Parsad

It was $12.30 back in 2019...I would imagine it's well below that now. Cheers! https://finance.yahoo.com/news/fairfax-financial-holdings-thinks-blackberry-121239544.html

The big boys got the cash; but even the big boys wont waste capital on something that is not something, which what Blackberry was few years ago. Big Techs are not in the business of private equity, where they would buy company and surgically remove what they really like and sell off the pieces. They need to have jewel already polished and in a presentable form, and then ,,, they will pay top dollar and open their checkbooks. That is what John is doing. FFH started as a value investor in BB, but as the initial bet went off, it confused itself/role with that of a passive private equity. If you were to read Watsa' comment about BB back in 2013 in his letter, you will see how irrelevant those comments are today vis a vis what BB looks like today and where it is going. If you were to read Buffet's comment on Apple in late 2016 when he started to swing his bat at Apple in slow motion, you will see his comments are valid 4 years later and in fact have aged well. So definitely the initial thesis was off for BB and Watsa was wrong as he has freely admitted. But that "wrong" is now sunked, and now that you are in the cusp of really getting traction on that investment on the business front, and i am not talking about the short-term non-sticky YOLO, it is not time to exit BB in the way they exited Overstock. Or for that matter when they sold Johnson & Johnson and other holdings higher on the quality ladder. They seem to leave a lot of money on the table. Sure, they can use derivative intelligently as previous posts to lock in some gains. For BB only, I (the short complainer) authorize the intelligent use of shorts to offset a partial downdraft from here. As for position sizing, although myself, I complain about position sizing when it comes to FFH and its market timing (i.e. Stelco), I also admit what i like about FFH is the concentration in its common equity bets. BTW i believe we are still far from the breakeven price for FFH on the commons. I believe it is $17 USD. +1 Generally agree that selling to a party that has some synergies is the best exit strategy at the best price. I certainly hope FFH is able to do so, but if they're not currently entertaining those discussions, it could be worthwhile to consider the current rally as an encouraging environment in which to trim the position in - subject to regulatory approvals and etc. There has been multiple discussions on FFH's average price on BB. I believe all of those discussions end up with a breakeven cost of ~$10 for Fairfax's common equity. This is largely the result of doubling/tripling the position back in 2011/2012 time frame when BB was ~$6-7/share. I believe there is an interview with Prem floating around somewhere from around that time that also confirmed the $10/share breakeven. I believe that's correct. Also with the convertibles at $6, the average cost would come down even more. Regarding BB's crazy run. I bought Overstock.com at $2.99 back in March, and I also bought a ton of LEAPs. I sold out between $20-30, because I thought that was where fair value was. But the sucker went all the way up to $110+, which would have been a 80 bagger for me on the LEAPs and 40 bagger on the equity. Even back down to $60+, it's 2-3X what I sold at. So stupidity knows no bounds. BB could go to $40-50. I would hope that Fairfax as value investors would take their original capital off the table before that peak, but sometimes holding on is the right way to go after you've taken some money off...look at Tesla shareholders! Cheers!

Generally its the former...the LP would be left with $1.8M. If the GP reinvests their fees, then there would be X number of units issued to the GP at the month-end unit price of Y. All of the units would be priced at Y at month-end. In this case, the LP would have $2M in it, but a higher number of total units. If new capital now comes in, it would be brought in at the price of Y. The fund would now have to achieve above the monthly hurdle on the total number of units before new capital came in, but after the GP reinvestment was made...so the watermark is actually $2M. If no reinvestment by the GP, but new capital comes in, then the high watermark would be $1.8M. Cheers!

Who do you think is going to make more money over the next 5 years? Someone buying Berkshire today or Fairfax today? When Fairfax hit four times book in 1998...if someone didn't sell, that's their foolishness. Just like investors not taking advantage of discounts over the long-term. If you are a value investor, you never fall in love with any stock...no matter who the manager is. At some point, you sell and move to other discounted investments. Cheers! Someone buying Markel. ;D Possibly. I think it needs to get a bit cheaper...like back in March/April. It's small enough to compound faster than Berkshire. Otherwise at current valuations, I still give Fairfax the edge. Cheers!

Who do you think is going to make more money over the next 5 years? Someone buying Berkshire today or Fairfax today? When Fairfax hit four times book in 1998...if someone didn't sell, that's their foolishness. Just like investors not taking advantage of discounts over the long-term. If you are a value investor, you never fall in love with any stock...no matter who the manager is. At some point, you sell and move to other discounted investments. Cheers!

Quarterbacking is the easiest thing in the world to do, until you actually are the quarterback. Then you hear all of the bullshit from the Sunday morning couch quarterbacks about what you should be doing. Cheers! Yea...that would be true if there wasn't tons of people doing live play by play during much of the timeframe in question. Except there has been. Look at the difference between this and Berkshire. People start salivating every time there's speculation Buffett might be buying something new. People hold the breathe every time Prem does the same and are basically just praying for breakeven with half of the portfolio. Thats a big reason for the discount in the market. That discount has created wonderful buying opportunities for both short-term and long-term FFH shareholders. When was the last time someone could buy Berkshire or even Markel at similar discounts...2008/2009? Your deference to Fairfax's supposed ineptitude actually helps investors in Fairfax, because those big cyclical swings drop the price to below intrinsic value relatively regularly, and then it generally rebounds to higher historical prices. That's value investing! Cheers!

Quarterbacking is the easiest thing in the world to do, until you actually are the quarterback. Then you hear all of the bullshit from the Sunday morning couch quarterbacks about what you should be doing. Cheers!

We don't know if the stock is moving on momentum, or perhaps there is something in the works. Let's leave it up to the investment team to decide what to do. Because if something is happening, they would have a better idea of the upside. Either way, things look a lot better now than they did six months ago. Cheers!

Shareholders will benefit this time because we get to keep the cash (reserves are in excellent shape with redundancy in their book again last quarter) to buy back stock as they did in 1990. Their best investment at these stock levels is to participate in the hard market, monetize non core assets and buy back their own stock..that’s it. Couldn't agree more! The fact that virtually all asset classes are fully valued, they will probably get the opportunity to also exploit the bond and equities market over the next 12-24 months. But they don't need to do that to hit their targets...it would just be icing on the cake, just like the return of market price to book value. Cheers!

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share. It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose. If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years. Cheers! The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns. ...and one to ask: ''is 15% a realistic expectation?''. I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations. yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;) Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount. Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him. And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years! Cheers! What is the thesis on ATCO? David Sokol I think that was the original thesis, but Bing Chen is an extraordinary manager himself too. Very impressed by what he's been able to do, how he leads and his investment/finance acumen. Sokol picked a winning CEO! Cheers!

Congratulations! Lovely, lovely voice! Keep encouraging her and good luck. Cheers!

It should also be noted that this hard market is a global phenomenon. Not simply regional like during after a Gulf Coast hurricane or Italian earthquake. You combine catastrophe losses, with underpriced premiums in many regions where global warming is taking hold, and a global pandemic...zero interest rates, overinflated stocks, fully priced bonds...you get arguably the greatest hard market in recent memory! You bet it will. For a good 2-3 years or so until you start to get private equity, hedge fund, institutional capital coming in down the road. Cheers!

The rotation began back in November...alot of value stocks have been rising since then. Our portfolio shot up some 45-50% in the 4th Q and 1st Q 2021 so far. Where you have you guys been? Ironically, it began just as we started to get some large redemptions in September/October...typical! Cheers!

Happy New Year all! Best in 2021! Cheers!

The only dependable part of the Steelers game all season was Rothlisberger until they went into the mini-slump. Their defence isn't what it used to be, so I think they are vulnerable...same problem with Seattle. As long as their star quarterbacks are playing well, and their defence is playing ok, they have a shot. Whereas I think both Kansas and the Bills are very well rounded teams this season...from their quarterbacks, offensive line, defensive line, special teams, running game...both teams are well balanced to go all the way. I think it was almost guaranteed that Kansas would repeat until Edwards-Allaire got hurt. Not only was Mahomes playing well, but the running game with Leveon Bell and Edwards-Allaire was almost unstoppable. Add Kelce as arguably the best tight end in the game taking over from Gronk...well, they looked damn good! I was expecting more from Lamar Jackson this year. I thought they had a really good shot as well, but Jackson is the one who is a little more erratic this season, even though he's still putting up good overall numbers. Then there's Tom...Tampa looked rough from game to game early on, but they are really coming on with good defence. Never count Brady out! The saddest story is the Jets have started winning...just as they were about to win the draft lottery and get arguably one of the best quarterback prospects in the last decade...and that's saying ALOT! Poor Jets fans! Cheers!

Hi Greg, I fully understand your feelings. I have no problem if he attacks Prem, me or whoever. But he knows he's been warned countless times about keeping politics/religion/non-investment topics out of other boards/threads. He wanted to piss me off by quoting me...on religion...while the subject was Fairfax in the Fairfax thread. You don't do that. Yeah, once in a while you'll post outside of the Politics thread, but for all intents and purposes you do try to follow the rules, no matter how blunt you get. Cubsfan does too...LC and the liberal contingent do too. But Cardboard not only ignores the rules, he is often the instigator and I've had tons and tons of complaints against him...that I've ignored because he posted here so long. But I can't ignore it forever. If he's purposely going to be a dick, so be it...he's gone! Cheers!

If you are going to use the quote Cardboard, use the whole thing so people understand the context: I don't think LC, nor I have any problem with your belief in God. What we have disbelief in is why that belief in God is based on stories written by men who didn't even know what a virus was, let alone had the ability to communicate broad distances like we do today, but somehow spoke directly to the creator of the universe! The second part we have a problem with is that you take those stories written hundreds, if not thousands of years ago, to heart and revolve not only your beliefs around them, but want to extend them upon other people. Why? Because you believe those stories or beliefs stand on a higher moral ground...that the majority of people don't want to stand on with you, because they think your beliefs are archaic and misogynistic. Cheers! Prem isn't running around making an asshole of himself telling liberals what retards they are, how they are turning Canada into a shit-hole or espousing other rhetoric. His faith is for him...not the rest of the world. Second, I've warned you so many times about bringing politics to boards outside of the Politics board. I've tried to be as fair as possible, even when I got more complaints about you than any other poster in the history of COBF...and most of those complaints came only in the last two years...but I can't justify giving you so many opportunities when you keep moving the topic off subject and onto political issues in non-political threads. Good bye! Cheers!

Though about it. Kansas will repeat! Cheers!

Two wonderful contrary indicators that Fairfax's stock price will do well in 2021 and 2022! Mark my words. Cheers!

My guess is if this scenario plays out we will simply see the hard market last longer. Insurers have been seeing inflation happen already for years on the cost side (social inflation). For non-life insurance companies the big question for 2021 is where does the current hard market go? Does it last all year and into 2022? What average rate increase do we see each quarter? Looks like Q4 2020 will see strong price increases with no end in sight. Yes other pieces are important: 1.) where does covid reserving go from here? 2.) how strong is the economic recovery? 3.) where do interest rates go? 4.) how bad is catastrophe season? One other thing I would remind people regarding their concerns around low interest rates. Prem and Hamblin-Watsa are one of the few insurance teams still around that saw, studied and completely understand how low interest rates affected Japanese insurers over the last 35 years. They predicted the turmoil that Japanese insurers would face, and they also watched and studied how many insurers survived and thrived. And they are also one of the few investment teams that expected low interest rates to eventually arrive on a global basis. So if anyone has contemplated this scenario carefully, they are the ones. It's also why they got some of the macro calls wrong, because with all of the government intervention since 2008 and again now, we keep prolonging the inevitable day of when consequences of these events actually arrive. Cheers!

+1 +2! Cheers!

As many people have years of experience following Fairfax, is this amount of insider purchases atypical? Yes. Also Prem has never bought remotely close to as much stock as he bought in June...the $150M investment. I've just never seen him buy like 10% of his net worth at one time and probably 80% of his net worth outside of Fairfax like that. Unheard of! Cheers!

I honestly cant see how you can make these statements? Interest rates are at all time lows---unless of course rates go negative in the US? A clear head wind for any insurance company even if Brian B is making the calls on duration and quality. Quality stocks---we are talking about Fairfax aren't we? And I would love to get your feedback on the comments attributed to Prem in the recent G&M article. Has Fairfax closed out all its shorts? Have the comments attributed to Prem in the article left him with enough wiggle room to short again in the future? I don't think they've taken out any other short positions. That doesn't mean they don't have existing short positions or other hedges. You cannot manage a leveraged reinsurance portfolio without hedging some of the risk. You'd be a fool not to! Whether that hedge is a large cash position or actual hedges is a matter of investment management...but Fairfax has always protected the downside to their portfolio, especially in periods of economic risk, and that's because it will ultimately affect their statutory surplus and ability to write business when premium pricing is high. In terms of buying quality bonds and stocks. They learned to stop buying crappy turnaround insurance businesses and put Andy Bernard in charge of overseeing all insurance operations, they could do the same with the investment portfolio. I think Wade Burton and Lawrence Chin will have more and more responsibilities. I imagine the next generation of Fairfax positions to look more like Tom Gaynor, rather than Fairfax when the old guard at Hamblin-Watsa was fully in charge. I also imagine we won't do as well on the bond side as Brian ages, so quality stocks will become more important. I think we'll also see a change in the types of private businesses they buy...better quality...tier 1 instead of tier 2 and 3. Cheers! Sanjeev, I did not ask about hedges. I asked about the comments attributed to Prem in the recent G&M regarding Fairfax's short positions. Specifically, the article attributed the following comment to Prem: "However, Mr. Watsa said the company is not making bets against any stock or sector at this time." If this is an accurate statement than Fairfax has closed out the short that caused the unexpected loss in Q3. If it is not accurate then Fairfax needs to correct the record. I also do not believe you have addressed the concern I raised about the ultra low interest rates. As you know, Fairfax is required to hold a significant portion of its overall portfolio in bonds. The yield on these securities has been all but eliminated given where rates are. The overall yield in the portfolio will continue to decrease as each bond being held matures. Any upward movement in rates will result in bond losses albeit unrealized if Fairfax is able to hold each bond to maturity. It is an open question whether the underwriting performance will be sufficient to offset the loss of yield on their bond holdings. I do not believe the loss in bond yield can be replaced by quality stocks. I am not sure what that statement even means? You also commented that you believe Fairfax will change the type of private businesses they invest in---Tier 1 instead of Tier 2 or 3. What specific evidence do you have to support that statement? I see no evidence of this at all with the possible exception of the reorganization of Fairfax Africa and on this one I would have preferred that the company acknowledged that Fairfax Africa was a mistake and sold off its holdings. In the meantime they continue to hold numerous retail and restaurant businesses that will take years to recover from the impact due to covid and if they do recover they will get back to being mediocre businesses at best. Finally, you have previously referenced the positive impact that Wade Burton and Lawrence Chin will have on overall investment results. Two very talented and hardworking individuals but for now and for the foreseeable future Prem is in charge. Enough said on that point. I just get a sense from what you write or how you write that you believe that everything will work out just fine. Clearly myself and other posters on here are not in that camp and have several very specific concerns that need to be addressed before we can wholeheartedly jump back into Fairfax in any meaningful way. Do you have the print version of the article? I cannot access it. The quotes provided are comments from the writer...not Prem. I cannot comment unless I see exactly what Prem's comments were. On the comment regarding rates...that cuts two ways. Fairfax can lower its interest rate costs on its debt. Low interest rates will affect all financial institutions. Fairfax is global and can invest in bonds in other countries and other currencies. When it comes to generating bond income, I'm less concerned about Fairfax doing that while Brian is there. He'll always do better than his peers. Regarding Fairfax buying better quality investments and businesses. I think that will just be the natural progression as the older Hamblin-Watsa team passes on duties to the Cundill influenced team of Wade Burton and Lawrence Chin. Prem has the final call, but you guys don't understand how much free rein Prem gives to the guys in charge. And it's really a group of about 6-7 people who make the bulk of the investment decisions...by committee. And while I don't expect Christine and Ben to have a major influence over the board...their investment experience, as well as Lauren Templeton's will have some influence as their tenure becomes longer and longer. Overall, as you've read from Prem, Wade has a terrific record comparable to Tom Gaynor's. They learned at the knee of Cundill and now Prem, Brian, etc. On the last paragraph...I'm not asking anyone to jump in. I'm just saying that the psychology being displayed is something we've seen numerous times before on numerous stocks. Usually, by the time investors are ready to jump in, they've already missed the first big stretch of gains! Cheers!

While I don't put any stock in it, as I do my own analysis, but for those that pay attention to insider filings...alot of directors buying stock regularly...not just Prem's massive $150M purchase a few months ago: https://www.canadianinsider.com/company-insider-filings?ticker=FFH If you believe they know more than you! Hmmm! Cheers!

I honestly cant see how you can make these statements? Interest rates are at all time lows---unless of course rates go negative in the US? A clear head wind for any insurance company even if Brian B is making the calls on duration and quality. Quality stocks---we are talking about Fairfax aren't we? And I would love to get your feedback on the comments attributed to Prem in the recent G&M article. Has Fairfax closed out all its shorts? Have the comments attributed to Prem in the article left him with enough wiggle room to short again in the future? I don't think they've taken out any other short positions. That doesn't mean they don't have existing short positions or other hedges. You cannot manage a leveraged reinsurance portfolio without hedging some of the risk. You'd be a fool not to! Whether that hedge is a large cash position or actual hedges is a matter of investment management...but Fairfax has always protected the downside to their portfolio, especially in periods of economic risk, and that's because it will ultimately affect their statutory surplus and ability to write business when premium pricing is high. In terms of buying quality bonds and stocks. They learned to stop buying crappy turnaround insurance businesses and put Andy Bernard in charge of overseeing all insurance operations, they could do the same with the investment portfolio. I think Wade Burton and Lawrence Chin will have more and more responsibilities. I imagine the next generation of Fairfax positions to look more like Tom Gaynor, rather than Fairfax when the old guard at Hamblin-Watsa was fully in charge. I also imagine we won't do as well on the bond side as Brian ages, so quality stocks will become more important. I think we'll also see a change in the types of private businesses they buy...better quality...tier 1 instead of tier 2 and 3. Cheers!