Cageyone

Globalfinance, many thanks for the link. It really underscores that this is a quality acquisition and adds to my comfort as to the way that Prem negotiated and financed it!

Good discussion guys! I'm part of another group of patient FFH long term shareholders (i.e. retirees) with no new money to invest. So we would be disadvantaged by the options route and we've come to count on the dividend. But I can see the advantages to some shareholders of the opposing views!

Does the $650 put in a ceiling or a floor for FFH's SP? Or is it irrelevant?

Mr Market seems to like this transaction - FFH up about 4 per cent at the moment.

It will be interesting to see what FFH's realized gain might be if this transaction is completed!

Great to see underwriting results continuing to improve!

Hi Liberty! Thanks for your post and the links. Although the life expectancy calculator says that my wife and I both have a good shot at making 90, that's only 17 years from now. So any ideas of how to live well longer are of more than just academic interest to us! When I was 32 I was in the 3rd year of what became a 30 year management consulting career. Our one kid was 2 and we opened our first tax-sheltered savings plan and started saving for retirement. Thanks to some solid investments like FFH we're not concerned about out-living our retirement savings. So we're keen to go on living "healthily" as long as possible! Cheers! Cageyone

Seems to be a lot of volatility recently (back up 3.3% today) suggesting that Mr. Market can't decide whether Q4 will be lumpy to the downside or lumpy to the upside! So what do y'all think?

Thanks to everyone for their contributions to this thread – it’s a great learning experience for a guy who is probably the least active (read lazy?) long-term buy and hold investor on the board! But it’s also inspired me to go back and have a look at the performance of my financial holdings since I retired in 1999 and stopped adding any new money to my investment portfolio. Concentration has worked extremely well for me during 2014. Currently I’m 53% in FFH, 17% in BAM, 7% in TRP, with the balance diversified over 30 other names. This year my tax sheltered RRIFs are up 17.3% even after withdrawing a mandatory minimum 7.5%. Over the past 15 years the annual percentage change in these accounts has been “lumpy” – up 31% in 2003 and up 25% in 2006; down by -6% in 2008; and basically flat in 2000, 2011 and 2012. But over the 15 years the CAGR for these accounts has been a reasonable 8.3%, resulting in slightly more than a triple. I was particularly “lazy” in 2014 – not initiating any new positions nor adding to any existing positions. My only transactions were to sell 20% of a small VRX holding near its 52 week high (that more than covered the cost of my original Biovail shares) and 20% of one of my larger forestry holdings (CFP) when it reached a 52 week high. Currently I’m holding about 8% cash in my RRIFs, so I will have to do some more selling in 2015 to meet the mandatory withdrawals (and to keep the tax man happy!) The downside of being a long-term buy and hold guy is that there were 8 positions totalling over 10 % of my 1999 portfolio that I literally “rode down” to zero – including such memorable names as Can West Global, Hollinger and Stelco. So going forward I really should be a little more proactive in divesting “losers” before they totally disappear. But I seem to find reasons for holding on, even to the bitter end! A current example might be BlackBerry where I’m down 50% -- but then it’s only a 1% position – and so far it looks like Prem has the right guy (in John Chen) “on the job”. (But I also followed Prem into SD and I’m now down about 75% and still holding/hoping!) My bigger concern has been whether I should remain so concentrated – so the discussion on this thread on concentration has been quite relevant and helpful. So thanks again, and best wishes to all for 2015!

Even if it stays at $10 US, those of us north of the border will get a bigger FX "bonus" this year!

It has been quite a ride! I sold a few of the shares that I bought in 1989 for under $14 CDN at very close to that 1999 peak and subsequently bought them back for $81 CDN. So at this milestone I do wonder "could it happen again"?

Upbeat note in the Globe and Mail! http://m.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/value-investing/high-flying-fairfax-is-poised-for-further-growth/article21719922/?service=mobile

Ben, with nearly 50% of my portfolio in FFH I very much appreciate your insight! For example I'd been thinking that Prem was still under water on BlackBerry with a cost of about $17 but didn't realize that he may actually close to breakeven.

Hi longinvestor! My biggest problem now is that I have to become "less lazy" and figure out what to sell! I'm now into mandatory withdrawals from my sheltered account and in the next year I'm going to have to start raising some cash to keep the tax man happy. (Ironically, my monthly mandatory withdrawals exceed my annual contributions before I retired a dozen years ago!) So do I sell some solid stuff that is near it's all-time highs (such as Fairfax or Brookfield Asset Management), or to I reduce my stake in VRX which was on a tear but may collapse (if you believe the VRX bears) or do I sell stuff that I'm waiting to get back above water on (such as Blackberry, Sandridge Energy, Barrick etc. etc.) -- or do I do a bit of all of the above?

Congratulations Gio! Your story prompted me to go look back on the trends in my portfolio. Unlike your “proactive” style, I’ve been a (lazy?) long-term buy and hold (rarely selling anything!) investor who has been tracking his investment portfolio on a weekly basis since the “crash” of 1987. Just looking at my tax-sheltered account, it took 5 years until 1992 for the first double, but only 3 years until 1995 for the second double. The third double took 7 years until 2002 and the fourth double took 5 years until 2007. But in the 7 years since 2007 we’re only up 50%. I guess my conclusions are: (a) compounding works, (b) good luck helps a lot, and © macro events are eventually mitigated over the long term! It’s also helped a lot to have FFH gradually building up to over 40% of this portfolio. (But I’ve also “gone to zero” on a number of names including Prem Watsa’s Can West Global and Conrad Black’s Hollinger!)

With FFH at 49% of my portfolio, I'm OK with 10% keeping in mind the downside protection of the hedges and deflation bet!

Thanks for that tomgrt - after all every cloud has a silver lining!

Love it when results are lumpy to the upside!

But apparently 200,000 folks bought one in the first 36 hours!

Great topic and terrific insights - thanks to everyone! I adopted the buy and hold approach 30 years ago mainly because I was too busy with work and family to be an active investor! Overall I'm up north of 10 percent per year - but mainly because of three positions - FFH, BAM & TRP which now total over 70% of my portfolio. However, now I'm going to have to force myself to be more active because the tax man will soon be forcing me to raise cash and I'll need to start figuring which "core" and/or "non-core" positions to start selling down!

Hi Shan! I'm just a simple retired long-term buy and hold investor who has been long FFH for over 20 years. So now that FFH has grown to nearly 50 percent of my portfolio I am currently content to let Prem figure out my best hedging strategy! (But the jury is still out as to whether I'm doing the right thing!)

Nice to see BV trending up!

Hi One World Trader! A full-service stockbroker who I have known socially since the early 1970s -- and with whom I have done all of my investing -- had met Prem and was very impressed with him both as an investor and as an individual. So I followed his suggestion re FFH "and the rest is history"! Cheers!

Hi no_free_lunch! The next 20% of my portfolio is in what I view as infrastructure stocks (BAM & TRP). I'm holding about 10% in cash and the other 20% is a mixture with a bias towards resource names (the largest being MX, CFP and TCK.B). This 20% mixture also has some small positions in some of Prem's so far less than stellar picks i.e. RFP, SD & BB (average cost mid 20s!) I also followed Prem into Canwest, which my "buy & hold" approach took me to zero! Part of my dilemma is that about 75% of my portfolio is tax-deferred and being north of 71 I will soon have to start selling down some positions in order to keep the tax man happy! So I remain open to suggestions! Cheers!

Hey Sanjeev! A great cause --delighted to help out! PS I've been wondering about being bald, so now it's good to know that it's because of my value investing DNA!