Parsad

Yes, and this gives analysts and shareholders greater visibility of what is going on at the company and how the investments are managed. I think this is the direction they are headed to prepare the company post-Prem. Can you imagine the investment issues at Berkshire after Buffett, even with the two Toms there with the amount of money pouring in every day? Or Markel post-Gaynor...lack of depth on the investment side? We've got very capable people at Fairfax (HW, Fairbridge) and associated with Fairfax (Sokol, Chen, KW, Trott, Dalton, etc) that can manage the huge amount of capital we have and that will flow in from insurance over time. And those associated with Fairfax have very honed skillsets in certain industries that make them among the best. Cheers!

No, Paul is spending time working on his personal ventures and enjoying life with his family. You never know...you may see him back at Fairfax or working with them in some way in the future, but presently he is not involved with HW or Fairfax. I certainly would not be surprised to see some future deal where Fairfax and Paul are involved in some way. Cheers!

That joke has aged well! It's too bad that neither Biden, nor Trump, have a shred of Reagan's charisma and delivery. Cheers!

I know Patrick. I also know Jonathan Johnson who runs Overstock now and is overseeing Medici Ventures which owns all of the blockchain technology companies they invested in. I'm also an Overstock shareholder and have followed the company and owned the stock on and off for nearly 20 years! I've made more money buying and selling Overstock.com than any other stock or idea. Patrick was 100% correct about crypto and blockchain. But it won't be BTC that leads the way. ETH has a place in all of this...but not as a leader. It will be stablecoins backed by actual assets or revenues that will become mainstream and pave a new way for financial transactions. Blockchain will also create instantaneous one-to-one title transactions...essentially eliminating most, if not all, intermediary institutions...think Visa, Mastercard, American Express, Paypal, etc, as well as bank tellers, real estate brokers, ticket stations/vendors, etc! Those institutions will have to figure out a way to remain intermediaries or create their own stablecoins to conduct transactions for a fee. Cheers!

Agree with that. A few years from adoption and a decade or so from ubiquity. Cheers!

You guys are confusing two things: The current crypto batch and portability of assets. Yes, it's easier in terms of portability presently, while investors have faith in it. It doesn't mean that the current batch of crypto can hold their value long-term...as we've seen from their volatility and lack of usability as a currency. I fully agree that future crypto backed by some sort of asset (gold in vaults, land, resources, tax revenue, operating revenues, etc) will work both as a store of value and currency...and will be easily portable. Cheers!

Well, you both might be correct. I don't think Prem is giving the reins over to anyone completely, but we have seen him make considerable changes to 1) lessen the load on himself 2) prepare the company post-Prem and 3) simplify the company. - Added a President to oversee everything - Changes to the board including bringing in family members and younger directors - Narrowing the scope of investments and widening the allocators - Ensuring future control of the holding company Having a go to group for capital allocation is not only a good idea, it is a must now that the core group is well into their 70's and the older ones are getting closer to 80. Notice how the core group is overseeing the burgeoning new recruits or some tenured members...Chandran with Fairbridge, Brian and Prem with Wade and Lawrence, and refocusing their energy back into larger, sure bets, rather than venture capital ideas with the closure of Fairventures and the labs. It's probably the closest its looked to Berkshire or Markel in some time. Fairfax's succession plan may actually be more advanced than Berkshire's or Markel's! Cheers!

I know the reasons behind Paul leaving, and I can 100% assure you it had nothing to do with Fairfax, Prem's relationship with Paul, or anything to do with the company. Basically, he had spent his children's life working 12-16 hour days, and he just needed to spend more time with them before they were gone and had flown from the family nest. He wasn't going to retire, so he made a very tough decision to leave Fairfax and spend more time with his family. Kudos to him! Cheers!

Paul was at Fairfax for about 15 years...and he was President of Hamblin Watsa during the financial crisis. Meaning approval of the portfolio moves, including buying CDS, would have to be run by him and Prem. So if you are going to say things have gotten better after Paul left, then you better point out some of the greatest successes happened with him there too! Also, all of the successes that everyone is cheering about now as part of the turnaround...Atlas, Eurobank, Resolute, Brit, Fairfax India, Fairfax Asia, Stelco, etc were all under Paul's watch. Cheers!

How is crypto (in its present form) any different than a Monet or Ferrari in Russia? You cannot use it at the local Perekrestok to buy bread. You may be able to trade one or the other for some gas at your local Lukoil station! Store of value and tradeable currency are two very different things. Crypto will have a place in the future...but as I said before, just not as it is now. Cheers!

Be careful! This is the problem with political risk...it's immeasurable. Shareholders in SBRCY will probably get wiped out, even if the sanctions are short-term. Bondholders would more likely make some money here, but only if sanctions are short-term. The only hope is some Chinese bank walks in and buys it, since Russia cannot nationalize a bank that has no prospects under essentially a worthless ruble. If you are trying to take advantage of this situation, look for businesses outside of Russia that have been hit because they do business there, but have no risk in terms of most of their assets being situated outside. Cheers!

Yes, I totally agree with this. That's kind of my point. That distortions created a period where massive growth occurred, but for traditional value investors, the normal collapse of the cycle (both tech bubble, housing crisis and now the pandemic) never were fulfilled because governments simply kept reinflating. Thus the eventual rebound in the cycle of traditional value stocks including commodities. Buffett is no longer a traditional value investor. Munger and Phil Fisher's influence has made him more of a hybrid...traditional distressed value investor who pays up for growth...essentially just an "investor" now...and that may be the best model and what we should all aspire to. But it is hard to change when you've done the same thing for so long...Buffett and especially Munger are incredibly unique in this way. Fairfax remains a Ben Graham distressed value investing firm...they have not changed, nor are the old guard likely to ever change...so damn hard to go against your nature. I personally have an incredibly hard time paying up! Wade and Lawrence may have some influence on Fairfax, but the team that was together for nearly 50 years won't change their stripes. So we have these cycles where Prem will be right and Prem will be wrong as distressed value investing moves through time. Cheers!

Not quite accurate. The level of monetary and fiscal manipulation implemented using modern economic theory has been extraordinary during the last 20 years since the beginning of the tech bubble and well into the pandemic. Outside of Japan during the 90's and early 2000's, the level of manipulation of interest rates and capital injections, alongside completely unprecedented asset purchases used since the housing bubble crash...all of this was done for the first time. We don't understand the distortions this created or the massive bubbles (3 times) in 20 years we have been exposed to. Sure, some of us have benefited from these rapid cycles, but no one has experienced this before. This is not dissimilar to when interest rates spiked in the late 70's and early 80's...outlier events and the eventual unpredictable outcome...except in hindsight. And I think that's where alot of the reflection of Prem is coming from...hindsight! I don't know of a single investor on this message board that got it right over the last 20 years. Even Buffett didn't get it completely right. Were there mistakes? Absolutely...shorting, lack of quality targets, etc. Were there winners? Also for sure. Could they have done better? Well, let's measure that over periods...the last 10 weren't good...let's see how those numbers change progressively over the next 5 years. Cheers!

I would also say that the reason no one got it right over the last 20 years is because of the distortions monetary policy created. Those that got the tech bubble and housing crisis right, didn't get it right from 2015-2020...so many, Prem, Rosenberg, Grantham, Klarman, Gundlach...pretty much every hard-core distressed investor. They expected continued fallout and a full blown correction, but monetary policy refueled the bubble. Those that missed the tech wreck and housing crisis, were generally non-value investors and got the growth aspect correct. Then came the pandemic and really no one other than perhaps Bill Gates and Steven Soderbergh saw that coming! Again, many missed the reinflation trade with all of the money pouring in from governments. And growth investors all bought into crypto, SPAC's, meme stocks, pandemic winners, etc. Those that were fat on the hog on those investments, completely missed the coming correction. Cheers!

From March 2021 Letter to Shareholders: Last year at this time, it looked like the long drought in value investing was coming to an end. For the decade ended December 2019, value-oriented stocks had the worst ever relative decade versus growth stocks (particularly tech stocks) over the last 100 years. And then COVID-19 hit, and the NASDAQ went up 44% in 2020. The divergence in 2020 was the worst ever in a single year as the spread between growth and value indices averaged between 20 and 30 percentage points. Jeremy Grantham documents this well in his article ‘‘Waiting for the Last Dance’’. IPOs (including SPACs) in 2020 were back to the records set in 1999. Current market conditions remind me of the phrase ‘‘Renaissance of Value’’, the title of a talk Ben Graham gave in 1974 after the demise of the Nifty Fifty – the growth stocks in the late 1960s and early 1970s that sold at P/Es of 50 - 100 times and higher – before they crashed in 1974, after which most never saw their 1972 highs for the next 15+ years. As Ben predicted, value stocks did extremely well over the next two decades. More recently, we had the dot.com boom which peaked in 1999/2000. Many of you will remember Microsoft selling at $60 per share or 170x earnings in December 1999. A year later, in spite of record earnings, Microsoft was down 65%. It took Microsoft 16 years before it saw $60 again. Today, Microsoft sells at more than $234 (40 times earnings) as earnings have increased 16 times since 1999. Cisco peaked on March 27, 2000 at $80 per share at 181 times earnings. One year later, it was down 80%. Today, 20 years later, Cisco still sells at $45 per share (16 times earnings), never having seen $80 again. This, in spite of earnings today being 6 times what they were in 1999. Which brings us to the current period. Just recently, the FAANG stocks accounted for 25% of the S&P500 – never before have five stocks dominated the S&P500 index to that extent. Technology now accounts for about 40% of the S&P500 – a record only last seen in the dot.com era (37%). Zoom had a market value of $130 billion – yes, $130 billion, with revenues of $2.7 billion. Shopify has a market cap in excess of Royal Bank even though Royal Bank earns more money annually than Shopify has revenue. Peloton has a market cap of $40 billion, Pinterest of $50 billion – companies which recently have gone public! And bitcoin hit $53,000 – a market value of $1 trillion – and I thought it was expensive at $19,000 in 2017. Massive speculation! And I can go on and on! As in the past, this will end - and it will not be pretty! In March 2020, because of COVID-19, the whole world was shut down – more than 180 countries closed their economies, something that has never happened before! Because of testing, therapies and more recently, very effective vaccines, the world can see normalcy returning. This is the environment in which value stocks will thrive. We feel our best investing days are ahead of us. Inflation and interest rates have been going down from the early 1980s – we may well have forgotten that they can go up, sometimes quickly and significantly. 10-year treasury rates have gone up from a historical low of 0.5% in 2020 to 1.5% recently. With high savings rates and significant pent up demand combined with U.S. President Biden’s potential $1.9 trillion fiscal stimulus plan, we may see inflation and interest rates rise significantly. As I write this to you, commodity prices, especially copper, have gone up almost to decade highs. From current levels, a 100 basis point increase in rates for a 10-year treasury bond and a 30-year treasury bond results in a 9% and 22% decrease in the price of those bonds. These are very significant risks that we have reduced by having an average bond maturity of less than five years. For bond investors: caveat emptor! Very few people have been correct in every decade...Buffett is one of a very small number that probably could be counted on one hand. But I'm not sure Prem got anything wrong in the above excerpt, and very few were as right as him between then and now about so many things, and just about every critical period since 1985...Japan Crisis, Tech Bubble, Housing Crisis, SPACs/Crypto/Tech Stocks! Who on this message board has held Amazon since 2000? I'm probably one of a handful of people who held Overstock.com (an online retail business and early competitor to Amazon) on and off since 2002...and I did not imagine Bezos taking Amazon to the highs he has. In fact, while Amazon's retail business is a juggernaut, it's really its AWS business that allowed it to scale profitably from 2005 on, while pouring all of the retail money back into the business. So many on this message board read and knew about Google emulating Buffett's Owner's Manual just before its IPO, yet who invested in the Google IPO in 2004 and held their shares? Ahhhh, no one on this message board! My friend who knows very little about stocks, other than what she watches on Jim Cramer's show, was smart enough to buy a ton of Apple at about $16 pre-split and never sell...is she some sort of sage? Nope! Just damn lucky! I know of very few people who actually got things right over the last 20 years. Cheers!

No individual stock is a suitable replacement for cash. If something happens to Buffett tomorrow or a massive catastrophe hits, the stock drops significantly (yes, temporarily, but it could drop just when you need the cash). Berkshire insures some of the largest risks that require coverage and Buffett is 91 years old. Same with Fairfax...Prem is now 71 and we know Fairfax's stock price is volatile with catastrophe losses. Cash is cash! You don't want to hold it all the time, but nothing beats it when opportunity presents itself. Cheers!

According to many on here, my 50% cash hoard that developed over the last 7 months is a burden and blight with inflation. So much for that theory! On top of that, like nearly 40% of my entire portfolio is Fairfax who is also sitting on 50% cash. Christmas is coming very early this year! Cheers!

Guys, I've deleted like 50+ posts put up in the last few days. Please move any political discussions of the Russian/Ukraine issue and its ilk to the Politics board. Cheers!

Agree. A cringe-worthy topic, but what would happen in the U.S. if they had 1.5B people? Cheers!

The margin Charlie is using relative to the size of the portfolio is actually very low. I don't think there is as much risk as people might think. Also, he's Charlie Munger...someone who for the last 50 years has studied, espoused and practiced extreme risk management...both from a portfolio and insurance perspective. If anyone understands risk and how it relates to capital loss or outsized returns, it would be Charlie Munger. Cheers!

I've got like 14 episodes of Billions on my PVR...when they ended their season like 2 years ago, I ended up watching so many other series and they just kept automatically recording as the new season started. Great show with some wonderful actors, and they get a lot of the Wall Street stuff correct! Cheers!

Only saw the first two episodes of 1883...they were free on the Paramount channel available in Vancouver...not the same as Paramount+. I'm hoping 6666 is available here on the regular Paramount channel or through Amazon Prime when it is released. Cheers!

Obviously the small investor! Every small investor should have some stocks, some bonds, some real estate, some gold and now a little crypto. They don't know why they own it, but they should own a little. And cash...who needs cash? Cheers!

I would imagine Charlie has more insight into China's political situation than most of us do...especially from his friends like Li Lu, etc. I don't think he ever even worries about what other people think of his investment strategy...and if something falls in price, he WOULD be a fool not to buy more, including even levering up if he thought it was dirt cheap. He'll come clean eventually down the road...win or lose...but losing doesn't really seem like Charlie's thing! Cheers!

To supplement Viking's answers: 1) Yes, Andy Barnard. No comparison for Ajit Jain, but Andy is exceptional among insurance executives. 2) Yes, Fairfax on a percentage basis has more long-tail insurance than most insurers. 3) Yes, Fairfax uses both more insurance leverage and asset/equity leverage than Berkshire. Historically, Fairfax's insurers have written very good business from organically grown business, and 5-years out from some of the poorer insurers they bought and turned around. They have a very good record of releasing surplus capital when reserving for losses compared to the majority of insurers. They no longer acquire poor insurers and try to turn them around, thus the quality of the insurance businesses and their combined ratios have improved dramatically. 4) Peter Clark was recently appointed President. Before that, Paul Rivett was President before he retired. If something happened to Prem, Peter Clark would take over with advisement from Andy Barnard on the insurance side and Wade Burton on the investment side. Prem's son and daughter are directors of the company, similar to Susie Buffett and Howard Buffett at Berkshire...they maintain the company culture and directives their father laid out. Most of the directors at Fairfax are highly qualified and have been with the company for some time not unlike the directors at Berkshire Hathaway. Unlike Berkshire, Prem's holding company which controls the multiple voting shares in Fairfax, would retain those multiple voting shares and Prem's estate (likely his family) would retain control...a good thing if you trust Prem's family (which I absolutely do), and something an investor might be wary if if they don't. Cheers!