Parsad

Yeah, that would be nicer and more fair to those that don't want to sell and understand the value of the company, but really, in a capitalist market, we're bitching about a company making a capitalist decision?! I loaded up on the stock over the last year, while some on here were bitching about how it was fairly priced considering the industry and possibly deteriorating shipping rates...now people are complaining that one of the majority shareholders also finds it cheap and makes a takeover offer? Crazy! Should I feel bad that I bought shares at $10.25...somehow taking advantage of shareholders who didn't know what the value was? Cheers!

Stubble...do you see another offer? It's like you expect Fairfax to pay full fair value for everything they acquire...you guys do realize they are in the business of making money, not giving it away! If investor's don't like the offer...vote and make sure it fails. It can't pass unless the majority of non-consortium shareholders vote in favor of the takeover. But to blame the company making an offer is kind of absurd, isn't it? Even if the offer isn't what you might like it to be. Cheers!

It's just a way to draw attention to ATCO's silly share price. If they get majority approval, they get a deal, shareholders get liquidity and Fairfax shareholders still benefit through Fairfax shares. If they don't get it, the stock price stays up closer to $14-15 and they retain the core group of ATCO shareholders while the consortium still controls the company. It's win-win either way...and relatively fair, as the majority of non-consortium shareholders have to approve. Cheers!

They didn't! The bathhouses and orgies went underground. Straight people were afraid to report their symptoms and illness, because they might be criticized or assumed to be gay. Do you remember Charles Barkley's criticisms of Magic Johnson at the All Star game? The stigma around Johnson's personal life. Yet Johnson is as healthy as a horse today with zero count blood thanks to the cocktail, and Barkley is essentially whoring himself out to LIV to bring him over even though he can barely walk! Cheers!

Are you still madly confused about why the masks, distancing, closures and vaccines were pushed?! It wasn't to stop the spread of Covid, but to try and make sure the system wasn't overwhelmed at once...a flood, rather than an avalanche! If the system had been overwhelmed, then you'd be bitching about how they fucked that up too! Cheers!

In the 70's the outcry was that we would be out of food by the millennium. Guess what? Today, we produce twice as much food, with half the resources...technology and science increased yields and improved farming methods. I can't believe that science and technology will not continue that trend. I imagine in the next 20-30 years, a lot of food production will be done by robots. Already large scale farms utilize automated tillers and harvesters that use GPS to do their job and work 24 hours a day. Vertical farms will grow food close to city centers and maximize water efficiency. Global warming will decimate some agricultural centers, but create new ones where the climate becomes more favorable. Developing countries that are becoming first world economies will have access to capital and technology that will improve their production efficiencies. One day, it may be hard to feed the planet...but I don't think that will happen in my life time or probably the next couple of generation's lifetime. Cheers!

Not shifting the goalposts...just saying that stigmatizing any group is inaccurate and simply delays reporting, testing and eventual treatment of the disease. It serves no one! Cheers!

The stupidity around the AIDS epidemic was that it was assumed and stigmatized as a "gay man" disease. When in fact, it affected anyone and everyone if you came into contact with HIV infected blood. It disproportionately affected gay men because of the ease of transmission through anal sex compared to vaginal sex. Promiscuity combined with unsafe sex practices, both amongst homosexuals and heterosexuals, led to increased spread of HIV. From the study and the statistics you provided, should we not call Monkeypox the White Homosexual/Bisexual Pox? Cheers!

Greg...for such an intelligent guy, you really make some silly associations. Like HIV, which was high amongst the gay population initially, not because they were gay, but because of the types of sexual contact engaged in made them more susceptible to blood on blood contact. Monkeypox can be transmitted between you and your wife, as easily as anyone else, depending on the type of sexual contact you engage in and the skin to skin contact involved. https://www.hrc.org/resources/monkeypox-and-what-you-need-to-know?utm_medium=ads&utm_source=GoogleSearch&utm_content=GeneralInfo&utm_campaign=GoogleGrant&gclid=EAIaIQobChMIzt7V7Nqr-QIVvzytBh2oiQTyEAAYAyAAEgJKBvD_BwE Cheers!

Geez! Spanish Flu originated in Kansas! Exactly my point. Cheers! https://www.ncbi.nlm.nih.gov/pmc/articles/PMC340389/

Because it creates a false sense of who is transmitting the disease when the statistics are taken in a vacuum. Notice the number of Asian hate crimes in the last two years? A direct result of morons calling it the "China virus"...one particular moron in Chief creating that false identity for the transmission of the Covid virus. Your "joke", and it's always just a "joke", suggested that only gay men transmit the Monkeypox virus. This was the same stupidity around HIV 40 years ago. Cheers!

And your upside is limited while the downside is unlimited! It's just stupid. Cheers!

New entrants will come in, but remember that equity and bond losses extend to outside institutions (hedge funds, private equity, pension plans, etc) as well. In an inflationary environment, the replacement cost of losses has probably escalated dramatically...I can tell you for a fact that every type of insurance I buy (other than life insurance) has increased the replacement cost and increased premiums. So while you will have new entrants come in, it will be offset by the magnitude of losses in statutory surplus and the sheer demand for insurance. The other factor is if you are an insurer with lower losses so far like Fairfax. They've made sure that statutory surplus levels are more than adequate for their insurance subs to write as much business as they can, while maintaining the size of their portfolio and liquidity levels so that they can take advantage of opportunities compared to other insurers. That's if Fairfax does take advantage of the opportunity...often they've been TOO patient when the table turns and should have invested more. Combining both...lower losses and greater opportunities...means that buying Fairfax at 0.8-0.9 times book may make more sense long-term than buying other insurers at 1.2 times book or higher. Cheers! From the 2nd Q transcript: The next question is coming from Jaeme Gloyn, National Bank Financial. Jaeme Gloyn Yes, good morning. My question is focused on the top line growth, gross premiums written obviously, really rapid growth, the last three quarters, I guess, a modest deceleration, but still at north of 20%, in in Q2 ‘22, year-over-year, gross premiums rightly grow. Just want to get your views on where you expect to see that top line number trending over the next couple of quarters? Should we continue to see north of 20% premiums growth? Or is there some dynamics in the market, whether it's a deceleration of that of hard markets, in some lines, that might keep or push that growth rate down below 20s but still in the teens. Prem Watsa So Jaeme, the next quarter, two quarters or three quarters, we never, you never can tell what the growth is going to be. But there's a lot of momentum for these growth rates that you've seen to continue. We don't believe in forecasting these things, we just look at what has happened. But there is a lot of momentum for it to continue. Hard market is not going to continue forever it'll stop some time. But the big thing that you should focus on as an analyst, all of you analysts, look at the impact of interest rates going up, like shareholders equity for a whole ton of companies reporting, record earnings, operating income, like us, book value down 5%. Now our book value, at least on the fixed income side, it doesn't last long, between six months and 18 months, as Jen was saying it disappears. Meaning it's redeemed and we put the money back into higher yielding income and that's why treasury bonds and other bonds. And that's why our rates going up. But if many of the US companies have got 10% and maybe 15% decrease in book value, shareholders’ equity per share, and in a way and in Europe where interest rates went to zero and negative, and they are now moving up. And that's still very marginal at best at 10 year rates at 1%. And third year rates at 1.5%, 2% increase in those rates will have a significant impact. And like I said 30% drop in shareholders equity for some early reporting companies. And so you have to watch that and a lot of the European companies report only on the second half. So meaning they report only on a half not a quarter by quarter basis. And so this -- what we might be seeing is the hard market continuing, you can tell, but you have to watch this and the hard market might continue what Peter, you want to add on to that? Peter Clarke I think the only thing I'd add is we're still getting rate and we're still getting fairly good rates, like 7.5%. So that's going to drive growth alone. And then different lines of business are increasing still DNO, VNO for example, in the US has stabilized. But property CAT, a lot of raise, a lot of capacity there. And a lot of opportunity. So we're seeing a little bit more on the reinsurance side, less on the insurance side, but I think we'll see -- we'll still see strong growth in the next six months. Jaeme Gloyn Yes, and I guess I take it that you are more resilient, equity based balance sheet book value, allows you to be more competitive in this hard market than some of your global peers. Prem Watsa That’s it. That's exactly right, Jaeme.

Greg, another post like the ones I deleted and you get a 30 day ban. Think before you post. Cheers!

The other thing on the call was that book value losses for most insurers being announced are somewhere between 10% and 30% for 2022 so far...while Fairfax's book loss is around 5%. It would take a $300-400B catastrophe loss to wipe out 10% of book for global insurers. That means depending on bond and equity prices, the insurance hard market may continue for 2-3 years as insurers recoup their book losses and incur further losses as rates rise in the next quarter or so. Cheers!

China also has two sets of books...so write downs will never be seen by the public. When your banks are state-controlled, they essentially have a lifeline of $14T a year. The government isn't asked to intervene, they will intervene. After GFC, I remember the China experts that Fairfax used to bring to our dinner every year for a couple years. The real estate bubble and bad loans by developers were known back then. From what we were hearing, it was certain that China would have a day of reckoning. Well guess what? 10 years later and we hear about bankrupt developers each year, but somehow no real estate crash. The handful of times we've seen China real estate prices get volatile and citizens protest, it has been squashed. I saw the huge oversupply myself in a couple of cities about 7-8 years ago. But still no crisis! Still no correction. And I saw the massive, vacant centers myself! At the same time, I also saw the massive amount of wealth that China now had. The technology they possessed. The megacities that actually had people living in them. The vehicles and hubbub of commerce everywhere. With China its like the three monkeys...hear no evil, see no evil, do no evil. And here are the accounting books you should look at...don't worry about that other set! Cheers!

I agree on the stabilization part. In my opinion, If any thing, some retail prices will come down before Christmas as retailers have to get rid of excess inventory. Also, they will still have a glut of inventory as the supply chain opens up and backlog items show up on shelves. I think most prices will come down through the end of the year and we have already started the expected rally...markets predict out 6 months. With interest rates higher, discounts have to be greater to get revenue numbers to stay comparable or better than previous quarters. So as we saw this quarter, revenue numbers are comparable but margins are being squeezed. Does this mean we are out of trouble? Not a chance. There are still a ton of risks out there. So buy cheap, sell dear when you know you are getting a good deal. Ignore the noise. It's a sideways, volatile market for a couple of years as corporations become more efficient and equilibrium is reached with the new level of interest rates. Cheers!

I think they've had enough time to stretch out their liabilities. This was all supposed to come to a head shortly after the GFC...never did and they've slowly dealt with much of it. They'll probably get hit now as we're seeing, but they can likely manage the total exposure at this point better than 5-6 years ago. Cheers!

Well, I was a bit optimistic! Great 20%+ growth in insurance, they put about $10B into 1-2 year short-term bonds, and interest income and insurance profits have grown dramatically. Huge losses in equities and some bond losses...greater than I expected. Book value dropped to $588! Doesn't look like they bought any shares back in the quarter. If Fairfax's portfolio got hit that bad and they were positioned better than anyone else, this is going to be one shitty quarter for many insurers. Probably a buying opportunity in the insurance sector if prices fall as the insurance business is doing well and these are temporary portfolio losses for many insurers. Cheers!

All the macro guys have gotten it wrong since the GFC. They got 2000 and 2008 right, but from 2014-2020 they were wrong. Rosenberg, Grantham, etc have been perma-bears for a decade. Ignore them! Ignore the noise. Buy cheap, sell dear! Cheers!

Insurance: 1.) does top line growth remain close to 20%? I would imagine will be close to that. 2.) is CR below 95? Below 94? I imagine it will be 94, but would like to see 93. 3.) is hard market still alive and kicking? Outlook for remainder of 2022? From what I've read, the hard market continues well into 2023. Bond portfolio 4.) what kind of increase do we see in interest income? Brian usually surprises us with his moves...at the same time, we expect interest rates to continue to rise through the next quarter. 5.) what changes do we see in bond portfolio? If they've bought bonds, it will be higher rate 2-5 year stuff. 6.) what is average duration? (1.4 years at March 31) I imagine this stretched out a wee bit...probably closer to 2. 7.) what is amount of mark to market loss? US$400-500 million? Maybe slightly less...$350M. Equity Portfolio 8.) what is amount of mark to market loss? (My estimate is around $1 billion) Suspect your estimate is probably correct...will be offset in 3rd Q by rebound and gains from sales. Other 9.) share of profits of associates? $200 million? Your guess is as good as mine. 10.) Book value? Was US$626/share March 31 I imagine BV dropped to around $605...losses partially offset by insurance profits. 11.) share buybacks during quarter? (At March 31, 2022 there were 23,810,965 common shares effectively outstanding.) They've been buying...maybe 300K shares or so. 12.) capital allocation priority moving forward? One I would add is have they been allocating any capital into markets with some stocks down 50-90%? - level of debt is ok - continue to fund growth at subs in hard market? Probably. - buy back stock? Probably. - buy out minority shareholders in Allied World? They'll probably listen to you. Updates/Commentary: 13.) pet insurance sale: on track? To close when? Proceeds to be used for? 14.) Resolute Forest Products sale: to close when? (I think i read Q1 2023 due to needed regulatory approvals) 15.) Stelco dutch auction: will Fairfax be tendering shares? 16.) was regulatory approval received to take control of Digit? Cheers!

Unlike the number of people that were vulnerable to Covid, I believe most of the cases are people who were never inoculated for Small Pox. So, the vast majority of people shouldn't be concerned. Mainly the anti-vaxxers are at greatest risk and for those whose immunity to Small Pox has waned. Cheers!

No, Americans are allowed to buy real estate presently. No ban went into effect. Although some cities like Vancouver have an annual empty home buyer tax, which is 1% of the property value charged to homeowners (Canadian or otherwise) if the home is vacant and not in the long-term rental market. Cheers!

My sister-in-law is a Notary and a lot of her business is real estate closings. For the last year, there have been a lot of cases where buyers are doing last-minute financing closures, as they are still pulling money together at the last minute. In many cases, they are posting multiple deposit checks as many don't have the full down payment themselves and are reaching out to family and friends. This has only worsened as interest rates have started rising. Renewals and refinancing's are also proving tricky now as the 5-year fixed rate has risen from below 3% to closing in on 5-5.5%. Cheers!

I thought that was one of Anthony Hopkin's best performances and accurate to the real story...a very entertaining and well done movie! Cheers!