plato1976

good question... I think it really depends on if fairfax 's equity holding will be better than the index ... if it does significantly worse, the fairfax book value can be wiped out - very unlikely though

Hi, Prasad: I agree with you on most points, except the part "China bubble has popped" At least for real estate there, the price surge has accelerated in some major cities, esp. in Beijing, in past few months. The real estate prices in most 2nd tier and 3rd tier cites are still rising (very slowly), or keep flat I don't think the real estate bubble has popped. But anyway, the problem there is so serious that I don't even want to touch anything related to China now. It's not as simple as en economic problem - it's much deeper /Plato1976 I think you'll both be quite disappointed within the next two years. After that, I suspect we will see another long multi-year bull market. We are only at the beginning stages of the deleveraging in Europe and I think the China bubble has finally popped. The best indicator will be to watch home prices through Asia, Australia and Canada. If you start to see them going down, things will slow down everywhere outside of the U.S. North America will not be immune to the Asian flu, as the recovery has been underway here, but headwinds are coming. That's my macroeconomic prognostications for now! ;D Cheers!

He is very bullish on the U.S. I share his bullishness although I feel the market is over-stretched. I think a sensible person should be able to see the strength of the U.S. by now, the system of the society, pro-business pro-innovation, cheap energy, abundant resources and so on and so on The only overhang is the gov debt and esp. the medicare/healthcare issue down the road - a compromise will move out this uncertainty at some point but I expect a very bumpy road ahead and therefore ample entries . could be very wrong. On the other hand, I am NOT bullish on China, at all and I am a Chinese (first gen immigrant), and I have much deeper exp in the Chinese market than in the U.S. market... Sometimes when I watch US Tv program and see so called experts talking about Chinese economy or data from China, I just want to laugh - these guys simply don't know what they are talking about... I sincerely think China not only will have a crash - they NEED a crash - the sooner the better - it's better for China in the long run. I was a fan of Jim Rogers years ago - no longer so - now I think he has obvious holes in his logic. Probably I should buy another house in silicon valley but the housing price already rose a lot and is over the high of 2007 in many regions......

I remember their avg entry is sth like SP at 1200 I guess the Shiller P/E10 is now about 15x where they put on the hedges initially (at around 1030 on the S&P500). Not that it matters much to you given that what really counts is where the markets are today (not where they starting hedging), but just a venture down the hindsight 20/20 road for fun.

They also have Russell2000 short which probably lost more. But it's a little puzzling they lost 1B last year - seems more than I expected. The index was only up sth like 15% last year, so they have a short position in total roughly 6B at the beginning of last year ? Now they have only around 4B equity holding so do they need 6B short to hedge ? seems they over-hedged ?

" slightly better terms" ? I thought the insurance corp still pay his hedge fund the same fee ?

50% in AIG ...... not sure if this includes the warrants ......

40% cash here and if you think ffh is cash then 50%+

Parsad, Do you think the long term impact of high rate is positive for AIG ? On the one hand I feel it's positive for their P&C, but on the other hand I feel they may have long duration bonds in their life insurance business... so I am not sure. Their average duration of bond seems not high - 5/6 years as I remember Thanks! /plato1976

one quick question, say the share count of all stocks in the market didn't change much; so if A is holding less stock and more bond, there must be a B who's holding more stock now So who is the B ?

In fact , I really want to know how to buy some out of the money options of long term GJB or long term GJB interests ; but I don't see how I can buy these things, seems only big players can get them from investment banks

10 yr alpha against SP500 is "only" 0.79% ? maybe the glory is no longer there

well, I think the market just believes the congress will pass sth in a few days (even it's not tonight)... anyway, I picked up some berkshire around 89 Ha! :) Good one! I know we still have quite a few "cheap" stocks around to be had. However, normally people would be worried about debt ceiling, no? It does not even seem to be getting any attention. I do wonder why... Anybody can share their insight why there is this lack of "concerns" about the upcoming debt ceiling fight? Or that is going to be a non-event?

Disclaimer: I was never an FBK shareholder, but as I said, I still feel very bad about that decision, at least I couldn't understand that, and maybe it's b/c of my lack of some financial knowledge. I don't want to treat others in an unfair way even that it benefits myself in the SHORT run. I believe "fair" is part of FFH 's name so I don't understand why that happened

I built a position in Fairfax financial this year. But I do have some concern about Fairfax. Prem and FFH are highly respected for their ethic standards. However, how they can support someone like Tom Ward at SD is a mystery to me; also, I don't feel good about their rejection of a higher takeover offer for Fibrek To be clear, I am a newbie in finance, so I very possibly missed some important points. Someone here can probably educate me on the two issues I raised above. But these are red alerts for me at this time. However, FFH seems very shareholder friendly so far and their investment record is really superb so that I feel comfortable to put 20% of my liquid investment assets into this position now.

I think the reason is just indexer selling with 1&2 as minor additional selling pressure. Other factors are old factors - should have been counted in the price long time ago. but I am confused that today's volumn is still big - shouldn't the index selling finish by Nov 30 ? No idea why - I didn't get ffh shares last week, and though I wouldn't get it at 34x , but happily got it today at this price. Not bad XMAS gift The next level for me to add is $300 - which is roughly 0.8 P/B

why should this increase volumn ? This news seems not material at all

Hi, Mungerville: Could you kindly let us know how to buy "very long term put options on JGBs " ? I was looking for a way to buy currency and long term bond options but didn't find Seems you have to be a very big player to have some customized products for you Thanks!

I suspect that the reason is that not everybody wishes to hold FFH for a decade like you and me. Some people are more active investors and want to pick up a 50-cent dollar and then turn around and sell it for 80-cents in a year or two. People who are able to do that reliably can have a better return than just holding FFH or BRK for lengthy periods. I suspect that people are now looking at FFH as an opportunity to buy very cheap and sell a little bit less cheap sometime during 2013 for a quick 20%. As an observation, back when ORH was still publicly traded, many of us made good money by flipping back and forth between FFH and ORH depending on which looked more attractive. For whatever reason, the relative valuation of the parent and subsidiary would swing perhaps 30% back and forth a couple of times per year so you could play the relative valuation while retaining a long-term exposure to the basic P&C business and to the investing prowess of Prem et al. Too bad we can't do that anymore! SJ Thank you SJ! And yes! I was suspecting the same reason. But, let’s say that FFH is worth 1,5BV (it is worth much more, especially if the ‘Kaboom’ moment Mr. Gundlach talked about is really in our future, but let’s keep it simple!): when people buy FFH at $370, they are buying $1 bill for 68.5 cents; on the other hand, when they buy FFH at $350, they are buying $1 bill for 64.8 cents. Again, not such a dramatic difference! Anyway, it was just a passing thought of mine… by no means an interesting remark! giofranchi Gio, I am afraid the 'Kaboom' moment Mr. Gundlach mentioned doesn't necessarily mean that will benefit FFH If I was reading correctly, he was worrying about sovereign debt explosion and high inflation, will that necessarily lead to market crash ? Or deflation first and then high inflation later ? If the later case, FFH will benefit