Parsad

It will almost certainly go up 2 times over the next five years if Prem hits his 15% ROE. 5X would be pure speculation unless they hit some major investments out of the park...they would have to compound book at close to 38% per year for the next 5 years! Possible, but not likely unless you have opportunities like they had during the tech wreck, housing crisis or pandemic. Cheers!

In 1998, FFH traded at 4 times book value...I'm guessing that's multiple expansion...it took 15 years for anyone who bought to get their money back. Intrinsic value isn't some static multiple of book. Intrinsic value is the total lifetime cash that can be taken out of a business discounted to the present. It is at once a finite number that may continue to grow or increase over time or it may collapse...depending on the business. Cheers!

Sure, that's completely fine. But there is a difference between speculation (trading) and actual investing. Trading would include buying and selling assets to make short-term gains solely on events, catalysts, momentum or news. Investing would be buying an asset below intrinsic value and selling near or above intrinsic value...timeframe or events aren't important. Cheers!

That's incorrect, since it would have no bearing whatsoever on intrinsic value. Multiple expansion is irrelevant to intrinsic value. Your focus should be on growth in intrinsic value, because the stock price will ultimately follow intrinsic value. Index inclusion or a lower level of volatility actually gives investors less opportunity to add FFH at discounted prices to intrinsic value. Cheers!

No, I would not be buying FFH at 1.4-1.5 times book...even as a starter position. The only insurance company that I would pay that for is Berkshire, because book doesn't accurately reflect the intrinsic value of its non-insurance operating businesses. Fairfax does not have that much allocated to quality non-insurance operating businesses which could justify a price to book similar to Berkshire. Maybe one day, but it isn't there yet. Cheers!

Yes, correct. It already makes up about 25% of my net worth, and I'm comfortable with that long-term. If Prem can grow it 15% a year from here, that's as good as it gets. Cheers!

You guys crack me up! Stop looking for index inclusion...stop thinking that Fairfax will only go up forever...stop worrying that it might drop if it isn't included in the index...this stuff will drive you crazy and make you do the stupidest things. Buy it when it's cheap and hold on if you want to make it a bigger and bigger portion of your net worth. Otherwise, buy when it's cheap and sell when it's dear. Prem is only human...as is the rest of the team. They will do everything they can to increase shareholder value, and it sure looks like they can continue at a 15% ROE for the next 2-5 years. But things will go up and down...that's just the nature of the beast and being a distressed value investor. Worry about the bigger picture...the investments they pick, the insurance businesses, their stakes in Greece and India, the bond portfolio, investments in associates that are now very large like Eurobank and Atlas...index inclusion didn't get them to where they are and in the grand scheme of things it won't mean anything! Cheers!

It's funny you sent me that. I just bought a brand new king size bed (automated) and a new luxury mattress. God my back has never felt better and I stretch out each night like I'm at a hotel. I'm also buying super soft down pillows from the Fairmont Hotel arriving before Christmas...got new sheets, pillow cases and a super light duvet as well. Not sure why I've never spent money on a quality bed, since I sleep for 6-8 hours a night, 7 days a week...that's a good chunk of anyone's day. A good bed is definitely worth the money! Cheers!

Might be a combination of things...index inclusion speculation, end of the hurricane season, approaching dividend, etc. Cheers!

I would manage $500B exactly the same way I manage $5M. I would want to be able to sleep at night with nary a concern if markets fall 50% tomorrow morning, or war breaks out in Europe or an 8.0 earthquake hits a major city. Cheers!

+1! Cheers!

I don't think this is a disgruntled claimant. He was under investigation for fraud and insider trading...I would guess that the people who possibly could see their names tied up with him...they don't want to be known. It looked like a clear, professional targeted killing...8 feet back in the head, and the guy makes a clean getaway. Probably left the country already. If it wasn't for that one picture of him at the hostel, no one probably would ever know who he was. I think the writing on the casings are just to throw people off and make them think this was some disgruntled insurance claimant. Cheers!

Memories fade as time passes, but for those that saw the despicable tactics used by the hoard of shorts at that time...not easy to forgive and forget. I remember everything they did, including Hempton. He's owed a knuckle sandwich by me if we ever meet! For those that are critical of Paul Rivett's time at Fairfax, he was the guy who lead the charge against the shorts and hedge funds. While it didn't financially benefit Fairfax, it did eventually lead to the SEC and Justice Department tearing new aholes into these guys and ending the careers of a bunch of them...including prison time! Cheers!

Have a safe and happy U.S. Thanksgiving! Cheers!

If you have nothing nice to say, say nothing at all! Therefore, I shall say nothing! Cheers!

One of one! There will never be another like him and the world will be worse off without him. I continue to be in awe of his intelligence, humility and wisdom! Cheers!

Thanks Xerxes...will do! Cheers!

Godfather Part 2 might be the greatest movie ever made. Cheers!

Frankly, I don't think there has ever been a better time to make money as a young person. While the guarantees and comfort of a gold pension are a thing of the past, the speed and flexibility with which a young person can start a business and exploit global markets is unprecedented. Combine that with cheaper alternatives to investing like ETF's, tax-sheltered options for investing and the fact that husbands and wives are both working and have access to similar jobs with closer to equal pay...it's a great time to build a comfortable life! When my grandpa came to this country in 1964, he bought a house for $13,500 CDN. It was sold in 1991 for $400K CDN. In 2005, that same piece of land was worth $1.8M CDN. Today, the property goes for $3.5M CDN. That's just a fact of life in a city with three borders (2 natural - mountains, ocean; 1 man made - US border). Land is limited to build on, so you build up and the value keeps going up. You can build the same online business in any city...you don't have to live in Vancouver, San Jose or New York. The cost to build it out is the same. The workforce can be outsourced. Every generation has it tough, and every generation slogs through it fine most of the time. But the fundamental lessons of living below your means, don't lose money, don't aspire for material things, pay yourself first...those lessons are timeless! Cheers!

Can't vote for them. Irony is they've also always been batshit crazy until recently and now may be the most sane of the four parties. Although if I move to a beautiful cottage outside of either Quebec City or Montreal on some acreage, it might be worth voting for them. I'm thinking about it! Cheers!

Now that I have money, I think I want to do what Marc does for the rest of my life! Bye everyone! Cheers!

+1! I don't want to vote for the Conservatives or NDP...equally batshit crazy when it comes to policy and outcomes...but I can't vote for Trudeau. I didn't in the last election, and I can't do it this time either. All three parties like the Democrats and Republicans are now spend, spend, spend or cut taxes which will reduce revenues...no one cares about a deficit or the national debt! Cheers!

You can't exclude something you didn't see coming. For example, you can't say there is a general exclusion for anything not in the contract that might happen. Otherwise insurers buying reinsurance wouldn't buy a contract for a specific risk, and in turn, general insurers could not offer that protection to consumers/businesses. Cheers!

+1! You know, Ericopoly on here turned $80K into $20M in just over 10 years with only 5 bets. Yes, they were massive bets, but he just waited for those single opportunities where he swung for the fences...the fat pitch! If people focused on Buffett's 20 punch-card philosophy of investing, they would become rich without too much effort. But you have to be patient, alert and committed. As well, you need to trust your analysis when you swing. Your investment in FFH over the last few years is a living testament to that philosophy. It works like a charm! Cheers!

Not true! Taking on debt is not necessary to achieve a comfortable life. And I wouldn't worry about currency devaluation if you have assets that go up in value or even operate in multiple jurisdictions where the currency risk is diversified. Coca-cola will always go up in price faster than inflation, because consumers will pay a few pennies more for the brand. If a business has pricing power, is global and is in demand, it will always be worth more after inflation. Why? Because any inflationary pressure can be passed on to consumers. And your eulogy for your father was excellent! I would re-read your own statement and remember that he also didn't come to Canada to watch you lose everything he worked for and you worked for. In other words, being cautious is the foundation for you to build on...not destroy. Cheers!