Parsad

Beanie Babies mania lasted about 10 years...prices went up more than 20 fold. Manias have no set time limit...they blow when they blow. Not saying that BTC is a Beanie Baby Bubble or Tulip Mania, but it certainly hasn't proven to be a real replacement for fiat currency at this point either. If anything, it's proven that it isn't a useable replacement. Cheers!

Not a ponzi...not taking from Tom to pay Harry...just speculative like art, jewelry, collectibles, gold, etc. But you are right. Investors aren't missing anything here if they don't invest in crypto. There are multiple assets classes that people can create wealth out of. You don't have to invest in everything. Circle of competence remains the defining reference point for successful investing. Cheers!

Yup! I remember at one AGM, Munger told the story of how a young fellow came up to him and thanked him for everything he's done and the lessons he's passed on. He then goes on to ask Munger: "I really admire everything you've done, but is there any way I can do it faster?" Cheers!

Fairfax knew the company well because they were both under a similar type of short attack by hedge funds, analysts and journalists. There was some overlap in the players involved as well. Whereas Patrick Byrne was this bombastic, confrontational type leader, Prem was a quiet, optimistic, stick to the plan type leader. Yet both had become targets. Sam Mitchell who was on the core investment team at Hamblin Watsa was old friends with Jack Byrne of Geico fame. So he also knew Patrick. I believe Sam was the one who initiated the interest on behalf of Hamblin Watsa. Francis Chou also took a significant stake and naturally was close to Prem and Fairfax after being a vice-president there for so long. Between the two, I think they had close to a 20% stake combined...11-12% at Fairfax and 6-7% at Chou Funds. Sam actually sat on the board of Overstock.com for a while, but Patrick was so erratic and had a hard time focusing on one thing that they eventually parted ways and sold their position. I can't remember exactly when Francis sold out, but I believe he held on longer than Fairfax simply because he thought it was cheap. Me personally, I've known about Overstock.com almost as long as I've known about Fairfax or Amazon.com! I've traded in and out of Overstock.com probably 5-6 times in the last 15 years...making money every time it got cheap and selling when it started to get pricey. The best trade was in March 2020 when everyone was panicking and Overstock.com fell dramatically. I bought a ton of shares at $2.99 and a ton of $7.50 LEAPs when it was around $5. I made 8-10 times on the $2.99 stock and 15-20 times on the LEAPs. But I actually sold too early! If I held on till it hit the high of $120 per share, I would have made 40 times on the stock and like 80-100 times on the LEAPs! I was kicking myself after still making a ton of money! But as a value investor, you are really stretching yourself ethically and strategically when things start to get speculative. It's just not in my nature to hold on to something when valuations go crazy! Rule #1: Don't Lose Money! Rule #2: Don't Forget Rule #1! Cheers!

There are tons! You would have to do your own research and dig deep into each one or find a niche you want to exploit. I'm not smart enough, so that's why I just buy OSTK and let Pelion manage the portfolio for Medici Ventures. I'm not paying for it, so I don't have to worry...it's essentially a free call option. I'm just paying for the online retail business by buying OSTK. Cheers!

Pretty damn funny! Cheers!

For the most part...no. Not that it couldn't happen. It's just that crypto and these trading platforms in many cases avoided registration, so they never became qualified investments for most institutions, funds and accounts. If major developed nations were stupid enough like Venezuela, then yes, this would have been more like the Financial Crisis rather than Enron. I'm also not sure the tide is now out far enough to expose everyone who has been swimming naked. There is probably still a little more fallout coming. Maybe a bunch of smaller fish than FTX...but still more to come! It is actually a good opportunity to add blockchain companies and businesses to your portfolio if you want that exposure. The reason being is that this is probably going to force developed nations to bring all crypto and blockchain companies into full compliance and regulatory oversight over the next couple of years. Cheers!

When I started this thread, the question was meant as a rhetorical question. Markets may move sideways for years...we don't know...no one knows. But if markets offer volatility and cheap investments...swing! And then when those investments are no longer cheap...sell! That's it! No trying to figure out the top and bottom, because markets will do irrational things for longer or shorter than you ever expect. Cheers!

This press release hasn't aged well! Cheers! https://www.prnewswire.com/news-releases/ftx-and-kevin-oleary-announce-long-term-investment-and-spokesperson-relationship-301352189.html

You can go to the bank with the death certificate...the bank will also make attempts to contact you for various reasons. With wallets...it's gone baby...gone! The only comparable would be old school Swiss bank accounts. They wouldn't contact you either. Cheers!

If you die, and your heirs do not know your seed phrase or keys, they will never recover the coins. Cheers!

Cryptocurrencies won't replace fiat currency. Fiat currency will go digital and use blockchain technology for transactions. Every transaction in the future will be one to one...direct transactions...encrypted...secure. You want to own the tZeros, etc that facilitate the transaction...especially transactions of private assets. You will still be using USD in the future...not bitcoin or something else. But the transaction will be one to one, instantaneous, secure and you will be able to sell any or all assets. Cheers!

Yes. I was down to 3% cash last Friday. I like patterns. Cheers!

Does anyone know Aaron Kaplan, founder of Prometheum Inc.? He runs a FINRA/SEC regulated trading platform. I just heard an interview by him on Bloomberg, and this is one of the few guys I've heard that really knows what he is talking about when it comes to crypto and regulation. Recommend you catch the interview if you can...I can't find any link...maybe it will be on Bloomberg or Youtube later. Cheers!

Nope. Don't own any, and if I did I would smoke it! I do own a fair amount of OSTK, which has a huge portfolio of blockchain companies they've invested in over the last 7-8 years, that they are growing and will monetize over time. You get a profitable online retailer, with little debt, tons of cash, owns their own head office and the portfolio of blockchain companies is essentially free at current prices. Why BUY crypto, when you can own blockchain companies for FREE! I would also rather own the highways than the cars! Cheers!

Significant, but still small relative to the entire digital advertising market. It was increasing dramatically from late last year into the early part of this year as crypto was taking some hits. Cheers! https://mediaradar.com/blog/cryptocurrency-prices-ad-spending/

You look at the destruction in the last year...fortunate the 50 and 60 year old males also didn't get involved. Otherwise the pain would have been more contagious and reached into conventional assets. The Ontario Teacher's Pension Plan is taking a hit because of their investment in FTX...not the first pension plan writing down crypto assets this year. Can you imagine if crypto had become mainstream and made up 5% of the loans, business, investments of global financial institutions and pension plans similar to more conventional lines of business?! A bunch of VC funds and hedge funds probably are writing down FTX investments, alongside other crypto investments. And if Binance does fall eventually, it will be interesting to see who takes a hit from it! Cheers!

Crypto was never worth anything. It's the blockchain backbone that is important. It will work its way into every asset class in the future and every financial transaction. Cheers!

Whenever we start to get a ton of positive chatter around the stock and future expected performance, we start to see more buyers because more people feel confident or become aware of what is happening at Fairfax. I would imagine those investors combined with some buy backs is really pushing up the stock. Also insurance investors see that many insurers have lost tremendous book value in the last 3 quarters...they are probably moving some assets from other insurers into Fairfax. We all knew it was coming...it is slowly getting here now. Cheers!

I think it was both. He knew how his company was situated, and he knew that a ton of money would float into the system. Cheers!

I fully agree with you. My methodology and assumptions is my "margin of safety". It's kept me from being one of those Fairfax investors complaining about their lack of consistency and how my returns suck compared to Berkshire, Markel and the S&P 500 because I've held the stock for 20 years. I've made money (lots) every time I've bought Fairfax and each time I've gone into the stock in a huge way...2003 (90% of my portfolio)...2007 (60% of my portfolio)...March 2020 (60% of my portfolio). I've never looked backwards or historically at Fairfax when buying it...that was to give you some measure of value. My bets were always when I thought they were positioned well for the future and were cheap on a price to book basis. I'm just saying that investors should look historically to develop their margin of safety, and then bet on the business based on how they will do going forward...but always keep that margin of safety as your measuring stick. It will protect your portfolio! One other note. Have any of you seen Prem put another $150M of his personal money into the stock lately? No, because he knew it was stupid cheap back then. That $150M will be $300M very soon! Bet big, bet boldly when you know things are dirt cheap! Cheers!

True. But they also benefitted heavily by betting against mortgage backed securities in 2008. In my mind, the lack of investment during the last 10 years when the markets were doing great is also offset by the opportunities they have presented themselves now...negligible losses in equity, hard market for insurance, ton of opportunity. That's probably why institutional investors shy away from Fairfax. Not trust issues, not because they don't understand the business, but consistency has been lacking in the last 20 years. They've had some very significant peaks and valleys. Leadership and talent are legit! Prem is a real investing rockstar and in my opinion a legitimate heir apparent to Buffett in terms of an investing mentor and leader. But now they need to be consistent...rock solid...grow Fairfax the way they always meant to be. I shouldn't complain, since I've been a beneficiary of Fairfax's volatility over the last 20 years...but it is now time for them to take FFH to another level. Cheers!

Let's use the historical average for ROE over the last 20 years. Book at the end of 2021 was $630.60. Book at the end of 2001 was $117.03. That's a ROE of 8.8% annualized. Using current book of $570 ending Q3 2022 times 8.8% equals $50 per share. P/E then equals last week's low of $480 divided by $50 or 9.6. Cheap, but not dirt cheap. Do I expect Fairfax to do better over the next 20 years on ROE compared to the last 20 years...yes! And I've also excluded the increase in book value expected in Q4. So that's your margin of safety. I think you'll do very well buying Fairfax today...that's why I still have nearly 30% of my portfolio in Fairfax. But it certainly isn't as cheap as it was during the pandemic when it was a no-brainer. Cheers!

Fairfax should trade at a larger discount than Berkshire or Markel. The reason being is that Fairfax uses more leverage...more asset to equity leverage...more debt. And that works great during a hard market, low catastrophe year, but will also hit harder when premium prices aren't adequate and catastrophe losses are huge. It's why most reinsurers trade at a larger discount than general insurers. Is Fairfax trading at a reasonable discount that would make it a good investment going forward. Yes. Are economic conditions and insurance markets set for Fairfax to do well. Yes. So Fairfax should do well...probably better than most insurers going forward for a couple of years. Is it dirt cheap? No. Cheers!

You look at revenue and earnings numbers across almost all of Berkshire's business segments in the 3rd Quarter and they certainly don't like they are in or entering any sort of recession. They were up across the board and impressively for the most part. If there is a recession coming, I certainly don't see it happening in the 4th Quarter or probably 1st Quarter 2023. We'll see after that, but business still looks pretty solid outside of tech. Cheers!