gary17

We are all long term bag holders who want things to pop tomorrow :) Nice ;D

Hello I'm wondering if anyone here holds AwH and has an opinion about this firm. It was one of my only holdings when I first started... made my first bag of money there before giving it away to BlackBerry :( My dad was smart enough to buy them when I was selling - it now is at $110, still around book. CEO / management I believe are ex AIG. They moved from Bermuda to Switzerland. Is in Lloyds... I like everything I read in their annual report. But with what happened to Tower Group and the short attack at Am trust, I am concerned there's some underlying accounting or management issues that I'm not seeing. Would very much appreciate thoughts from those who pay attention to this space. Cheers

starbucks boeing US military education from ivy league schools such as Harvard & MIT

Hello I am wondering if anyone here by chance knows how banks in Japan performed during the country's deflationary period. I looked at the charts on google but don't believe I am getting reliable information. Other than Japan, is there any other nations on the planet that had a very long deflation? Thanks Gary

Would tax implications affect this ?

You guys bring up an interesting discuss. Generally the risk increases with the price... so as we go from starting price toward some own estimated intrinsic value the margin of safety will decrease. I suppose the mentality for those who hold is I got it at cheaper so I can afford the price dropping back to where I started.... whereas if one has bought at say 80% of IV that affordability is much less... I guess in my mind are we suppose to look at this on a daily basis and watch every step of the pricing correction OR just simply look at this as from price A to IV and ignore the middle... If the market conditions is good, when the stock is no longer a value stock, or about to graduate from being one, other types of investors may be interested... therefore, is it really risky to be buying or holding even at 80% IV?

Gio - I am curious as to if you have invested in Berkshire stocks. Assuming you have not (because I don't see you talk about it much) -- why not? It meets all your criteria - Greatest management on the planet with the longest track record and integrity and was selling around book! Gary

China. Real estate. Bubble. They have built like 3.5B worth of housing when they only have 1.2 or so population.

Thanks!! This reads like the Intelligent Investor summarized in less than 100 words ;D Great, this has been a productive morning - thanks to all :) Gary

LOL!! That's the question I have been asking myself !!!! I did buy a tiny amount of FFH & LRE & MKL like 3 months ago... and I had to let them go.... because I felt I wasn't thinking clearly.... I am now back to where I was... still thinking.... I am in my early 30s... have a (relatively) stable job.... and I do enjoy investing... (even when I am not making money -- sometimes I wonder if I have a gambling problem!) Will it be better to give my money to Prem or other compounders or should I manage it myself? Prem does get access to cheap leverage that I can't get AND he can buy some of these companies in such good terms that I can't get - e..g, Eurobank at 0.30/share! And The Keg (privately held previously?) I just need to make sure I don't let my overconfidence / ego / unproven investing skills get in the way of this decision making process :) Gary

Are the people at the society's bottom today not far better off than those in the early 1900's? Yes, the ultra rich got super, super rich -- but are the poor's quality of life also not getting better? I'd argue it's way better. I'm talking about access to food, clean water, medicine, and a decent shot at changing the quality of life for themselves. Gary

Thanks -- I don't see where he explains why he sold Wells Fargo,etc. It was noted in the annual letter... But a verbal explanation would probably shed more light. Gary

Gio - what do you think is FFH's "cost of capital"? I believe this question was asked yesterday at the Berkshire meeting - both Warren & Charlie did not give a very direct answer.... I believe they said they focus more on opportunity cost..... What is the cost capital --- is that possible to explain like I just finished highschool? Is it simply the portion of combine ratio over 100? Is it that simple? Thanks! Gary

It is interesting the two sides of the argument I'm hearing isn't helping me solve the similar argument going on in my head.... I like what FFH has been doing - underwriting improved ... Although the soft market has just started, we will see - like his European investments and other international investments - I actually like the rim investment - low cost of leverage via float... Assuming they can do around 100 combine ratio or even better moving forward Things I don't like - macro bets - some of the things he writes in his letter vs reality - the lumpy performance. I get the long term trend , but I don't buy why results should be so volatile. What if his shareholders need money for some sort of emergency?

So to the people who bought last time it was 500, did they not see the value get destroyed for at least fifteen years? I'd say the price is more or less an accurate measure of value most of the time...if there's additional value, I'd say it didn't get unlocked, and those people who dependent on that money , perhaps in their later years, didn't benefit from FFH shares !

Thanks Gio I'm not a trader but I do believe if the price is way too high it is not worth holding then I'd sell. I like what prem is doing. But I don't understand why it took fifteen years to break 500 .. So people who bought the last time it was fifteen have only collected dividend. ... I'd argue fifteen is long term! Tom, I agree. Unfortunately, this is only theory. For instance, I think FFH is worth much more than 1.3 x BV, I don’t even think its BV makes any sense today… You, on the other hand might think about FFH differently… You see? I think FFH is trading well below IV, you might think it is trading above IV! Practice is much more complicated! ;) What I think we might agree on follows: holding or buying FFH today, you partner with a great entrepreneur and his wonderful team of people, and you pay a fair price to do that. This simple recipe in the long run tends to yield very satisfactory results. Unless, of course, you want to jump in and out… then, good luck to you! ;D ;D ;D Gio

Beatles!

You are the second person whosever explained to me like this. Spot on ! Thanks! The other person was my dad when I asked him if I should sell my rim shares after it ran from 8 to 16 ... He said if you won't buy it at 16 then you should sell. It's a difficult concept to grasp They (the shareholders you are asking) like the price if they choose to hold (unless they do so only for tax savings). Otherwise, it's all too easy to sell and go to cash. Just as easy in fact as having cash and buying the shares at the same price. So how is that any differnt? Buying vs holding? Other than taxes and psychology, they are the same bullish sentiment. Having cash and buying is basically the same vote of confidence as holding and not selling to raise cash (other than taxes and psychology).

Hello Would any FFH shareholders still add to Fairfax at current price, which is about 1.3 book - How expensive has it been in the past? Thanks

The only two things china has that we didn't - a government made of seven people that can make fast decisions and ability to print its own currency. But agreed a lot of unforeseen issues. My friend recently got back from a golf trip in china says there's hundreds of ghost towns each with like a dozen forty high rises nobody lives in. At night you would see one may be two lights on in the entire subdivision. But most of the developments are funded by local governments because the construction has been a lucrative way to transfer money into their own pockets. Hence the central government is cracking down on corruption. So similar to Ireland and US or any other housing bubbles, except this appears to be built using state money most of the time.

speaking of the devil - apparently Moody just brightened Greece's banking system ;D

i am no bank expert... many others on this board are i have been lucky though to do reasonably okay with banks because they are generally the first to benefit when the macro environment starts to change - it is less clear to me what they see in Greece.... Ireland is something I can easily understand: low tax rate; high tech (IT and pharma); and the exposure to the UK economy is also something I liked. So even for an ordinary person like me without knowing all the nuts and bolts that Wilbur and Prem did - one could do well just like Band of America when the US economy turned. Greece - what does it offer to the EU / world economy? What is their competitive advantage? low tax? I'm having a harder time seeing the rationale... I should add David Einhorn added to Alpha Bank - another Greek bank - so clearly they are seeing something. I think it's probably just a bet on Greece return to 'normalcy' - so the comeback could be very strong; but probably not as such a home run as Ireland. Gary

Thanks for sharing interesting points - perceived risks vs real risks - better to come late into the game of turnarounds and get better data points - deep value investing often needs a catalyst such as a buyout - Prem waited 6 extra weeks for Wilbur to be able to sell his shares even though they had already received a high bid... Quite telling of Prem as a business partner :) Gary

Was trying to buy an apartment in west Vancouver but the seller wanted $20k extra so I had to let the deal collapse. :(

Yes I get that they are just using the same pot of money they started with - but I tend to look at it as the current state: money today is money today; doesn't matter where it came from. If I have X amount of money today, I should be making the best decision based on the info available.... today. So if he's even more convinced today than he was 4 years ago that the crash is so close, then he shouldn't be wasting a dime on a Greek Bank -- that's just my way of thinking. Perhaps the alternative could have been less hedge, keep the quality companies and have a bit more cash. But I see there's already been a ton of discussion on this topic..... All I'm really after is why the seemingly contradicting investments that'd seem to cancel each other out ... Personally I do think Europe has ways to go and agree it is probably a very good investment in the long run. Eurobank also has quite a bit going on in Eastern Europe (so is NBC and Alapha I believe) - perhaps that's where he is seeing growth in the "long term". Gary