Mystery Guest

Spoke to him at the AGM, told him I liked the presertation, he proceeded to quiz me on the content. I hope I answered correctly!

Dont Forget that in Canada, money borrowed to invest in Dividend paying Candadian Corporations, is tax deductible so the dividend provides more flexibility for people with substantial shareholdings. ie senior employees and long term shareholders We can assume that Prem borrowed the 150M to buy shares a while ago and the interest he carried to make that trade would have been deductible from his income.

I look at these guys the way I look at Jim Cramer, a paid circus clown, a noisy distraction for the weak hands, they encourage churn and frequent trading. Driving the average Joe to an investment advisor out of frustration, who will calm the waters, claim he has better intel, and earn a commission keeping the customer in some sort of index based portfolio. The solution is self education and temperment. No Offense to anyone on this board working as an investment advisor. If a person has a nervous disposition they should indeed LEAVE IT TO THEIR ADVISOR, and just keep feeding their portfolio.

Yes being decentralized the insurance companies exist as distinct entities in their markets, HWIC allocates overall capital, provides insurance strategy and manages their investment portfolios in their currency and markets as if locally owned but with the worlds smartest value investors club checking in once and a while from Toronto. I think of it like an Octopus it grows by adding tentacles of insurance worldwide each arm applying Fairfax Strategy to its own local market HWIC is the Giant Brain at Head Office which is strictly a value investing operation. I would argue they are taking the Float Investing model to a new place. By using a decentralized team approach they are not reliant on one genius. they are growing the model worldwide, they are able to find Ideas in world markets via their local presence. Peter Furlan was at an event an investor walked up and started asking him a bunch of insurance questions. Peter looked at him and said You know I actually know almost nothing about insurance apparently the investor, now ashen in appearance, was only saved from his distress when Peter told him he had the wrong Peter You are looking for Peter Clarke

Yes it will, This Monday, and the following days, will be one of those

I would argue that we are here, because we are looking to identify those opportunities. The pandemic was justsuch an opportunity, Mr Market ... over reacted and universally devalued all healthy businesses because of a universal headwind. While there would be short term revenue challenges for all businesses the strong would emerge with an opportunity to grow market share in the recovery. Like the AMEX salad oil scandal, or the Wendy's human finger in the bowl of chilli, the crisis had little to do with the underlying value of the business. When WENDY's tanked because of the finger I bought as many shares as I could. A year or so later they spun off Tim Hortens, the real object of my desire ...the result my first multi bagger! I still have a small chunk of RBI shares with a tiny cost basis so I just collect the dividend and wait for the next artificial crisis to decide if I need to actually do something.

@Buffett_Groupie gave me a hard time at the AGM for having sold some shares over the years. In 2020 when the pandemic was tanking all stock, prices I made a defensive decision to sell 30% of all of my holdings and go to cash ... I started rebuying my holdings too early, my goal was to re acquire my holdings at a discount and sit tight for an eventual recovery. At the time it looked like I had played it badly ... however the key goal with any trade/transaction is to continuously increase my share count and let the business do the work. I have experienced a few small 5 and 10 baggers over the years and try not to sell anything unless the fundamental thesis falls apart, or the stock is taken out in a take private/tender offer ... the goal is to not miss out on the ultimate gift of compounding... sitting still is still difficult

I suspect you will do fine ... your long term buy and hold strategy will have you holding gains long after others have dipped back out or reduced their position size. If you have not read it, the book 100 baggers by Christopher Mayer is worth a review. Its a good reassuring bedtime story for those of us who have been long for many many years.

As a Canadian there are also tax advantages to a dividend as it makes interest on funds borrowed to purchase shares of a dividend paying Canadian corporation tax deductible. It also makes it shareholders take a longer term perspective as they do not have to sell a portion of their holdings to fund their living expenses.... I used to look at it your way, but i believe there is wisdom behind the dividend.

Brent Horn and the like Quite Frankly I used to look for these lukewarm receptions to solid reports as a sign my undervalued thesis was correct, and yet I still had more time to add to my position... It has been a profitable directional indicator a few times. Brent Horn is telling me what his audience still wants to hear from him. On the flip side things are about to get very ugly once everyone is singing the praises of the CEO... and there is no dissenting opinion. Why have they not closed out the swaps .... We are not there yet.

We have talked about market timing at the AGM, in reality you have it correct, time in the market is what actually works. However in 2020 I oversized my position thinking this was probably the right time to take that risk. In my calculation the only real risk was another period of lateral price action. the real challenge now is to grow the rest of my portfolio to catch up to Fairfax so I am not forced to sell any! ...working on that

I had been a Shareholder a little over a year when the SAC short attack happened. I recall my first lot of shares were about $120. When the short attack happened I did some investigation and found that Prem had not left town with his church funds... and backed up the truck with my limited means. Since then I have reinvested dividends and bought and added when I would be forced to sell other holdings because of take private or tender offers, the Home Capital turn around comes to mind. Beyond occasionally having to sell a few shares to finance life ie an overdue home reno. I sold 30% of my holdings at the start of the Pandemic and rebought at a discount (tax free accounts) a few months later to capture more shares. If I believe my own math, my POSITION via reinvested, dollar cost averaging and opportunistic buys is 210x my original investment. Of course I will not disclose how tiny that original position was. I am no where near as smart as any of you, but a buddy once said... if you can get him to open his wallet, It creaks. (he thought he was insulting me) I do not trade, those $9.99 TD fees are ridiculous. Recently TD called me and offered to manage my money for .75% fee. They suggested they might be able to help me keep up with the index... my wife had a good chuckle at that one ...

Bravo this philosophy will serve you well in life ! I work in an industry with low renumeration. for many years I followed your perscribed path. I have used the Smith Maneuver as you have described ... and been building a portfolio for years. Fairfax has been a core holding for 20 years. like you, i perceive risk differently, risk only exists where you are not doing the math and worst case plan.(margin of safety) Today I. showed the wife the accounts, she said "that's too much, more than we need" not actually huge, but enough that retirement is covered for all possibilities with a wide margin of safety. What i am saying is have this frugal and analytical bent is more important than picking the right horse . The highest risk is not having a big picture plan.

Does he still have his " CAD 1,180 fair value estimate" from May? if he's selling at that price we are all buying

I am in this camp. Been a shareholder since before the first Short attack. Backed up the truck back then. Then backed up the truck again during the pandemic. I have a substantial core position which I have been told has "CONCENTRATION RISK" so at some point I will have to sell down to a "reduced risk" position. On the other hand after this many years I see the key risk as missing out on this 18 bagger turning into a 100 bagger. I actually don't care about the quoted price, as long as they keep hitting their targets I am ok with Lumpy Results. I will also say I am finally understanding Buffett's claim that the best holding period is FOREVER ... my original shares bought at $100 are now spitting out $200+ in earnings annually. Why would one disturb that unless one were to see other dollars for sale for 50 cents or less. I would also be ok with a 50% reduction in the quoted price, unless Prem actually raided the Church Kitty and left town. Cheers