Xerxes

Zaslov is making an executive decision about the War of Rohirrim https://amp.theguardian.com/film/2023/feb/24/new-lord-of-the-rings-films-in-the-works-at-warner-bros

Now that the European restrictions for refined petroleum products from Russia has kicked in, Russia has more incentive to refine less and sell more crude (unrefined) it is a lot easier to defy sanction through sea-based crude carrier phantom fleet than it is on refined products (supposedly)

I did a CTRL-F search. He mentions “Newmont” exactly zero times in his letter. Newmont being a 5% position

That is fair ! Thank you for sharing. That said, I question his position sizing on Newmont, for someone who worries about “blow up” risk with Fairfax. Newmont is trying to be biggest gold miner (getting bigger for getting big sake) to attract the “generalist investor” as the one-stop-shop for all of your gold investment. Contrast that with Barrick that refuses M&A at a premium and wants profitability on every mined ounce. Looks like Newmont has captured the generalist in Bloomstran.

The thing is he posted that after Berkshire bought it. Everybody is using Berkshire as some kind of intellectual filter.

He barely talks about his other holdings in his portfolio.

i use to buy case studies out of interest since I like corporate history and all that stuff. but not much recently. I think you can buy some of the HBS case studies on the cheap through Ivey Business School. There is an arbitrage opportunity. somewhat related, The Business Breakdown podcast has a really interesting episode on Harvard Business School Case Studies.

1 year anniversary AW cover page.

The traditional high-tech A&D (21st century war hardware) will do ok, but there is a lag time between budget, orders etc. EDIT: I should add that defense contractors will/are probably feel the squeeze on their fixed-contract Government deliveries as inflation cuts their margin. See Northrop Grumman and B-21. However given that Russia is forcing NATO to fight a 20th century type of war in 21st century, I think a better bet is a broader directional bet on the old economy, industrial, raw material. Even if the war ends tomorrow the replenishment of ammunitions, shells, spare will take years and years.

John While I recognize my handwriting in that post, I actually do not remember in what context I wrote it. I looked back a few pages ago as well could not find it. But point taken.

^^^ I would go back to SJ comment about “normalized earning”. Prem himself indicated that this elevated earning will be going to be for a few years. with these two comments in mind is the 650/100 is really cheap if numerator continues to soar and the denominator peaks out couple of years from now

The highlight of the conference call (which I listened yesterday) was that for the first time Prem looked at FFH's valuation from an earning multiples point of view (notwithstanding that he is choosing some elevated earning figure in his P/E) On IFRS 17, I didnt understand anything On future capital allocation, this sounds more and more like an oil & gas company that at some point it is done in investing in drill bits, labor, h/w, assets, and when the earning start to gushes out, it will repurchase its own shares (at all time high in absolute terms but at a low multiple) That said, I guess the SIB in late 2021 and the TRS will help balance out future repurchases at high dollar terms. --- Prem Watsa I'll take a crack on it, Mark, and then pass it on to Peter. So share buybacks, we just think is the right way to do -- go forward for our shareholders. We bought 2 million shares in 2021, and we continue to buy an normal course issuer bit. And so point number one, I've said many times, financial position, financial strength. We're not going to buy back stock at the expense of our financial position. You'd expect me to say that because on a long-term basis that you have to have financial strength and we have that. Number two is our insurance business. I mean we've expanded our insurance business huge, doubled our premium and become one of the world's largest insurance companies, property casualty companies with excellent underwriting and excellent reserving and a very diversified base so that you have $1.3 billion of cat losses and you still have 96% combined ratio, a 95% combined ratio last year with, as I said, very small result redundancies taken. So that's a very good position to be in. But as the insurance cycle changes and flattens out some, Peter? Peter Clarke Yeah. No, just to add, if we look back over the last three years, as Prem said, we've grown significantly. And we've generally funded the capital required to grow through internal means through our operating earnings. And there'll be a time when growth will slow. And the expectation is when growth slows, and our earnings will then produce dividends to Fairfax. And then we can look at all the options available and buying back our own shares, especially at these prices would be something -- would be of great interest to us ...... And -- but all our companies are doing very well and our expense ratios have come down. The reserving is excellent. And -- but we do see growth in the future. We do see growth. And if growth slows down, as it will some time, then we expect, as Peter said, to look at continuing to buy back stock at significant amounts. Jaeme Gloyn Okay. So if I understand, I guess, the view near term is that, that growth rate will reaccelerate, or there's a view that it should reaccelerate and that you'll sort of maintain. And if it doesn't reaccelerate, you'll maintain underwriting leverage through share buybacks? Is that... Prem Watsa That's the exact way, right? We don't forecast, right? We don't forecast it. We take it as it comes, and it's a very decentralized operation. And we can tell you that the rating environment is good. I can tell you, we'll expand at 15% or 10%, didn't tell you last year, didn't tell you two years ago. We just look at what our companies face and doing the right thing for our shareholders long term.

Try this spy-series on Prime Prime Video: A Spy Among Friends, Season 1

so basically U.S. is dollar cost averaging its non-value added adventures in the Middle East and buying the dip on this one, which also happens to have a better ROI

you are welcome. for clarity the answer came in the context question being asked previous Berkshire energy investments (like Exxon) which were rather “trade”

Munger had a few things to say on Chevron and Occidental on Daily Journal AGM. I recommend folks listening to it. They are into the Permian for the long haul

And very well earned !!

i recall few years ago on the call, the guy from Leucadia said something along the lines of personally owning Atlas. I was like WTF ...

If one is in this camp (bold/underlined), 1.5 year or so from now, any Fed rate cut that spoils Fairfax's bond portfolio, could be buying opportunity to buy the common stock on the dip, betting that it is a cyclical Fed cut and that it will not go/stay close to zero ...

On the duration discussion, my view is that Prem & Co. have a very strong and clear multi-decade view on the secular direction of interest rate (notwithstanding the short cyclicality of it). For them the 2018 pivot and the unseen Covid events that took the rate back to zero are either cyclical in the case of former or coming out of the left field in the case of the latter. But the long-term story is one that is marching upwards.

Railroader: The Unfiltered Genius and Controversy of Four-Time CEO Hunter Harrison: Green, Howard: 9781989025048: Books - Amazon.ca The pig that flew: The battle to privatize Canadian National: Bruce, Harry: 9781550546095: Books - Amazon.ca I read the first one, in the same year that came out. I think Buffett also mentioned the book in his AGM couple of years later. The second is great story about all the effort that went to float CN as a public company. I really enjoyed it. Unrelated to railroads, the author of the first book, Howard Green, also wrote about the story of TD Bank went to expand its business in the United States. It is a great story. Too bad, I read it many years after its publication. Banking On America: How TD Bank Rose to the Top and Took on the U.S.A. eBook : Green, Howard: Amazon.ca: Kindle Store Another book by Howard Green, which a new one, covers the latter years of Bronfmans/Seagram dynasty. I have not read this one, but do intend to. Distilled: A Memoir of Family, Seagram, Baseball, and Philanthropy eBook : Bronfman, Charles, Green, Howard: Amazon.ca: Kindle Store

So if you had bought FFH at the same time as Prem did and held it, you would have beaten all the FANGs, and market indices.

I think there was a bit of Karma too.

@dealraker The original Canadian National and CP did have a lot of fat in them. I would argue that the work that Hunter Harrison did was needed but ultimately perhaps taken too far by others. CN was a crown corporation that was privatized in the 1990s. So you could imagine that the journey from crown corporation to a profitable business needed some pushing by none other than Michael Sabia and Hunter and the former BBD chief (whose name escapes me) CP for a longest time owned a string of hotels (the famous Fairmount) and it was run like a royal court. Some of that was taken out pre-Hunter I think. Just to show how unwieldy they were.