Dazel

Looks like You are not cancelling out the 799,230 shares owned by Hamblin Watsa that are owned by Fairfax...and shares purchased that have not been cancelled but are owned by Fairfax. Pg 20. Of the third quarter report shows the breakdown of shares outstanding. Your first number is what they state as the effective shares outstanding at September 30, 2018.

All of the yelling and screaming a year ago about Allied being a bust etc....should be laid to rest! The insurance companies are now what we all dreamed they would be. Unfortunately, the investment climate (prices) are not cooperating to create gains short term so the numbers look weak. However, October certainly has brought some opportunity to buy some bargains which I expect Fairfax was doing. The structure of the company is set up to outperform...execution in a value environment and large buybacks here will make this a company to own for the longer term. Brian Breadstreet has successfully navigated the long term fall in bond prices...avoiding the large bond losses most of the industry is getting hit with. Corporate bond opportunities are showing up.

“Price is what you pay...value is what you get” that’s it. Mr. Buffett The value guys all know what it is like to buy momo, growth and popular stocks because we all got smoked when they fell out of their ass at some point (hopefully early in our lives)! We learned the hard way of the folly of growth that looked like it would never stop or the moat that could never be broken etc. We had our blood spilled and learned by fire...we try to pass on this horrible experience to those that believe the hype. We look stupid to the young Wall Street gurus and day traders that rule the world in the high multiple growth oriented stock market. We miss the rise and fall of the crypto’s and the pot stocks...the 150PE tech companies that can’t ever be beaten. Our stories are boring at cocktail parties...as we get rich slowly over time. We sleep well and from what I see (hoping) we live longer as we nurture our craft until late in life. a quick story...that won’t make any headlines...was having a beer with a friend on a dock where I fielded the question of the time....how high would Amazon go? There was “nothing that can stop it” was every headline and my friend could not help but think there was more upside. This was the first week of September....I was studying an arbitrage opportunity on a tender offer from Thomson Reuters. It was like talking about a snail on the beach compared to a new Tesla powered jet boat that might spray us on the way by! I explained my snail project (TRI) I figured that I could make between 0 and 9% in the next 3 weeks but the kicker was (at least to me) that I thought there was 0 downside or I would break even in a worse case scenario. Of course the response was...Amazon could do that in a day or two!!!i am not sure but it may have done that! I explained that I had the conviction to bet a lot of money on TRI because I did not see any downside as my shares would be bought out at least what I paid for them on Sept 30. If $9b in shares were not tendered all would be paid for at the high end of the tender or $47 USD. I determined that there is no way that they will have that many shares tendered as it was a third of the outstanding shares. That is exactly what happened and I made my 9%. My friend followed...today the difference between Amazon and the TRI arbitrage is above 30%...Amazon is down 20% plus since then and I have the 9% return in the bank to continue to buy more value in this sell off. You only hear of value investors after the tide has turned everyone wishes they were value investors when growth ends but like lemmings they are incapable of ignoring the supposed easy profits that their neighbors are making in straight up markets. I don’t feel any better because Amazon dropped I am indifferent. It is a great business however, I don’t know what it is worth...but I knew the deck was stacked in my favor at TRI and that is how value investors think. There is no one that wants t hear that story other than value hunters. It’s lonely but rewarding....for some reason the investing world has decided to pretend that Mr.Buffett was not a stock market operator. He made 25% a year pre tax from Arb’s like TRI. There is more than one way to get to heaven so don’t get pigeon holed on what value is....it’s there or it’s not.

Buy every share you can Prem. Every last one!

All joking aside...there is not a person the planet that knows more about Freddie Mac then Mr.Buffett. He bought at $4 and sold at the top $70. He knows the business better than anyone....given the opportunity I would bet very large on Mr. Buffett making a deal of his lifetime. The funny and somewhat stupid speculation part is the government would do the right thing.

Also a founding partner at BlackRock....but I like speculating more on Berkshire!LOL

Cherzeca, I know you joke....but he is former CEO and chairman for Berkshire and Jefferies backed Berkcadia ...they (Berkshire and Jefferies)could recap most of the company in 24 hours...pretty sure his salary would not matter if they were his partners! This type of investment would be very good for Berkshire and all involved. Credibility to Mnuchin....just saying. Complete speculation. Dazel

The important factor is in what the intrinsic value is...and that will give you an indication of what the future returns will be. Insurance operations-many doubted this for a longtime and it is the backbone to Fairfax now Capital allocation-a lean 7 years to say the least! Are they moving in the right direction?2017 was a an unbelievable year but was tarnished by record hurricane losses. Opportunity-emerging markets may be the in the best shape for value in decades especially India...rising rates will create bond volatility and Bradstreet is the best in the world at buying bonds Capital structure-are we an issuer of shares or a buyer? They bought half a billion back last year Interest rates-if the entire portfolio was put in short term treasuries it would produce $800m more than it would have two years ago! Rear view thinking is the killer of investing returns.

Excellent buy back prices! While many do not pay attention to buy backs it is the secret math to a high share Price over the longer term. Fairfax has reached critical mass....and I believe will follow Singleton’s Teledyne model as long as we are cheap.

I don’t think Florence will be much gang for what it’s worth (I am no expert).....U.S reinsurers are rallying 3%ish...as the storm is downgraded. Fairfax has a big sensitivity to storms in its stock price some of it deserved from the past some not. I am fighting Prem for shares on this pullback...hope he wins big time...LOL. Yes I am a sucker for buybacks. Best of luck all. Dazel

I am assuming everyone likes Prem again? Kidding best of luck to all. Dazel

Ericolopoly, You can't win either way....sorry...and sorry about what’s going on. However.... So put an outrageously large one time payment together and close all open arguments. Forget math, stocks, emotions about the amount of money. Your kids are more important. While you are a retired dude and have been the entire time......man you are crazy smart...you will figure out a way to make the money back in the future sorry you will have to go back to work. I have done this with friends (which I consider you) before and I am not a lawyer. All the best, Dazel

Fairfax is looking like some of us thought....strong. Congrats Fairfax team! Buybacks at almost $300m since quarter 4..not that disappointed they were buying just not cancelling. India investments showing their real value Bradstreet buying Treasuries yield rising $125m unrealized bond losses is exceptional for the rate rise first quarter. Allied looked OK 96% not bad for jnsurance...

Your welcome SJ.

SJ, The only thing not balanced is my investment account its asset rich!! Prem has made me buckets of cash! And only pays himself $600k a year to run, live and breath Fairfax and 95% of his net worth is in the company what the hell else do I Want? Dazel

While Petec has been right on the objectivity of the amount of stock to repurchased as not as high as mine...I did expect a bigger chunk of buybacks...that were likely held back first quarter. If anyone was listening I said they would and should buy back large amounts below $700. Well we are there....so I do think and I will defer to Petec’s view. Very little buy backs it was an opportunity. Prem’s character questioned, Allied being disastrous, Indian holding companies where Prem would steal the company...can’t remmeber their term, prem’s Family getting money they don’t deserve, HW the worst investors ever, value is dead. Buy bitcoin and pot stocks instead..LOL. It’s not time to claim victory but a move from $565 (when I came back to the board to defend Prem and Fairfax)....is significant. Especially with the worst hurricane season on record! The keys now that buyback will not be there.... 1. Bradstreet sees fit to engage 2. Insurance companies “all” fire like they can You have and will see the converts change their tune on Prem and Fairfax will turn positive. I have seen this movie before...it’s $1000 a share in not that long a period of time. Expect crickets on the board expect for those brave and the ones that counted the assets will make a lot of money. They will say it was easy...should have been able to see it. Well some did...congrats for now...FFH is just getting started. Long and strong Prem and Fairfax...As I said....they will blow away MKL and BRK over the next number of years...it’s just math. Dazel

These transactions are not new to anyone on the board....it looks like the fact that Prem had to announce them as a material change (they have been involved in the discussions of split of the investments for sometime)is likely the reason for the lack of buy back. The only buybacks that would be allowed would be the automatic purchases that Fairfax put in place before the discussions. While I am happy with the appreciation....very disappointed more shares were not bought back!

It’s is usual to see companies show the redemption of their shares at month end...in this case Fairfax redeemed and cancelled 41,000 shares. I have had trouble finding Fairfax buyback action in the past. Nice to see the share buy back kicking in!

https://ca.finance.yahoo.com/news/fairfax-announces-early-redemption-allied-202313339.html

Those puts are worth a lot of money.....and they will be worth a lot more. Hopefully there was a lesson learned and those that were looking at buying pot stocks and Bitcoin did not. That was my intention...

Do any of you the brilliant insurance analysts have ballpark expectations for Fairfax first quarter underwriting? Obviously all will be watching AWH and Brit for reserve strength....

https://www.bloomberg.com/news/articles/2018-04-02/stock-market-pain-bleeds-into-junk-bonds-as-hedging-costs-surge This is what I have been talking about...those that are not looking closely would not see what has been happening in the credit markets in 2018. As a whole they are still not cheap but there is more value to look at for Bradstreet then he has seen for quite awhile.

Dutchman, Fairfax does not need a reason to reverse $30 in a few hours like today....LOL. Buy back the shares Prem....the scenario is perfect.

NetNet, YES.

As I have said here...My thesis on a “one off” in a tender offer was because I did not think we would be undervalued as long as we have been! I changed that view Mr. market has decided to ignore FFH and I am fine with that as long as we are as you say “steadily” buying back shares at these undervalued valuation levels. While we know the investment in associates are vastly undervalued...they do not come through in the debt to capital levels...they are lower than they look. Speaking of upgrades with the liquidity profile As I have said before I am expecting a debt ratings upgrade which may be reason for the buybacks being limited at this time. The very successful European bond offering is evidence of the financial strength of FFH. An upgrade is very material to not only bringing debt servicing costs down, allowing for optilnality for financing, as an insurance company profile it is very beneficial.