Parsad

The competitors haven't been able to emulate the product well enough. Like Coke, Pepsi and generic soft drink makers. You said you don't drink coffee, so you probably won't be able to taste the difference, but Starbucks coffee and their constant desire to improve the product, is still unmatched by its competitors. You have the big chains that offer perhaps one type of premium coffee, and then you have the smaller snobby shops that eschew the giant...yet the quality of Starbucks coffee overall is still better than their competitors. Thus you develop a powerful brand based on the quality of what you are purchasing and how accessible it is. Then you have the store model and systems like McDonalds...albeit significantly higher end. You go to a Starbucks in Vancouver, Seattle, New York, Dubai or Sydney, and you will get the same quality coffee, specialty drink, etc, at each of those stores. Why? Because the training and systems the baristas go through, not unlike the food prep lines at McDonalds. Their advertising is also very specialized, especially to their customers through their "Rewards" program, and email, online and print advertising. Finally, while they slowly expand the line of products offered at a Starbucks store, the main focus is always around the core...coffee and food. And the prices around those items are aimed directly at the more premium market, not down market, so their margins are always steady. Cheers!

No, I believe the only tweet he actually sent, was the initial one on that interview he did. I would guess a staff member is putting out the tweets. Cheers!

Yes, a fitting end to a great show! Cheers!

What a joke! It's why the industry has the credibility of a Nevada State Boxing Commission sanctioned event. Cheers!

I would welcome other board members views on this confusing issue - is it really possible to hedge the economic future? Well, I think it becomes a distraction from the broader picture of finding quality investments at a significant discount to its intrinsic value. At the same time, Fairfax is not just some ordinary investment company, but a leveraged insurer that relies on its capital base to maintain statutory levels so that it can underwrite insurance business. So, if you are that insurer, and you can buy coverage for what you perceive to be a real risk, at a cheap price when no one was expecting it...then you make that bet. I wouldn't recommend that bet for the average investor, or most portfolio managers, but for a leveraged insurance company or financial institution, it may be a necessary evil, just like buying currency derivatives for a leveraged bank. Cheers!

Nice job Ross! Cheers!

Barron's article. Type in the title in Google, and click on the first search return. You will be able to view the article. Cheers! http://online.barrons.com/article/SB50001424053111903533504579095501695880962.html?mod=googlenews_barrons#text.print

I think it's great, but the cap should be lower. I don't think you should be able to raise more than $100,000. The funds and success should be tracked somehow as well. How many great businesses were started on a shoe-string budget and funds from family and friends? I don't think this is any different, except that it isn't limited to family and friends. But it becomes dangerous when you solicit large amounts of money, and there is no way of holding people responsible. So, if there was some way to track people, funds raised, how they are utilized, and whether the business succeeds or fails, would be important. You need to keep the repeat offenders, scams, frauds and bad bets out of the capital markets somehow. Cheers!

If they get the guilty plea, that would bode well for Fairfax. Thanks to Shai for the link! Cheers! http://dealbook.nytimes.com/2013/09/24/sac-is-said-to-negotiate-settlement-of-charges/?_r=0

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers! He is one of the most respected writer in french about investing. He is a good friend of Francois Rochon at Giverny Capital. He is one of my favorite. Sometimes he is wrong but usually he is very good. He always write what he think. What do they say...those that can, do...those that can't, teach! Yes, I know I'm about to get lambasted by every teacher on here, but my point was how many companies has Mooney turned around? And not just Mooney...how many companies have I turned around? So, why the hell would I put my opinion out there in a major newspaper unless I had tried to do it myself first. Armchair quarterback! Cheers!

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers! Yeah, see what I mean? Ok, I get your point. Cheers!

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers!

It was very nice of him! John's done a great job at Manual of Ideas, so to be mentioned in the same breath was humbling and very complimentary. Cheers!

Good job by this writer for Gurufocus! Cheers! http://www.gurufocus.com/news/229743/2013-pabrai-investment-funds-annual-meeting-notes--chicago

+1 7.5% or even 15% arent garenteed just because you have a business model, or are happy with lumpy returns. I think Al's message missed the mark.... Well, historically they have achieved a 9.4% annual return on their investment portfolio… I thought 7.5% was conservative enough… But it seems I live in a bubble!! ;D ;D PS Actually, I don’t need a 15% compounded increase in BVPS… My firm will probably continue to post operating profits for many years into the future… (of course, this might be another bubble of mine!! ;D ;D) Therefore, a 10% compounded annual return from its stock market investments will probably be more than enough! To achieve such a result Fairfax must get a 4.5-5% annual return on its investment portfolio… practically half its historical result. That’s I think a good margin of safety… Of course, a good margin of safety, if you find yourself in bubble territory, might still not be enough!! ;D ;D giofranchi I can perfectly live of my income as an employee but that doesn't mean I have to be happy with lower returns in investments because it's just an "extra". I have my questions with the way Fairfax (or PW) presents the returns they achieved and the way Prem pounds the table about it in the annual letters. For example, is it correct to implement the first year of operations when that year achieved 180% return? Look at the CAGR when you remove the first few years (because those are irrelevant now anyway) and you get a clearer picture. Same goes for the last 10/15 years. It's just a lot more accurate when looking for future returns. Buffett doesn't exclude his early years when he was killing the markets, nor does Leucadia where they made a killing in their first couple of years. Investors, including board members here, take very short-term views of performance. You look at those two companies above, as well as Fairfax, and their compounding of book over 10, 15, 20, 25 years has been extraordinary. They get lumpy results when certain bets just kill it, and they buy things that fit their discipline. Leucadia's entire existence was buying turnarounds and it actually worked better than Buffett's purchases of quality businesses. Fairfax is buying in Canada because they are testing the waters in areas they operate...easier to integrate...easier to flex your reputation...start small...start with businesses you know. They've also stepped out and bought things like Thomas Cook India to expand and look for businesses there, but with people in place who know the region better than them. You are in the first inning of a nine inning game, and investors expect them to be swinging at every pitch like there will never be another opportunity. Crazy! Cheers!

Well, I have unconditional love for Prem and everyone at Fairfax, but I won't hold something to hold it. Otherwise you just create more risk in the portfolio if the margin of safety isn't adequate, and you give up opportunities that may be even better elsewhere. That being said, the average investor would be far better off holding Fairfax than any index over the long-term, and I would suspect will do better than if they even owned Berkshire Hathaway, simply because of size. As well, it's been three years of subpar performance because of their conservative stance, while markets have roared ahead. And now, you have the additional impact of significant acquisitions and deals that have gone sideways...Sandridge, Torstar, Blackberry...while insurance pricing has had a tepid recovery. So the amount of pessimism around Fairfax is pretty damn big when considering that the company is no where near the financial distress it has faced in the past, and is very well positioned to take advantage of others when the shit hits the fan. I don't know...sentiment on here may be a good contrary indicator. Cheers!

I've bought and sold Fairfax many times since 2003. In fact, we sold half our stake several months ago to buy other stuff while retaining our cash position. But, now reading something like this after the BBRY acquisition and the amount markets have run up, I think the true contrarian would actually be buying Fairfax. I think I may re-establish my position with more of this sentiment floating around. Cheers!

Don't know. Cheers!

Actually, I would have been happy had Prem quietly made some money for me rather than making a high-profile, but very dubious acquisition. I really don't care if the rest of the world knows who he is. Just do a solid job on capital allocation....which unfortunately is an open debate right now. :( Well I agree with you on keeping the low profile, but Munger and Buffett are getting older, and the investing community will need quality mentors to continue lessons on investing, life, morality and economics. There are plenty of people out there worthy of that, but I think Prem deserves that recognition as well...especially for the quality leadership he brings, as well as the astute investment mind he and his team possess. Cheers!

A few of the articles today introducing the rest of the world outside of Canada to Prem. About frickin' time people paid attention! Cheers! http://blogs.wsj.com/moneybeat/2013/09/23/meet-prem-watsa-the-man-riding-to-blackberrys-rescue/tab/print/ http://blogs.marketwatch.com/thetell/2013/09/23/meet-blackberry-acquirer-fairfax-financial-the-canadian-berkshire-hathaway/

You been sleeping SmallCap?! ;D Cheers!

What did he say about Exor? I might have missed that, as I stepped out to use the washroom for a few minutes. He flat out said that Pabrai Funds has a position in Fiat. Cheers!

Fiat. The 7-8 commercials, plus him saying "we have a position in Fiat" kind of gave it away! ;D Cheers!

If that's what you think...so be it. Cheers!

Is this is real Pabrai Mohnish? He has an ID in this forum? Wow! :o Do you think Mohnish would be caught dead posting on here? Plus he could never write anything that eloquent without using the word "Dhandho" in there somewhere. Plenty of Pabrai groupies out there...they were throwing their underwear at him like he was Tom Jones this weekend. ;D Cheers!