Luckyone77

I haven't sold nor have I added but I've certainly taken a shellacking. I'm not near as convinced about this company as I use to be but the stock price is probably just too low to start selling. It's by far my largest holding but I'm very disillusioned with their stock picking. Some are simply inexplicable. As far as the Macro bets go, it is what it is. I agreed with their logic but let's face it, so far, it hasn't worked out. Time will tell. Hopefully, they'll prove to be visionaries. Insurance is clearly doing much better and I like the India play. They just seem to take too many BIG gambles on companies with bad fundamentals or dying prospects. What happened to Rule#1: Don't lose money! SD, among a few others, is beyond my scope of comprehension. IMO, they need to become better capital allocators and more protective of the "ball" before I invest more cash. Sure wish I would have just bought an SP 500 index fund and went fishing back in 09. I'll get em next time.

We ate a Cactus Cafe on a recent trip to Kelowna. Food was great, atmosphere great and the waitresses were even better. They know how to hire.

Totally agree. These guys are really starting to worry me. SD, Blackberry, RFP. I could have thrown darts at a board and had a great deal more success than this nonsense. They need to get their eyes checked because I just can't figure out what they're seeing. Truly head scratching picks when there's so many more viable companies out there. They've sold class assets to buy what appears to be junk or small potatoes. I'd be a liar if I said they haven't lost me at this point. I keep hoping they prove me wrong and put egg on my face. So far, all they've done is take money out of my wallet. A chef? Really? That's the best they could come up with? This is going from puzzling to goofy. Maybe they should look at something other than a dying or insignificant Canadian business for a change.

http://www.insidermonkey.com/blog/blackberry-ltd-bbry-losses-lead-to-another-quarterly-beating-for-prem-watsas-u-s-portfolio-360271/ Disappointing but not surprising considering several of their most recent and larger purchases are at 52 week lows. Can't imagine it's much fun around that office right now as they must be scratching their heads at some of their decisions. Having a harder and harder time justifying my investment here. Here's hoping their Macro bets pay off and compensate for their "seemingly" atrocious stock picking.

Wouldn't deflation have to be "significant" for all these bets to pay off in a meaningful way?

You forgot Sandridge . . . Oh yeah! Ouch! Not sure how I forgot that one. That shadow didn't work out well at all. Probably the biggest single loss I've ever incurred. I somewhat blame myself for that one as I'm from OKC originally. I made a couple of calls back home and friends familiar with that situation told me it was bad news and very suspect CEO but I didn't listen. Basically the same thing happened with Blackberry. A very good friend way up the food chain in technology looked at me like I was crazy when I told him I was buying Blackberry before they introduced their new phones awhile back. He said it'll never happen. He was right about the phones. Why can't these guys see this stuff? What's happened to their analysis of these companies? Maybe they need to start trying to hit singles and doubles instead of aiming for the fences with these flawed companies and losing their butts. Cigar butts, that is.

Dell, Blackberry, Greek Bank, Resolute Forest Products. Hmmm. That hasn't worked out...so far. I like the deflation hedges though they haven't worked out...so far. I like the shorting for protection though that hasn't worked out...so far. I like the India positions and it's potential for growth probably the most...TBD. They sure seem to be making lots of bad decisions lately. I did make a killing shadowing his ICO investment. That's one in the win column. I find myself losing my religion as Fairfax is by far my largest holding. Getting harder to overlook all these "apparent" mistakes. Will time prove them to be visionary like in 08 or just wrong? Hard to figure out and, though I hold Watsa in high regard, it's increasingly difficult to overlook some of these things. With that said, the deflation hedges and shorting can go from looking stupid to "brilliant and legendary" in one day. Tough call.

..."Watsa was asked why his firm, known for value-oriented strategies, put money into BlackBerry. He said, "These things go in cycles," adding that "BlackBerry used to be $140 (a share). Every stock analyst loved it. Today it's $10. Few stock analysts like it." Conversely, Watsa pointed to Apple Inc. (NASDAQ: AAPL) as a point in how companies can move in the opposite direction." There's a good reason why only a few stock analysts like it. Watsa's logic here sounds very strange and CYA to me. Especially using Apple as a model of a tech turnaround. Hardly a normal company or normal outcome. Kind of like saying so and so won the lottery and so can I. Yes, things do go in cycles but in technology that circle can look more like a vertical line straight up and straight back down.

I don't disagree with that. However, in the Annual letter it seems Watsa clearly states that the reason they got into it didn't pan out (bad analysis) and it's no longer the reason why they still own it. Now they're just hoping for the talent of Chen to pull a rabbit out of the hat. Hopefully, he can.

http://finance.yahoo.com/news/blackberry-cut-strong-sell-layoff-181006813.html Maybe there'll be a happy ending here but I'm simply not seeing it. Feels like they're counting on some kind of Hail Mary pass to bail them out of this mess. This is looking more and more like a not so good cigar butt. Serious question, has any technology investment worked out yet for Fairfax?

I own an iPhone and wouldn't even think about switching simply because all my devices are tied together and IT WORKS! That's worth a lot to me. For what ever nominal gain I might get from Android or BBY it simply wouldn't be worth the amount of effort it would take to get all my devices on the same page all the time. That's not to say that I don't think the Apple claw hold on my technology isn't concerning (and expensive) but Google is even worse in that regard. These guys simply have too much power. Creepily so. http://nypost.com/2015/03/28/google-controls-what-we-buy-the-news-we-read-and-obamas-policies/

Fitch says deflation top European risk for world ratings http://www.cnbc.com/id/102545607?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=102545607

From the annual letter: "I have learned that the tech world is very difficult to predict and things change very quickly." Sorry but that statement strikes me as odd in that it seems he just figured that out about the technology business. Not a lot of moats in that industry.

...."PS: as for “Rule #1: Don’t lose money”. Horse Apples! That’s a nice “goal” but if anyone has been able to put that into practice 100% of the time they must be invested in GIC’s at 1%." Of course, some investments go down and you often times may lose money if you decide to sell at such point that it's below what you paid. I'm referring here to a potentially permanent lost of ALL your investment. That's VERY different than the Buffett approach and very doubtful that Berkshire would have ever put their toes in the SD water. I doubt it ever would have entered his universe. No matter how you want to spin this one it's totally baffling considering just how many signs there were that this company had serious issues. Surely there were much better and safer places to allocate the money than to a company that had the possibility of zero in the equation. I certainly don't discount the fact that maybe many of you are right and that Prem is making some chess moves so far beyond my ability to perceive that I'll look like an unwashed heretic for questioning his rationale. I have so much money with him for that very reason. But I'll never be so star struck that I won't always question anybody with my money. Here's hoping he puts egg all over my face. I like making money while I get embarrassed. It's more palatable than just being embarrassed.

Maybe you can give me the Readers Digest version of what all that would tell me. I'm really not trying to be antagonistic, I'm just trying to follow the logic that potentially might get us to zero on an investment. I thought I did understand how they operated and though they're doing great so far this year, I'm losing a little religion with this SD news. After all, isn't Rule #1: Don't lose money?

61,000,000 million shares may be a smallish position now but it wasn't about 8 bucks a share ago or whatever their average cost is.

"He invests with one eye on bankruptcy." ---Jurgis In the case of Sandridge, maybe he should have had both eyes on bankruptcy. Not that Sandridge is zero yet but even I have never had a stock pick go to zero. And they have (or should have anyway) a helluva lot more stock picking expertise than me who does this on the side.

You're probably right but zero is still zero. Was it that hard to see? Unless I'm mistaken, Sandridge wasn't making any money at $100 barrel because of their debt. Why would they stand a chance at $50-$60 or less. (A condition shared by many of these overextended oil companies). Nevertheless, I get your point but it seems like SD has been a money hole for a long time. I owned quite a bit for awhile but sold at a significant loss. Thank God I sold it when I did. It just kept getting worse and worse and that was in good times. Just not sure what the Fairfax team saw (or see) in it. Don't they own something like 62,000,000 shares. How much have they lost on Sandridge? Fair company at a great price? I think not on both points. Here's hoping Watsa and his team proves me wrong. Ironically, and to your point about hedges, his deflation bets and his hedging are why I'm still in it. I share his view that this is a 1 in 50 or a 1 in a 100 year event that hasn't played out yet. I've been wrong since 2009 but still maintaining course. Look, I still believe in Watsa or I would have sold out my position but some of these stocks are head scratchers and are giving me pause. Making such a huge bet on a company that gets cut in half is one thing, at least there's some value there. But possibly belly up? Hedge or no hedge that's perplexing. Somebody in the team should have seen zero coming at them. That's a lot of money, some of which is mine, down the drain. I'm just trying to connect some dots here. That's all.

Barsax: Possibly so but Fairfax is still, by far, my largest holding. With that said, can you really dispute my points? I mean Sandridge possibly at zero?! That would be the mistake of all mistakes. We're talking about ZERO and they just bought more a few months ago??? Shouldn't somebody at Fairfax have factored that possibility into the equation? Especially considering their debt load. As I said, it's totally baffling. Now maybe he knows something about Sandridge that I don't and he ends up making money on this deal. Not sure how considering what they've paid but it's for that kind of insight why I have so much invested with him. I'm just teetering a bit and trying to get my hands around the logic and philosophy here.

So much oil there's no place to put it? "That extra crude is flowing into storage tanks, especially at the country's main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week." http://news.yahoo.com/us-running-room-store-oil-price-collapse-next-171025276--finance.html

Barsax: If he's bearish on oil prices then why in the world would he have bought more of Sandridge in the 4th qtr? Maybe I'm missing something here but it just doesn't add up...especially in light of all the debt that Sandridge is carrying. And as far as buying Blackberry goes vs buying Apple, again, who knows. Maybe being a Canadian company he felt like he had some insight or possibly bias to it. Baffling. Simply seems to go completely counter to Mungers advice to Buffett that Buffett in his latest yearly letter credits for being the cornerstone of Berkshire. Buying great companies at a fair price.

Sandridge was downgraded to zero value in this guys opinion. Never really understood the investment here and the fascination with Tom Ward (no longer with the company). The big blustering ego red flags surrounded the guy. In addition, it appears that Fairfax actually purchased more of it in the last qtr of 2014. Huh? I'm a Watsa fan but some of these investments are simply baffling. In this sense, he has a decidedly different approach from Buffett who believes in buying great companies at a fair price. Too often lately, it appears he's buying average (at best) and dying companies at a high price. Dell, Blackberry and Sandridge all come to mind. Maybe in time he'll be vindicated but I wonder if he shouldn't adhere to Mungers advice to Buffett a little more. http://www.thestreet.com/story/13064256/1/shale-oil-bust-enters-phase-two-led-by-hercules-and-sandridge.html?puc=yahoo&cm_ven=YAHOO

So, Europe officially slips into deflation with todays news. What does it mean and how exactly can you calculate what that means to FFH's deflation plays and the value of the company? I'm a marketing major not a Finance major, so, go easy guys. A part of me is thinking it's time to buy more of their stock but FFH's "tech stocking picks" (Dell and Blackberry) seem to be SO off the mark that it gives me pause and concern about what they're thinking at times. I've spoken with 2 highly placed tech executives or tech board members (not a Blackberry employee) who thinks there's not a happy ending there. Frankly, they just laugh it off. Of course, they could all be wrong and Watsa could have the last laugh or FFH might simply be too stubborn to admit they've got a loser on their hands. Time will tell.

I think he bought Dell at some point too.

Does anyone at FFH own a Mac? They seem to be a bit myopic and off base when it comes to technology. They'll probably prove me wrong but I just never saw the fascination with Dell or BBRY. Anyone who has owned a Mac or iPhone knows where the action is (or being in the ever changing tech world, was). The last time I had to order some PC's I called Dell. It was apparent that the glory days were over. It was such a hassle that we ended up just going to Best Buy and buying several computers there instead. Cheaper, easier and MUCH less hassle. In regards to BBRY, just seems like another company who's shipped has sailed. A good friend who serves on several tech boards around the globe told me before the latest phone models that BBRY was toast as far as phones go. I should have listened to him. Probably a very good reason why Buffett always steered clear of technology.