Parsad

No, you come out as someone who is mixing opinions on disastrous macro economic scenario with value investing principles. Well, actually I'm trying to point out that it's probably not prudent for the average investor to focus on macroeconomic forecasts, whereas for an insurance company that has significant leverage, it is probably a prudent thing to do. Alot of people are having a difficult time making that differentiation. Each to their own! Cheers!

Wait a minute! Am I hearing this right? the several stocks I just 'picked out of thin air'.. you own 4 of them!? I guess I should have made that clearer. Have not owned them until this year...more precisely, bought in the last three months...all four of them. Cheers!

Munger I wasn't saying that Prem was hedging for a 10% drop. I was just giving a simple example of what a dramatic affect a modest 10% drop could do to Fairfax's portfolio. In Fairfax's case, if we saw a 30% drop in their portfolio, it would wipe out 90% of their equity! I always find it amusing how posters assume that some of us are disagreeing with Prem...someone who we've followed since the beginning and have a mentor/student-like relationship with. We don't hold the Fairfax Shareholder's dinner every year before the AGM, or our own AGM in Toronto at the same time, simply because we think Prem is an idiot. Other than my own father, there is no one that has, and continues to influence my thinking more than Prem Watsa and Warren Buffett...they are Gods to me...truly Gods to me! No one has influenced my life more...not a single teacher in elementary, high school or university...no one. I would bend over and kiss my own ass if Prem asked me to! ;D But the biggest lesson I've learned from them is to be independent in your thought process. Every case is not the same. The average investor's unleveraged portfolio is not the same as Fairfax's. Even this period will not be the same as the Depression or Japan...it may rhyme, but it will not be identical, as there are too many variables. The only constant is Ben Graham's principles...buy cheap with a margin of safety and sell dear. No one knows exactly what we will see...only hindsight will prove who was correct. As Prem said, things could trend sideways for many years, or we could see a significant correction...no one knows. Cheers!

I don't know about as cheap as they've ever been, since almost all of them were cheaper when the S&P hit 670 in February of 2009...but they are relatively cheap in relation to other asset classes. Other than KFT, we've never owned any of those stocks in our personal/corporate portfolios or our funds...but we own a fair amount of four of them today! And none of those four are Kraft. Also, as I mentioned previously in another post, our largest position is a company never mentioned on this board or its predecessor...it is significantly cheaper than any of the stocks listed. Cheers!

Again, while it always pays to be cautious, the average investor should remember that Fairfax's portfolio is leveraged 3 to 1 against equity, and total assets are leveraged almost 4 to 1 against equity. That means a modest 10% loss in the portfolio is a 30% loss in equity for Fairfax. For the average investor that is nothing, but for Fairfax that could mean a drop in their credit rating or the ability to underwrite adequate amounts of business. Cheers!

My friend Mohnish Pabrai started his Dakshana Foundation three years ago, which supports and coaches economically disadvantaged gifted students who are writing the IIT Joint Entrance Exam. The success rate has been very good and the economic multiplier effect that occurs when one of these students graduates from IIT is amazing! Corner Market Capital will be an annual donor to Dakshana, and I encourage anyone interested to visit their site: http://www.dakshana.org/ 2009 Annual Report: http://www.dakshana.org/AR09.pdf Cheers!

I thought this was a somewhat amusing article on how Timothy Geithner is constantly mistaken for a Goldman Sachs alumnus. Cheers! http://www.cnbc.com/id/38033411

Yup, you definitely did. Our average cost is $18.48. We started buying at $19.50, and bought a whole bunch at $17.22 on June 8th. Everytime it's gone below $18, we've nibbled a bit more to bring our average cost down. Cheers!

By the way, it seems like you don't read Value Line? Does anyone read Value Line? I'm cheap! You can find almost all the information you would ever require on the internet for free. Actually, the biggest source of information for any investor, by far, should be EDGAR. But once in a while, when Value Line has certain short-term specials (like right now...13 weeks of the Small & Mid-cap Edition for $49), then I will get the print version, which I can keep and dig through over and over through the next year. But I'm not a regular subscriber. Cheers!

Most news feeds pick up stories from the WSJ, as well as the Washington Post. I'm a bit partial to the Financial Times though. I like to go for a cup of coffee near my home Saturday mornings while doing my grocery shopping, and I'll grab the Weekend WSJ at the grocery store before heading over to Starbucks. Cheers!

No, Monday to Friday I take the bus. It starts almost right at my front door and ends right at my office, so I get a nice comfy seat both ways, each day. I can spend the 40 minutes reading, rather than sitting in traffic listening to the radio. The bus has the carpool lane each way, so its as fast as me sitting in the car in the non-carpool lane. I have the IPhone going with some music on, my "News" apps open, and if I need to respond to emails I can as well. If there isn't much happening, I just print off an annual report at the office and read that on the way home. It's great! Cheers!

By the way, do you mind sharing with you what news paper/websites you go through everyday ...I know you do a lot of reading everyday First thing in the morning: - Turn on Bloomberg Television and it stays on as I get ready In the morning before leaving the house: - Vancouver Sun newspaper - National Post newspaper On the way to the office in the morning on my IPhone: - USA Today Online - NYTimes.com - Bloomberg.com In the office, monitoring and reading all day: - Ft.com - Bloomberg - CNBC - Globeinvestor.com - CNN - Yahoo Finance - Google Finance - Businesswire - All filings on EDGAR and SEDAR for companies in our portfolio and in our watch list - All letters, reports, etc emailed to me - Corner of Berkshire & Fairfax Message Board On the way home: - Office copy of the Globe & Mail newspaper At home after dinner and a bit of television: - All the 10-Q's and 10-K's not finished during the day - More emails - Any other ideas I want to research - Check the Corner of Berkshire & Fairfax Message Board again Before falling asleep: Turn on Bloomberg and see what is happening in Europe & Asia...usually leave it on and it automatically shuts off about an hour and a half later! Then you have all the stuff I do once every week or so: - Check 52-week lows and greatest percent losers for NYSE, Nasdaq, Amex, TSX - Run screens on various pre-sets, then dig into filings of anything that piques my interest - Read portions of any books (past & present) I have an interest in Somewhere in all of that I work for Quantum, handle all the administrative duties for CMC & MPIC, raise capital, make client calls, answer emails, and return phone calls to non-clients, friends & family. Alnesh does the accounting! ;D Cheers!

The foreclosure by Bill Ackman's group on Stuyvesant Town has been postponed, as they have been sued by the senior creditors of the project. Cheers! http://www.bloomberg.com/news/2010-08-19/ackman-group-s-stuyvesant-town-foreclosure-auction-halted-as-creditors-sue.html

Terrific article by Nick! Glad to see the Fool is adding some quality contributors. Cheers! http://finance.yahoo.com/news/What-The-Oracle-of-the-North-fool-4232510043.html?x=0&.v=1

Are you saying this is a sell signal for FFH? No, just that no one was talking about him in 2007, and now everyone is talking about him. You go on the Fool board or Yahoo board, and so many people have Prem lumped in with Buffett now. Three years ago, Chanos was still shorting Fairfax and he was getting all the press. Even most value investors were siding with the likes of Chanos, Herb Greenberg and at one point...Mark Cuban! Remember that? Cheers!

Cardboard, you'll like this one: "Prem Watsa" Crawl date - January 1, 2007 to August 1, 2007: 226 Hits Crawl date - January 1, 2010 to August 1, 2010: 22,600 Hits Cheers!

You guys do realize that google has an option to filter search results based on the first crawl date right? lol Ah...no! ;D Thanks! Based on that using the crawl date January 1, 2010 to August 1, 2010: Entered "Coming Depression". Result: 40,500 hits Entered "Double-Dip Recession". Result: 1,080,000 hits Entered "Quality Large Cap Stocks". Result: 47 hits Entered "Cheap Large Cap Stocks". Result: 0 hits Entered "Cheap Big Cap Stocks". Result: 40 hits Entered "Quality Big Cap Stocks". Result: 4 hits Entered "Economic Recovery". Result: 2,460,000 hits Entered "Economic Collapse". Result: 820,000 hits Using crawl date January 1, 2007 to August 1, 2007: Entered "Coming Depression". Result: 668 hits Entered "Double-Dip Recession". Result: 96,800 hits Entered "Quality Large Cap Stocks". Result: 7 hits Entered "Cheap Large Cap Stocks". Result: 0 hits Entered "Cheap Big Cap Stocks". Result: 0 hits Entered "Quality Big Cap Stocks". Result: 0 hits Entered "Economic Recovery". Result: 238,000 hits Entered "Economic Collapse". Result: 224,000 hits Cheers!

Sorry Ophi, it wasn't WHO, but the CDC. Cheers! http://www.scientificamerican.com/article.cfm?id=google-flu-trends-on-par-with-cdc-data

There is a problem with using the Google methodology for argument rebuttal. That result set you're looking at? It's estimated. If you continue to iterate through the result set, you might be surprised to find only a few thousand URLs. Also, here's another big problem (and this, IMO, is much bigger than the cardinality of the data set problem) with using Google to prove something: key words can skew the result set. For example, does a search on banana bread return a true estimation of the popularity of banana-bread? Or does it just show how popular banana or bread is? Or, maybe there are links that mention banana or bread in passing. One way to resolve this is to use quotes to use the AND operator on the key words. However, with more keywords, there is more subjectivity to the result set. Also, how do you resolve that "Cheap large cap stocks" may be equivalent to "cheap large capitalization stocks", or that a keyword search on cheap large cap stocks may not even be about cheap large cap stocks but something entirely different? The result set is not meaningful in these cases. I would probably only use this kind of analysis if the keyword was a single word or a compound word (for example, "banana bread"). Anything beyond that is suspect. You'd think that was correct Ophi, but you may be partially incorrect. Using the same initial words in the search, but add in "2007" (pre-recession) instead of "2010": Entered "Coming Depression 2010". Result: 96,000,000 hits Entered "Coming Depression 2007". Result: 6,210,000 hits Entered "Double-dip recession 2010". Result: 1,330,000 hits Entered "Double-dip recession 2007". Result: 437,000 hits Entered "Recession 2007". Result: 17,400,000 Entered "Cheap large cap stocks 2010". Result: 61,000 results Entered "Cheap large cap stocks 2007". Result: 518,000 results Entered "must buy stocks today 2010". Result: 510,000 hits Entered "must buy stocks today 2007". Result: 430,000 hits As you can see, the number of hits for the word "coming depression" using 2010 is multiples higher than if you entered 2007. The same result for "cheap large cap stocks" for 2010, was multiples lower than 2007. There was no possibility of a double-dip recession in 2007, as we had not entered the first one yet. Thus the hits were less. I would think most of the hits for 2007 had to do with the initial words "double-dip recession", as Google's search alogrithm accumulates all hits on the words, past and present. Why did this not happen to the other two? Your reasoning becomes apparent in the fourth test "must buy stocks", where the date has no real effect on the number of hits. It seems as though Google's search alogrithm is hitting the first four words and there is little difference between 2010 and 2007 in the number of hits. Cheers!

"must buy stocks today" yields 113,000,000 hits Did you try "must buy stocks today 2010"? Yields only 510,000 hits. You do know that the World Health Organization now uses Google to track the spread of the flu virus based on the number of posts coming up in various regions and searches on the web? Cheers!

This statement is just not true. Not sure how to resolve other than to agree to disagree. I've got an easy way to resolve this. Do an advanced Google search for a few of the words you've entered in the sentences below and add "2010". How many hits do you get? How many articles do you read about the US entering a massive depression in the next 5 years? Entered "Coming Depression 2010". Result: 96,000,000 hits Forget that -- how many economists or anyone in the mainstream believe a double dip is possible? Entered "Double-dip recession 2010". Result: 1,330,000 hits How much do we see/read about the once in a lifetime opp in quality large cap stocks? Entered "Cheap large cap stocks 2010". Result: 61,000 results Cheers!

You have got to be kidding me. There were articles every day about the housing bubble and a US consumer spending beyond their means. Everyone was aware of the risks but still didn't believe housing prices could decline while also believing the US consumer could go on forever. It seems that way to you now, because you are viewing it in hindsight. There were very few articles on credit derivatives, the housing bubble, overvaluation in equities, the narrow spreads between corporate bonds and treasuries, etc at the time. I know because everyone on our board was following what Prem was saying, and most people on Wall Street viewed him as a kook! Just like they did about the lawsuit against the hedge funds, or that a Japan-style deflationary period was possible. CNBC had the top mortgage executives on their show on a regular basis. I remember seeing Angelo Mozillo touting new 110% financed mortgages. Only a very small handful of people were talking about risks to the economy. Every channel on television had a new show about flipping houses or the new hedge fund managers that were making a killing. Frickin' Ron Insana joined SAC and started the Insana Legendary Fund (lasted 9 months) and David Robinson, the former basketball player, also started a hedge fund. Ironically, at the bottom of the bear market (last week of February and first week of March 2009), there were very few articles talking how cheap the market had gotten. I remember talking about WFC at $11 and GE at $8 on here, and almost no one wanted to bite. Today, everyone thinks WFC can do no wrong. Everything becomes apparent and 100% accurate in hindsight! Cheers!

John Hillery, of Hillery & Associates, passed away from cancer. He was a fantastic investor and a very good friend of Francis Chou's. If you were impressed by the investment acumen of the guys at Fairfax, John had an even better risk/reward ratio the last time I checked three years ago. JOHN DOUGLAS HILLERY Died in the kind and capable hands of the doctors and nurses at the Credit Valley Palliative Care Unit following a two year battle with cancer. John lived a rich and full 64 year life and several times said he was one of the luckiest guys on earth. Beloved husband and best friend of Susan (nee Sheppard) and loving father of Shannon (fiance, Matt Wentzell). John was a twin brother of Elizabeth (Bess) Crawford and an uncle to Bess and Roger's daughter Melissa (fiancé, Jim O'Hare); a younger brother of Robert Hillery Jr. (deceased), brother-in-law of his wife Lucille and uncle to their daughter Tanja (and her son Seamus and daughter Clara) and sons Patrick and Michael; and a brother-in-law of John Sheppard (wife Lenore). John graduated as an Electrical Engineer with honours in 1969 and as a Lawyer in 1972, both from the University of Toronto. He practiced corporate and commercial law at Lash, Johnston, Sheard and Pringle in Toronto following his call to the bar in 1974. In 1976 he joined Indal Limited as Corporate Counsel, VP and Secretary. In 1984 he became VP of Investments at Indal managing a portion of their pension fund until 1989 when he went into business for himself as an investment fund manager. When he retired in 2007 his Hillery & Associates LP hedge fund had 50 partners. In his retirement he was a very active private investor continuing the work he loved so much. We were particularly grateful for the exceptional skill and the kind and reassuring manner of his surgeon Dr. Peter Ferguson at Mt. Sinai Hospital. We would also like to thank John's GP, Dr. James Pencharz and Kamila and Lorianne John's homecare nurses for all their caring and skilled support. John loved spending time at the cottage on the beautiful and peaceful Ahmic Lake with his many relatives and friends nearby. He was an active member of Humber Valley United Church for almost 30 years and served as the Treasurer for eight years and also as Chair of Stewards, Chair of Counting and as a Trustee. Visitation will take place at The Simple Alternative Funeral Centre, 1535 South Gateway Rd., Mississauga, ON L4W 5J1 on Thursday August 19, 2010 from 2 to 4 and 7 to 9 p.m. A Memorial Service will be held on Friday, August 20, 2010 at 1 p.m. at Humber Valley United Church, 76 Anglesey Blvd., Toronto, M9A 3C1 416-231-2263. See www.hvuc.ca for directions. Donations in lieu of flowers to Humber Valley Foundation, 76 Anglesey Blvd., Toronto M9A 3C1 will be gratefully received. John started his fund late in life and several years ago, he just closed the fund. He had 50 partners or so, maybe $40-50M in capital, and said he didn't want any more partners or any more capital. He was happy to work with what he had, and turned away any new interest in his fund. His actions were one of the reasons we decided that we would shut the MPIC Funds down early as well...raise enough capital to do something with, but not so much where you lose the ability to compound it, the passion, and the fire. The last annual letter I have (2006) is attached. Those numbers he produced were done with an average over 50% cash in the fund! A fantastic manager who loved his low profile and just investing capital. Cheers!

I remember very few, if any, articles making the same sort of arguments Prem was making before the credit crisis. Today, you have virtually every article talking about deflation, crash, unemployment, foreclosure, etc. The media reports what is happening, not where the world is going. Cheers!

About 25% of shareholders held a protest vote against Dell CEO Michael Dell. Cheers! http://www.bloomberg.com/news/2010-08-18/dell-fails-to-get-re-election-votes-as-director-from-25-of-shareholders.html