Grenville

For what it's worth, I had a similar question when I was investigating Davita a while back. I called IR and eventually got a call back and answer. Unfortunately, I don't remember their response and didn't write it down in my notes. I would suggest calling them if someone else on the board doesn't respond with the answer.

Question on how to calculate the cost of leverage or similar metric for puts: I know for calls the cost of leverage is solved using: Strike = (common stock price - premium)*(1+leverage %)^(term) For puts, would an equivalent equation be: Strike = (common stock price + premium)*(1+leverage %)^(term)

This was also released today: "FHFA Directs Fannie Mae and Freddie Mac To Delay Guarantee Fee Changes" http://www.fhfa.gov/webfiles/25937/GFeeDelay010814.pdf

Thanks! I was wondering what was driving the prefs today.

$350 million. I agree there is an outstanding risk control question of how big of a position they will take in a given company as a % of FFH's equity and it isn't reassuring that Prem gives a poor seat of the pants answer. With that said, however, there is a large difference between another $500 million in BBRY equity and another $500 million in BBRY debt. Thanks for the cost base in BOI. I agree there is a huge difference between debt and equity. Risk is much less. It's the position size that bothers me.

What's their cost base in BOI?

I just don't get it. They have now invested 1.38bln! Think about the opportunity cost of that money in todays market.

Merry Christmas, Happy Holidays to all board members. 2013 has been an interesting year! Looking forward to 2014. Thank you everyone for all the good discussion, links and posts on the various threads. I'm very grateful for a resource such as this board with quality contributors. Thank you Sanjeev for running the board and holding the annual Fairfax dinner.

Thanks for uploading. I just tried to view it off the Fairholme site and it didn't work for me.

Thanks for posting! It will be interesting to see how Matt Rose's responsibilities evolve.

Does anyone know if the consolidated class action complaint was submitted? The date on the joint status report had the document due 12/3/13. I checked the Perry Capital case Docket Report on Pacer and didn't see a filing.

I believe it was to balance the cash flows they were making on their index shorts and other derivatives. I believe they also are with similar counter parties to somewhat hedge their exposure.

They converted the shares to total return swaps which are reported in the NAIC filings for the insurance subs. See ORH. It makes it harder to follow they're position in those companies.

Have a safe, enjoyable holiday break everyone!

Interesting to see Ackman build 10% positions in both Freddie and Fannie common stock. He was buying heavy at $3 at least in Fannie. http://www.sec.gov/Archives/edgar/data/310522/000119312513443212/d630953dex992.htm http://www.sec.gov/Archives/edgar/data/310522/000119312513443212/0001193125-13-443212-index.htm

I noticed his name too, but I think he is an analyst in NY for the insurance division. See the wording under his name.

Good read. Thanks for posting!

here is the filing with the new breakout of investors: http://www.sec.gov/Archives/edgar/data/915191/000119312513435223/d625754dex4.htm

Agreed. A step in the right direction. Bad actors need to be taken down. I appreciate Prem going after these guys. Capital markets need to be free functioning, they are important to capitalism.

Thanks for posting! I wonder what happened. BAM reduced their stake from $50mln to 10mln and Markel from 100mln to 70mln. Do people think investors in BAM pushed back, wondering why they were investing in BB? It would be interesting to know what drove the change.

Eric, You might find this interesting: http://www.theatlantic.com/technology/archive/2013/11/the-100-000-battery-that-could-help-hotels-save-bundles-of-money/281194/ Battery storage to deal with utility price increases. It is more commercial.

Thanks for posting. Here is the Joint Status Report filed by Perry Capital on 11/6/13. Still reading it, but it does outline a new coordinated schedule. Joint_Status_Report_11-7-13.pdf

OTC trading resumed

I've decided to sell down my stake in Fairfax and I wanted to share with the board members. I've owned Fairfax since 2008 and attended the AGM since 2010. I've also read all the AR's since inception and have a lot of respect for what Prem has built both in terms of companies and people. My issue has been with position sizing with respect to shareholder's equity. I've asked questions related to this at the 2010 AGM and this year at the dinner. Below are my questions and the responses I got from Prem. I went back to my notes to post here. 2010 AGM: "How does FFH decide its max position size for an investment in the common stock portfolio? Is there a general rule based on % of equity? For example when WFC continued to decrease in value to $10, no additional shares were bought. -->Answer from Prem (from my notes): 5 to 10% range at the high end in relation to book value. 2013 Dinner: "At a past AGM you mentioned the max position size for an investment was 5 to 10% at the high end. The position in Blackberry at cost using YE SE was 11.5%. What changed to allow such a large common stock position relative to past guidance?" --> Answer from Prem - Referred to Paul Rivett to confirm position size and then answered that they were just averaging down into the investment. Recent comments re Blackberry $9 offer " To Reuters: “We wouldn’t put our name to such a high-profile deal if we didn’t feel confident that at the end of the day that our diligence would be fine and we’d be able to finance it … Short term these things fluctuate, there is speculation one way, there’s speculation the other way. We never pay too much attention to the marketplace.” Mr. Watsa said Fairfax won’t put in anything more to the offer than the 10 per cent of BlackBerry it now owns. “The 10 per cent is like $500-million,” he said. “It’s a significant amount of money. We’re going to bring equity partners and we think the company will be very well capitalized.” http://www.theglobeandmail.com/report-on-business/top-business-stories/fairfaxs-prem-watsa-fires-back-at-skeptics-as-doubts-over-blackberry-deal-mount/article14540650/ The fact that Prem & Fairfax are investing an additional $250mln after already investing 880mln after all their comments at the meetings and in the press related to this deal were too much for me. I understand that 1.13bln is not much in relation to assets, but it's huge related to shareholder's equity. The position size was huge related to equity before this additional investment and now it's bigger. Some may say that this additional investment is in the form of debt so it's safer, but to me it's an additional investment. I would much prefer Prem & Fairfax putting this kind of money into better businesses, but I understand it's not their specialty. I just think if you're going to go after turn arounds you need to be disciplined on how much money you put in, especially when that's what your telling your partners.

Remarks Adapted From Comments Delivered by Timothy J. Mayopoulos, President and Chief Executive Officer, Fannie Mae http://www.fanniemae.com/portal/about-us/media/speeches/2013/speech-mayopoulos-2013mba.html?p=Media&s=News+Releases&from=RSS