Zorrofan

Given the recent run-up in the markets of roughly 30%, which I think is way overdone, I hope they do put some hedges back in place. I am very pleased overall with the steady progress the company is showing although, I must confess it was disappointing to see book value growth drop from 53% in 2007 to only 21% last year. Sigh. Prem will just have to try harder this year. ;D cheers Zorro

The short answer is yes, if the portfolio was down instead of up they would have disclosed it. They did, IIRC, disclose CDS losses after quarters end. It took some of the bloom off the reported quarterly gains but they wanted people to understand the volitilaty of the CDS. Prem et al just have that much integrity.... cheers Zorro

Perhaps Buffett secretly is a belliever in peak oil! ;D cheers Zorro

Anyone have any idea on the relationship between Fairfax and Steelhead Partners, LLC? they seem to be involved in several deals: AbitibiBowater and ICO to name two. cheers Zorro

It is offical...April 30th results come out http://www.fairfax.ca/Assets/Downloads/Press/fpr2009-04-16.pdf cheers Zorro

Guys, thanks for the comments. Once again proving the quality of the board..... cheers Zorro

Alas, it has been many a decade since old Zorro saw the inside of a school, so please help old Zorro out! Here is my question.... I need some help calculating long term results. If one invests in a company's shares paying a 10% yield, after a 50% drop in share value, and an expected 5% growth in dividends each year how do you calculate results over the long term if: 1. the company pays 10% dividend for 5 years, you reinvest the dividends every quarter 2. After 5 years, stock price doubles in value 3. Each year dividend increase 5% What I am trying to do is two things: calculate the total return and try and figure out how WEB does this in his head so easily.... Thanks Cheers Zorro

Any idea when the 1st quarter results are due out? It will be interesting to see how much of an increase there will be in the interest/dividend income. Also how well the equity portfolio has done, how much rates have hardened or soften etc etc..... cheers Zorro

thanks - interesting read cheers Zorro

Thanks Uccmal, now I don't quite so bad! :-[ cheers Zorro

Claims that most of the risk in the US banking system resides in the top 4 banks Maybe go long the strong regional banks and hedge by shorting Citi or one of the others: Two things: First, I have been thinking about the regional banks as well. But if commercial real estate is the next to tank it will have a huge impact on regional banks as IIRC they have the most exposure? The implosion at what I thought was a sound reit like KIMCO makes me wonder what the next shoe to drop will be. Gut feeling I have says it isn't over yet. Second, how do you do the quote thingy? (sorry to be so technical :-[ ) cheers Zorro

I would disagree with you on both LUK and ICO. When the recovery does start both are positioned to take advantage of rising commodity prices. FFH was buying ICO at around $4, have been buyers again recently under $2 and I doubt they are simply looking for a run up from $1.87 to $2. cheers Zorro

I feel this is clearly a bear market rally. But having said that, who can call the bottom? There are plenty of interesting ideas, just be prepared to hold on if prices fall further. I like LUK - wish FFH would buy more of it than some of the stuff they did like Canwest. Having said that, FFH has upped it stake in ICO to 37m shares, or around 24% of the company. Any thoughts on ICO? To me it is a play on the whole energy sector (if you feel oil is going higher long-term so is coal) plus a nice inflation hedge. cheers Zorro

They don't ring a bell at the bottom... I thought Business Week published a cover saying "Equities are dead!" Seriously though, Sir John Templeton always said to buy at the point of maximum pessimism. I don't think we are there yet..... cheers Zorro

There is to be no wasted butter chicken or, heaven forbid, mini-burgers... Please don't do it... ; ) I was just trying to be funny... you're taking it too far! Butter Chicken is way, way too good to waste (kinda like throwing a plate of momma's pasta at someone - very wasteful, and borderline sacrilegious Did you notice that everytime we even talk about food FFH stock price goes up? Hmm..... Cheers Zorro

I should add that at first I thought they were going after the hydro assets held by ABH, sort of a mini-version of BRK's drive into utilities but that didn't happen....

Uccmal I have to agree with you. Viking posted earlier that he couldn't understand FFH's investment in companies like TS, CGS, ABH, IFP.A, SFK, BRK.UN, JAZ.UN or Mega Blocks. Frankly neither can I. Why aren't they buying into companies like LUK instead or even more JNJ? I think the results five years from now would favor LUK over any of the above. I know FFH has done very well over the longterm (19+%) in equities but still I have to wonder. There seems to be better, safer opportunities....... cheers Zorro

This is a prime example of, IMHO, I would consider excessive. Can this really be justified? http://www.nytimes.com/2006/04/13/business/13exxon.html?_r=1 cheers Zorro

Eric et al This is the way I see it. The whole AIG bonus issue is a prime example of what is wrong with corporate America today. I have no doubt that AIG is filled with many hard working, ordinary Americans. But I am highly sceptical that they are going to see any of this bonus money. Instead it goes to upper management, the same people who put AIG in the position of needing a taxpayer funded bailout. You say you are mad that sand is being kicked in the face of Wells Fargo. Well, I am mad that corporate America seems to think it is okay to pay themselves huge bonuses for poor or mediocre performance (at best) while the shareholders get little or nothing in the way of dividends or share performance. A few years ago WEB wrote in his annual letter about excessive executive compensation. To me this whole AIG debacle is a prime example of excessive compensation. Kick sand in the face of Wells Fargo, to me this incident is kicking sand in the face of every shareholder in America. There are retention bonuses being paid to people who have already left AIG! This is fair or reasonable? Yes, I agree people should be compensated for the job they do but today it seems we read of executive after executive being paid tens of millions in bonuses, stock options and God knows what else while the stock performance of their company does nothing. How about company layoffs while I renovate my office for $1.5 million? Not AIG but a prime example of the lack of accountability at the top. I see the integrity the WEB, CM and Prem demonstrate and ask why it is so hard to find examples of that today. I don’t want to argue, make this personal, or even pretend that I have all of the answers. Executive compensation is a sore point with me. No doubt Congrees is doing some grandstanding but there is a bigger issue here. We need to look at Executive Compensation and realize that it comes out of the pockets of ordinary shareholders. The AIG issue is one of taxpayers pockets being used, but in other cases it is shareholders who are footing the bill. I have said my piece and won’t post on this topic any more. Cheers Zorro

No, you are misunderstanding me. I have nothing against Wells Fargo. AIG executives did cost their company $180 billion. Thats why I don't support them getting bonuses. What I said was that IF Wells Fargo execs had done the same thing then I would hold them to the same standard. My whole point was/is that I am against tax dollars paying bonuses for what I consider poor performance.

What the hell? Why should we demand Wells Fargo executives be let go? The bill covers all firms who took more than $5b in capital -- and that's Wells Fargo. Eric, if Wells Fargo executives cost the company $180 Billion then yes let them go. Otherwise we are using tax dollars to reward poor performance! Why should the executives that ran AIG get huge bonuses when the company needs a taxpayer funded bailout? To call it a reward to retain talent is laughable. cheers Zorro

"I love watching Larry Kudlow say, "They are going to run all that talent off and who then will run the business?" I love to say to Larry - "lets see, these folks ran the business so well it needs $180 BILLION in government bailouts to stay operating. You call that TALENT?" IMHO the shareholders should demand they go..... my $0.02 cheers Zorro

If you look at what WEB is doing - investing in COP, Kraft, MidAmerican, Wrigley's - he is looking for companies that should do well in any environment. BAM seems to be a similar investment with their holding in real estate (long leases), utilities, timber. I'll have to take another look at BAM, at first the real estate holdings made me a bit leary but management seems smart and has been buying back stock. thanks for the thoughts.....a good discussion cheers Zorro

I have been thinking about the effect of the seemingly endless multi-trillion dollar bailout packages. At some point the economy will recover and the results of the huge deficits currently being run will come home to roost - likely in the form of 1970's style high inflation. So, what is the best investment one can make now (given the current economy) with an eye to the future? Oil, gold, or commercial real estate? I am leaning towards oil (WEB for example has bought COP) as you can earn a dividend (gold not so much) and the supply is being reduced as companies scale back on exploration. I also note that Prem has increased the holdings of ICO to around 37m shares or approximately 24%. Comments? Cheers Zorro

Not to blow my own horn (okay, maybe a little) I said that I thoguht Prem was too early in getting rid of the hedges. Hopefully the CDS will help offset some of the losses in equities. I also hope FFH is buying back stock right now. There are many bargins out there, but Prem might have heard of this little insurance company up in Canada that I think is a steal at this price..... cheers Zorro