay CG taxes rather than donate the shares directly?

LOL, one would think he'd have no trouble qualifying for a mortgage. Or Berkshire would lend him the money. Do we know what else he owns besides BRK shares? My guess this is part of an estate plan.

"Just waiting around to leave town until after the storm so we can check the properties." Yeah, know that feeling all too well.....

If hedged, one might anticipate a rather dramatic drop in the price of the stock when the TRS is terminated. BTW, you are in New Orleans, right? Stay safe.

The most compelling feature seems to be that Fairfax can put a floor on the price of the stock as long as the price remains cheap and the company has enough cash to continue repurchasing shares. The biggest concern (to me at least) is that Fairfax has the power to terminate the TRS if and when desired for little or no added cost. Also, the identity of the counterparty(ies) would be good to know; unless the TRS is hedged, this has not been a good bet for any such counterparties.

Thanks @TwoCitiesCapital. Can Fairfax terminate this transaction at any time? Otherwise, how long does it last? I would think that if the company anticipates an operational rough patch of any duration it might want to terminate the TRS in advance.

The irony is, the more stock Fairfax repurchases at ever-higher prices, the more the TRS grows in value. I'm not entirely comfortable with that relationship. Also there is at least one counterparty - do we know who is on the other side of this bet and what control, if any they may have? Given that the TRS is now one of Fairfax's largest equity positions, the details are worth knowing. I'd imagine there is a written contract somewhere but is it available to shareholders?

I think it is more reflective of the "haves" and the "have nots". Auto financing appeals to folks who cannot afford to pay cash for a vehicle, the rates tend to be high and the asset depreciates the minute you leave the dealer lot. Home mortgage rates for most current borrowers are historically low whereas it might cost some homeowners more to rent and/or sell and repurchase another residence and the underlying asset continues to appreciate in value.

For us novices when it comes to total return swaps, can someone explain the mechanics, i.e., how often payments are made, whether there are any added costs to Fairfax for maintaining the TRS and whether either party can exit some or all of the TRS at any time and if so at what cost? Also is there an expiration or maturity date?

Absolutely, the investor is responsible for all his/her decisions. But so is management. My point is the same management responsible for the equity hedge/short position is still in charge. Have they learned? We hope so. But that doesn't make folks wrong to ignore their history. Besides, who knows what people who passed on Fairfax did with their investment dollars; there have been other great performers and everyone's criteria for evaluating potential investments is different. You (and I) saw a stock that was too cheap to pass up. But that doesn't make not buying it (i.e. acts of omission) wrong.

@Viking, while I largely agree with you, it is a stretch to suggest that those who did not invest in Fairfax got it wrong. It was, and frankly still is completely rational to look at management responsible for the company's stagnation in the 2010s and compare them to present management. Looks like mostly the same folks. Personally, management is the number one factor in any investment I make. Without management, i.e., decision-making, companies don't generate anything. My choice to invest in Fairfax was due solely to how cheap the price had become; I initially invested IN SPITE OF (not because of) management. Has management done better in the 2020s? Well yes, for many of the reasons of which you so eloquently write. But even so, I'd hardly be willing to give the same management a pass for 10 years of poor decision-making and don't blame prior shareholders at all for taking a pass on this stock. Unlike Berkshire, where for 40+ years I've never questioned management (even while admittedly not understanding many decisions, past and present) Fairfax is, and always will be on a relatively short leash.

Indeed, there are many more world-wide options available today for folks everywhere, which perhaps explains why there are so many South Americans/Asians/Europeans who spend time and buy residences in Florida.

Sergio Mendes - Brasil '66. RIP.

No denying that technology is highly useful and here to stay; but that doesn't make the quality of one's life today any more enjoyable. Personally, there is a lot about the old days that I miss. [Way] back, Florida was an uninhabitable swampland. Like most places, development, combined with desirable natural resources attracted people, including snowbirds from Canada. It wasn't that long ago when there were as many Quebec licenses plates as Florida plates canvassing the streets of Hallandale and Hollywood during the Winter months. But Florida did not get any more expensive than most other nice places on a comparative basis. In fact, until the last 5-10 years, the West Coast of Florida was one of the better Winter-season bargains one could find anywhere and today prices are simply competitive but hardly out of the norm. Canadian snowbirds, like anyone else of course, are free to choose travel destinations but the tourism and real estate industries in Florida have certainly not suffered so evidently there are still many who find it to be an affordable destination while full-time residents continue to move here from other States and countries. So I'd ask whether the issue of Canadians going elsewhere, if true, is a bit more complicated than just cost. You're right about small cars and Europe but of course everything in Europe is smaller (just kidding, kind of). However when you see an RV on the highway here next to you, my guess is the driver is most likely not a 20 or 30 something. On the flip side, the "tiny-home" craze is surely not being kept alive by retirees and even though there are some fine mobile home parks scattered around they are far from the norm.

Hmm, not sure I understand your point but unless constrained by means or health, older folks do all the same things as their younger counterparts, often even more. Health care is indeed a concern as you age, which is why good health care is far more important than the local currency exchange rate if you are able to afford a second home somewhere else. As a US citizen, I don't know any older folks who downsize to a trailer (I'm sure there are some but just saying..), drive smaller vehicles (if anything they drive LARGER vehicles) or haven't adapted to technology when it suits their purposes. Maybe they just don't need all the bells and whistles of the latest i phone. As someone who has lived AND WORKED both in the current age of technology as well as before the PC and cellular phone were hardly even in use, let alone necessary, I can tell you that there were very distinct advantages in both times (albeit for vastly different reasons) and if forced to choose, I would have to admit that work and life in general was probably more enjoyable back then - for reasons that a lot of young folks may probably never understand.