Parsad

Hi Everyone, Our 2013 Fairfax Financial Shareholder's Dinner is coming around the corner. Unfortunately, the beautiful "Imperial Ballroom" was booked for 2013, so we have the Tudor Rooms, one floor above on the Mezzanine Floor. The dinner menu will be tweaked to make it a bit better...details to follow. Book your tickets early, as we are limited to only 170 people this year. We had 143 last year, so I expect this thing to be sold out pretty fast! 2013 Fairfax Financial Shareholder's Dinner April 10th, 2013 Fairmont Royal York Tudor Rooms 7 & 8 - Main Mezzanine Floor 100 Front Street West Toronto, Ontario (416)368-2511 All proceeds, including profits from tickets sales, corporate sponsorships, advertising, auctions and donations, go to "The Crohn's & Colitis Foundation of Canada" in memory of JoAnn Butler, who was Prem Watsa's assistant for many years! Buffet Dinner Tickets $150 No Buffet Tickets $75 Cash Bar Buy tickets at www.cornerofberkshireandfairfax.ca (top of right hand column) Reception: 6:00-7:00pm Dinner: 7:00pm-8:30pm Speakers and Q&A: Approximately 8:30pm on

Watch out fellow Canadians...you're getting yourself into a real pickle! Cheers! http://www.theglobeandmail.com/report-on-business/economy/household-debt-surpasses-levels-foreshadowing-us-housing-bust/article4613321/

Transcript of his speech to the Atlanta Rotary Club. Cheers! http://newsroom.bankofamerica.com/op-ed/remarks-atlanta-rotary-club-annual-prayer-breakfast-moynihan

Hi Folks, For all new members, please remember that we have new registration requirments that went into effect October 1st, including a one-time fee of $10: http://www.cornerofberkshireandfairfax.ca/forum/terms-of-use/terms-of-use/ In terms of spam registrations, so far so good...the one-time fee has eliminated about 70% of the fake registrations so far and made my life a heck of a lot easier. Cheers!

Canada...Like America, just better! ;D Cheers!

Bloomberg article on foreclosures. Cheers! http://www.bloomberg.com/news/2012-10-11/california-leading-u-s-out-of-housing-bust-mortgages.html

It is held the morning after the Berkshire meeting and includes a very nice breakfast. This year it expanded to the Omaha Hilton across the street from the CenturyLink Center where the Berkshire meeting is held. Tom Gayner and Steve Markel make some opening remarks and then open it up for Q&A. The audience includes a lot of informed investors and large value investors such at Tom Russo, David Winters, Mohnish Pabrai, etc. The discussion is useful and questions are typically informed and intelligent. I have found that attending gives me an opportunity to both follow the investment and take the measure of management, whom I've found to be first class people. Thanks Val. Do you have to be a MKL shareholder? No. Cheers!

It is held the morning after the Berkshire meeting and includes a very nice breakfast. This year it expanded to the Omaha Hilton across the street from the CenturyLink Center where the Berkshire meeting is held. Tom Gayner and Steve Markel make some opening remarks and then open it up for Q&A. The audience includes a lot of informed investors and large value investors such at Tom Russo, David Winters, Mohnish Pabrai, etc. The discussion is useful and questions are typically informed and intelligent. I have found that attending gives me an opportunity to both follow the investment and take the measure of management, whom I've found to be first class people. They are most definitely first-rate management at Markel. A more trusted bunch would be hard to find. Cheers!

Parsad I don't think you understood me. What I meant by my comment was that we live in very very dangerous times when a large part of the electorate, specifically the younger generation think that people like Jon Stewart are so brilliant and then they demonstrate that they are just actors. If Stewart doesn't get the severity of our debts I can assure you his viewers have no clue. Same answer as before. Basically this is the same old inter-generational debate that we have every so often..."you young whipper snapper"..."you old guys are out of touch"...etc, etc. You do realize that the same arguments were made against the misunderstood, naive, belligerent, sophmoric youth of the 70's, and they ended up being some of the greatest capitalists in history. I don't see how this proportion of the electorate will be any different. Am I the only old guy here who isn't turning a shade of "old geezer"? Geez...I feel like Neil Young..."Old man, look at my life, I'm alot like you were!" ;D Cheers!

I need to hire myself a financial assistant too! ;D Cheers!

Well, of course I like hearing this from that article: Not all of Klarman's bets have paid off, or not as large as he would have hoped. Earlier this year, Baupost dropped its objection to a $8.5 billion settlement Bank of America (BAC) made with bond investors. Baupost had been pushing B of A for more. But with the AG suit, legal experts say it's more likely Klarman will get JPMorgan to pay up. "The Martin Act gives the NY AG superior subpena power than any private plaintiff has," says Issac Gradman, a lawyer who specializes in securities claims. "So Schneiderman could get much more than anything Baupost has unearthed so far." Cheers!

Definitely not Buffett, but I think he's as good as Weschler and Combs who will be running things. He's also got a hell of lot more runway than them. Hamblin-Watsa is as good if not better than Gaynor, and the leverage there should help. If I had to choose one, it would be Fairfax hands down...but investors will do better than the markets with any of them. Cheers!

Please don't tell me you are as stupid as Jon Stewart and think that balancing the budget equates to extinguishing the debt lol I don't think that's very fair--he did screw it up on the debate, but there is no way he actually thinks that. I think he just had an issue in the heat of the moment. Are you kidding me? Jon Stewart proved to the world just how stupid some of these talking heads are. He could not grasp the difference and was so pro Obama he refused to even listen as O'reilly tried to explain the difference. We live in very very dangerous times. The times are no more dangerous than past crises. Every decade we go through a period of peril and despair, and then the immediate gasp of relief as things bottom and economies eventually turnaround. Every 30 years, the depth of the event looks unmanageable. Every 50 years, it looks like the worst thing that ever happened. I think most people who were around during the time of Pearl Harbor thought it was the worst thing that could have ever happened. Well guess what...70 years later 9/11 came along, and everyone then thought it was the worst thing. Right now, the world is at the depths of a long economic crisis, and eventually we will all come up for air. This too shall pass! Cheers!

You are correct. Berkshire's size will prove to be a detriment. As far as price to book value goes, Berkshire's non-insurance businesses, and perhaps even their insurance business, deserves a significantly higher premium than many others, simply because they are businesses that are on top of their respective food chains. That being said, I think investors will do better long-term with Markel than Berkshire...and they will do even better with Fairfax than Markel! ;D Cheers!

I don't really understand the argument, taxes are only levied on profits, so by reducing your workforce/not growing, you are reducing your profits in the first place. Let's say he makes $2 in profits now, and pays $1 in taxes. He could grow it to $2.5, but now that the rate is 55% instead of 50% (random numbers) he chooses to layoff people and shrink, reducing his $2 to $1.75. Now he makes less money because of his choice rather than more money, even with the change in taxes. If his changes did not affect the $2, then why didn't he do that in the first place? Why not grow and reduce the fat? This CEO's way of growing is to take from his employees and line his pocket with it..."If taxes go up, I'm not paying more, so some of you will be going to cut costs!" That's basically his argument. If there were zero taxes, would there be zero unemployment? I've never met someone who turned away $1000 because they may have to pay $450 in tax, instead of $350, but that's this guy's logic. Go figure! Did tax rates stop Gates from building Microsoft, or Buffett from building Berkshire (please don't bring up float and deferred taxes, because Berkshire pays a ton of taxes regardless)? Yes, exactly. He saves his own ass under the "largesse" of Obama, but hey that's none of your damn business! ;D Cheers!

Although, you've got to love this quote: "It was a stupid error, but it wasn't going to sink our ship," he said. "Only when I come to Washington do people act like making a mistake should never happen. Of course it happens." Cheers!

What a hypocritical jerk and blowhard! Cheers! http://finance.yahoo.com/news/ceo-workers-youll-likely-fired-131640914.html

New prototype walk-up, drive-thru stores. I've always been fascinated by Starbucks and Shultz...it's one of the few businesses that boggle the mind...led by a relentless, passionate CEO that continually evolves the brand. I remember years back, Buffett discussing at an AGM on how coffee on a per capita basis had been decreasing for the last 40 years, yet Starbucks was somehow growing 15-20% a year. Just another great American business story! Cheers! http://finance.yahoo.com/news/an-experimental-new-starbucks-store--tiny--portable--and-hyper-local.html

To sum up, everything being equal, if WFC was being sold at the same valuation levels as say BAC, I'd be all over it. I think it's a great bank. I think they have a polished image that in some respects is well deserved and in other respects is part of a good PR machine. I think that some of their good fortune is due to excellent management and some is due to being lucky to miss out on certain things. I think that there are a number of people who believe that WFC is a superior bank investment because it has the Buffett imprimatur. As I said, good bank, not good valuation. There are tons of banks that perhaps aren't of the same quality but selling for fractions of WFC. Banks that will be increasing by multiples, not percentages. What's the best that happens with WFC? It grows along with the economy and perhaps gets a little multiple expansion. Nothing wrong with that, I just think there's better out there. I agree with that, and I think you could say the same thing about US Bank too. Excellent banks, but their valuations are at a premium to their peers...deservedly so at this point in time. It also doesn't mean that they won't maintain relatively high valuations for some time relative to their peers. They avoided alot of the mess and are expanding when their peers are shrinking. We own both BAC and WFC...the only banks we've ever owned...and we own a hell of a lot more BAC. Cheers!

Satirical writeup by Jonathan Weil. Thanks to Alan for sending it to me! Cheers! http://www.bloomberg.com/news/2012-10-04/how-to-run-your-hedge-fund-from-a-prison-cell.html?cmpid=linkedin

I'm sure more of these are going to pop up against other banks...BAC is probably next. Cheers! http://www.bloomberg.com/news/2012-10-09/u-s-files-civil-mortgage-fraud-suit-against-wells-fargo.html

At some point, when you get significant panic selling in the ensuing rush after a large flash crash, you will not be able to cancel all of those trades. Somebody is going to take a hit eventually (derivatives losses), and it won't be pretty. Markets in the short-term work on confidence and fear, and if you have fear for a prolonged period...such as after a flash crash were people become extremely risk averse...you could see widespread selling. Cheers!

I agree with him on both counts. Cheers!

I've been warning about this for some time, but something bad is going to happen one day from the huge amount of volume HFT's are doing...almost guaranteed to create panic selling at some point in time...and then who knows what it will trigger on the derivative side with counterparty liability. Cheers! http://www.cnbc.com/id/49333454

The hedge fund part is cute, but they appear to be chronic liars which will get them dinged when they start looking for FT jobs on Wall Street. Are you sure about that? They may be hired just because they can do that! ;D Incidentally, I think people are being a bit too hard on these three. They are just a couple of college grads who have bought into the hype of running a hedge fund and living the high life...and definitely into their own hype. How is it any different than an aspiring broker, corporate legal beagle, or even someone aiming to be the next Justin Bieber? They will most likely fizzle out and go work for a friend of their father's, but they are probably no worse than many others trying to do the same thing. They aren't corrupt...just stupid! I think all of the negative press and notoriety is probably punishment enough for their egos. Cheers!