Nnejad

By commercial buildings, doesn't that include retail/industrial? Still, this is 50 sq ft of commercial buildings per Chinese person added since 2008. The US has total commercial building sq ft per person of 242. The US has added ~ 24 sq ft of commercial buildings per person since 2003. i.e. 1) China has added twice as much per person over half as much time, and 2) the US includes a major boom period (2003-2008) while China is just over the subsequent bust period.

I mean I understand the enjoyment of sarcastically addressing the entire group after they've shared their thoughts, but is it unreasonable to think that people would at least explore a statement like "500 pages per day"? It's not THAT obvious that 500 per day is out of the question. You'd be correct if someone thought actually reading 500 pages a day. I assumed it included scanning things like newspapers, which Buffett claims to "read" 5 per day. At say 30 pages per newspaper, that's 150 pages right there in probably two hours in the morning - or perhaps in his bathtub... Then add in a couple of 10Ks, BRK business unit reports etc.... and one could conceive how Buffett could arrive at 500. I gave up tracking it after I was spending more time estimating and logging pages then actually reading. But I agree entirely - we were assuming it was counting articles, news and research reports, in which case 500 didn't seem out of the question. For example, I just printed 120 pages of research reports on a company for tonight.

Exactly...I think I wrote about it in the thread last year too, asking how it is humanly possible. The "per week" was a relief to hear, especially when repeated it as you mentioned! OH MY GOSH...IT'S PER WEEK!?!?!?!?! Thank goodness, I was just surfing Amazon to find a book on divorce, our marriage is on the brink. I can't even think about the bills from Amazon, let along spending time with my family, I need to hit my daily quota. I'm a learning machine... I couldn't wait to add "divorce" to my list of mental models.... bmichaud, you're not alone - me and a co-worker also started tracking our reading after that quote.

http://business.outlookindia.com/article_v3.aspx?artid=289651 EDITOR’S NOTE Greater Than The Parts How Fairfax’s investee companies in India fit together and how they intend to grow independently while also benefiting from each other Toronto-based financier Prem Watsa has established himself as an astute investor and has a track record to prove it. While the investment style of Fairfax Financial Holdings mirrors that of market legend Warren Buffett’s Berkshire Hathaway, there is one key difference. Buffett has shied away from making investments in India. Even his brief entry into the Indian general insurance market through a corporate agency was eventually wound-up. Watsa’s Fairfax, on the other hand, has made a major investment in each of the past three years. Watsa is replicating his holding company model in India through Thomas Cook and that provides an opportunity for Indian investors who subscribe to his investment philosophy. Our cover story this issue tries to understand how Fairfax’s investee companies in India fit together. Thomas Cook, itself a powerful brand in the travel space, has bought two companies that have the potential to grow with capable managers steering them. How these three companies intend to grow independently while also benefiting from each other is the focus of our story that starts on page 44. I think this is the link to the article. I'll probably cave and pay the 99 cents for the digital issue. http://business.outlookindia.com/article_v3.aspx?artid=289664

Off of memory, I think they subscribed to more of the BBRY convertible debt in January. Per the 13D, it seems like Fairfax is a trimming of some of its shares so its effective ownership stays below 19%. “Under the terms of a subscription agreement with BlackBerry dated November 4, 2013, Fairfax agreed that until November 13, 2014 neither it nor its affiliates would beneficially own more than 19.9% or less than 9.9% of the outstanding Shares. As previously announced on January 8, 2014, Fairfax determined to sell Shares over time in order to rebalance its ownership in BlackBerry, subject to the above-noted restrictions. This previously announced Share sale is concluded and the current rebalancing is complete. In the future, Fairfax may determine it is necessary to continue with further rebalancing, subject to the above-noted restrictions.” I'd trust the 13D. The confusion probably comes from some reporting issue related to the convertible debt. Here's a link to a link to a Globe article which probably explains it in more detail (subscription required). http://www.techinvestornews.com/Mobile/Latest-Mobile-News/fairfax-not-bumping-up-stake-in-blackberry

For those interested. http://secfilings.com/searchresultswide.aspx?link=1&filingid=9812663 Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended and supplemented by inserting the following immediately prior to the last paragraph of Item 4 and by deleting in its entirety such last paragraph of Item 4: “Under the terms of a subscription agreement with BlackBerry dated November 4, 2013, Fairfax agreed that until November 13, 2014 neither it nor its affiliates would beneficially own more than 19.9% or less than 9.9% of the outstanding Shares. As previously announced on January 8, 2014, Fairfax determined to sell Shares over time in order to rebalance its ownership in BlackBerry, subject to the above-noted restrictions. This previously announced Share sale is concluded and the current rebalancing is complete. In the future, Fairfax may determine it is necessary to continue with further rebalancing, subject to the above-noted restrictions.” Item 5. Interest in Securities of the Issuer. Item 5© of the Schedule 13D is hereby amended and restated in its entirety to read as follows: “© Between January 29, 2014 and February 24, 2014, Northbridge Commercial Insurance Corporation sold 250,000 Shares on the open market at an average price of $10.03 per share, Northbridge General Insurance Corporation sold 1,250,000 Shares on the open market at an average price of $10.03 per share, United States Fire Insurance Company sold 500,000 Shares on the open market at an average price of $10.03 per share, Advent Underwriting Limited sold 700,000 Shares on the open market at an average price of $10.03 per share, Odyssey Reinsurance Company sold 1,500,000 Shares on the open market at an average price of $10.03 per share, TIG Insurance Company sold 500,000 Shares on the open market at an average price of $10.03 per share and Zenith Insurance Company sold 500,000 Shares on the open market at an average price of $10.03 per share.”

Lol.

I like it.

I bought Cali munis in general (CMF) and MCA for my levered position. They offered ~ 3% and 7% yields at the time. I already had several positions in my portfolio that would do well if interest rates rise. This seemed like a good opportunity to add to the other side of that bet.

If you don't mind my asking, why NTT and not DCM?

If you exclude inflation or look in USD, I don't think Bidvest's growth has been far short of Fairfax's.

Anyone know who Thomas Cook India is surging? http://finance.yahoo.com/q?s=THOMASCOO.NS%27

Am I right in this? Let's say the average expense ratio for the insurance industry is 30%, and the average combined ratio is 100%. Berkshire, by automatically being allocated 7.5% of all premiums written at Lloyds, is piggy-backing off the underwriting work of the other Lloyd's members. Meanwhile, it's marginal expense cost to write this blanket business is close to 0%. So effectively, if the industry writes at 100% CR, Berkshire writes at 70% CR on this deal?

"Use the abbreviation “SH” to designate shares and “PRN” to designate principal amount."

$25 billion investment portfolio: $100 mm interest and dividend income $3 billion in debt: -$50 mm interest expense Le sigh...

Seems low. Their exposure to the area would suggest cat losses from Sandy of ~$225 mm. Some of that would be absorbed by "pre-catastrophe" underwriting profit (YTD combined ratio of 97.1%) There's also about ~$350 mm in gains from RIMM, Cunningham Lindsey, Brick, etc. Their portfolio did well this quarter.

Well, the optimistic view would be that it's got 50 mm in net cash, and so long as revenues grow over time, the company can generate FCF more in the range of $40mm (with some benefit coming from changes in working capital).

Passed. Wooooo!

For those interested: http://www.businessinsider.com/richard-koo-the-world-in-balance-sheet-recession-2012-4#again-no-benefit-to-liquidity-pumping-in-japan-11

Your emotions and love for Prem must have clouded your judgment on this one, because you are clearly not thinking straight. Here's an scenario that exemplifies what is happening here: Say you and your man-crush Prem are partners in a business. Prem owns 60%, you own 40%. The business is currently at cyclical lows, but you both believe instrinsic value to be ~$1.30. In fact, an arms-length party offers you $1.30 for it, but Prem declines (however you are keen to sell). Instead, he decides to squeeze you out and pay you $0.10 for your minority stake, because he believes the business would be better under his care, and he is in control. Would you still be madly in love with him in this scenario? I believe most rational businessmen would be quite angry, justifiably so. Stick to the facts on this, not your emotions. He's clearly doing the opposite of his supposed "fair and friendly acquisition" mantra. That's hardly a fair scenario: here's a better one. Me and Prem are partners in business- I own 60%, he owns 40%. The business is at cyclical lows, and he wants out. I, as managing partner, try to assuage his concerns by telling him with the same message I have been telling him the past three years. Seeing no progress is being made, decides to get the process rolling: he enters into a lock-up agreement to sell his stake at $1 in order to get a third party (Abitibi) interested. If he hadn't done it, that third party would never have begun the process. Now, a new superior bid has come in. Prem has no say past this; as I mentioned before, he's locked in at $1. Now you may argue that he did not need to go to court against the private placement. But see this from his angle: he owns 20% of a firm which he has locked in to sell at $1. There are three options: Abitibi fails, Mercer prevails at $1.30; Abitibi prevails; Abitibi fails and Mercer walks away. In option 1, Prem would still walk away at $1, as Abitibi is not crazy- they will buy at $1 and sell at $1.30. In option 2, Prem still walks away at $1, as Abitibi has prevailed. In option 3, Prem is stuck back holding the shares, but now his economic stake has been significantly reduced. Further, he is no longer in a position to force change, as the white knight bidder now has enough power to keep current management in place. I don't know how you argue option 3 is an unlikely scenario; once the warrants are issued, Mercer could easily walk away, Fibrek could keep their jobs, and everything would ground to a halt. Regardless, from Prem's perspective, the ONLY rational path was to fight against the warrants. He had nothing to gain from them being issued, and only something to lose. Furthermore, one last point. 1) Mercer fell to about $.30 per share in the last recession. Fairfax believes in a coming recession. 2) Prem bought plenty of shares of ABH at prices above $22 per share. So from their perspective, it doesn't take much reconciliation to see why they originally opted for a Abitibi deal instead of a Mercer deal. (Similar logic would apply for Steelhead, as well)

Amen.

There's still a lot of disillusionment here people. Look at the following: North American Softwood Pulp Markets Weak, Containerboard Stable Jan. 19, 2012 - North American softwood pulp markets remain weak and hardwood pulp markets appear to be close to a bottom — January prices were flat month/month, say analysts at Deutsche Bank (DB). U.S. NBSK (Northern Bleached Softwood Kraft) pulp fell $20/mton to $870/mton in January. Spot prices at $600-650/mton (-$25/mton month/month in January) remain well below list price levels. At current spot levels, prices appear to be at or below mill cash-cost levels. ..... http://www.paperage.com/2012news/01_19_2012market_report_db.html Taking YTD figures and annualizing them, you are optimistically looking at 60 million in EBITDA. Add 10 for the energy project, and you have $70 million EBITDA to work with. Now, note the following: Since the 2Q of 2012, list prices have fallen from $1025 to $870. Spot prices are much worse, but that's a 16% decline in prices for just list prices; That's 47 million in EBITDA lost (if you assume a similar 16% decline in FBK's realized price). Then you have $16 million in cap.ex, 10 million in interest expense, and nothing left in FCF. And then weigh this analysis... Is this conservative? How could it be if we're not admitting that over the last 6 months, a significant amount of revenue has shifted towards spot prices, or that the RBK markets also got much, much worse. I don't think ABH would walk away, and so at $1.01 maybe there isn't a lot of risk... but I don't think ABH is going to raise its bid either, because in a few months this is going to look real ugly from a financial perspective.

At the end of the day, after you adjust for all of that, I think your calculation will come out close to mine, which is basically near breakeven. Now what I like about the transaction is that there will be synergies, and so it makes this an attractive investment for ABH even when conditions are depressed. And as someone pointed out, the analyst gave zero value for the RBK mill, and that's about right. You do not want to be relying on recycled fiber right now - the competition over inputs with China is tremendous, and I don't see how this will ever change. The best you can hope for on the RBK side is a zero return. It was a bad acquisition, and in all likelihood, this other planned acquisition was not going to be any better.

No, there's the market price and then the realized price, which traditionally is a 10% discount. The market price has fallen from 1040 to 840. It would be akin to me saying realized prices have fallen from 936 to 756, but I'm not trying to bog down the argument away from the main point, which is that: 1) the NBSK pulp business is highly cyclical, and 2) right now, FBK's mill is barely making any money.

Dude.. you're sounding crazy. You've started by calling a legal transaction illegal, and then proposed a host of illegal or unethical remedies to solve the problem. Stab in the dark, but if Fibrek was trying to vertically integrate, the only major public option would have been EACOM - a high cost, Eastern Canadian lumber producer which is losing money on an EBITDA basis and is a very risky producer. The valuation on a buy-out would be ridiculous.. and its perfectly rational to want to stop such a bad plan. And you're completely exaggerating the extent of this take-under. If FBK was run rating 60 mil EBITDA, and now NBSK pulp prices are down from 1040 to 840, on 350k tons per year, you've just lost all your earnings power. Under ABH, you can cut a lot of costs, and you vertically integrate even the RBK business, and this makes sense... so as a FBK holder, you benefit by participating in ABH's success.