Parsad

True. Cheers!

Even with big bucks, it's hard to beat casinos because of table limits. If you can somehow play in a high stakes game, with no table limits, then a good player can do well. High stakes poker tables prove that there is a certain amount of skill involved and those abilities can distinguish between the good and great players. But unlike statically picking stocks, there is an element of luck with gambling...that does not exist in stock-picking, unless you are throwing darts at a list of the S&P500 and hoping one of them will be a 100-bagger! Cheers!

Pabrai is effectively saying that he is 80% directionally right on each investment. Now the comparison does not hold fully when you consider varying time horizons. But that would be the gist. I still don't get it. How is he able to calculate with any degree of precision that a stock has a 4 out of 5 chance of going up? What would such a calculation even look like? He's not calculating the probability of the stock going up or developing some calculation for that. What he's saying is that 4 out of 5 times, after he analyzes a business and invests in it, the stock will eventually move closer to intrinsic value 80% of the time. And he will be wrong roughly 20% of the time. Cheers!

Yep, the BB shareholders are up in arms. I guess their underlying assumption was that either BB doesn't need the liquidity or that there is a long line-up of potential lenders who would be prepared to lend a half-billion at 3.75% with no conversion privilege. I am from the school of thought that FFH's last note flotation was at 4 5/8%, so if that's what FFH pays for debt, what should a riskier outfit like BB pay? Maybe 7%? Seriously, a 15 minute walk through their financials for the past 3 or 4 years is enough to make a guy want to puke. Maybe there is a long line-up of outfits wanting to lend money to companies that have drastically transformed their business and are cashflow negative? I don't see it, but I've been wrong plenty of times before... SJ Blackberry shareholders are still up in arms about this: https://www.newswire.ca/news-releases/concerned-shareholder-objects-to-blackberry-s-related-party-transactions-with-fairfax-851354230.html SJ Your prior actions tend to form your reputation... "Fairfax and Mr. Watsa have a history, when presented with a conflict of interest, of working against the interests of minority shareholders and for the benefit of Fairfax. In September 2019, the Québec Superior Court rendered a judgment in which it found that Mr. Watsa and Fairfax, as insiders of Fibrek Inc., acted in a "blatant conflict of interest situation" for the benefit of Fairfax by enabling the acquisition of Fibrek at the "lowest cost possible," to the detriment of Fibrek's minority shareholders who were bought out at an unfairly low price. The Court also found that despite the trust and confidence Fibrek placed in Mr. Watsa and Fairfax, Mr. Watsa purposely refrained from disclosing Fairfax's true intentions to Fibrek management." Your prior actions tend to form your reputation! More examples please, because if you are going to point to 2 transactions out of some 300-400 conducted over 30 years...please! The only reason Blackberry is even around is because of Prem putting John Chen in charge. Cheers!

From what I understand, Ryan Reynolds is a minority shareholder and he is staying on as a shareholder of American Aviation. The rest of business (Davos) is mostly owned by Fairfax and the Sokol Family. Not sure how much is owned by who, but it looks like Fairfax and the Sokol Family are selling. Cheers!

The gist of the article...nothing wrong with it...it's cheap...but no catalyst. Just to get back to book value is a 40% return...what catalyst do you need for that? Cheers!

I've pounded the table in the past, and I've been pounding it for the last 3 months, even before Prem made his $150M purchase...but here it is from the horse's mouth, which most won't pay attention to anyways: Prem Watsa So, Christopher -- so I understand what is your question. Let me just say as I have said that our share price has been ridiculously cheap. I said that at the annual meeting. I said that in the first quarter. Saying it again and of course and I disclose that I have taken advantage of it and bought as many shares as I could to let everyone know it's ridiculous cheap. In 35 years, we never know when the stock price is going up or down. We just know that's cheap. Is it going to go up in the next six months? Or, is it -- I have bought it so that in the next five years I think it will be terrific return. And, Fairfax as a company, when we retire stock we are going to retire ton of stock if it's available. But we have to be careful when we retire it in relationship to the potential we have in the insurance business in terms of our financial position, in terms of the uncertainty in the marketplace. So, we have to take all of that into account. Our stock price is dirt cheap, and I can tell and I don't know if it'll be six months or a year or when it will go up, but it's going to go up very significantly, and that's been my experience over 35 years. And to our shareholders, I would say take advantage of it if you got to opportunity to, but otherwise, we just have to focus on the long-term. So, next question, Ella? Cheers!

That is for the first six months of the year, right? Making money in 6 months during a pandemic? Really? I am stealing Parsad's favourite: cheers! The point of a long-short book is for gains on the shorts to offset losses on the longs when unexpected bad things happen (for example, a worldwide pandemic). If your shorts aren't making money (to offset losses on longs) during an event like that, maybe not doing them would be a better choice? Or am I missing something here? If so, I'd love to know what it is... They are long on value stocks and short tech stocks. So naturally, they haven't seen significant gains on the long side and they've suffered on the short side. They will see their gains when tech stocks correct as main street returns to normal business and tech stocks get priced closer to reality. Blackberry has barely moved...Fairfax India has barely moved...Atlas Corp (which is just killing it during a pandemic) has barely moved...and they are sitting on a ton of cash and bonds (which way have interest rates moved). So I think the fact that insurance is doing so well, even with significant insurance losses, is why Prem has tipped his hand and expressed his expectations to the general market with his $150M stock buy. Insurance despite the pandemic is doing fantastic and they've indicated pricing pressure is here...and when their investment portfolio turns as market sentiment eventually and inevitably turns to value stocks...Fairfax will see book value increase significantly! We've seen it before, and we'll see it again. Cheers!

Feel exactly the same, even though I made a great return and stuck to my investing playbook! Cheers!

By the way, for those over the years wondering what I saw in Overstock.com, all you have to do is read today's quarterly report! It's a frickin' cash cow, with massive inventory turnover, and they are sitting on a ton of cash, plus all of their block-chain related businesses. The only two guys I feel more sorry for today than myself are Prem and Patrick Byrne. Fairfax's stake would have been bigger than their investment in Blackberry and Patrick Byrne would have been a billionaire! Both sold well before the pandemic. There is no God! Cheers!

Normally when you make 10 times your money in 3 months, you are very content and happy! In this type of pandemic and this type of market, I'm a bit lost, confused and today, feeling really shitty...even though for all purposes, I did the right thing. Many of you know of the one stock I've made alot of money on, that everyone hates, and at this point I can call it "In & Out"! That company, formerly run by a brilliant, nearly schizophrenic, paranoid genius, named Patrick Byrne is Overstock.com. From my estimates of intrinsic value, understanding the underlying business over the years, I pegged intrinsic value around $20-30 per share. When the pandemic hit, I saw the stock fall to $2.99, which is where I accumulated a large position in my personal portfolio and also bought a bunch of LEAPs. I already had some LEAPs in MPIC Fund I, LP, that were about to expire in January 2021, and I had bought them when the stock was around $10. Frankly, before the pandemic, I thought they would expire worthless in January! As a well-intentioned and observant practitioner of deep value investing, I sold everything when the stock started rebounding...essentially sold the whole kit and kaboodle between $14 and $23, making about 5 to 8 times my money on the $2.99 stock, and the LEAPs for 10 times to 15 times in my personal portfolio...all within 2 months. The LEAPs in MPIC Fund I, LP were well out of the money, but they too rebounded and I sold them for 10 times what I had paid a year and a half earlier. Anyone on any regular day and era would say "fine job" whether lucky or not! Now this is where the disconnect happens for value investors, because many of us deep-value guys, don't know how to just hold on...and often if we do let our winners run, we get burned as they turn quickly. The stock I had bought alone would have been a 25 bagger today if I held on...the LEAPs in MPIC Fund I, LP would have been 50 baggers today, and the personal portfolio LEAPs that i bought alongside the stock would have been 70 baggers today...all in three fucking months! Somebody buy me a drink, because this market is killing me even when I make money hand over fist! Cheers!

I love newspapers. I read at least two a day in print, and one online. You have to sift through what is in the newspaper...weed out pertinent articles and those that provide little value. It gives a very good perspective of what is happening in the world around you, and a very broad view of the world, business, science, technology, life, sports, entertainment...you name it! A book can provide useful information, but it may not be relevant or relate to the state of the world around you. Hand in hand, books and newspapers provide a broad base of knowledge, and you never know which will come in handy on any given day, at any given point of time. Cheers!

Friend who promised to share any future lottery winnings years ago on a handshake sticks to his word: https://www.cnn.com/2020/07/24/us/lottery-friends-jackpot-trnd/index.html Cheers!

I've found it delayed and slow as well. I thought it was maybe just my network. I'll get our IP to check their server or reboot it. Cheers!

What have you been eating recently? My portfolio needs that you go out for lunch! SJ Frickin' can't until the restrictions are off. It's no fun when hot waitresses have masks on all of the time! Cheers!

Whenever I see a run of posts like this on Fairfax, the stock usually does well in the ensuing months...keep it up! Cheers!

i disagree with this comment specifically. I think 9-10% ownership is a huge incentive. Sure, this is not BRK level of ownership with Buffet. But if i compare to many other companies their CEO ownership is as low as 1%, it is really high. More so, what else is in Watsa's portfolio. Is it >90% FFH stock, if yes, than i think proper economics incentive is there on both dimensions. Personally, i would preferred no dividends as it gives the optics of cash-cow that all it does is to ensure the cash inflows is just enough to cover the cash outflows + $10 per share for dividends. But that is me. +1! Cheers!

i disagree with this comment specifically. I think 9-10% ownership is a huge incentive. Sure, this is not BRK level of ownership with Buffet. But if i compare to many other companies their CEO ownership is as low as 1%, it is really high. More so, what else is in Watsa's portfolio. Is it >90% FFH stock, if yes, than i think proper economics incentive is there on both dimensions. Personally, i would preferred no dividends as it gives the optics of cash-cow that all it does is to ensure the cash inflows is just enough to cover the cash outflows + $10 per share for dividends. But that is me. Yes, the key difference is that the typical CEO with a 1% ownership stake is not entrenched by virtue of multiple-voting shares and is at risk of being turfed if he pursues too many visible pet projects. That is possibly one reason why you will not see the CEO of Bank of America hive off $50m for his son to manage. It is probably also the reason why the CEO of BAC will not nominate his son and daughter to sit on the Board. If you are going to make use of multiple voting shares to retain control with a relatively small economic interest, you need to always be more Catholic than the Pope when it comes to using the firm's funds. SJ I think Berkshire and Fairfax shareholders know the difference between how these two companies are managed and the typical corporate structure of most corporations. You get what you get with Berkshire and Fairfax...that you will be treated equal to management, and that management has interests that are aligned with shareholders long-term. That some family influence or atypical culture will exist...be it Howard Buffett on the board of Berkshire or Ben Watsa on the board of Fairfax. Otherwise investors are welcome to invest in other companies where the culture is more agreeable to them. Cheers!

Why Silicon Valley's Biggest Companies are Investing Billions in India: https://www.cnn.com/2020/07/17/tech/google-facebook-india-investment-jio/index.html Cheers!

Well, yes, that is one potentially valid conclusion, and I generally view it as solid, sound advice. But, there is yet one more problem with an outfit that sometimes does not seem to respect its partners. That problem is that the controlling shareholder has, until recently, only owned 7% of the economic interest in FFH but is likely now up to 9% ownership of the economic interest. That arrangement once again creates incentive problems because it creates a situation where every dollar of FFH's money that the controlling shareholder channels to his pet projects only costs him personally 9-cents. This might be a potential explanation for seemingly strange decisions like hiving off $50m of FFH's investment portfolio to be managed by Ben Watsa. What is FFH paying Ben's firm to manage that $50m? Is it 200 bps per year? More? Less? Nobody on the outside knows. But, what we do know is that if it is 200 bps, that makes $1 million per year, and of that sum Prem would pay $90k to guarantee his son a job while the minority (majority) shareholders would pay the other $910k. Prem could have allowed his son to manage $50m of his personal assets, which would also have guaranteed Ben a job, but then Prem alone would be paying the freight on that. Is it the same type of situation with TS? As others have noted, the TS controversy amounts to chicken-feed in the context of FFH's operations. Giving Paul Rivett a sweet-heart deal on TS would only potentially cost a few million of FFH's dollars. But, is this a case where Prem is happily spending 9-cent dollars for the benefit of his friends? Who really knows at this point. I would hope that Prem provides an explanation at the next quarterly call. The problem with this type of personal conduct that gives the appearance of a potential conflict of interest is that it casts suspicion on both good and bad decisions. The charitable gifts that FFH makes are the same sort of thing where Prem is effectively spending 9-cent dollars. We like to believe that all of these donations are made with the most altruistic and best intentions. But, now, when an expenditure is made that is not perfectly obviously aligned with the duty of a fiduciary, it is hard to not have a niggling concern in the back of one's head that the expenditure might not really be in the interest of shareholders. SJ The "market" has responded to all of Prem's actions in the way that matters most; Fairfax's share price has gone no where. In fact, it is currently back to where it was at the end of 2013. Closing Price in CAD: Dec 31/13: $424.21 Dec 31/14: $608.78 . . . . Dec 31/19: $609.74 July 16/20: $424.41 It will take performance of 15% per year for the next 3 years to get us slightly above the price at the end of Dec 31/14! So this will be a 9 year period where the share price will have done absolutely nothing. There are many reasons for the under performance of the share price however I can't help but think that Prem's pattern of personal conduct has played at least a small part. Markel's price hit 2015 prices...WTM hit 2015 prices...Everest Re hit 2014 prices at their lows...this is irrelevant to whether an investment is a good investment or not. Whether FFH is a good investment now...especially compared to when it was priced higher. You know better than that! Cheers!

Stop defending him....this one is not even close.... The revised Rivett/Bitove bid works out for something like $60 million in total to acquire a company that has $70 million CASH on its books and NO DEBT and no unfunded pension liability plus it has various minority investments that conservatively will raise a further $100 million when they are sold. You're asking some shareholders to stop defending him, but have you or anyone asked Prem why he is supporting the Bitove/Rivett deal? You guys always talk about self-dealing at Fairfax...show me some frickin' examples. The only things you guys point to is Resolute and now this. Resolute was to the benefit of Fairfax shareholders. If the Bitove/Rivett deal wins, do you think there might be some long-term opportunity for Fairfax? And why are you pissed off at the investor and not Torstar management...they are the ones who should be explaining why they are supporting a specific deal to all shareholders. Cheers!

Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Charlie Munger has a yacht. https://channelcatcharters.com/about.html Although it is a cheapskate yacht really. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Both Munger and Pattison use it more for either their customers/clients or charitable events. Cheers!

First Kennedy Wilson/Fairfax investment under $2B loan portfolio: https://finance.yahoo.com/news/kennedy-wilson-fairfax-complete-first-100000592.html Cheers!

The subscription fee is only for those that want the upgraded services above and beyond the message board. Otherwise, they would have full access and use of the message board as they do now. So nothing would change for the majority of users or new users. Cheers!

Yes, that will be in there. Cheers!