Estimated Profit

Thanks very much!

Would anybody be able to get me a .pdf of their most recent Report? Thanks in advance all!

As far as underwriting is concerned... when was the last large catastrophe that negatively impacted FFH? What will combined ratios look like when the next happens?

Talking about market fatigue in regards to digesting FFH offerings. FIH.U just did a secondary offering at $11.75. When FIH.U first came out you couldn't buy it on the new issue - it was very hot. Now when they did a secondary at $11.75 it did not sell out at all brokerage firms. Additional clean up offerings at $11.25 had to be made. This will make brokerages hesitate to do bought deals in the future. I am very curious to see how well Fairfax Africa will do. If it will do well or sputter out. Again, coming to market time and again hurts the value of the currency, the reputation of the firm and ultimately the firm's credit ratings.

http://bloom.bg/2j9m35g Hey SD. Listen to the link above from Bloomberg. FFH is the lowest rated of the insurers as per the above reporter. Tapping the markets and using their stock like a currency as much as they do really risks fatigue. The more you use your currency the less value it ends up having. The reputation of the company needs to be of paramount concern. re. FFH Africa As much as we have compared Watsa to Buffett in the past... a major difference in what Buffett has done and what Prem is doing is that Buffett did most of his business in the USA. In the US, Warren knows the business culture, the players, how the rule of law works etc. In India it is possible that one might argue the same for Prem. Seeing Watsa start investment holdcos in Africa looks to me that he is starting to build a stable of Emerging Markets hedge funds. This while he builds his global insurance company. I understand that this gives him access to opportunities not available to others. But by using the Fairfax name he is risking the reputation of the firm should one of these subs and/or holdcos (Emerging Markets Hedge Funds) blow up. In EMs this could well be more the norm than the exception. People who know and love FFH will start to question how much exposure they have to the firm and one day they may come to market and find that the well has run dry. Perhaps these concerns would have been better addressed in this string: http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/identity-crisis/ which to a large part is a conversation on these issues and more with the company. Value2 Yes some hedges are still in place just nothing like before. To take off as much as has been removed shows how much they were "bets" and not "hedges" per se. [Please note that these speculations have worked out before (CDS) but when huge bets don't work we see just how much damage they do. All the while they are being discussed as "hedges" but I digress.]

I am a big Watsa fan but I hate to say it... I'm worried. Fairfax India - I can get that. Prem has a direct relationship with the country. I imagine that through him, his team and past successes, FFH would have a cultural appreciation, reputation, and the connections to be able to do well there. I see him as someone you can trust investing in a country that is ripe with opportunity as well as risk. Nepotism, cronyism and corruption must be rampant there. But if you can navigate the seas there is amazing opportunity. When the IPO was completed for FIH, Prem said on the conference call that he had no intention to dilute the shareholders of FIH with multiple secondary offerings. Now he is raising another 500 million. My biggest concern about this is that it is motivated not by what is best for shareholders, but by the fact that FFH generates huge fees from managing this money. They generate 1.5% of NAV for the investments plus 20% of all profits on the funds NAV greater than 5% per year. This is an incredibly small hurdle. I am looking for 10% - 15% increase in value of NAV minimum. The projected growth rate GDP for India is 7% per year.... the hurdle is less than that. At any rate, surprise surprise, they are selling as many of the shares into the market as possible. Allied World Fairfax's biggest takeover to date. With FFH's capital destroying hedges now being thrown off the books I imagine that Prem is looking to make up for lost time. But as Buffett espouses, invest in what you know. OK. take on leverage, dilute the company further, and expand the size of your company. the above two ventures alone are enough to juice earnings, expand a burgeoning Empire and add to the bottom line of all shareholders going forward. But now Fairfax Africa? Invest in what you know? I mean, as nice as it may sound that Ethiopia and South Africa and a few other countries have real potential there is a minefield of risks with investing in this continent. What real oversight does Prem and his team have in this from Toronto? Now there may well be potential and they are going for it... fine. But what about biting off more than you can chew. Prem looks now to be trying to monetize his reputation as much as possible. Multiple very bad preferred share offerings where he took advantage of investors by issuing as many horrible offerings as he could while there was an appetite for them, dilute, issue more debt, more stock and then raise as much as they can by selling an additional FIH tranche and now Fairfax Africa... In short, I'm afraid he's going away from quality and heading for quantity. Fairfax has really been a cult of Prem Watsa story. There is no way he can oversee all that is going on with the company. How long will it be until one of his subs in the various jurisdictions goes rogue? It just feels like all of this expansion is staring to look willy nilly. I welcome all thoughts. I'm an owner of all things FFH. Bonds, prefs, common, FIH.U... I'm a fan obviously and have been for decades. I'd just like some perspective. Is something rotten in the State of Denmark? :o

Thanks DTE --- Far East --- just might go take in a show... 8)

I was thinking of seeing a show in July at Pine Knob Music Theater (DTE Energy...) which is between Detroit and Flint. I drive a newish German luxury sedan with Ontario plates and I'm a bit nervous parking it in the lot during the show. Am I being paranoid or prudent? any comments would be appreciated.

I had the opportunity to speak with Prem a few weeks ago and I asked him about his thoughts on the credit rating of the holdco and he intimated that it is unlikely that upgrades are pending. He said that in order to justify a strong rating a company would need to have a centralized hierarchical structure when it comes to the running of its insurance businesses. In other words all major decisions would come from the top and be implemented down throughout the company. FFH isn't structured like that. The subs have a fair amount of autonomy when it comes to running their respective businesses and the agencies don't like that. They see it as a risk and not a strength. As a result, all things being equal, i don't believe we should be anticipating an upgrade. That said, if Prem is proven a genius, again, via profits on his portfolio, he may be thought of more like Berkshire, which might bring upgrades, but I wouldn't hold my breath even then.

I get it. If you are a feminist, and your spouse cheats, you must immediately and irrevocably divorce your spouse because feminism is all about who sleeps with whom. Judgement and rational thought are absolutely forbidden to feminists. Feminists should never decide for themselves what sort of life they want to lead. Rather, they have to always follow feminist ideals (as interpreted and dictated by a man) because doing otherwise would be hypocritical. What's more, if you're a feminist, the ideals of feminism must be the most important issue to you, to the exclusion of everything else you might care about. Feminism is everything--compromise and thought are off the table! Got it. Thank you Richard. The line of reasoning that Hillary isn't into woman power because of staying with Bill is ridiculous. Ridiculous as well is the thought that she is a bad example to young women. Who is a better example to young women; Hillary or Donald? Hillary is a damn good example to Women. You can be a Mom, a Wife, a First Lady and a Presidential Candidate. While at the same time being someone who had to deal with marital problems, etc. etc. She certainly is flawed, but compared to Donald??? If Hillary gets elected, it will do more for Feminism than anything since the time Women got the right to vote.

Don't forget many shares are held in accounts where distributions and gains are non taxable. Eg Retirement accounts and pension funds. The math isn't as straightforward as it seems.

Didn't Prem implement the dividend shortly after getting a large loan from RBC to buy more shares for himself? It's his way of earning more money to pay off the loan. Please correct me if I'm wrong. Also, would it be preferable to cut the dividend and have Prem pay himself a la Frank Stronach? I think the divvie is the lesser of two weevils.

Account is not permitted to have more than 20% speculative positions, currently holding 15% SDS, and options are not allowed. Cash and bonds cannot exceed more than 30% which leaves 40% net invested, 5% FFH position puts it down to net 35% invested, looking for a way to hedge this. Investing in a company that has an internal hedge like FFH will mitigate risk somewhat.

Greetings and Salutations, Fairfax is a company that is 90% or so hedged to downside market risk. Does anyone out there know of any other publically traded companies that are also hedged that would be worth a look? I have an account with a mandate to stay invested and am not able to hold as much cash as I would like. Thanks, EP

I don't think there will be much proplem with trigger pulling from this bunch here. I'd appreciate it if anyone can tell me how much leverage is still in the system (margin used by individuals and investment banks etc.). As far as the drop that happened in 08 - 09 a lot of that was from margin calls en masse. If the amount of leverage being used in the markets has been reduced, we may not see the massive precipitous declines like we saw back then. That said, if Banks need to raise capital to support their businesses, you want to have dry powder for the fire sale that has yet to begin. I guess it would be analogous to banks having their assets foreclosed upon by their creditors. I want to have money available to buy their beachfront property at forclosure prices. ;D