Uccmal

Viking, Thanks.. It wasn't on the Nasdaq site yet. a.

HI Viking, where are you getting the purchase numbers from? Going from 10% ownership to 100% is a mighty leap. However, They certainly know Zenith very well so it may be a good company to buy. This type of move appeals to me much more than acquisitions of companies they have no prior relationship with, particularly in the insurance sector.

Probably Feb. 18th this year. A.

I am on the opposite side of the situation. I have had a US margin account in addition to my Canadian margin account since I started investing on my own 13 years ago (I am Canadian to clarify). At times I have held alot of US stock. I am of the opinion that the Canadian dollar is more or less at the higher end of its range when it is around parity. So around parity I move cash into my US account. When the Cdn dollar backs off I move the money back. It is not accurate or precise but it works in my favour most of the time. This week I made $2000. I have done this repeatedly so if I get stung one day I will have had a good run. Now there is a downside to this whole thing. When Brk was sub 40 g in the late 90s the Canadian dollar was as low as .63. With inflation etc. one who bought BRK from Canada back then would have broken even about now. Currency fluctuation is just something we get used to and put to our advantage. Round about way of saying that perhaps opening accounts with various currency exposures and buying the stock in the home currency may be lucrative. All that being said I have an impossible time once two currencies become involved such as buying an ADR from the US.

Were I a cynical individual I would say that TD was doing a little profiteering on this deal. Depending on the exact exchange rate used they made anywhere from 1 to 1.6%. I am going to ask Fairfax if they could remedy this in the future. Better that FFH or me gets the money than TD. Now if TD was trading cheaper I would just buy its stock like I have done with Bell Canada. I hold just enough Bell stock to pay my assorted Bell bills via the dividend.

Viking, Your rationale of course makes perfect sense, except that we know that FFH has at least 170-180 M per Q of dividend and interest income, and growing, in a very low inflation environment. We know they have made $3-4 per share on Magna alone in the last month, a couple of dollars on GE, some on Intel, etc. The BV per share you estimate is likely close or slightly low. Markel is at 1.2 BV; BRK at 1.3 to say nothing of intrinsic value of either company. They are both cheap as well which fuels your overall thesis. Leastways I figure that FFH should trade in line with these two nowdays. FFH at 1.3 BV would be about 460 US which would be about right for me. Anyways, I am just impatient, sometimes. Not always a good trait in a value investor :P

smazz, lets hope. I do like the preferred structure versus debt. The next report is going to take alot of reading to get a handle on the company again. So much has changed. So, why then is the stock trading so f-g cheap?

I sold half my Kft shares - small position anyway. I just dont have the patience for this one to turn. The stock will probably lose 15-20% during the transition creating some value along the way.

There only letting people close out options. When you look at the bid/ask the bid price is those who wrote the options trying to buy them back on the cheap and close out their positions. The Montreal exchange does not have any Fairfax options listed. I am thinking that the interest will just not be there.

I am in a rude mood today and this didn't help. Other than getting the money cheap while they can I dont understand this move. The optics are horrible for this kind of issue. It looks as though they sold stock to pay the dividend - I am only implying what it looks like not what the reality is. Since it is at the corporate level I dont imagine it is for Canwest - god I hope not. It could just be to cover some of the market cap lost over the last 15 days - 800 million. Sometimes I wish that Fairfax would hire a sophisticated PR firm to show them how to communicate via press releases etc. Anyway I bought a couple of hundred shares today at a price $20 lower than I sold 100 at on the ex-dividend day. Sometimes I wonder though when I will stop beating my head against the wall... ::)

http://www.cornerofberkshireandfairfax.ca/forum/ As good as it gets...

Bronco, That is very well thought out. So, basically shareholders need to vote with their feet. Up until the 1980s many companies paid out a high proportion of the earnings as dividends. Perhaps shareholders need to insist on high payouts (BRK being an exception) and reward stocks in kind by buying them. One of the best ways for Congress to prevent future stock juicing would be to favourably treat dividends. This would then create more of an owner culture among large companies. Dividend it out or your stock price suffers.

I saw a quote from a Republican Rep who commented that the US banks behaviour toward bonuses was 'just stupid. They might as well have put a sign on themselves saying just shoot me'. Cant recall who it was. Anyway, I am extremely disgusted with the bonus situtuation at US banks right now. From my standpoint Goldman Sachs, JP Morgan et al would all be out of business if it were not for the intervention to save their counterparties. I cant blame Congress or the Administration if they want to take away everyone's bonus going out ten years. Essentially it amounts to the government directly paying investment bankers at the aforementioned collection of companies these bonuses. It strikes me that there would be some million Americans who are probably qualified and ambitious enough to be investment bankers for a salary of say 1 million per year clean. Essentially, everyone at a company who directly, or indirectly, received benefit from bailout money should be paid only as much as the highest paid person at a crown corporation (about 1.5 million) in Canada. Wind it down over a ten year period until it is deemed to be fully paid back. As for the banks threatening not to lend, they can be legislated to do so easily enough. BTW - I am not adverse to merit pay. I just dont buy the BS that these investment bankers are any more talented than 1 million other Americans who would kill for their jobs, even if they only paid 1 million. Let the flames and arrows begin...

I really like PD. They are in a sweet spot right now. They have raised capital, taken charges for idling some of their fleet, and drilling will likely start to pick up. The combination of o&g prices rising, less drilling for rapidly depleting gas, and the move toward more cogen should bode well for PD. Safer than trying to determine whether x-company has enough reserves, or if they have lied, or calculated correctly, or need to make an acquisition to keep pump numbers up. Basically with PD you get a claim on few percentage of all the O&G drilling in North Am, and a substantially larger relative percentage in Canada. Wait for it to reach 30 or so and sell, and wait for the next round.

We just might. Last year we got about 9.40/share. This year its looking like about 10.30/share.

I would just stay away completely. As Beerbaron has alluded, there is way to much information that is unknowable, incomprehensible, and just plain lies.

Myth.. Lets put it this way. I exercised about 25% of my total Leaps - I still hold ones that are deeper in the money with the time value removed. I will likely sell some shares, perhaps half of those I exercised after collecting the dividend, depending on what the shares do. I will be doing it primarily to reduce my margin debt to safer levels. FFH will still remain 40% or possibly greater of my holdings. If FFH suddenly rose dramtically I would likely take some more profits, and so on, until it reached 2 x book where I would reduce it to a small long term holding. Moving target, as always, based on reported book values.

Obviously, the collective doesn't think so. And in this case I side with the collective. FFH is at its annual high for the year. If there is some sort of significant insurance event in July or August you would kiss the value of your options away. A round about way of saying that I wouldn't buy FFH at this price at all when I can likely get it cheaper sometime later. RE: Dividend - As per Smazz earlier there is really no point in debating this item. FFH is going to have a small dividend every January unless the shit hits the fan so you might as well accept it. Prem is now committed to the point of being trapped. Any signal that they couldn't afford it would put FFH back into deep value territory. Buybacks aside there is no way he wants to see that stock going down below book again.

No, no options at all for FFH. I noticed the time premium is gone as well. I exercised my high dollar value Leaps -280s but cannot afford to exercise the rest. My margin has gone through the roof putting me at risk in other areas. Fortunately I have already bought a tranche of puts on SPY units.

That seems a reasonable line of thinking.

They should make it quarterly. Save the money from the year end and eke it out quarterly. This will help get the stock off its annualized merry go round.

With due respect to Sprott, one needs to understand where he is coming from. He runs hedge funds so while he is talking his book, he is also preparing for the opposite of his book. I am also of the opinion that no one can forecast markets. FFH hedged with CDS' for 4 years before the event was realized, and their hedging was very specific at first to mortgage packagers. Prem had been forecasting a full market meltdown for 10 years. While Sprott is predicting declines, Marc Faber has been predicting better times, as has Barton Biggs,and Warren Buffett (by his actions at least). All of them have decades in the business, so who is right? Is anyone else getting forecasting fatigue right now? I have just stopped reading any articles that are not company or industry specific.

Be succinct! imo ValueCarl How's this for succinct: Go elsewhere!

Mranski, These are more legitimate criticisms than the Yield Pigs commentary of Value^2. I agree that their business model took a bit of a hit. I also concur with JEast that they are doing their best to survive the storm. They had always intended on issuing shares to finance the new ships but I dont think this was intended to be done at such low prices. I bought my shares under $8 and am happy enough holding them for now. As always, for me, this is done on a risk adjusted basis, as per my knowledge of the company, its players, its business, etc. - I have about a dozen similar size positions that together add up to my total investment in Fairfax. This could be an incredible recovery story where one easily triples their money and gets a huge dividend into the foreseeable future, or it could break even. The chance of total loss seems remote. At the moment it pays more than the 10 year bond and has significantly more upside potential than the 10 year bond.

Agreed. A waste of time.