Dazel

https://godigit.com/why-i-started-digit/ It looks like go Digit is a fintech Insurance co. And it is located in Silicon Valley of India...maybe they will use blockchain technology. List on the Nasdaq and be worth a couple billion next month! Kidding about the listing!!!Lol. But not blockchain...they have technology around their home office to implement blockchain into their operations.

https://www.indiatoday.in/india-at-davos-2018/story/narendra-modi-in-davos-live-pm-to-deliver-wef-keynote-at-elite-gathering-of-global-ceos-1152136-2018-01-23 While this will not show not up on the balance sheet of Fairfax India or Fairfax it is extremely important. Part of the Fairfax thesis is the continued growth of India and Modi pushing for foreign investment is important for that growth. India has not been at Davos since the 1990’s and their growth was enemic. With China tapped out with massive debts...I am betting India takes over the torch for global growth as their demographics are fantastic. It’s early days of course but Fairfax has a huge head start. The Indian stock index is too small (overvalued because too much money chases small number of stocks) and there is very little opportunity to enter the country and capitalize on this growth. Foreigners have very little opportunity to buy into private business the way Fairfax has... Fairfax and Fairfax India are a great way to capitalize on this growth...this probably should be on the Fairfax India thread as well....the jewel of the Fairfax family could be “Go Digit” the Indian start up insurance company. One thing all will agree on is Fairfax has proven to build companies well and have created incredible value in the process. Munger thinks Ajit Jain has created about a $60-$80b dollars of market value through building insurance operations from scratch. I think Fairfax as a whole can do that. https://timesofindia.indiatimes.com/business/india-business/fairfax-to-back-general-insurance-startup-digit/articleshow/59117659.cms

Cardboard I am aware of the pricing...does not Make sense...to bet against a mania and pay that high a price...that is why it’s a mania of course. I guess I am really sending up a flare...for what instruments are coming and when someone spots that...that make economic sense...mania’s have to settle...but wow are there some beauties out there...billion dollar companies with 0 revenue!!! Selling pot for $10. A gram with $1 tax and H.S.T... It’s hilarious...and people are falling over them selves to buy it. Sad.

“I am a Buzz Kill” I know I know. Dazel

When someone wants to be serious about shorting this garbage and ways to do it logically I am in for a discussion about instruments to do it...that goes for any pot stock and Bitcoin and the other 600 coins. I don’t want to talk about why if you can’t see it...well enough said....it may be 6 months not sure but these are slam dunk shorts...just not yet. Everyone I know young and old are coming out of nowhere to buy this ponzi mania. It’s fish in barrel at the right time...I have screamed about business set ups to anyone who asks...what do they do? They buy....and for now they are a genius... Fairfax bought puts on the dot com iPo’s as the insiders lock ups expired as did Sir John Templeton....there are no instruments here yet that I know of...anyone have ideas? Bitcoin futures are too short....looking for the best way. To be clear whoever is speculating making money all the power to you!!! The voting machine is alive and well...I want to be around when it becomes time to be weighed...

https://www.bloomberg.com/news/articles/2018-01-22/biggest-u-s-east-coast-oil-refiner-seeks-bankruptcy-protection As I said earlier expect a lot of these....the system is about to be cleared of the zombies....the way it should be. This will bring opportunity to Fairfax...and create action in the credit markets.

Feels like 1994 http://fortune.com/2013/02/03/the-great-bond-massacre-fortune-1994/ https://www.ft.com/content/32cca748-8fe8-11e2-9239-00144feabdc0 You can multiply the bond loss numbers by at least 10 I won’t paste a late 1993...1994 stock market chart but if you are paying attention...take a look it is eerily similar to where we are now.... Once again if 2018 played out like 1994 the global central banks would be over the moon with the outcome....and the world would continue to grow because the bond losses would be quick and prices would stabilize and recover by the end of the year... It’s what I would do if I ran the CB’s. ECB would slow buying th long end of the curve and US treasury would sell their longer dated bonds...easy to do if they go that way. Sad they control things but they do until they don’t. We would have Fairfax $1000 in that scenario. Guns Gold And Fairfax

We ere at 2.67% this morning on the 10 year treasury....after a government shut down. Things are quiet for these levels... Gundlach is watching JNK....says that it has remained under its 200 day average every day but one since Nov 1. Junk bonds are the canary in the coal mine...It is possible we get a spike in rates in the scenario we are in....that is the perfect situation for Fairfax. Scenario....rising rates spike globally....as the trillion dollar bond market gets spooked...and unwinds quickly. Many are naked with tide heading out get caught run for the door...drives rates on the 30 year to 4.5 to 5%. This would achieve many things for the central banks who have-are controlling the bond markets 1. We get a correction in the market of between 5 and 10%...preferably 10.1% for governments. 2. Crypto mania nonsense gets crushed without CB’s having to do it themselves 3. Risk and moral hazard are at least thought of.... 4. The process would likely be quick and painless as the those that can (Fairfax) would be heavy buyers of a 5% 30 year....this would help global financials greatly if the could refinance their bond portfolio’s at higher rates and strengthen banks balance sheets. However many would suffer massive bond losses in the short term. 5. Rationality in a stupid environment May be achieved for a short while...but the bull market will continue in equities because cash returning to the bond market on short maturities will hold long rates down...and actually create a capital gains opportunity in bond buying and equities that sell off. Not sure how Fairfax shares will-would react to the above scenario which appears to have already started....it may be possible to wait...or you could have a spike in the share price. Either way they are in a position to make a lot of money if this trend continues.

Cigar butt you are correct...you know what takes care of the excess capital? Higher interest rates...the world has not only been reaching for yield they have climbed Everest...rising rates will squeeze liquidity and the excess capital will disappear. So it’s not just Bradstreet kicking th bond worlds ass he is the best in the world at accessing credit. (CDs portfolio hit every financial that was exposed and then made I killing on the right Muni’s).... One of the consequence of where we are for those that are paying attention is that for debtors it’s a great time to bankrupt a company. Why? The realization of the remaining assets is high so debt holders will get higher payouts in liquidation then letting a company dig a debt hole into the future they will never get out of. This is a consequence of risng rates and liquidity squeezing....banks don’t want to lose when they see the credit cycle tightening....it will slowly (or quickly) have consequences. For almost a decade banks have not foreclosed because it was worth it to float the zombies with cheap money....that cycle may have changed...with Carillion...Steinhoff was mostly a scam pyramid...(Canadian Pot stock aren’t?!!) This what Fairfax does best....restructures...taking first creditor position an environment of restructure and growth would be nirvana for Fairfax..many did not comment on the Blackberry move to debtor but it had very little downside nor did Resolute out of bankruptcy. This is early days of course....does not take much for Bankers to get spooked...do you not think they are checking their loan books after gettting burned? Unless they are in Toronto...and smoking the wacky tobacco not sure WTF Canadians are doing...gambling on houses, gambling on Bitcoin, gambling on Pot stocks...all with debt. The world will continue forward and at a good clip but higher rates will bring opportunity and some destruction. https://www.bloomberg.com/news/articles/2018-01-17/u-s-banks-have-lost-more-than-1-billion-on-steinhoff-loans https://www.bloomberg.com/news/articles/2018-01-15/carillion-banks-lead-losers-as-2-2-billion-debts-crush-builder

https://www.cnbc.com/quotes/?symbol=US10Y 10 year U.S treasury has gone through 2.62% at 2.637%...if this is the trigger that spooks the $100t bond market its the highest rate since 2014...the 2 year going through 2% is the highest since 2008..we will see some fireworks...nice to have about $20 billion in cash.

I had a lot going on today...just reread my posts....in aback and forth between many different things I made the mistake of thinking one of the posts was SD’s (an absolute gem highly intelligent and great for this board!)... I apologize for the misrepresentations in Responseto both SJ and SD...not for the response itself. I think I subconsciously would have really liked a head to head with SD on the Indian business houses and discuss the value of a bitcoin....civilization, global warming...Second thought....not really. Cheers, Dazel

Thanks SJ I understand your concern greatly! I think i have explained it as much as I can until I see the annual report.

SJ they are not exiting....if they are worried they will hedge the bet. It is 3 % of the investment portfolio. At $30 I will worry about this They would be there if they joined Kodak and issued a coin maybe go up 5 times like them!!!! The crypto crowd should start a thread on it!!!! let’s go! If things get stupid( the stock takes off) and they may...I would join your concern.

U.S Treasury moves year over year 2-year 83 basis points 10year 18 bp 30 year -13 In Sd’s number if Bradstreet went long 30 year he has made money....in price and got a high yield...2 to 5 year debt has got “whacked” globally. Greece 10 year -361 bp The answer from me is I don’t know. Will know more after the annual.

To SD’s point of The bond portfolio getting “whacked” for $220m on 100 basis point parallel move in yields. What kind of losses would occur on $100 trillion? Whacked?! Yes. http://www.scmp.com/business/companies/article/2104277/its-anybody-guess-which-way-us100-trillion-bond-market-will-go

SJ I don’t care...check Onex fiiings I don’t think their lawyers are stupid do you?

Fairfax is not selling Blackberry. They will likely make a couple billion by th time they are done it is already one of the great turnaround stories. John Chen is a superstar.... SD you think they issue a new coin?

Obviuosly. Gerry Schwartz and Brian Dalton are not in jail. Last time I checked they are iconic Canadian entrepreneurs.

Ahh SD, Welcome. How was your sum of the parts broken down on Bitcoin? Nice speculation congrats hope you sold. Sears has operating losses of what $15 $20 billion? Pretty clear where the value went! Blackberry is cash flow positive... What if the long term bonds were in Greek debt? Than it’s a home run! It matters in what. Indian business houses really? They using block Chain? Lol.

Onex synthetically sold the majority of their Celestica holding at the highs in the tech bubble. https://www.theglobeandmail.com/report-on-business/in-its-mind-market-uncouples-onex-shares-from-celesticas/article4153011/ http://www.marketwired.com/press-release/onex-settles-its-celestica-forward-sale-agreements-tsx-ocx.sv-542002.htm Altius did the same thing with their sale of their Aurora shares at the top of the uranium bubble frenzy. http://www.marketwired.com/press-release/altius-minerals-corporation-tsx-als-reports-third-quarter-net-earnings-316-million-tsx-als-958233.htm

SJ, No need for excitement yet...I am always early as well! I will wait for the annual to comment on the duration...It depends on what was held at the longer end of the curve...Allied bonds I think you meant...Brit should be gone. I will post the best example of what I have ever seen by a value investor holding a tech stock during the last bubble....this is not a worry at this point...all of Blackberry would like be sold in pieces...radar to Verizon, patents to a specialty company that is expert in this field, QNX to anyone(Nvidia), lots of cash for easy spin off...if they wanted to realize the value they would get a least $30 tomorrow. If the market starts to appreciate this and then some there other ways to synthetically sell it.

To add to the further posts Prem has publically stated that Fairfax believes that rates will rise with global growth...they are right for now let’s see how it plays out...to me defence on bonds which is the greatest portion of their investment allocation and always has been to a point where Bradstreet pulls the trigger at higher rates. Equity holdings are emerging markets skewed $5b in India, $2b in Greece...inflation protected in the commodity related ownership I mentioned in my previous post...boat loads of cash...rising insurance premiums. It’s a good spot to be....the blind bond buyers of the last several years will learn too late that they swimming naked. For those that think Fairfax is lost...Gundlach is advocating commodities and calling for higher rates...Prem and his team were early as per usual but they are positioned for this theme. If it continues to play out the share price will be much higher before the public can figure it out. Unlike everyone else I would like to see this strategy success develop slowly so we get rid of a lot of shares through buy backs at these levels.

The old bond king Bill Gross says the bond bear market is in full swing...this is huge for Fairfax as they hold over 43% (after the sale of first capital) in cash...others bond portfolio will get hit with big losses. Fairfax will avoid the losses and be able to deploy at higher rates. To me this will be the story of 2018...Fairfax hold several commodity related investments as well which have and will continue do well in a rising inflationary environment...Resolute, Altius,Apr energy, Seaspan, Fairfax Africa.

Also of note I am pretty sure that Bradstreet has made money in Greek bonds...however, I am not sure how much he held into last years rally. Greek debt is the best performing in the world and now yields approx 3.5%....these were generating above 10% yields for a longtime. Of note the U.S 10 year is trading above 2.60% yield at 2.613%. Last years high was 2.63% and as someone else quoted Gundlach (the bond king), he says if we breach 2.63% rates will skyrocket up. This thesis would jive with the real “bond king” Brian Bradstreet’s strategy.

Maybe Ben Watsa is like Chris Davis and it runs in the family and he has $50m of financials! I see Chou funds kicked ass in the last couple months he has $500m of Fairfax money I think....but his performance has been dreadful too! Maybe Ben is a the smartest of the bunch....if he isn’t and his performance is sub par he will be replaced...not sure how he could not beat Prem and his team over their dry spell! Lol. My money is on Bradstreet...always has been...he has consistently outperformed his bench marks by a wide and incredible margin. The fact of the matter is Prem will take heat about structure, Ben, his recent performance until he rights the ship. That is the way it should be.....