steph

Fairfax is all about trust in the management. So it seems logical to vote 'yes'. The day you are really disappointed, the day you don't belief in this team anymore you just have to sell your shares.

FF Group . 80% is export. Fosun Group is a shareholder.

Fairfax is very attractive as an investment because they are quite different from other insurers/companies. It is a nice company to own in a portfolio because its stock price (and the intrinsic value) will behave in a very different manner than most other holdings of your portfolio. They like to make directional 'bets' and are patient investors. Sometimes it works out, sometime it doesn't. It is therefore very difficult to put a price on FFH today. This is not a Coca-Cola type of investment with steady, predictable cashflows. But they are smart people, with a growing and improving insurance business. Paying 1.25 times book is a very reasonable price for what FFH has to offer.

"It is better to ask your wife for forgiveness than for permission."

Bank of Ireland +/- 700 million USD. My best guess is that total Greek exposure at the end of the 3rd quarter was over 1 billion. Some Indian stocks??

Actually I hadnt realized FFHs investment in Eurobank was that large And of course FFHs exposure to the energy sector will weight on Q4 2014 results If they post a loss for Q4 2014, we will probably see a contraction in the multiple they are selling for today And maybe we will get another chance to buy or to increase our investment in FFH. ;) Gio Yes funny that everybody talks about Blackberry and Resolute but their largest equity position was Eurobank. Bank of Ireland is also still a very important position. I am most curious about their deflation positions. Deflation and deflation expectations have risen sharply in Europe. I really wonder what impact this had on their book.

That would be nice! Greek exposure should cost +/- 5% of book. I can`t really believe that number, what are the big greek positions that result in this? They hold 2.441.440.286 shares of Eurobank which were at 0.312 at the end of september and at 0.187 at the end of the year. So this is down +/- 360 million USD for the quarter. This is their largest position, but they have other positions too. So, maybe not 5% but certainly 4%.

That would be nice! Greek exposure should cost +/- 5% of book.

yes, I also believe book value should be slightly up since the end of 3rd quarter.

Very curious about its book value at the end of the year. Equities down essentially due to large exposure in Greece (Eurobank) and hedges costing money. Bonds should be up. And I hope the CPI hedges will give a nice surprise...

ok. Thank you!

Hi, Is there a way to know how the CPI hedges are doing?

I am long Berkshire, Markel & FFH and believe that they all deserve to be around 1.5 times book considering their business and track record. BRK and MKL are more or less at that level and I just think that FFH should also be around those levels in the long run.

When looking at p/b values for Markel and Berkshire I believe it is time for FFH to go to 1.4 -1.5 times book or between 550 -600 USD. The last quarter confirmed that on the insurance side things are getting better and that on the investment side they are still quite good.

Regarding the 15% target. Just one observation, I would like to have your opinions. If you don't take into account FFH first year book value goes from 23% to 19% per year. And if you don't take into account the 3,4 first years, when FFH was very small, you get close to 15% on average. The first decades were great, but when they started macro investing, even with the incredible gains of 2008&2009, performance has been disappointing. So 15% seems a though target if they don't stop 'macro investing'.

I believe being cheap is great as long as it is a natural way of life for you. But I know people who are cheap and are obsessive about it. I even sometimes wonder if they enjoy life??? It is all a big stress for them. That's why I prefer to concentrate on money that comes in and less on what goes out.

There is a lot of talk about BBY regaring FFH, but Bank of Ireland is their largest position. It is worth 1billion euro or 1.37 billion $! Ytd it is already up an impressive 40%!

+1 Completely agree. I own and I like FFH. We are all in the business of taking 'calculated risks' and being wrong is part of it. And FFH has been completely wrong about the way they hedged their portfolio. I have no problem with that. But they should accept it and stop talking about 'unrealised losses'.

Is there enough liquidity in out of the money puts for a multi billion portfolio?

Funny, I am just rereading "one upon Wall Street" from Peter Lynch and he clearly thinks you should always be invested, there is always something to do. And then he talks about an old saying on Wall Street, which I like a lot : "The bearish argument always sounds more intelligent."

Ok great, BAC. What would be a target price on normalized earnings?

What is your best idea for 2014? Just one stock. I always find it hard to just select one idea, but it is a good exercise. Who wants to get started?

I forgot to add that I didn't buy any banks when they were very cheap! :)

I don't see myself as a good market timer at all. I am more the buy and hold good companies type of investor. But I must say that I thought there were many red flags surrounding the financials in 2007 and sold all of them. The first warning sign was that the financials as a sector had gotten so important in all indexes. Usually from 25% to 40% in just a few years. And when a sector gets this important you know it is very popular/hot. Just look at Japan in 1990 or IT/telecom in 2000. The second warning was that although most financials looked cheap or reasonable on a pe and dividend yield level, they were not because compared to historical figures everything was way too beautiful: roe, bad debts,... Was it luck? Probably a little. But For me it was one of the easier calls of the last years.

congratulations to everybody on this board. These are all very good results! I am very happy with my 20%. But this is for a global fund. International markets have been weaker than the US this year (except Japan). Best US stocks: AIG, Google, Wellpoint, Medtronic, Endurance. Worst = Oracle and then FFH