Parsad

Nice! Great company with excellent recurring cash flows. They didn't get it cheap I bet you...but probably a better investment than the alternatives at the moment. For those complaining about Fairfax buying garbage restaurant companies...well they listened. Aisenstat also owns the Hy's Steak Houses, which I doubt were part of the deal..as well as Vancouver's Gotham Steakhouse (overrated). But the Keg is a great chain...my whole family are regulars! Prem, you better have a $25 Keg gift card for shareholder's this year. My whole family is coming for this AGM! ;D Cheers!

In our Canadian Fund, we did not receive an incentive fee for the first five years. Not many managers could survive that long without some form of payment. But I think that type of survivorship is good for the industry. There are way too many, in fact the vast majority of investment managers, making a paycheck while adding zero value for their investors that could not be achieved through passive ETF's. These are good points. I've never understood high water marks except as a matter of marketing and asset gathering. From the standpoint of managing money though why should someone have to make an investor whole before they get paid? They did the work and oftentimes a loss is due at least in part to just overall market performance. My feeling is that unless lookups are unreasonable if someone isn't happy with performance take your money out and fire the guy. If an investment manager does a good job, at some point in time they would receive incentive fees, and generally the better the job, the greater the compensation. So the high watermark is irrelevant in terms of the manager getting paid. The truth is, that most managers want to manage money, but not take the risk and costs associated with an incentive fee structure without any fixed management expense ratio. It's nice if you have $50M under management and get "1 & 15", because you are guaranteed $500K a year...whether you do well or not. Even if you manage $10M, that's a decent $100K a year...which manager is going to sweat making $100K a year for doing nothing? And that is where the high watermark becomes incredibly important for incentivizing the manager. You lose money, and it may be years before you get paid again. Thus, you better be making good decisions short-term and long-term regardless of where the market goes! Cheers!

I believe that section indicates that the previous structures were 1, 2, or 3, and that he was consolidating into the 6%/25% structure. Yes, I think you're correct. I was to fast with my conclusion. But is profit participation then calculated individually or not? Because differences between partners can be quite substantial after years as 2008, 2009, depending on their follow up investments. Yes, profit participation is calculated individually, as income, dividends, gains, losses have to allocated every time capital comes in or out. So if you are accepting capital monthly, then you have to allocate income/losses monthly and set the new high watermark. It is definitely the most equitable way to pay a manager and also incentivize them. You lose money for partners, it takes longer and longer to get paid. You make money, you get paid. You make a lot of money for partners, you get paid very well! But, I believe that level of compensation works best in a system where capital can be taken away from the manager, not one where they have permanent access to it. The more permanent the capital, the lower the incentive fee should be, as the amount of risk to the manager reduces over time. Just my opinion! Cheers!

Is the business profitable yet? Even if you look at only the rental business, minus operating expenses unrelated to insurance, stock option compensation, etc...the enterprise is still not making money. Cheers!

Nice job Nate! Looks fantastic. Cheers!

All I know is that Archie Bunker would be backing Ford! Cheers!

Actually, one of Mohnish's best presentations I've ever heard...very different than his other investing presentations. Highly encourage you to listen! Cheers!

Cheers! http://cbs360.gsb.columbia.edu:8080/ess/echo/presentation/6ca9b1a5-2935-4e5d-9a28-3ccab52fa454

At the end of the day, results are all that matter. Whether you have a checklist, no checklist, internal checklist or any other tool. Cheers!

70% sold! Get yer tickets...only 140 seats and 70% gone. Cheers!

Now what I would like to see, and there has to be a tape of it somewhere, but Ford and Steve Ballmer doing the "monkey dance" together! That must have happened. I can see these two hanging out. By the way, I bet there is some sort of comment or sketch on Saturday Night Live tonight about Ford. Cheers!

Relative to their assets? Not likely. I'm guessing Fairfax wanted to close this thing and with close friends. Looks like Markel and BAM made room for others who wanted to join the party late. Interestingly enough, Lawrence Chin who went to high school with me and worked at Cundill, is now Senior VP at Mackenzie. I didn't now him very well, but I've followed his career over the last ten years. Good for him! I know Tim's always had nice things to say about him. Cheers!

So you have the Qatari fund, plus Brookfield and Markel...now Manulife. Thanks to Lotsofcoke for the link! Cheers! http://business.financialpost.com/2013/11/08/manulife-blackberry-debt-offering/?__lsa=2bfe-a0e9

With all of the attention on Blackberry, I hope the financial industry and Fairfax shareholders alike, don't discount the magnitude of what has transpired this morning...the guilty pleas submitted by SAC Capital! http://money.cnn.com/2013/11/08/investing/sac-guilty-plea/index.html?source=cnn_bin Through the resilient counterattack brought on by Fairfax through their lawsuit, to the determined and diligent work of Preet Brahara and the United States government. This plea was years in the making and is possibly one of the most prominent industry criminal cases since Michael Milken or Bernie Madoff. Fairfax's deposition played a very prominent role in the U.S. government's case, and I'm sure several books will be written about this entire event. Congratulations Prem...at least one thing has gone right recently! ;D Cheers!

What Rob Ford needs right now is the help of another very-well known Canadian expat...Lorne Michaels! ;D Maybe a guest hosting job on SNL, or reprising Chris Farley's counsellor role..."In a van, down by the river!"...could rehabilitate his image right now. It worked for Miley Cyrus. Cheers!

LOL! What was Toronto thinking when they voted for this guy? The rest of the country despises Toronto because of their whole "Leaf Nation", but really, we feel sorry for you guys now. This is just too embarrassing, even as much as we want you to look stupid...this is too much! Cheers!

I agree 100%! And thank you very much, Parsad! It is a great idea backed by flawless execution: it is destined to become more and more influential worldwide. Its future, as far as I can see, is very very bright! :) Gio Glad everything worked out Gio! Actually, at our very first Fairfax Financial Shareholder's Dinner, board member Calonego brought someone who he was on a first date with to our dinner. Not actually at our dinner...he got a booth next to our dinner, so that he could date her and still listen to the investing conversation! Fast forward 9 years, and not only did he end up marrying that girl (obviously she was a keeper, if she put up with that night), but they have a baby too. So, it wasn't this community's first stab at romance regarding a value investing nerd! ;D Cheers!

Good luck Gio! Let us know how it goes. Cheers!

I don't hate anyone Junto...not even Steve Cohen. But thanks for explaining to me how I feel. You don't even know me! Have we even ever met? Have you even had a conversation with me as long as I've spoken to Sardar, Prem, Mohnish or even many other board members on here? Yet, you are perfectly comfortable making a statement like that. People are awfully brave and honest under anonymity! Cheers! Far from anonymous....links abound since the beginning. I stand by my comments and my assessment of your constant either support or negative comments towards the two. Perhaps, severe dislike is a better characterization. I don't need to meet you to follow the trends/tendencies. No negative feelings on my end just trying to point out my assessment of the situation that I think gets overlooked on the site. Words on a page are words on a page. Cheers! Well, that's exactly what they are...words! Do you think that reading about dinosaurs tells you everything about dinosaurs? Or if you read the financials on a company, that tells you everything about the company? Of course not! It may give you some insights, but no context or any other details. How would you feel if I came to certain conclusions about you solely through your blog? I would assume you are more complicated than that, and that those words aren't the summation of your life or thoughts. You don't know the extent of my interactions with Prem or Sardar, or even about events or experiences left unshared. Wisdom indeed!

LOL! Nice job. I think all the BBRY shareholders can use a good laugh right now. Really, what is going on in Toronto right now anyway...the Mayor is on crack, the Leafs are winning...maybe this is the Rapture and the Apocalypse is coming. Cheers!

I don't hate anyone Junto...not even Steve Cohen. But thanks for explaining to me how I feel. You don't even know me! Have we even ever met? Have you even had a conversation with me as long as I've spoken to Sardar, Prem, Mohnish or even many other board members on here? Yet, you are perfectly comfortable making a statement like that. People are awfully brave and honest under anonymity! Cheers!

60% is done! Get your tickets as soon as possible. No way I can get extra seats this year in the Upper Canada room...140 is capacity for the way the room is laid out for dinner. Cheers!

I certainly think a good outcome suggests it's more likely that the decision was correct, than a bad outcome does. Investing isn't roulette - the odds are unknown. Most of the time I can only make extremely rough guesses about future "probabilities". I feel it would be presumptuous to second guess the past too. So the fact that Bernie Madoff's ponzi scheme didn't blow up years earlier suggests that the decision was correct until it eventually met its demise? I think munger would disagree with you. He said multiple times at annual meetings he put more than 100 percent of his net worth in a single stock on more than one occasion. We know Buffett did it a few times with the partnership at 40 percent and he bought a huge amount of geico in 76 when it was probably 50-50 it would avoid bk. Buffett can't concentrate anymore because brk is so damn big. Munger nearly went broke in 1973-74. In the end, things worked out ok, but not because he had bet everything on one stock. You guys listen to him and bite hard on one sound bite, rather than examining exactly what he is talking about. Munger says bet big when you have the odds in your favor...not always...but those few rare times when you know you have a huge advantage, bet big! He's not talking about someone like Sardar betting the farm every hand...he's talking about betting the farm on rare occasions. I've done that, Ericopoly did that...but he was not talking about pulling all of the cash out of Steak'n Shake, leveraging it to capacity, and then betting it on a restaurant stock that was barely trading below fair value! You guys need a refresher...read below: BETTING ON HORSES AND PICKING STOCKS HAVE MORE THAN A LITTLE IN COMMON. -------------------------------------------------------------------------------- Odds on horses and stocks are set by the market. Munger: The model I like - to sort of simplify the notion of what goes on in a market for common stocks - is the pari-mutuel system at the race track. If you stop to think about it, a pari-mutuel system is a market. Everybody goes there and bets and the odds change based on what's bet. That's what happens in the stock market. Any damn fool can see that a horse carrying a light weight with a wonderful win rate and a good post position etc., etc. is way more likely to win than a horse with a terrible record and extra weight and so on and so on. But if you look at the damn odds. the bad horse pays 100 to 1, whereas the good horse pays 3 to 2. Then it's not clear which is statistically the best bet using the mathematics of Fermat and Pascal. The prices have changed in such a way that it's very hard to beat the system. And then the track is taking 17% off the top. So not only do you have to outwit all the other betters, but you've got to outwit them by such a big margin that on average, you can afford to take 17% of your gross bets off the top and give it to the house before the rest of your money can be put to work. Believe it or not, some people make money betting horses. Munger: Given those mathematics, is it possible to beat the horses only using one's intelligence? Intelligence should give some edge, because lots of people who don't know anything go out and bet lucky numbers and so forth. Therefore, somebody who really thinks about nothing but horse performance and is shrewd and mathematical could have a very considerable edge, in the absence of the frictional cost caused by the house take. Unfortunately, what a shrewd horseplayer's edge does in most cases is to reduce his average loss over a season of betting from the 17% that he would lose if he got the average result to maybe 10%. However, there are actually a few people who can beat the game after paying the full 17%. I used to play poker when I was young with a guy who made a substantial living doing nothing but bet harness races.... Now. harness racing is a relatively inefficient market. You don't have the depth of intelligence betting on harness races that you do on regular races. What my poker pal would do was to think about harness races as his main profession. And he would bet only occasionally when he saw some mispriced bet available. And by doing that, after paying the full handle to the house - which I presume was around 17% - he made a substantial living. You have to say that's rare. However, the market was not perfectly efficient. And if it weren't for that big 17% handle, lots of people would regularly be beating lots of other people at the horse races. It's efficient, yes. But it's not perfectly efficient. And with enough shrewdness and fanaticism, some people will get better results than others. It ain't easy, but it's possible, to outperform in stocks, too. Munger: The stock market is the same way - except that the house handle is so much lower. If you take transaction costs - the spread between the bid and the ask plus the commissions - and if you don't trade too actively, you're talking about fairly low transaction costs. So that with enough fanaticism and enough discipline, some of the shrewd people are going to get way better results than average in the nature of things. It is not a bit easy. And, of course, 50% will end up in the bottom half and 70% will end up in the bottom 70%. But some people will have an advantage. And in a fairly low transaction cost operation, they will get better than average results in stock picking. What works betting horses also works for stock picking. Munger: How do you get to be one of those who is a winner - in a relative sense - instead of a loser? Here again, look at the pari-mutuel system. I had dinner last night by absolute accident with the president of Santa Anita. He says that there are two or three betters who have a credit arrangement with them, now that they have off-track betting, who are actually beating the house. They're sending money out net after the full handle - a lot of it to Las Vegas, by the way - to people who are actually winning slightly, net, after paying the full handle. They're that shrewd about something with as much unpredictability as horse racing. And the one thing that all those winning betters in the whole history of people who've beaten the pari-mutuel system have is quite simple. They bet very seldom. Winners bet big when they have the odds - otherwise, never. Munger: It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a mispriced bet - that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple.

Looking for a job? ValueInv, why are you being such a dick? Can you please grow up. Returning the favor: That's my point! That comment is from April, and you still have a hard on for Txlaw...to try and make him look stupid. What does this accomplish? No one is a child here. How can grown men lob grenades at each other as if they are still in sophomore year of high school. God Lord! Cheers! Couching BS in polite professional language does not make one a grown man anymore than putting lipstick on a pig makes it a supermodel. Wellmont is doing what I used to do- engaging Txlaw intellectually. It's actually funny to watch someone else do it. It is also amazing that there is only one person who takes him to task. I'm fine if you engage him intellectually. It's the other stuff that the board can do without...such as the sophomoric shot you made today!

Looking for a job? ValueInv, why are you being such a dick? Can you please grow up. Returning the favor: That's my point! That comment is from April, and you still have a hard on for Txlaw...to try and make him look stupid. What does this accomplish? No one is a child here. How can grown men lob grenades at each other as if they are still in sophomore year of high school. God Lord! Cheers!