steph

"If you look at the psychological characteristics of a “Dangerous Bubble” – they were all present in spades at the peak of the real estate bubble in 2005. It was a “can’t lose” and “gotta be on board” speculative mentality when it came to owning real estate. The same was true with the tech bubble of the late ’90s." I just read this recently (don't remember where) and from all the people I see and meet today, I can tell that we are not even close to this speculative mentality. People are still extremely sceptical of this bull market. Just my impression. Mr.Hussman is a perma-bear. He will probably wait tu turn positive when markets get as cheap as in 1932. Good luck to him! His cost of ommission will be huge.

Duro Felguera is an interesting spanish company to look at. Aggreko Plc has lost 35% from its top. Still not deep value, but a wonderful company with big moat. Worldwide leader in its sector by far. CIR (Bestinver is large shareholder) also still cheap.

some observations about FFH. I own FFH not for their underwriting skills and not even for their equity investments, but mainly for their amazing track record in fixed income, which for an insurer is still the main part of their portfolio. I was happy to see that underwriting is getting somewhat better. FFH has always had a 'special' way of managing their equity portfolio. To me there have been many strange decisions but somehow it is the way they feel at ease managing the equity portion and their track record has been very good. So that's fine for me. On the bond side there is not a lot to do these days, but volatility will come back which is what they are waiting for. Many people on this board seem to think that FFH is defensive because they have hedged their equity positions. I don't agree. If you want an insurer which is not tied to the stockmarket, buy WTM or HCC, but don't buy FFH. FFH is a market neutral hedge fund (at least regarding the equity side). They have mainly hedged with the Russel which is less correlated to their positions. They are not just hedging, they are taking a very active decision, selling what they think is expensive and buying what is cheap. Just look at what happened this quarter... I understand that there are risks and that they are not perfect, I just would probably be more at ease if they could just accept and say that they were completely wrong about their hedging. I would never invest in GLRE. Just look at the management fees they pay Einhorn's hedge fund! This is just a way for Einhorn to have stable capital. Unless you have no problem with 2% and 20% fee structures...

Antwerp, Belgium.

THX!

Does somebody know if FFH is planning to post the slides of their presentation? Are we able able to find them somewhere else? Thx!

Dont Corporate profit margins and Corporate profits as a percent of GDP go hand in hand? Sales in the economy overall do not change dramatically and tax rates have been stable so I would think that they tend to track pretty closely. Vinod I do understand that in the long run corporate profit margins have to revert to the mean, this is economics 101. I however do not agree that corporate profits as a percent of US GDP have to revert to the mean. US companies are exporting much more than before. Many companies do nowadays 50% or more of their business outside of the US. They report these profits in the US, but these have no relation with the US GDP.

Hey Racemize, I completely agree with you. I never dared to say it, but reading 'margin of safety' was a big disappointment for me. I probably expected too much...and I thought it was just another average investment book.

Fairfax seems to attract a lot less of interest on this board. What are the reasons? Better alternatives (BAC, AIG), their equity hedge or just not cheap enough? With the markets where they are and with Blackberry rebounding nicely, Fairfax, not too far from book value, seems like a very good risk-return proposition.

I would buy: USA: BRK/FFH/AIG/ENH/GLW/JNJ/MDT Europe: CIR/Duro Felguera/Bijou Brigitte/Binckbank/Unilever Asia: Hengdeli/Chow Sang Sang/Toyota Industries Have a nice day!

I have held a portfolio tracking the Magic Formula stocks for 5 years. in the end the results were quite similar to the S&P 500, but with huge volatility. Just to give an idea: the first 8 month the underperformance was 16%! So, all in all, I am not convinced. 5 years is statistically significant and although Magic Formula probably outperformed 70% of the time, 2 short periods of significant underperformance made it an average investing strategy.

Thank you Parsad for your confirmation. I was a bit surprised when I called Fairfax and asked them what kind of proof (that I am a shareholder) they needed from me to be able to attend the shareholders meeting. They told me that my ID was good enough to attend the meeting??? I am coming over from Europe, and here you have to be able to identify yourself as a shareholder to be accepted at shareholders' meetings. What is your opinion?

Hi, I am new on this board. Is it still possible to get tickets for the Dinner?