obtuse_investor

I am glad you brought this up. I tend to completely agree with you. There is an assumption being made that more time spent investing/researching would increase results, or at least, not harm them. Personally speaking, it is excellent to have something time consuming (like a 9-5 job) that I can simply dedicate my attention to when I don't have anything to do in the market. If I didn't have that "distraction" from the market, I would probably be far more active than not-- there by lowering my rate of return. But maybe this is just me. If and when I run into this high class problem of retiring early, I will make sure I take on time consuming hobbies.

Yes? Wild guess: IBM It isn't often that you find one of Buffett's big four trotting around his purchase price.

If and when Sanjeev decides to move to a new board platform, I'd like him to consider Disocurse (http://www.discourse.org/). This platform seems to address all the issues that were raised in this thread.

I guess I am one of those weirdos who read Privacy Policies... their policy is quite funny! Example: http://www.seclive.com/policies/TOUandPrivacy/

Very nice. Hopefully it is a fremium business model. Until I see them reveal their premium offering I would use their cloud storage with caution.

Hahaa! I had a nice chuckle at the typo. That darn autocorrect. Interesting article-- thanks for posting

Just to be clear, my biggest issue with the approach has been the "equity hedges". I am quite ok with the CPI derivatives because they don't cost much and is reasonable insurance against an economic catastrophe. In fact, it was encouraging to see them consistently increase their strike price for Europe and France. If and when there is deflation expectation in the market, I bet it will show up in Europe first. Europeans (read: Deutschland) have historical reasons to be very averse to money printing, unlike the US. Europe is so terrified of the inflation monster that they are ignoring the deflationary one lurking right behind them.

They've been selling the stocks and reaping the gains as the market went up. Those gains won't disappear if markets correct. Cheers! Based on my understanding, they had to realize hedge losses to keep that ~100% hedge stance. Those gains instantly disappeared.

True-- but if you click the 10y link, you see that they have been about the same. Long term is where it's at.

They didn't hedge it because it wasn't a hedge in the first place-- this was a directional bet. They expected bonds to rise (yields to fall).

USD :)

I am, of course, pleased to see underwriting profits for 2013. I hope this continues into the future. This is foundational for a strong FFH. I am not happy with their hedging strategy, of course. Quite simply, they could have just parked money in cash and lived with <1% yield. Why the urge to be in the market if they see market as highly valued? Why the urge to be buying return swaps and other instruments, when they lead to a negative sum game? If they got into cash in 2010 and missed the rally since then, they would be in the exact same boat as today; i.e. nothing gained and nothing lost. They call these equity "hedges", but they really aren't hedges at all. They were and are directional bets. They just happened to lose the bet. If the market dropped another 50% from 2011 to 2013, they would have been slightly up, but not much. But relative to everyone else, they would have looked brilliant. They could have achieved the same result with far less stress and stayed in cash since 2010. I really hope, at least behind closed doors, Mr Watsa and his team are reflecting on what they did and how they could have done it better. I have a lot of respect for Mr Watsa and his team. I expect them to be introspective and self-critical, if not in public, then in private.

IBM

I have been following them too since they parted ways from fairholme. It is interesting to notice that they diversified their cash position away from USD, into Canadian dollar and the Norwegian kroner-- two of the most overvalued currencies out there. The Canadian dollar, less so now that it has dropped close to 10% in the last couple months. If this wasn't a [bad] macro call, then I don't know what it was.

Church House.http://www.ch-investments.co.uk/ No relation-- I just liked the book. I would consider investing with them if I wasn't managing myself and was based in the UK.

Forgive my ignorance, but can you define "alternative capital" for me (and others like me)?

I wonder what method are Fairfax's CPI derivatives tied to. This would be a worthwhile question to ask at the annual meeting, if not the Q4 conference call. Alas, I can't go this year because I am expecting to be knee deep in diapers. New baby on the way.

Very interesting, Packer. I just went through your spreadsheet. It definitely looks like a good set up. I didn't incorporate taxes, but that would be worthwhile exercise. One thought that went through my head was an approach like this should be made "future proof". The best way to do that is to make it "past proof". I wonder if it would survive 1930-1939 like returns. To paraphrase Munger, "tell me where I will die so that I will never go there".

For the macro market timers among us. at-a-glance-011514.pdf

I have an inkling that if that Vice Chairman title has anyone on it, it will probably be somebody whose name ends with "Spiers". It would only make sense. Cheers! Instead of saying "I have nothing to add to that", she can just say: "yeah, yeah, yeah, yeah, yeah" "yeah, yeah, yeah, yeah, yeah" Haha! I think he meant "Spier"; specifically this Spier:

You could say it but it wouldn't be very true. On a long timeline, luck cancels out. The one still standing must be skilled.

I'd include MKL in that list. MKL is more tax efficient than FFH because they don't write dividend cheques.

What do you mean by that. My take away is two fold. One, the poll is not meaningful without knowing who formerly held FFH and no longer does. Two, if the results are meaningful then a group of value investors is not finding a lot of value in FFh right now, or there are better values elsewhere. Obviously, lots of institutions see value in FFH, since they never have trouble issuing shares, but that is meaningless to me. Thompson- Reuters has lots of shareholders and the stock hasn't budged for 20 years. I was merely making an observation. I realize the unscientific nature of this poll and would never make a decision based solely on it. It is intriguing nonetheless. Agreed that a group of value investors aren't seeing much value in FFH these days-- I consider myself in this camp. Although, it is worth noticing that FFH's track record shows that often value isn't visible until it is evident to everyone. It is obviously too late by then. This is why I haven't sold out of my position and also haven't added to in 2013.

Such bearish attitude against FFH is intriguing... By the way, I am at ~11%.

I simply suggest dollar cost averaging into a low cost index fund on a set date, every quarter, every year. I sometimes even tell them exactly which one. I explain the algorithm to them; and if I notice that they are actually wondering why the algorithm, then I explain to them what it would do. I suspect none of them ever follow through long enough for a host of emotional reasons that all value investors are aware of.