Phoenix01

To Prem, Congratualtion on 25 years. Your integrity and honesty has been a guiding force to your team and your shareholders. This was put to the test over the 7 lean years and the results were remarkable. Having joined the FFH shareholder family over 10 years ago, it took a lot of faith to double down as the shorts were wreaking havoc on the stock price. This faith could only be there because of the honesty and integrity of the FFH management team. I purchased FFH to make a quick profit, but have ended up as a long term holder who will probably never sell. Thank you for showing us the importance of good management and corporate culture.

I am a little confused. The 2010 Q2 states that the ''Number of shares outstanding Common stock effectively outstanding – end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,546,935'' The press release states ''As at September 14, 2010, Fairfax had 19,927,389 outstanding subordinate voting shares'' & ''Fairfax has purchased 323,500 of its subordinate voting shares'' Simple Math Since the end of Q2 the share count has dropped by 619,546. What happened to the other 296,046 shares?

The hedge can be sold. If there is temporary deflation (or fear of it) the hedge pays off nicely. I think it is about taking advantage of the overreactions. When the risk is either overpriced or underpriced, FFH will take advantage.

twacowcfa, I like the way you think. What is the long term correlation of socks to the markets?

Personally, I cannot get enough and attend the pre-dinner drinks hosted by James and continue the discussion at the pub after the restaurant closes. For the many that do not live in TO, the cost of travel and hotels is much greater than the dinner. Option #1, Joe Badali was great at the beginning but I think that the group has outgrown their capacity. I believe that the attendance had to be capped last year. If the trend continues, even more people will have to be excluded. Option #2, Seems like the best option. We all need to eat and would like to make the most of this special evening. I am sure that we will be able to come up with fair and friendly solution for those who have difficulty to pay the extra $$. Option #3, This is also a good option, but we need to eat, so we will end up losing one or two hours.

Is she cleaning him out before FFH gets a chance?

That sort of makes you wonder why he was so eager to get rid of his cash and take possession of hard assets.

BB, You need to remember that the Chinese play by Chinese rules. Connections are much more important than competence because it is so cheap to hire competent people to do the work. Dealing with the bureaucracy is the real challenge. It looks like Sky One is doing that correctly. The results are intriguing, but the methods are not North American.

The vision statement should be a straight forward request. They can point me the existing documentation if such already exists. I found this interesting article while digging a little deeper. http://seekingalpha.com/article/129921-three-reasons-to-heed-china-sky-one-medical-s-10-k-filing-extension Perhaps it is time to re-think this position!

This one also caught my attention. Based on the finanacials I have started to nibble. I asked their IR department for their vision statement and some insight of the managmenet culture last week and still have not received a reply. :(

For a good analysis of LPHI, take a look at the links below. http://harbor.typepad.com/analysis/2010/01/life-partners-1.html http://harbor.typepad.com/analysis/2010/02/life-partners-2.html http://harbor.typepad.com/analysis/2010/03/life-partners-3.html

To summarize: Pardo from Waco! - runs the company like he owns it. (Oops! He does. Over 50%) ---Subsidized airplane ---Private mammoth museum in the stock room ---He is in bed with his wife (her company anyways) He is definitely no Prem or Warren. Life settlement is a profitable business that is on the fringe and it appears that Pardo is too. Harry, Thanks for pointing out the shareholder sponsored museum. Have you had a chance to visit? (Just curious)

Ragnarisapirate, Thank you for the additional information. I reviewed the links and the supporting documentation is quite spotty. Considering that there is a smear campaign happening, each claim needs to be reviewed for its merits. We have seen the shorts operate against FFH and this seems to be very similar. If you run across anything that is factual, I would really appreciate knowing about it. Bookie, I wrestled with the morality of the business, but they are only on the buyer side of the transaction. The seller side of the transaction is much more subject to abuse. This is a thin line, but and important one. Twacowfca, This is the same thing that could have been said of Prem during the FFH smear campaign.

Corrected text! Red Flag # 5. Analyst coverage? Interestingly enough only one firm “covers” Life Partners: Taglich Brothers. ***Attacking the analysts covering the company!!! I have not looked into this. Red Flag # 6. Competition Major competitors in the viatical settlement sector include: Maple Life, Peachtree, Coventry First, Life Settlement Solutions, and Life Equity. ***LPHI is not in the viatical settlement market. See following link for better understanding of the company. http://www.executiveinterviews.com/U12682-lph-blus/

I have started this new topic to discuss LPHI. This stock has been shorted intensively and here is the link to an article that lists out the short position. http://www.citronresearch.com/index.php/2005/10/21/stocklemon-reports-on-fairfax-financial/index.php?s=For+investors%2C+this+Life+Partner+might+not+be+good+for+you+%E2%80%A6&submit=Search From my research, here are the counter arguements. Please let me know if I have missed something!!! Red Flag # 1. Egregious fees. We believe Life Partners is charging their retail investor clients egregious fees. ***Clients are lining up and revenues are climbing. This does not appear to be an issue. Red Flag # 2. Are those fees sustainable? ***Clients are lining up and revenues are climbing. This does not appear to be an issue. LPHI was named No. 1 of the 100 Fastest-Growing Small Public Companies by FORTUNE Small Business Magazine Red Flag # 3. Management track record Past indiscretions by management, including accounting abuses and other issues increase the risks for investors in LPHI. ***I have not found anything to support this claim. The annual report is well written and provides transparency. Red Flag # 4. Who’s minding the store? Who is minding the store now? LPHI’s auditor is a tiny firm with a really small public company practice. ***Attacking the accounting firm!!! I have not looked into this. Red Flag # 5. Analyst coverage? Interestingly enough only one firm “covers” Life Partners: Taglich Brothers. ***Attacking the analysts covering the company!!! I have not looked into this however the company has received the foll Red Flag # 6. Competition Major competitors in the viatical settlement sector include: Maple Life, Peachtree, Coventry First, Life Settlement Solutions, and Life Equity. ***LPHI is not in the viatical settlement market. See following link for better understanding of the company. Red Flag # 7. Life Insurers: no longer “The Rock” Life insurers are under enormous distress due to the financial crisis. ***LPHI does not hold the policies. They are brokers that facilitate the secondary market for life insurance policies. Part of their service is to make sure that the insurance provider is able and willing to pay out the policies. Conclusion Just two years ago, LPHI was an OTCBB stock that had never traded over $10. With its colorful CEO, lack of management oversight, tiny 30-employee operational footprint and string of regulatory troubles, it falls far short of the standard of accountability and transparency required of mid-cap Nasdaq companies. From an actuarial perspective, we’d say the odds are this one is terminal. ***The short argument against LPHI does not appear to be supported by fact. LPHI does not require much capital to operate. They have a diversified group of customers and their services are in demand. The CEO owns over 50% of the stock, so this makes them a difficult business to take down. During this economic downturn, they have survived the short and smear campaign and are still growing. The macro trends are in their favour and the shorts will have to cover at some point.

LPHI started trading on NASDAQ on Jan 2, 2009. http://files.shareholder.com/downloads/LPHI/807493359x0x286301/ff817784-ba17-4279-81b4-8542ff33c6e9/286301.pdf Shortly after the short attack began and lphi had to issue the following press release (Feb 11, 2009). http://ir.lphi.com/releasedetail.cfm?ReleaseID=376514 The latest share count that I have been able to find: Insiders - 50% Institutionals - 25% Mutual Funds - 13% Shorts - 16%

Like I mentioned, the stock is the subject of a short attack much like FFH. Here is perhaps a less biased view of LPHI and what it does. http://www.executiveinterviews.com/U12682-lph-blus/

Here is a really interesting one. LPHI - They are brokers in the secondary market for life insurance. This is an interesting alternative investment that is not correlated to the markets and shuld be growing substantially as the boomers get older. The business model is really interesting and is generating tons of free cashflow. There is also a huge short position that will have to be covered. Perhaps a second chance to to kick the shorts around!!!

If the economy takes off, then the extra cash goes into building out the business. If the economy stays steady, the cash remains at a low interest rate and FFH can earn a profit investing it. If the economy drops, the markets drop the interest rates stay low and FFH has extra cash for investing when things are low. This makes $1.2 B that FFH has raised very recently. I am wondering if they are simply taking advantage of this market rally to be ready in case there is a second wave.

The second just appeared and is named: Bill

FFH borrows $150M @ 7.5% and ORH buys back $150M in their own shares. Globally they have as much cash available and FFH benefits from 80% of the buyback through their current ownership position. Since ORH is expected to return 15%, FFH will get a better return than the interest cost. This also acts a hedge. If ORH shares drop (major disaster, market collapse or continuing soft market) then they will get ORH at an even better price. In my opinion, FFH is just loading the gun. All though $150M is a relatively small amount, it will still buy back 3 million shares at the prices that ORH has paid so far in 2009.

I met DengYu at the FFH dinner 2 years ago and was really impressed by him. I think that we can all learn quite a bit from him. Balancing risk and reward is extremely difficult and it is rare to find someone who can do it with such ease. I have also purchased several options last month and I am sitting on an 80% gain. Today I started to lighten up, but I think that there is still plenty of up side remaining in these options because the market tends to overshoot. Even if I can get more later, I must first take the risk of holding on to the options before I can benefit from the potential reward. Knowing when to back out is just as important as knowing when to get in.

As part of my "sell in May & stay away" strategy, I sold my Gannett shares and LEAPs with a very hansome profit.

For what it's worth, I am selling just about everything and taking the summer off. The market sell off took up too much of my time and I will use this opportunity to revisit my investing approach. Sell in May and stay away!

I took the opportunity of the rally to bail out of my ORH shares and replaced them with an equal amount of ORH.A and ORH.B. I think the summer will not be kind to stocks, especially those that are vulnerable to hurricanes. I am happy with the 10%+ yield for my parked money and I think that I also get some sort of protection against treasury fluctuations.