Uccmal

Until RIMM comes out with a Rights Offering... :-) Of course :-) Racemize, From memory, which is certainly flawed. This was a one time large controlled company of FFH, the minority of which traded on the TSX. They are an insurance adjuster company. Originally FFH bought an adjuster called Morden & Helwig. Later on they bought a company with the name Lindsay in the title, merged the two and created Lindsey Morden, circa 1997-98 - may have been a little earlier even. LM had huge earnings for a couple of years right after creation, and then the bottom must have fallen out of the industry. Later on, in the early 2000s they merged with Cunningham (you will have to look in FFHs old reports for proper names and details). This created an adjuster behemoth, that promptly lost money forever after. So we had Cunningham Lindsey, that cost around 400 m to cobble together. They ran into financial trouble. I am guessing around 2002, FFH backstopped a rights offering, to refi CL. Anyone (me) who invested in this company prior to this, or took advantage of the rights offering, or bought the stock subsequently, lost money. At some point., long after I gave up, CL was taken private by FFH with a US Hedge fund (Stone Point) - 2007 I am thinking. The going private transaction was at a fraction of original book value. So, now they have gotten rid of it. It appears FFh got rid of this PITA for good, finally. The sfk tale, of which you are aware, has a similar, although not quite as disastrous end. Anyway, when, RIM has a rights offering, run for the hills as fast as you can. To be fair I made a small fortune on HUb Group, Northbridge, and ORH, and FFH itself, which dwarfs the losses on LM. I have been following the other thread on Buffett's success, without commenting. His buy good quality at reasonable or low prices, and try to never sell, resonates more with me than Graham's cigar butt style. Basically, as much as I admire Walter Schloss, and Graham, I cant do what they did.

Thus ends a long sad tale of in the realm of bad investments. This was my first foray into rights offerings backed by Fairfax. You think I would have learned my lesson. No, I had to do it again with sfk pulp. I believe I have finally learned this lesson.

In my view, the key to Schloss's success was patience. Embedded in that is ignoring the noise, keeping his head, etc. His genius wasn't in technical skills or superior analysis. I say this as one of the world's biggest fans of his. I owe him a tremendous intellectual debt. But he would be the first to admit that he wasn't a better securities analyst than many others. In a too self-deprecating way he often said he wasn't "too bright", which of course is ridiculous, but I think it reflected his view of what he did. His true genius was in patience, time arbitrage to the extreme. As Oddball mentioned above in a great post, Graham and Schloss advocated fishing in a pre-selected pond with large, slow fish. I know that many value folks believe that past pricing means nothing. Ironically, Graham, Schloss, Cundill, etc all mentioned past pricing as providing certain guidance. I think that people miss the point. It's not that a past price determines a future price, but past multiples will demonstrate what the market might be willing to pay in the future. I have never ceased to be amazed at how much prices truly do move from one extreme to the other on almost a yearly basis. Allan Meachum had a great line about this in an article a while back. He said that each year the price of most stocks will move about 80% from high to low. I have no idea whether 80% is an accurate number or not, but the gist is very true. So the point is that if you fish in the right pond, buy cheap and have patience, at some point you will have a positive outcome. That is Schloss's genius. He fished correctly and was willing to wait for a good result, whether that was 1 year, 4 years or more. He has said after about 4 years he would think about selling, but he really didn't like to sell. Most of the selling was probably forced by Edwin. Walter liked to hold on. He knew that in the real world (and Graham says this in Security Analysis) there are very few public businesses that actually disappear. Most survive if not thrive and so long as the future looks something like the past, the stock will do ok. You summed it up very well. He obviously was very bright but look at some of the people he hung out with. Many of us wouldn't feel very bright in a room with Buffett, Gates, Graham, K. Graham, and Munger. Very patient, like Francis Chou.

Norm, you should clarify that this is not back testing. This is forward testing. The Graham stocks are chosen at the beginning of a year. The results are a multi-year tally of year end results for the chosen stocks. A.

So here's the question. What do you invest in during a sustained low interest regime that will outperform treasuries? Presumably there is low or no inflation in this scenario. I believe that we are now in this scenario for a few years more, at least. I cant know how stock markets will behave but I dont think Japan is a good example, as their market was hugely overvalued prior to the crash. On the other hand I am not expecting new highs to come every day, either. My thinking is that stocks must pay a dividend, and be able to increase the dividend each year. In effect, they are leveraging available cheap money to operate with slightly higher returns somehow. Return of capital has to be a premium consideration. Well run banks are probably good. Borrow cheap, lend out slightly higher. Real estate companies (REits) should probably do okay, at least on the dividend front. Buffett's IBM purchase is instructive I think. He Bought a company that offers services in the info pipeline. Telcos are probably not so good, with high capex. Insurers have to be well run. Anyone who is underpricing too much will die a slow death, as will anyone who is overpricing. Large companies that can borrow insanely cheap, maintain cash flow, and avoid obsolesence, all at the same time. This is a good mental exercise for the years to come.

I think Buffett said something like this: "Walter's investors last names read like the roll call of Ellis Island.

I think it was either: Superinvestors by "Adam Smith" or during Buffett's coin flip debate with Samuelson.

Tx. Kraven, I looked under books but missed it. Anyways, looks like I will take a pass or just skim it at the book store.

Has anyone read this. I skimmed it and it looks promising. About Ben Graham

FT, Sounds about right. I am sure if Bill Miller hadn't left, he would have turned things around big time. Buffett has had his cycles as well, but has smoothed them over time. FFHs returns are going to come all at once, and no one is going to be able to time it very well. Kind of like my own record, and yours I am sure.

Too true. The losses on Rimm and Dell in the past couple of weeks add up to a couple of bucks per share. In the meantime there is all of those juicy hedges, just in case the Fiscal Cliff gets real ugly.

cfx is an interesting case. I have held it right through this downturn, some since The last downturn. I haven't bought any for awhile - tapped out. The power production alone will get that dividend back up.

I had just started investing at the time. I had read alot about Buffett by that point. I worked out how much estimated gold there was, and its toal value at $400/ounce. Basically, the amount of gold in the ground came nowhere near covering the market cap of the company and I was being generous. If the find had been real the price of gold might well have dropped from oversupply. If Bre-x had mined out all of the gold that day the investors were going to be left with a huge shortfall. My assumption of course was that this was a one off discovery. Bre-x needed two or three of this size to pay back shareholders. It was my first introduction to a mania in real time. It took me ten minutes of calculations to determine it was a really bad deal. So, I was well prepared to avoid the Tech runup that followed.

HWIC is a wholly owned division of Fairfax. They are distinctly separate entity from the insurance Companies. Their sole purpose is to invest for all of the FFh companies. VPs oversee the various types of investments. There are numerous analysts working there. Any analyst can bring an idea forward. They have meetings where everyone needs to defend their choices. Prem has the final say on making an investment. I have met at least a couple of the VPs and analysts over the years. For off shore investments there are "investors" of the value framework that work for Fairfax. This gives them a global catchment of equities, bonds, and other instruments. These days they work with their partly owned sub Kennedy Wilson in buying distressed real estate as well. KW has an excellent record of buying real estate in downturns. I addition, of course, they have been involved in Joint Ventures with Wilbur Ross, Kennedy Wilson, Longleaf, and others.

Beat me to it. :)

I think I worked out the banks on the prior post about this.

Mike L. puts alot into his community. Obviously he sold some stock along the way.

In Canada it carries on as if you owned the common stock from the beginning. We have no long term/short term differentiation, so far.

Maybe the planet has tilted a bit from all the hot air coming from our politicians these days. We have had the longest hottest summer by far, since records have been kept in Ontario. Mid march to about now. I can live with it. The skiing kind of sucks though.

They are certainly very good, however I'm not sure how much of a benefit they got from issuing their shares at a huge premium to book value (it was up to 3x at one point!) -- I think it was quite a bit. Very good point. Financial engineering helped some. However, they also issued alot of stock well below book as well. You also need to strip out year 1 which was an anomaly. Give them 20%, after everything is netted out and 15% going forward, CAGR. With FFh everything is always in fits and starts.

No friggin idea.... They may well be onto something. The CAn. Auto Workers just took a 4 yr. 0% increase. The government of Ontario is freezing all public sector wages, either by legislation or through bargaining.

Lol, Dent's track record as a contarian indicator is nearly 100%. I wouldn't let what's left of a little bet by FFh to sway me away from investing. The stock is floating around book again. I recently added 100 shares back. Their bets on the long side, as mentioned above, dwarf the CPI derivatives bet. You really need to put it in context. It wasthe same size as each of several numerous long side equity holdings. FFh provides awesome downside protection, with a huge upside as well, for a person (me) who has most everything else in US financials.

David Dreman covers this in a generic sense in his fattest book I think it is called contrarian investment stategies. I made a bundle on Sino Forest years before it became a fraud. I think its holdings then may have actually been legit. Well never know. BB bought WFC in 1992. FFH has held Arbor Memorial for 10 years. Russell Metals was also an FFh turnaround, and is now a premier metal broker. I held and still hold some Rus for 9 years now. FFH is long gone. H&r reit is another former FFH funding. There are probably others in the FFH fold. Is this what your looking at?

I pumped gas in 1982. Our price per litre was roughly 0.40 cents. Today I paid 1.25. Both times are at highs in the cycle. That is just under a 4% increase per year. Roughly the 30 year rate of inflation. People react very irrationally to fuel prices. Today I fueled up at some gas station on a major highway that was empty of cars. The price was 125.9 per litre. A mile down the road people were lined up in what looked like close to a 10 minute line to get gas at 123.9, a savings of 2 cents per litre. In my vehicle that would work out to about 1.20 per litre savings, if I was willing to wait ten minutes. I am not. My time is worth about 200 an hour to me, if I were to bill myself, so ten minutes would cost me perhaps $30. I am taking the money made between salary and investing over the last 8 years and dividing it roughly by time spent to get my billing rate. I will use a generic ATM in a variety store at a cost of 1.50, rather than drive up to the nearest CIBC machine to save the 1.50 - starting and stopping my vehicle and driving to the extra stop takes more time and money than making the one stop. Most people are not rational about time and money.

Charlie took out a loan to buy British Columbia Power bonds and invested everything he had in it. In the low millions, I believe. Discussed in Alice's book.