StevieV

I think dumping the airlines was pretty simple. They were all in big trouble, but bailed out by the government. Relying on whims of government assistance isn't part of BRK's investment philosophy. So, they dumped them. Makes sense to me. I don't have any criticism of that move.

From the headlines, it doesn't seem like they totally killed the deal today. Why not? Isn't the management a big problem? Failed to execute a sale for more than 4 years and apparently created no value over that time as they claim that is still the best deal. I don't know how there could be a much clearer case for the CEO losing his job, but he remains.

Didn't mean to imply the short would be BB. I am interested in BB. Also, separately, interested in any short equity.

I am not listening live. If there is anything about BB or the short position, I would be interested. As posted now pretty-far upthread, there was an outstanding unrealized short equity gain at the end of 2020. I think that has to mean a short was still open.

What was said?

Did they say that the shorts are fully closed out? $175 million in short equity unrealized gains as of year-end according to one of the charts in the release. Unrealized = active as of year end, right?

Nice job so far Safety. Price has risen a good bit so far this year, but as you mention, risk has gone down substantially. There is still a lot of upside left, but without some of the larger risks. Refinancing closes on Feb 10th. My comments assume that everything with that and the tender go smoothly, which is what I am expecting.

I agree that the circumstances make a difference. Fairfax could use the cash AND the move in BB's share price isn't based on a huge change in the prospects for the business OR a sober re-assessment by the market. Even if you Prem/Fairfax think BB's future is very bright, there's no reason they couldn't trim their holdings and keep some for this bright future. They could also have sold and buy back shares back later if and when the frenzy is over. I don't own BB directly and don't have an independent view of what price it should trade at.

Liquidity has been there. 365 million shares of BB traded yesterday

They had to have started selling today if they hadn't already. The company may have been surprised on Monday to see BB's stock trading so high. By today, they'd have to have discussed it and made a plan. That plan must have included selling at some of the prices reached today. That's how I see it at least.

If you are wondering whether it is possible to sell into the rally, AMC took the opportunity to shore up the balance sheet. https://seekingalpha.com/pr/18167918-amc-completes-market-equity-program . Wonder if they'll sell some more shares. Anyway, clearly didn't kill the rally. I remain very curious about how Fairfax is handling. My guess is that they started to sell a portion of their stake on Monday and have continued to sell at a measured pace into the rally. If they didn't start selling Monday, then they had to have today. If not today, what could their sell price possibly be? $40, $50? I don't think it's that high.

It will be very interesting to see what Fairfax does or has done. Given the trading action in BB and other names, who knows where BB's share price will go and how fast. It could be $40 or $50 next week. That would normally seem preposterous, but now, not so much. So long as Prem and Fairfax have some rational plan and explanation, that is fine with me. It is unlikely that they pick the top. If it goes to $40, it would be hard to complain if they trimmed the position at $15, $18 or $20. On the other hand, as the price goes higher, the argument for holding the full position grows weaker.

You'll feel differently when it hits $50 on Friday ;) $50? I thought it was going to $100.

Imagine... unloading BB and buying BRK at today's prices. So simple yet so unlikely. You guys make fun, but the fact remains that since 2016, BRK is up 75% to date, while BB is up 140% to date over the same period. Whether it's market exuberance, Robinhood accounts, investors recognizing that BB is not the same BB, or capital flowing to cheaper stocks from overpriced stocks...BB has done better than BRK. My point is that Prem spent 12 years as a portfolio manager then another 30 years running an insurance holding company/investment company...you really think he can't do better than BRK going forward with the universe available to him and the universe available to Berkshire? If so, why the heck are you posting on here...trolling Watsa?! Cheers! The fact also remains that since 2016 Fairfax is down more than 25% to date. I don't think it is a good time to point to stock prices as vindication of Prem and Fairfax. Prem hasn't been able to add value with shorts. He and the company have seemingly have acknowledged as much. If they can't add value with it, they should stop doing it. I'm not sure whether or not Prem/Fairfax can do better than investing in BRK. BRK isn't a bad stock at all in my estimation. BB was a big loser a month ago. The sun has now shined upon shareholders of the company and turned it around. I hope Fairfax is able to take advantage. I wouldn't, however, want to point to the BB position as evidence of the company's stock investing acumen.

The question becomes....how will shareholders feel about Prem if he does not capitalize on this parabolic move up in Blackberry? What will you do if the Blackberry price retreats and we find out that Fairfax did not lock in any of the gains? As SJ correctly points out....a $1 billion unrealized gain on the convertible debs alone? Only of value to us if Prem acts to lock in those gains. Would you be okay if he does not act? If he lets this opportunity pass us by? I don't expect them to monetise. Sharp moves like this don't usually offer big shareholders the chance to liquidate. Normally you may not, but this is not a normal situation. The volume today is again HUGE. 123 million shares have traded so far today as I type. Just over an hour into trading. I see no reason Prem couldn't dump 10 million shares for $200 million today. By this afternoon, maybe 10 million shares/$200 million will look low. JOKE I can't help but make - watch Fairfax make a killing on BB and then lose it being short GME

No, FFH has no legal impediment to selling its shares. There is, however, a sigalling risk when insiders are dumping their shares. If you can dump them in one large block-trade at an agreed price and then fill out the regulatory filings to make the public announcement afterward, then it's not a problem for you. If you cannot find a buyer for a large block, then you'd need to sell them on the market in small dribs and drabs over the course of a few months (it is a very large stake!). Before you are even able to dump the majority of your position, you'll have had to file some insider transactions reports, which signals to the market that insiders believe that the price is too high. In short, your favourable price could disappear because of your obligation to file. On the other hand, if you were not a BB director, you could quietly dump your shares on the market over several trading sessions and your only need would be to eventually file a 13F a few months later... SJ If the WSB board is what is driving the share price (and that seems to be the case), I'm not sure the signaling risk is as great as it would normally be. How many folks over there are buying because of Prem's involvement? How many are going to sell because Prem is selling? I know very little about the WSB subthread board, but my guess is zero. If the stock starts to lose momentum because of Fairfax selling, maybe then. Volume today and some recent days has been huge. I think Fairfax could dump some shares if they like.

If my quick math is correct, Fairfax's BB position is up roughly $400 million YTD (equity and convertible). We'll see where things go.

Is this supposed to be supportive of the bull case? Doesn't look that way to me. 12% ROE gives you a $70 per share net profit...that's today...gives you a 10 times multiple of around $700 per share or 1.2 times book. If they compound at 12-15% ROE for the next 15 years...what would you say is fair value for that business on a per share basis? From a price of $430 CDN today. Cheers! The chart I quoted showed that the EPS in the 5-year range from 2005-2009 was greater than the EPS a decade later during the 5-year stretch from 2015-2019. An earnings/share decline over 10 years isn't bullish in my book. You give the bull case - that they'll today generate good profits. I haven't verified your numbers or Thrifty's, but your estimate is double the recent past EPS given by Thrifty. Sure, if they now start producing double the EPS, the shares should be worth a lot more. Of course. Fairfax hasn't had a problem projecting gains (15% in fact). It has had a problem avoiding stumbles so that they actually achieve them.

Is this supposed to be supportive of the bull case? Doesn't look that way to me.

Stock market capitalization is closing in on 185% of GDP...long-term interest rates are near zero...you have bubbles in other assets classes...tech stocks are frothing at the mouth with Tesla leading the way at a 1,000+ P/E...government debt as a percent of GDP is hovering over 100%+ for most developed countries...consumers while paying down debt in 2020, still live hand to mouth for the most part...what happens when stimulus stops...I'd say the short position this time may have some legs going forward compared to after the tech wreck when they didn't invest heavily and held short positions. Cheers! After posting my last comment and thought about it a little more I also wondered if shorting Tesla right now actually makes some sense (not that we know that is the name FFH was short at end of Q3). So, yes, I agree with you :-) I’m not a fan of shorting...but if I had to pick one, even though I really like the company and Musk...that would be the one. Extremely overvalued...one miss and boom! Cheers! I am thrilled if FFH is short Tesla (seems very likely at this point). It would easily explain the heavy short losses and would rule out something much worse, i.e. Amazon, etc, IMO. I've been searching for a cost-effective way to insulate myself from the inevitable collapse of certain ridiculous tech prices, with Tesla at or near the top of the list. As it turns out, this may already be partly built-into my FFH investment. We are speculating, but I hope this is correct. TSLA is up 40% since the end of Q3. That strikes me as less than thrilling. Sure, TSLA looks overvalued. Looked overvalued at half the price. At a quarter of the price. If the short is TSLA and FFH has held, they need a big move down just to counter the move of the last 2 months.

I would largely agree with this. I would consider that as the most uncertain to least uncertain returns. I am the least certain about Fairfax given their recent investing history. Most certain about BRK.

Viking, Any thoughts on how and to what extent the virus will impact KW's business? More multi-family in their portfolio than anything, but still have commercial and retail exposure. Multi-family should be less impacted, but some changes from people shifting where they live. Possibly some opportunities as well. SteveV

i don't think a bumpy 3-4% / year ($15-$20B) is a crazy guess. If they don't do a big acquisition/net stock purchases, they need to buy like 25 yards/yr or so just to stay cash neutral. I agree that Berkshire is price sensitive, maybe some years its 1% or some years its 5%. But to see them actually executing at about max volume is a positive foil to the strawman that Berkshire will forever accumulate excess captital. We're moving in the right direction 2018: $1.3B 2019: $4.8B 2020: $9.5B+ If 3-4% then that's about the same as S&P 500's net buyback + divvy yield, not that that matters. The feedback loop will be interesting. I think the Q2 opportunity was there because they weren't aggressive in Q1. Now that they've been aggressive in Q2, poof, the opportunity is gone (or, say, diminished).

Basically a speculative investment. $6 conversion in Nov. 2023 may turn out great. Not that much above the current $4.80 and 3 years is a reasonable time. Of course, may not work out at all.

I answered good host and good guest. If I had to choose only one, I prefer a good host to a good guest. A good host can get something out of most guests. A badly hosted podcast stinks no matter who the have on. I also listen to podcasts without guests.