nwoodman

"Lord of the Flies had more hope for their society than these goofballs!" That is gold! Nice reference to one of my favorite books from high school days :) Similar lack of cohesion in the Land of Oz which has seen the movement fizzle somewhat, not to mention that as a nation we are still a few rungs up Maslow's hierarchy on the USA. It could be a different story in a couple of years time. http://www.abc.net.au/news/2011-10-17/kohler-occupy-wall-street-as-they-fight-for-change/3575064 It was interesting to see a few of these graphs made the the7pm news on the ABC tonight. http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10?op=1

Thanks for posting. Only small potatoes but nice terms. Looks like FFH has a new sub. "Following completion of the Equity Private Placement, Fairfax will beneficially own, or exercise control or direction over, directly or indirectly, 26,757,523 common shares representing approximately 73.9% of the then issued and outstanding common shares (on a fully-diluted basis) and, assuming the exercise of all Warrants issued under the Debt and Warrant Private Placement, 42,142,139 common shares, representing approximately 81.7% of the issued and outstanding common shares." About Imvescor Restaurant Group Headquartered in Moncton, New Brunswick, Imvescor Restaurant Group owns franchised and corporate stores throughout Canada, under four brands: Pizza Delight® operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes® and Scores® restaurants operate primarily in Quebec in the family and casual dining segments and the take-out and delivery segments. Bâton Rouge® operates in Quebec, Ontario, and Alberta in the casual dining segment. Anyone been to one of their restaurants?

http://www.hoisingtonmgt.com/pdf/HIM2011Q3NP.pdf Interesting final paragraph "In view of the United States extreme over-indebtedness, we believe that 2% is a an attainable level for the long treasury bond yield. In the previous historic cases yields tended to remain close to their record lows for an extended period of time, coinciding with a long period of deleveraging. Presently the U.S. is in its fifth year of deleveraging, and patient investors in the long end of the treasury market have been financially rewarded. We continue to hold long positions in thirty- year treasury debt, but remain increasingly wary of the potential for further adverse meddling by Federal Reserve authorities."

I tend to agree that is why I thought the results were interesting, perhaps it is just an anomaly

Early days I know, but pleasing to see at least a little pricing power returning. Good to see Workers Comp leading a subdued charge for Zenith, up 2%. Surety up 2% also vindicates Loews sub CNA buying out the minority stake in CNA Surety. Energy up 2% has to be a good thing for Lancashire. http://www.marketscout.com/frontend/barometer2.asp cheers nwoodman

It is starting to get interesting. Arrears rates are on the rise albeit from a low rate http://www.scribd.com/doc/66629323/Report-Aussie-Mortgage-Delinquencies-Sep2011 and clearance rates are stuck at around 50% with property prices beginning to slide despite the best efforts of the spruikers http://afr.com/rw/2009-2014/AFR/2011/09/30/Photos/db5d0ebe-eb04-11e0-a6db-abb2c1b5de7c_rpdata.pdf cheers Nwoodman

http://www.bloomberg.com/video/72140684/ July 8 (Bloomberg) -- Warren Buffett, chief executive officer of Berkshire Hathaway Inc., talks about the outlook for the U.S. housing market and employment. Buffett, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses President Barack Obama's policies and continued negotiations on a U.S. deficit plan. The speak from the Allen & Co. conference in Sun Valley, Idaho. (This is an excerpt of the full interview. Source: Bloomberg)

Perhaps this is a bit simplistic but I find the QonQ change in book value from $45.54 to $46.81, +2.8% or 11% annualized acceptable. Over the long term they seem to be able to compound book value at around 10%+. Investing in Loewes seems to work out OK if you can pick them up in the range of 0.8-0.85x's book (37.5-39.5). At the current market price of 38.23 the are starting to look quite tempting Cheers Nwoodman

Some more details emerge http://www.independent.ie/business/world/bois-new-shareholders-millions-richer-from-underwriting-fees-2835756.html "The sale -- dubbed 'Project Foxtrot' in honour of Fairfax's lead role -- was put together in just four weeks after talks with private equity suitors collapsed when the Government refused to indemnify them against the bank's possible future losses. The mechanics of the deal saw the quintet of investors agree to spend up to €1.1bn on shares that were not taken up by existing shareholders who'd been given the opportunity to take part in a so-called rights issue. That arrangement made the quintet 'sub-underwriters' of the deal, falling behind the National Pensions Reserve Fund (NPRF) which had initially agreed to underwrite all €2bn of the issue. The NPRF had underwriting fees of 4pc for its role. A spokesman for the Department of Finance confirmed that the new investors also got an underwriting fee. The fee is likely to have been less than the 4pc enjoyed by the NPRF, implying a figure of less than €44m for the €1.1bn the quintet agreed to buy. Their fee is still understood to have been in the tens of millions. News of the underwriting fee is likely to fuel arguments that the quintet have got a fantastic deal on BoI at the expense of the taxpayer, but sources close to the department last night insisted the best deal for Ireland had been done. While the Government has paid €1.9bn for a BoI stake valued at just €300m today, the collapse in the bank's value since the first injection in February 2009 would have hit the state's investment, regardless of the outcome of this week's recapitalisation. A spokesman for the Department of Finance confirmed that BoI's new owners would be "locked in" to their investment for an unspecified period. Earlier in the week, Fairfax Financial boss Prem Wasra told the Irish Independent that he saw the investment as a "long-term" play."

Link to the article for those that are interested http://www.theglobeandmail.com/globe-investor/fairfax-bet-on-bank-of-ireland-averts-government-control/article2111528/ Cheers nwoodman

Top post Myth. The longer I do this the more I weight management integrity above all else. As you rightly point out, this is something that can only be gauged over years. Cheers Nwoodman

Link to the transcript, hopefully the ABC will hang onto this one as it is definitely a keeper http://www.abc.net.au/lateline/business/items/201106/s3234315.htm

http://www.abc.net.au/lateline/business/ "The market is going to be soft: Chronican" worth watching the interview just to see Ticky Fullerton's (interviewer) incredulous reaction to some of the poker faced banker's (Chronican) answers. This interview has made my day :) Cheers nwoodman

I don't dispute the inherent advantage of taking a hands on approach to understanding the issues. However it was more this statement that prompted me to comment "It is easy to look at China’s construction boom, and the real-estate market there, and compare it to what has happened in the US, Dubai or Japan but in reality the market is very different. Spending on infrastructure has a purpose, the trend is towards rising incomes and increased spending power, and property buyers are not exposed to anywhere near the level of risk that led to collapses elsewhere." I too hope China hasn't succumbed to significant misallocation of capital under the guise of GDP growth. Thanks for posting the article.

Is the implication "this time it's different"? ;D Cheers nwoodman

I believe Buffett is referring to a dollar of market value. So, if instead of Berkshire paying out a DIV, the money retained increases the market value of the stock by the same amount the economic outcome is slightly better for shareholders due to preferential tax treatment of capital gains, not to mention the potentially superior capital allocation skills - certainly applicable in my case :) Cheers nwoodman

Hi Ericopoly, as you would know, if you look at real estate bubbles around the world, tight supply is always used as a justification of why it is different this time. It doesn't seem to stop regression to the mean once credit starts to dry up. There are some nice graphs in this post that show this in the US context http://www.unconventionaleconomist.com/search/label/US%20Housing%20Market FWIW here in Australia the two supposed boom states of Western Australia and Queensland are currently getting hit the hardest in terms of declining clearance rates and rising delinquencies. The report below is prior to the recent 25bp interest rate increase at which time the banks put on an extra 15 bp due to "increased funding costs" http://images.brisbanetimes.com.au/file/2010/12/21/2104501/Australian%20Mortgage%20Delinquency%20by%20Postcode%20Dec10.pdf?rand=1292898395690 The real shortage at the moment is finding people able to trump up US550,000 for a median house Cheers nwoodman

This one is pretty close to my heart so I would prefer to draw on some of the local blogs, here in Australia, that might provide a good starting point for those not familiar with the Australian situation: http://www.unconventionaleconomist.com/2010/11/bubble-bubble-on-wall-whos-biggest-of.html http://www.debtdeflation.com/blogs/ IMHO our economy is very dependent on the kindness of strangers. Firstly, a source of foreign credit to finance the high price of housing. Secondly, credit growth and in turn fixed asset investment in China to facilitate the terms of trade. However, it is worth noting, that similar to other Western economies we seem to be sharing some of the precursors to a bursting of a credit bubble. There are currently falling auction clearance rates and retail is taking a dive. Albeit, with a backdrop of 7.5% mortgage rates. I personally think bubble is an inappropriate description. We have a housing stock that is currently valued at 3.3x GDP. To put this in context, at today’s exchange rate of around parity with the US dollar, the price of Australia’s housing stock is $US4 trillion. This is ¼ of the entire housing stock of the USA of $US16.5 trillion. This is an extraordinary feat for a country that has 1/13th of the population, 1/13th the number of houses and 1/12th the GDP of the USA. We have been through three terms of trade shocks in the last 100 years but there is no political will here to try and quarantine any of our good fortune. The one bureaucrat who suggested a little something out of the ordinary was shouted down and has decided to leave the post (just as it looks like debt/gdp is starting to contract). http://www.businessspectator.com.au/bs.nsf/Article/Ken-Henry-Rudd-Gillard-mining-tax-pd20101221-CC5LV?OpenDocument&src=srch One cavet to all of this is that macro does my head in but this seems pretty obvious to me. I feel very confident in buying L, FFH (US exposure), BRK as the AUD is my margin of safety Cheers nwoodman

"TORONTO, ONTARIO -- (Marketwire) -- 12/03/10 -- Fairfax Financial Holdings Limited (TSX: FFH)(TSX: FFH.U) announced today that it has entered into a share purchase agreement pursuant to which it will acquire all of the shares of Malaysian insurer, The Pacific Insurance Berhad, for approximately US$64 million. Subject to the approval of the shareholders of the vendor, PacificMas Berhad, the transaction is expected to close in the first quarter of 2011." http://www.pr-inside.com/fairfax-to-acquire-malaysian-insurer-r2288601.htm

Great site, thanks for posting Cheers nwoodman

Conference call transcript http://seekingalpha.com/article/233885-loews-ceo-discusses-q3-2010-results-earnings-call-transcript?source=thestreet

Hi alertmeipp, as longinvestor suggested I listened in via Skype. I find the best recording program is one called MP3 Skype Recorder http://voipcallrecording.com/ Cheers nwoodman

Sorry guys dialed in a bit late so I may have missed a question or two. Total time 18:59 Cheers nwoodman

Congratulations to the Fairfax Holdings team for passing this milestone I would like to pass on my gratitude for acting as exemplary stewards of our capital. You have provided us with a return on our "diversification" capital that exceeds both the family and business expectations. Keep up the great work! Regards nwoodman

Not really , for the most of the most part even their Emerging Markets investment exposure is hedged back to USD. I tend to think of them as a Bermuda based US company that just happens to be listed on the LSE . As always happy to be corrected by far more knowledgeable board members FWIW nwoodman