Xerxes

Thanks for posting that great discussion and the podcast. Didn't have the podcast on my list. I like his speculation on the Q3 $12 billion common stock buy looking at the energy patch and the clues in the filing. i guess we'll know tomorrow AM as 13F are posted. On Apple, i always held the view that its outperformance in 2020 had increased Buffet's margin of safety and pushed the envelope on the upper end of his perceived intrinsic value, thus Buffet is and will be more aggressive on buybacks. I think that it is evident listening to Bloomstrain how he was explaining that Berkshire buyback's are at increasingly higher costs (latest batch in October). Not mentioned in the podcast, the hardening of the insurance cycle that gets talked about a lot in the Fairfax threads, applies to Berkshire as well. if the corporate Omaha is seeing that in the same way, than more the reason to buyback shares before that tailwind fully develops.

Fair enough, but investment is not only about going with the right business and getting management right. There is also about position sizing. If Berkshire can average-up on Apple or average-down on Bank of America, overtime, there is no excuse for FFH. I understand this might have been a direct sale from previous owner and then a buy from the market. Surely the downside of one big buy on a highly cyclical business overwhelm the upside of any savings that might come from buying direct from the seller in this case.

Not unhealthy from the outside from where i am sitting, but in someways, i see Prem taking a big chunk of the stock in summer, as a validation that Fairfax is him, and he is Fairfax and he is going to right the ship and that it will be his strategy. I don't see him buying the stock that big (no matter how under valued it was) if other 'rising star(s)' was slowly taking over the going forward corporate strategy.

Maybe it is a name that folks here are familiar. "Bosch" on Prime. From producers of "The Wire" and some of the same actors. Great detective show. It was good enough in stopping me from watching The Boyz, which itself was great.

Pete, I am going to immortalize this quote. 11/13/2020 I admit, and I dont know the name, very well, but just the fact it lost +50% of its value, before the pandemic puts the whole 'margin of safety' thing about that framework of valuation into great doubt, in my opinion.

In my opinion they will sell Vault Insurance. Wild guess

On the reflationary trade, great news indeed. Should help partially with the mark to market of Q4. However, I am specifically looking forward to see the return of this specific bet some years down the road. To my knowledge, it was the most significant & only move FFH made throughout the mayhem of March-April, trying to lock-in while credit spreads were blowing up. Fairly big bet, give that it is 7% of the portfolio. "Since mid-March 2020, Fairfax has been reinvesting its cash and short term investments into higher yielding investment grade U.S. corporate bonds with an average maturity date of 4 years and average interest rates of 4.25%, that will benefit interest income in the future. To date, taking advantage of the increase in corporate spreads, Fairfax has purchased about $2.9 billion of such bonds."

LOL Jurgis I am partially blame for planting that seed. I have been bashing the shorts lately and specifically the comments made in the Q3 conference call that really sounded like: "ok guys we got burned enough by shorting, we are going to stop now." I think that comment was both meant for external as well as internal audience. In reality we do not know the nature of the shorts (which names), however i think we do know the vehicle being used, i.e. through total return swaps. See below. If I recall SJ made a comment on these few months back, something about putting a minimum amount and magnifying your gain/loss on a much larger notional amount. Page 19 - Q3 report "Equity contracts The company may maintain short equity and equity index total return swaps for investment purposes that provide a return which is inverse to changes in the fair values of the underlying equity indexes and certain individual equities. During the third quarter and first nine months of 2020 the company paid net cash of $152.9 and $438.1 (2019 - paid net cash of $6.1 and received net cash of $127.1) in connection with the reset provisions of its short equity total return swaps (excluding the impact of collateral requirements). During the third quarter and first nine months of 2020 the company closed out $90.2 and $494.6 notional amount of its short equity total return swaps and recorded net losses on investments of $36.2 and $176.7 (realized losses of $79.2 and $327.3, of which $43.0 and $150.6 was recorded as unrealized losses in prior quarters and prior years). During the third quarter and first nine months of 2020 the company did not initiate any short equity total return swaps. During the first nine months of 2019 the company closed out $89.9 notional amount of its short equity total return swaps and recorded net gains on investment of $30.3 (realized losses of $7.9, of which $38.2 was recorded as unrealized losses in prior years). During the third quarter and first nine months of 2020 the company entered into $148.8 and $1,183.9 notional amounts of long equity total return swaps for investment purposes following significant declines in global equity markets in the first quarter of 2020. At September 30, 2020 the company held long equity total return swaps on individual equities for investment purposes with an original notional amount of $1,342.9 (December 31, 2019 - $501.5). During the third quarter and first nine months of 2020 the company received net cash of $48.9 and $80.8 (2019 - received net cash of $8.2 and paid net cash of $53.5) in connection with the reset provisions of its long equity total return swaps (excluding the impact of collateral requirements). During the third quarter and first nine months of 2020 the company closed out $212.7 and $464.7 notional amounts of its long equity total return swaps and recorded net realized gains on investments of $52.9 and $122.3. During the third quarter and first nine months of 2019 the company did not initiate or close out any long equity total return swaps. At September 30, 2020 the aggregate fair value of the collateral deposited for the benefit of derivative counterparties included in holding company cash and investments and in assets pledged for short sale and derivative obligations was $298.7 (December 31, 2019 - $152.4), comprised of collateral of $205.2 (December 31, 2019 - $70.3) required to be deposited to enter into such derivative contracts (principally related to total return swaps) and $93.5 (December 31, 2019 - $82.1) securing amounts owed to counterparties to the company's derivative contracts arising in respect of changes in the fair values of those derivative contracts since the most recent reset date. "

Now you got the vaccine news. Names like Berkshire will benefit this morning on the back of the buyback as well. The real “juice” in my opinion is when BRK operating earnings will go back to normalization sometimes say in late 2021. That normalized operating earning will be passing through a much lower share count, boosting the EPS. Assuming anyone is following EPS for BRK.

Buffet had said in the past that low trading volume was a factor limiting buybacks without moving price materially. So, given the significance of the size in Q3 does that mean a whole lot of long term owners were selling out to BRK for whatever reason (tax etc) allowing BRK buy back without affecting prices a lot.

Petec What private asset on holding company B/S are you thinking of : I am seeing cash + some receivables as shown on page 3 of Q3 results showing the consolidated B/S. everything else rolls up under $39 billion as shown as “portfolio investments”

The comment was made in his prepared remarks and not something blurted out during Q&A session by accident. Therefore, he is either teasing his audience or there is something in the pipeline, and given the recent divestures probably the latter. FFH doesn't have any entity on its own balance sheet (except for its insurance subs). (i.e. unlike Onex that has gluskin sheff) If the intent is to "free up capital" at holding level, than the excerise is largely futile, given that today the money, for the purpose to invest in the hard market, is directionally going from hold-co to the insurance entities that own various bits of the far-flung portfolio. Unless perhaps the capital that is being freed at the portfolio is way more than their needs to investment in the subs + the cost of annual dividend at FFH-level, so that the rest can be dividend back from the subs to the hold-co. while still being able to re-invest in the subs (i.e. changing the direction of net fund flow to hold-co so that it could cover its $300 million dividend) With that in mind, the target needs either (1) be something that he wants to get rid of at a good price. However, the world is not fair and there is no marketability for rubbish at a good price. Or (2) he needs to monetize something that he does't want to sell but get a good price instead. That should help narrow down the list. If the monetization is from camp (1) with limited marketability, there would be a BV driven solution as oppose to a hard cash solution in camp (2).

Hopefully i didn't screw up the numbers as I jumped from one year to next: Below is the "realized" investment gains/losses that FFH booked against its equity at the end of each year. The purpose is to ignore the unrealized gain/losses as those are either reversed or realized at a later date. So no double counting. Also I ignored the shorts and equity hedges. I am just isolating the historical return on equity/bond investment over the past ten years. 2011: $703 million (equity) + $424 million (bond) 2012: $470 million (equity) + $566 million (bond) 2013: $1,324 million (equity) + $65 million (bond) 2014: $596 million (equity) + $103 million (bond) 2015: $818 million (equity) + $26 million (bond) 2016: ($184) million (equity) + $648 million (bond) 2017: $200 million (equity) + $419 million (bond) 2018: $1,326 million (equity) + $106 million (bond) 2019: $792 million (equity) + ($55) million (bond) 2020 (through Q3): $371 million From 2011-2019, net investment return through equity investment was about $6 billion. In the same period, net investment return from fixed-income was about $2.3 billion. Either i screwed up the number and that i missed a big negative somewhere, or FFH, when you look pass noises about its equity choices that make big headlines, doest seem to be that bad, if you do not take into consideration of the hedges and unrealized gain/loss. Maybe i ll double check, to be sure

To balance my depressing post about FFH's short position since 2016. Here is a more upbeat post for the faithful. Trying to keep a balance. Markel Market cap: $13B Markel's gross premium came to about $6.9 billion through end of Q3. To annualize that based on Q3 that comes to $9.2 billion. Last year total gross premium was $8.7 billion as a comparison. Combined ratio of 101 this year through Q3 compared to 95 last year for Markel. "The combined ratio for the third quarter of 2020 included $48.9 million, or three points, of underwriting losses attributed to the COVID-19 pandemic and $101.0 million, or seven points, of underwriting losses from Hurricanes Laura, Sally and Isaias, as well as the derecho in Iowa and wildfires in the western United States (2020 Catastrophes). The combined ratio for the third quarter of 2019 included $42.6 million, or three points, of underwriting losses from Hurricane Dorian and Typhoon Faxai (2019 Catastrophes). The combined ratio for the first nine months of 2020 included $373.9 million, or nine points, of underwriting losses attributed to the COVID-19 pandemic and $101.0 million, or two points, of underwriting losses from the 2020 Catastrophes. The combined ratio for the first nine months of 2019 included $42.6 million, or one point, of underwriting losses from the 2019 Catastrophes." FFH Market cap: $10B FFH's gross premium came to about $14.2 billion through end of Q3. To annualize that based on Q3 that comes to $18.9 billion. Last year total gross premium was $17.5 billion as a comparison. Combined ratio of 98.5 this year through Q3 compared to 97 last year for FFH. "In the third quarter of 2020, all of our insurance companies achieved a combined ratio below 100%, except for Brit. Our consolidated combined ratio of 98.5% in the third quarter of 2020 included catastrophe losses of $218.6 million or 6.1 combined ratio points and COVID-19 losses of $143.2 million or 4.0 combined ratio points. Core underwriting performance continues to be very strong with a combined ratio excluding COVID-19 losses of 94.5%, continued favourable reserve development and growth in gross premiums written of 13.9%, and operating income was $254.7 million despite the catastrophe and COVID-19 losses. We continue to focus on being soundly financed and ended the quarter with approximately $1.2 billion in cash and investments in the holding company,"

Don't want to suppress the jolly mood in the "FFH 2020" thread. So I'll post this here in this thread, just as a data point to be aware of. I took me only 5 minutes. Just went through the annual release for every year, and only copied the "realized gain/loss" through shorts/hedges and the likes. I ignored all the unrealized stuff, given that it would be captured when they are realized if not reversed. End of 2016, is when FFH management made the pivot away from hedges/shorts and took its losses. Unless, i made a mistake, i am counting about a $1 billion of realized losses in shorts since the pivot to move away from shorts was made. That sum is 3x the size of current FFH investment value in Blackberry common shares. Yes, in the grand scheme of things, that comes to 2% of a $40 billion portfolio and maybe shorts are for FFH, what bitcoin is for some. Small position big potential upside. But it is almost as if they cannot help themselves to not short technology growth companies. Betting against the central bank printing press has never been a profitable trade. Anyways ... 2011: zero 2012: $6.3 million 2013: ($1.350) billion 2014: $13 million 2015: $126 million 2016: ($2.634) billion 2017: ($553) million (almost all of it in Q4 2017!) 2018: ($248) million 2019: ($20.7) million 2020 (through Q3): ($327) million

:) Prem won’t sell unless he has chance to do both of the following: (1) sell at a huge premium (2) and as part of that to be able to close his last chapter and right the ship (ie his legacy). That said the Oaktree model is plausible. With minority selling out and him keeping his 10% or so. But then again he sees himself as a capital allocator than an insurance guru. 10 years from now maybe. Not now though. For now he set in his mind to prove his naysayers that he is right. It is interesting to think where Brookfield was 10 years ago and what powerhouse it has become and the size of its ambitions.

Couldn't find a KKR thread. So, i'll post it here. If Moderators could be kind enough to "move" this thread to the "investment topics" basket .. and re-name it as KKR, that would be awesome. Here is a great 45 min long with Mr. Kravis from KKR. Seems like a passionate person. I like that. I had listened to interviews with the head of Apollo Management, i did not like the guy. But Mr. Kravis seem like my kind of a leader, based on the optics. Interview is great. https://www.bloomberg.com/news/articles/2020-10-30/kravis-says-the-market-is-wilder-than-at-any-time-in-his-career I don't follow the name closely. Found out in the interview that KKR had recently (July 2020) bought Global Atlantic with its own balance sheet to add to its 'permanent capital'. i.e. not an investment through its funds. Interesting both KKR and BAM are going there in the insurance space. Looking at the post from 2009 that started this thread, it is interesting to see that Kravis had this Berkshire "permanent capital" in the back of his mind for a long time. Perhaps it is time for me to read the long over due "Barbarian at the Gates", not that it helps with today's KKR, but i like to read on company's DNAs. -------------------- https://www.bnnbloomberg.ca/kkr-to-buy-global-atlantic-adding-almost-90-billion-in-assets-1.1462201 (Bloomberg) -- KKR & Co. agreed to buy Global Atlantic Financial Group in a deal that gives it a major presence in the insurance industry and adds long-term capital. The alternative-investment manager will acquire Global Atlantic’s outstanding shares, according to a statement released Wednesday, in a transaction that could be valued at more than $4 billion. Global Atlantic, which was founded within Goldman Sachs Group Inc. in 2004 and became independent in 2013, had more than 2 million policyholders through its retirement and life insurance products and almost $90 billion in assets as of March 31. KKR’s rivals have been building out their own insurance arms in recent years and have brought on executives who can help them attract more business. Insurers are facing historically low yields in fixed-income markets. Apollo Global Management Inc. helped turn annuity seller Athene Holding Ltd. into a business with a market value of $5.8 billion, and funds affiliated with Blackstone Group Inc. teamed up with other investors in 2017 to buy Fidelity & Guaranty Life. “This is a transformative event for KKR,” said Henry Kravis and George Roberts, co-chief executive officers of the New York-based firm. “Our businesses are complementary and our partnership will benefit all of our collective stakeholders.” KKR will pay the insurer’s book value at the date of closing, subject to an “equity roll-over” for certain existing shareholders, according to the statement. Global Atlantic’s book value was about $4.4 billion at the end of March. ‘Permanent Capital’ The purchase is expected to be completed in early 2021. Global Atlantic will then operate as a separate business with its current management team, headed by CEO Allan Levine. KKR already manages $26 billion of assets on behalf of insurers. The deal also increases what private equity firms refer to as “permanent capital,” coveted funds they don’t have to give back to investors in a few years. Global Atlantic offers annuities for individuals through banks, broker-dealers and insurance agencies as well as life insurance. The company is also in the reinsurance business for life and annuity clients. KKR expects to fund the acquisition, net of the equity roll-over, from a combination of cash, proceeds from potential minority co-investors and the issuance of new debt or equity.

Agreed, best be prudent than not to be with the jumbo dividend when it comes to make commitment. I don't care about it anyways, not invested in FFH for its dividend. it is just a bonus. When i have time this weekend, i am going to work through all 'realized' shorts in the past 10 years and post it. Need to understand how much was lost and specifically how much was lost since it was publicly stated that they will no longer do shorts in 2016-17. This year through end of Sept, it comes to a total of $327 million realized losses in shorts. With another $89 million unrealized that be would be covered in Q4. Say another $100 million as estimate. So about ~$427 million estimate realized losses in shorts for the entire 2020. To put things in context, the dividend payment in Q2 is about $300 million i think. And net earning this quarter has been $133 million. I don't think a company starved for cash should be in the business of shorting. Specially, given the track record. PS: understanding that the shorts and dividends are from different bucket. And that the dollar value of losses in shorts should be compared against a base of a $39 billion. Still it is the size of their position in the Blackberry common stock ! If an investor has a certain point of view (in this case, hard core deep value), the shorts when placed against high growth names, wouldn't diversify the overall bet rather it compounds that directional deep-value bet (i.e. digging one's heels). However, had they used the shorts in a way that differed from their main deep value thesis, than the shorts would have been complementary and actually hedged their base-line view and perhaps added value (i.e. being flexible). It is not so much that they might still have new shorts, it is the way they used it that compounds their base-line thesis. But we don't have much details nor disclosure, so kind of remain as speculation on my part.

Listened to the conference call; some comments. Good overall. But not great. I thought Q2 conference was better than this one. Just the overall tone. Lots of questions from retail investors, and fewer and fewer from institutional investors. I am not a fan of when he goes off tangent talking about high multiple on technology names (he mentions Zoom) and virtues of value investing. I feel that he is keep digging his heels on his view. I thought his comment interesting in the prepared remark and Q&A on monetization. He certainly has been keeping his word on this in the past few years. So more to come and that is great. Just hope the monetization is not giving up family jewel because we need the cash at hold-co. Said differently, we are not selling because we need, rather because it is advantageous to trade the value. ----------------- Now I want to tell you this is just the start. Various initiatives are underway, including taking some of our other private investments public in the New Year. We have built significant value, as I mentioned before, which our shareholders will soon see. Q&A: But we are planning, we've got some private investments I can't talk about them of course, till it goes public. But yeah, we think they'll be worth a lot and they're good companies. And mostly their books had very low values compared to where we take them public. And we can build very significant companies we think over time, just like Horizon North will be over time. ----------------- Here is what i really didn't like or maybe not understanding. I am not sure how the unwinding of short works, shorts were being removed at the time Trump election. That was 4 years ago. Based on the conference call, Watsa keep saying that these are the remnants being removed. Does it take 4 years to remove shorts ? I understand if one needs to be strategic on covering the shorts, but i think if there was any short covering to be done, it could have all been done in March-April this year or during the Dec 2018 market plunge. Just the fact that they didn't cover these shorts in March-April 2020 when they had a chance, tells me that these are NEW 2020 shorts probably against high-flyers. Some data points: Q1: $248 realized losses in shorts (??? was that front-loaded) Q1: $122 unrealized gain in shorts (ok fine that make sense) Q2: $0 realized in shorts Q2: $96 unrealized losses in shorts (guessing a partial reversal of $122 unrealized gain in Q1 ??) Q3: $79 realized losses in shorts (guessing realizing a portion of the $96 unrealized loss in Q2 ??) Q3: $89 unrealized losses in shorts (huhhh where this came from ? did the unrealized exposed delta between $96 million (Q2) and $79 million (Q3) just expanded into a giant $89 million loss ?? was it Zoom ) I am guessing based on comment below in Q&A, we should expect unwinding of the remaining $89 million shorts in Q4. The fact that the total of realized and unrealized shorts in Q3 is far larger than $96 million in Q2 tells me that there are new shorts within even in Q3. Frankly, the company can barely adds to BV based on its long equity position, it shouldn't be toying around with shorts. ----------------- Here some excerpts: Mike Bill Thank you. Prem, could you give us a little more color on this short equity exposure? Exactly, what are we short? And the notional or size relative to our portfolio? So just the strategy in general there, that that that is a pretty big number. And I don't mean to Monday morning, or Friday morning quarterback because the third quarter was a strong one. But $168 million in losses on short equity exposure, I think deserves a little more explanation. Prem Watsa So Michael, we don't talk about individual names as you know, till we buy them or cover them. And on the shorts, let me assure you that it's over. This is just a remnant. And unfortunately, as you pointed out has gone up. But, not too long in the future we'd be out of it. It's all marked to market of course so you see it. And we reduced it quite significantly in the third quarter. And relatively soon, I just don't want to fix a time, but relatively soon that will be gone. And then as we've said publicly, we will not short the TSE and not short the indices, meaning we've samples or any of them, so we will not do that. And we won't short companies at all ever. And so rest assured there will be no more of those. Mike Bill Okay. So exactly broadly, what where are we short? You just said we don't short individual companies and we don't short The TSE or I guess the S&P. So I still don't understand what with this hedge is designed - what it's about? Prem Watsa Yeah. So Michael, basically what it was a position that we've had in the past. So it's not a new short to position an individual position that we've had in the past that we've covered and covered and covered. And this is the last remnants of it. ------------------------ Question about dividend; not exactly answered by i guess he means the cash will be there for dividend ------------------------ Tom MacKinnon Question on the [indiscernible] cash at $1.1 billion. I think you've always said you'd like it to be at least $1 billion there. Just trying to gauge you're comfortable with us where it sits right now. Just in - are you expecting some dividends from the operating companies in the fourth quarter because you do have a $275 million dividend that you're going to be - common dividend that you'd be paying in January? So just trying to gauge how comfortable we are with the whole cash position as it stands right now $1.1 billion? Prem Watsa Yeah, Tom, we basically want to keep an excess of $1 billion. So we expect to get some dividends and some other payments. And we have a huge credit facility that we paid back, as you know, from $2 billion down to $1.3 billion. So there's about $700 million that we've used. And over time we'd pay that back also to zero which it was at the end of last year. So yeah, so that's - Tom, we're very focused on keeping $1 billion plus in cash. We're focused on having enough money to support our insurance companies in this hard market that we're witnessing. And finally the extra money we were taken buyback our shares. So that's the order we'll look at it. Tom MacKinnon And if I could quickly squeeze in another, the equity hedge losses seemed a little bit higher than I would have expected. Could you get 266 notional, which is unrealized losses were $89 million. I mean, that's seems high relative to the notional. Is there anything I'm missing here? Prem Watsa Yeah, no, that's right, Tom. It's the remnants of what we've covering. So I told you that before and I guess in the first quarter, second quarter, and we've slowly but steadily covering it then it's gone. So it's on the way to - it's on the way out. ---------------------------

We just need some of the heavy hitters on page 17 in the link below start throwing their weight around. That ought to help to get 2% or more. https://s1.q4cdn.com/579586326/files/doc_downloads/2020/FFH-2020-Q3-Interim-Report-(Final).pdf

Excellent posts by everyone; not much else that i can add. I haven't listened to the conference call yet. maybe just a comment on sharecount. Q3 2020 outstanding: 26.3 million Q3 2019 outstanding: 26.8 million Q3 2018 outstanding: 26.7 million Q3 2017 outstanding: 27.6 million Q3 2016 outstanding: 23.1 million About 5% reduction in share count since the purchase of Allied World in mid-2017, which ticked up the share count by about 4 million. So while the volume bought back has not been staggering, my yardstick is look at the issuance in 2017. Back in the day the share price was trading at a 1.25 price to book, and FFH has been buying a cumulative 1+ million shares or so since. For reference, in 2019 price to book was around 1.0 and in 2020 at a 0.65 price to book. So Allied World which was bought at a premium when it was at its absolute highs in 2016-17, in retrospect was bought cheaply, given the deteriorating value* of FFH share price. If one can say Allied World was hugely accretive (i am no expert in insurance) than that is even better. I am prepared to declare half-victory when share count goes back to 23 million, bought mostly below to which they were issued. *Of course one hopes that values does go up.

------------ EDIT: Another way to look at, not from the largest asset (i.e. airport) point of view, but through all the publicly traded names. if stock market is valuing correctly, then the $744 million is correctly valued. That leaves $436 million of market valuation for all the private entities that is valued on the book for $1.9 billion. Take a discount for so-called hedge-fund like fees, illiquidity, emerging market etc. are the private assets really a quarter of their value on the books. End of Q2: $744 million of liquid public assets out of total $2.7 billion (public and private). 27% of total End of Q1: $591 million of liquid public assets out of $2.7 billion (public and private). 22% of total End of Q4 (last year): $877 million of liquid public assets out of $3.04 billion (public and private). 28% of total

My feeling is that, as great as a long term investment as the airport is, in the short-medium term, market would value a gain on BV based on fair value assessment of a given illiquid investment much lower than it would value a gain in one of FIH holding that are trading in the stock market. Namely these four financial names: IIFL Finance IIFL Wealth IIFL Securitie CSB Bank The first three are more or less flat since March, while CSB Bank had really good run since March (mostly front-loaded). In aggregate these had $634 million in market value as of Dec 2019, out of ~$3 billion overall investments, based on Annual Letter in March. By April 1 2020, these four bad boys had shrunk to a total market value of $390 million and them moved upward toward $472 million by close Q2 (June 30) out of total ~$2.7 billion of investments (liquid and illiquid). So, the four financials had always something between 18-20% of the total investments in Dec 31, 2019 and the same six months later. Whereas the Airport's fair value had 45% weighing of the total investments in Dec 31, 2019, and very close to 50% as end of Q2. I don't know much about airport valuations and little about financial services, either, but when the overall blended book value goes down, if one entity (airport)'s % of that blended book value goes up relatively and if it is assessed through fair value as oppose to the market, perhaps market will express its displeasure of that fair value assessment by discounting Fairfax India's stock, since it couldn't do it directly through that fair value assessment. But, that being said, the stock markets displeasure with the discount is CRAZY : Market value of FIH at $1.18 billion. Book value at $2.8 billion and within that the airport is valued at $1.3 billion. I think, once the four financials start roaring ahead, then you will see that flow through FIH stock price, given that. -Market seem to prefer an exchange determined price a whole lot more than fair value assessment done privately. -Financials will be seen as bellwether on the rest of the economy. Where are all those self-declared long term holders that can't get enough of being a long term holder only when something hits the front page of Wall Street Journal or Financial Times ?

Thanks. Insurance is a tough business. Never know how big your cost of good sold is going to be in the near term. Life insurance is probably an easier game. Maybe there is an easier way to have permanent capital (like an asset manager) rather than through the float. At least you know that your redemption as asset manager is a function of your investing skill set whereas for an investor that has insurance premium as float, the “redemption” is not correlated to one’ investing prowess, rather a function of randomness of nature. The only positive (if one can say this) is that because it is a tough business it takes out the players leaving FFH and others having better margins in the future. Lumpy results indeed.

Had a look: Blackberry and Kennedy Wilson are mostly flat quarter to quarter. Stelco did have a $45 million gain from end of Q2 to end of Q3. A bit less than 45%. Catching up slowly to the cost basis.