Uccmal

Lucky = Being born in a middle class family in Canada Unlucky - being a FFh shareholder going into 2002/2003 Smart - using google and typing in Fairfax Financial and finding the MSN Berk Board Lucky/smart - printing off a picture of Sanjeev and finding him at the 2004 AGM, after he first met Prem. Meeting other board members at same meeting as well as speaking with Roger Lace and Bill Joyner at the AGM. The next year Sanj. held our first pre-AGM dinner. All the rest stems from these events. Ubuy2wron: I think it is a matter of investing style and philosophy. When I drift from my style, as I did last year, I dont do well. With BAC I have gotten to know it since 2008/2009, first holding the warrants 2 years ago. I have followed AIG in the news for a long time, and have a reasonable understanding of insurance. I do investing related thinking/reading 2-3 hours per day, 340 days per year, for the last 15 years. 99% of the possibilities I review become just passing interest. Dazel: As a group we would try to decipher FFHs balance sheet, particularly the SwissRe, and Chubb Insurance (loans). No one knew how to account for this at the time, or how to unwind the messiness of FFHs balance sheet. The most we knew was that the FFh group were honest, hardworking, and smart. The shorts only saw the balance sheet and grabbed ahold of it without really knowing the FFH culture.

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/irving-kahn-video-looks-good-for-106!/msg65060/#msg65060

The article and premise are way too reductionist. People aren't buying stocks because the retail investor is always last to the party. They want to see gains in stock values first. That is why value investors have such an edge. The worldwide debt has now shifted to the government level. As economies improve, and tax revenues rebound the debt will stand still relative to inflation. Effectively, governments will print their way out of debt on the backs of the same retail investors who will be stuck in their 1% after inflation corporates, or worse yet in treasuries. Again the retail investor is last to the party, as are their large mutual funds. People should really learn to Bogle, and ditch 99% of the mutual funds.

I concur with what Sanjeev says above. Bac is vastly easier to analyze. By the time Of the options bet I had met Francis, and two or three other FFH executives and was struck by their honesty, and loyalty to Prem. Sanjeev had met Prem, who went out of his way to reach out through Sanj to our little suffering community here. In my day job alot of people lie to me or cover up with half truths. I didn't see that with these guys at FFH. It was a bit like poker. Still is. I always thought the analogy to poker in terms of ability to card count. Now, I see it more like the Kenny Rogers song - The Gambler.

Jean Coutu - pjc.a - tsx Sort of. Founder is in his 80s and his son took his hand at running the company into the ground by buying Rite Aid.

I bought leaps that were barely out of the money. My largest common stock position at the time was NB, as I viewed it as much safer than Fairfax. NB being public, well funded, growing, well managed, and firewalled from FFh made it safe imo. As Eric alludes to the difficulty for most of us and myself which was holding these positions. I would sell them out, take the gains and roll over to the next Leap cycle in the fall each year, until FFH delisted. I do the same now. I have stopped buying BAC and AIG Leaps until the 2015s come out. If they have moved nowhere I will sell them, losing the time duration portion of the investment. If they drop precipitously I will hold them, and buy the 2015s if the thesis is still intact. The warrants are very handy in this environment, especially for AIG. BAC common is so cheap it is sort of a toss on warrants versus common. BAC leaps I hold right now : largest number is 2014 - $10' others are, 7$, 12$, and a few 15$. As I sell them I sell from the top strike down. That is after I unload the remaining 2013 - 7.50s which are few. AIG: some 27$, 30$, 35, 40, and 45s. Wont buy anymore 2014s this late in the cycle. Building the warrant and common position now on pull backs, should they happen. JPM- have a small 2014 position I built after the London Whale. A certain portion of all of this is intended to be kept as common to provide future dividend income, for when I quit the day job. FFH is still my largest position, followed by RBS preferreds, and SSW.

I cant recall who first bought the idea. I know Mungerville (the original) had discussed FFH Leaps as early as 2004. Maybe Eric, maybe Numquam Perdo (he paid for an expensive house in TO with cash from his proceeds). He may have ressurrected the idea in 2006. Dengyu the Nugget, and Aberhound also did very well. My friend Ajay from Ca did very well, as did Sleepless Twindaddy. My records show me buying the common earlier in the year at just above 100 per share, then 2008, and 2009 leaps in June 2006. The stock languished for a month after my options purchases, then FFh announced the lawsuit on July 26th, and the stock immediately took off. Sanjeev was at lunch. One might call this overnight success, except I had held FFh since 1997/98 in small amounts, had read the AR every year to the best of my ability, and have been to every AGM since 1998, except this year. I kept buying more Leaps all the way into the subprime crisis, up to Jan 2011s. When FFh delisted the gravy train stopped. These kinds of deals pop up from time to time. Spring 2009 was another period. Right now, I believe that a similar opportunity exists with BAC (Hat tip Francis Chou) and AIG (thanks Plan Maestro). Right now I hold around 70000 Leaps/warrants and common on BAC, and 20000 leaps/warrants/common on Aig. Low risk - huge potential returns.

Not sure that article supports or refutes my thesis. I have yet to see a consumer electronics business that didn't commoditize very quickly. In the meantime there are high margins to be made but this too shall pass.

In a hurry to lose the money he made in 2009 I guess? I never get gold....just me I suppose.

I dont own any Rimm. Took my tax losses in November. However, I see alot there that has little to do with handsets or consumer direct services. Suffice to say Rim is never going to be more than a marginal player in that market now, and I think they are well aware of that now. Following on the smartphone, data service to consumers, I think this is a business that is rapidly commoditizing. Look for smartphones that do everything an Iphone does in a year or two for well under $100 with no plan. Google and Android have all but assured this. The same will happen in the tablet space. This does not bode well for Nokia or Rimm, or Apple, or HTC, or Samsung. MSFT always recognized that the best business was software, not hardware. That bodes better for Apple, Rim, and Google. Rim specific: Mike Lazaridis still works there and still has influence. The best thing Rimm could do was get him out of the spotlight to where he can work the magic that invented the reverse pager, without daily distraction. Prem and Barb Stymiest are there to oversee the numbers and overall strategy. IMO Thorston Heins is there to take the public heat and pass on the vague vision that they will communicate to the public and shareholders. He is also there to organize the company for a push forward into new areas. He is not the vision, more like the whippingmboy. QNX has a very valuable franchise in its own right that can be leveraged via RIM through all kinds of household, industrial, and mobile applications. They are already in military ops., Onstar, and multiple other platforms. Rim is going to look vastly different in a couple of years. Like Apple they aren't going to tell everyone what is happening until its released or in use. I dont think Prem is sentimental enough when it comes to business to plow money into something that is a sure loser. At the moment I am fully invested everywhere else so I will sit tight. Worst case is that I make the money indirectly through my considerable FFh holding.

The cycle they are looking at exists but it translates roughly into 17 yr+- secular bulls followed by 12-13 yr. secular bears. 2000-2012/13 - secular bear 1982-2000 - bull 1970/72 - 82 - bear 54/55- 70/72 - bull etc. Dates are rough. It has to do with spending/overspending and then retrenchment cycles. Your birth and the time you entered the workforce has alot to do with how you behave going forward and your investing luck. Buffett started at the beginning of a secular bull. Even politicians get credit or bashed for factors in the greater cycle that are out of their control. Corporate balance sheets are filled with cash now. This will start to be spent on hiring, given back to shareholders as cash, paid as taxes, etc. This will trigger the secular bull. I think we are actually on the cusp of the next bull this summer. Financials have started to rally, which precedes other stocks in the economic cycle. The greater tax payments will reduce or constrain government debt. And all of this is irrelevant to my investing except great bargains will be thrown up in turn over the next few years before we enter a long phase of value investing torture like the 1990s when I started.

I did that with Russell Metals - Rus - Bought after Ffh had exited, more than tripled my money. Also copied board members here more than anyone else.

I think copycat is the wrong term. I get great ideas from other great investors, and try to understand what they see in them. F. Chou, and B. Berkowitz, are the easiest for me to understand, and agree or disagree. FFh is very hard to copy these days since so many of their larger positions are workouts, or developmental investments of some sort. Buffett is similarly hard to decipher. Its always nice when a publicly successful investor buys what I have, or backs what I have, but it doesn't mean we will not all suffer together.

No argument from me. I have just come to accept it.

I have come to the conclusion after being an FFH shareholder for 15 years that they are mediocre underwriters and always will be.

Yep... Says it all. I loaded up 2014s and common in the 33-35 range. Unfortunately with BAC and AIG even cheaper it was hard to raise much cash.

Jonesing for junk food Parsad? burgers, cookies, and now hot dogs.

If I review a burger and post the review can I join the board for free. And, do I have to post a new review every year to maintain my membership. My review of McDonalds burgers: Big Mac: Tuesday July 3rd: tester: Uccmal Preliminary Review: Ate burger at 12:15 pm. The burger arrived in a styrofoam box, with a big M on the side. Upon opening the box I found what I believe to be the burger inside. It kind of resembled the box. It was cold and slightly soggy in texture with cream coloured goop draining from the side. I picked up the entity with my left hand and proceeded to take a bite. The flavour was reminiscent of Dow Chemical Styrofoam Mix # 33. I ate the burger to further assess it. Subsequent Review: 4 pm. Experiencing some nausea. Also finding myself to be very thirsty. Final review: 6 pm. Nausea nearly passed. Not hungry at all. The burger has lived up to my expectations of satiating my hunger, probably for days. Am I in? Next year I will review the Wendy's double burger, the preferred burger of Nancy The Salt Monster, and salt monsters everywhere.

I think the point of the test was to screen for over confidence. Buffett always uses the LTCM example of high IQ being potentially dangerous. I am sure there are plenty of examples where it could be very helpful. My take on Buffett is that he read thousands of balance sheets and annual reports at a very young age, and developed a very high competence. He then framed his limitations very well, and learned from his mistakes. The Mark Sellers speech posted elsewhere sums up the mix of necessary investment traits nicely. We need to be intelligent enough to understand many (not all) balance sheets, particularly what may kill a company. Then we need the temperment to invest when we believe the crowd is wrong. Then we need the fortitude to stick to our guns while everyone is against us. And experience does help. This is where I diverge from Mark Sellers. Once you have successfully ridden through a couple of these situations you have the experience and Framework to do it over and over again. That is assumming you learn from your experiences.

At the Extreme macro level we are roughly at the time we should be entering a secular bull market. In 1999-2000 Buffett was warning of a long period of below average performance. He was spot on. Secular bear : 99/2000 - 2011/2013% (12-13 yrs) Secular Bull: 1982-1999 (17 yrs) Bear: 68/69 - 1982 (13 yrs) Bull: 50-68/69 Bear: 29-49 The defined dates are negotiable; the general concept is sound.

Umm... JPM :P I look at it this way. They can delever today, and relever anytime they like when conditions are more profitable. Better than reaching for yield.

RE: lehman 2 talk. Funny how no one was worrying much about this ahead of Lehman 1. I recall the word contained being used by the Treasury, fed, and financial pundits ahead of the fall 2008 crash.

Bank downgrades causing a rally in financials: Bank Investors Dismiss Moody’s Cuts As Years Too Late http://www.bloomberg.com/news/2012-06-21/credit-suisse-cut-3-levels-as-moody-s-downgrades-biggest-banks.html

Alot of crow to meditate on....... I also think that WEB operates on an exclusion basis. He excludes those that dont meet his requirments. This vastly reduces the research required. To my recollection he has never invested in an E&p company, a junior miner, startup tech..

I suspect he uses some very simple version that doesn't require a calculator, also. I was just trying to answer twa's ?. I try to normalize earnings. An example might be BAC (sorry): Numbers are made up: BAC/ML made 3.00/share in 2001 to 2007. Take away some for excessive mortage lending (say 0.50) for BAC (absent cwf). That leaves you 2.50/share x 10Pe = 25. Book value is 22. Obviously alot of assumptions.