Xerxes

Not totally clear to me. My read is that the regulators in India have to push the limit to 75% for foreigners (which may or may not include FFH - it is not clear). If it does include FFH, than there would have to be cash outlay by FFH at a higher valuation, pushing up their cost basis. If it doesn't include FFH, than they get diluted. I just hope the whole 75% increase ownership hurdle, is not a repeat of Pershing/SEC/Universal/Ackman fiasco, causing FFH to go backward on something that stated to be "done deal" on the conference call. -------------------- On Blackberry i knew it !!! at least someone on the call push for it and asked the right question. The quarter had enough goodies in it, to offset lack of positive news on BB. Even the "Rude Gentleman" from Q1 2021, did not show up. He was probably happy,

It is possible that he closed his Yahoo shorts by buying some of the shares from Mark Cuban as the latter was exited his long.

re: ERIC I wouldn't know. But I will say this: Berkshire considers its equity portfolio composition as a propriety information. I have heard Buffett on one his AGM (perhaps 2018) where he said that as an answer to a question that inquired about his Asian holdings. He added (IIRC) that if it was up to him, you wont see much U.S.-based holdings either, but that 13F filing force him to make U.S. holdings public. These days he is showing BYD because it is a large holding. Nothing to do with FFH, but I don't think we will ever get to see the composition of those shorts and what drove them.

Ericopoly I am with you 100% on how i feel about Shaming of the Big Tech on his annual letter. I usually skip that page anyways because it irritates me (it actually does). But, i believe what he writes (as an opinion) and what he does, are often not the same thing. Except for the mystery short last year (people say it was Tesla), I don't believe we have any proof that he went out there and shorted FANGS. We make that connection, but there is no hard evidence. Said, differently, even if FANGs were to get cut in half today, you will not see him investing in them in a huge way, even knowing what he knows. He wants to own businesses from the ground up, and not ride someone else' glory. This is my perception

Thank you Daphne. Well that's it for me folks, I am going to leave on a high note !

Folks, Not to repeat myself from a month ago or so: On comments on why he didnt buy AAPL/MSFT but bought this. etc. why Quess as high p/e. etc. Prem (i believe) is first and foremost a businessman and then an investor. Therefore, his investing style is always with an eye to build something from the ground-up and help nurture an entity as a financier (if outside his domain of expertise). He is not there to take a swing at Microsoft or Comcast as a game-changing bet. This is not about value vs. growth but rather owning businesses vs. owning stocks mindset. His equity portfolio has two major components: i call them Beta and Alpha baskets. The Beta basket is managed by his underlings, that broadly matches the S&P500. The Alpha basket is his own bet, with an eye to not own as a stock but as a business or a platform. That is the basket that ought outperform with a caveat of having lumpy returns. I believe you all are commenting as investors first, looking at valuation metrics solely, and less as someone interested to have a piece of this business-building machine for better or worse.

Can this be the birth of a futures market, where people make bet on the quarterly results before their release.

I had a look at few article from 2013, (i.e. in 2 years it will be decade), the language and the tone was always about saving the "beleaguered Canadian entity". CPPIB has the right view, I think. A strategic investor was needed more so than financial one. It's a tough sell. Speaking at a conference Monday, André Bourbonnais, senior vice-president of the Canada Pension Plan Investment Board's private-equity unit, said his pension fund would as a matter of course examine any possible bid. But he said he that for any deal to succeed, it needed to include a "strategic" player, such as another technology firm, to help turn BlackBerry around. "My view is it needs the right kind of investor," he said. Fairfax hands BlackBerry $4.7-billion lifeline - The Globe and Mail All these are water under the bridge now. The question is at the moment, what incremental value does holding 10% of BB has (as oppose to use those resources to buyback your own share - a company you know well for instance). Could there be a bid/play from a large FANG name and is that what FFH holding it for. These things take time, but if there are discussion that the public is unaware of, that could be a reason why FFH didn't dispose of it during the Reddit Madness.

Distress investment

In my humble opinion, FFH investors and prospective investors need to differentiate between how FFH invest and what Prem W. write in his letters. I got no issue with how he invest for this equity position (yes there are bad apples) but have an issue with his Annual Shaming Parade of FANGs etc. It is entirely possible that the latter is doing him more harm than good from a PR and optics point of view. ------------------------ On a different note, is it possible that i am the only who is excited to hear what they did with BB and if not why not. I always believed that little bit about not being able to transact for 6 months back in January was more of a good excuse, on a name that they did not want to monetize to begin with. Just my read and perception.

Xerxes is going to give you folks some real news that is interesting but wont be moving the needle. Former President Barack Obama minority owner in NBA's Africa business (cnbc.com) "Nigeria-based industrial group Yinka Folawiyo Group and Helios Fairfax Partners Corporation, an investment holding company that trades on the Toronto Stock Exchange under the ticker symbol “HFPC,” are investors in NBA Africa, alongside former NBA players Luol Deng and Joakim Noah are also investors. In addition, NBA commissioner Adam Silver and NBA Chief Operating Officer Mark Tatum have board seats."

Dragging myself happily through Expanse Season 2. What a novel story ! like to know how was the return on Church of Mormon long-term investment portfolio in the century that show is set, since they talk about Mormons. Did they beat inflation The Mormon Church Amassed $100 Billion. It Was the Best-Kept Secret in the Investment World. - WSJ On a different note - new Dune trailer. I must have read the original book 5 times, that is two times more than JRR Tolkein's Lord of the Rings books, which I set as my discount rate.

The F'ING MONEY IS THERE, (i.e. Stelco is on fire today) ... but we keep getting 80 cents on every dollar that we put in. Need 20 cents more to make us whole.

Once upon a time, in galaxy far far away, when Dell Computer was running a hedge fund business. Fast forward to 20 years later, hopefully, Prem W. has closed out the derivate bet on himself by now.

Perhaps, if the intent is to close up the discount, and if the value is real there, than a NY-based listing would provide a boost in that price discovery. Surely, the NY-based bears have moved on, and FFH today is not FFH of then. Large pension and/or sovereign fund have a problem these days: low interest rate. That problem is pushing them deeper and deeper into the world alternatives into the arms of Blackstone and Brookfield. FFH (for that matter other insurances) have the same issue as pension and/or sovereign fund, albeit at a smaller scale. Difference is that they cannot push deeper and deeper into alternatives, because they need to keep them into T-bill and bonds for regulatory reasons. Now doesn't that deserve a broad industry discount to intrinsic value (given the very low yield on that bond portfolio). Add to it, FFH-specific opaqueness compared to other insurers. Now doesn't that deserve a FFH-specific discount to book value.

My 2 cents, My largest holdings are not high conviction idea, rather they are your-conviction-level-does-not-matter BAM, BRK, AMZN etc.

Men were in the business of empire building since the early days when cavemen were gathering food ... except Barry Diller perhaps. Looks like it took a major event like the once in a hundred years pandemic for the likes Masayoshi Son or Prem Watsa to change their way, but too often the empire building instincts kicks back in again and again. I don't know what the future holds, but it seems that the transition from asset-gatherer to a CEO that can get a laser focus on shareholder value per share, is usually a bumpy road. Empire builders do not find shrinking the company (i.e. selling assets to fund massive buyback) that exciting, even if it means more absolute wealth and control. For FFH's value to raise on a higher plateau permanently, one of the three things need to happen: (1) a large uptick in the insurance business (ala 2001) i wasn't following FFH then, but based based on past conference call, Prem alludes to the period where Odyssey (i think) picked up a lot business (2) large investment gain that is monetizable. Not enough to have a home run as paper gain. There has to be clear road/intention to monetization. Financial media loves the sum of the parts stories and conglomerate discount. How many of those famous relative trade actually worked out in a timely fashion. (3) re-rating in the bond market. --------------------- If 1 out of 3 happens, i think we can see a road to a higher plateau in terms of valuation. If 2 out of 3 happens, might even get a premium of book value. If 3 out of 3 happens, go buy lottery. --------------------- FFH de-listed from NYSE some years back. I don't know the whole story (related to the hedge fund short sellers i think), but it seems to that by doing that it also removed itself from being "discovered". If it insists it would not want a NYSE listing to get that exposure, perhaps that is a sign that it likes how things are: i.e. being opaque and under the radar. That is why for me, if FFH can deliver 5-7% gain I will be happy. That is my return target allocation of FFH in my portfolio. Digits and all those other things, all they do is to layer up more and more margin of safety into the stock, which is ok as well.

AMAZING !!

Thanks ^^ Had no idea that existed, Here is a description from Linkedin profile which still works. FairVentures is the innovation initiative of Fairfax Financial Holdings Ltd., with the mandate to research, develop, partner, and invest in innovative solutions to support the Fairfax family of companies. We recognize that Fairfax companies need to be on the leading edge of emerging technologies, processes, and thoughts as well as their application to their industry in order to stay competitive. The purpose of FairVentures is to evaluate new technologies, opportunities and businesses that are applicable to Fairfax subsidiaries and their customers. I am counting on these deep-value / distress guys to put money to work, when I am going to be wrong with the overall market (not that I am right), in the meantime, I will take 5-7% BV growth. I do not need 15%. Not talking about investing through flash crash, which they have shown they cannot as they are not nimble enough. But something like 2000-2001 slow 50% lumbering rollover bear market. Remains to be seen, if this massive 12+ months rally we have seen is a cyclical bull embedded in a long-term secular bull market, or just one massive bear market rally, which will loose steam and roll over in the next 15 months, with us standing on the top, and just not knowing it.

Viking, The more concentrated one is, the more one is concerned about a crash. But in reality, a crash doesn't discriminant so much between concentrated and diversified positions. As far as the crash is concerned, it is always six month away, because it helps us anchor our expectation. That being said, I would offer a differentiation between two types of events: A relative correction: is only six months away IMO If markets are forward looking mechanisms that saw a massive GDP bounce back a year earlier, one would expect that they would also see the decrease in the rate of change in the economy. For instance, it is expected that US GDP growth will be something like 8% by close of the year, with most of that being due to the arithmetic of starting at a very low base. One could say that the massive market rebound we had thus far, was "seeing" that GDP bounce back. Imagine, in March-April 2020, in the middle of complete chaos, the foundation of the next bull market was being laid, as it was "looking" past the noise and zooming into the recovery. After all, the economy went on pause and was strong going in. Therefore, it stands to reason that if we expect that 8% GDP growth to normalize to something more like normal 3% in 2022, the scent of that decrease in the rate of change would be pickup by the market 6-8 months in advance. But I think that would be a healthy correction. And while the not so nimble Berkshire and Fairfax of the world couldn't take opportunity of a massive drawdown (see below) for different reasons, a healthy relative correction would be ok for these self-proclaimed capital allocators. Mike Wilson from Morgan Stanley (who nailed the recovery) is saying the bull is aging rapidly and already in mid-cycle. The flatting yield curve is supporting that narrative. Market crash on an absolute sense A massive liquidity drawdown like the one we saw in March 2020 or Oct 1987, cannot be guessed/forecasted in anyway. By definition, if we all expected a crash (and I call this a crash and not a correction), there would be no crash. There is crash, because it is unexpected. Consider this, by Feb 2020, the virus was not an unknown and in fact the economic impact was well known, yet how many people saw the market crashing the way it did. I, for one, was expecting a mild correction. And of the ones that were smart enough to sell/hedge heavily, how many were able to go back in in full force in April. (Ackman ?) Those kind of crash, take down anything and everything (including gold). Only USD and US Treasury bond do well as they soak up liquidity on a global scale, for a brief moment, that is. Whatever event will cause the next meltdown, we don't know, but it safe to say that it will not be a pandemic or a variant of the current one. why ? simply because, IMO, market has a probability distribution table built into it. That "table" has now been updated and includes probabilities associated with pandemic and possible outcome. Yes, market can roll over and can correct, but it will not crash the way it did in March 2020, if there is a new variant or a new pandemic. Crypto and a SPAC PS: we already had a crypto and a SPAC correction, as it shows that excess liquidity is being pulled from speculative assets and going into the real economy. I think this is bullish for the real economy, as those sponges (crypto/SPAC etc.) are squeezed of liquidity. 2003-04 I just finished reading this book. Bull!: A History of the Boom and Bust, 1982-2004: Mahar, Maggie: 9780060564148: Books - Amazon.ca Great history book. Interestingly the book finishes around 2003-04, where the market bottomed in hindsight, yet in the book you got Warren Buffett and Jeremy Grantham of the world, calling the market still too expensive in 2003.

aug3020.pdf (berkshirehathaway.com) About a year out, so how did they do .. even though we don't really know the initial purchase date, but we can assume perhaps the heavy buying would have been post March-2020. "The companies, listed alphabetically, are Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. These holdings were acquired over a period of approximately twelve months through regular purchases on the Tokyo Stock Exchange" Mitsubishi (8058), Mitsui (8031), Itochu (8001), Marubeni (8002) and Sumitomo (8053) 38%, 62%, 39%, 29% and finally 20%, respectively, as one year return. Interestingly, looking at these I realized that some of that of them (Ex: Mitsubishi) have a NYSE listing. Not for the whole conglomerate, Mitsubishi Group, which is fact private, but different tentacles (i.e. Mitsubishi UFJ Financial Group), which by itself is worth $70 billion, has a NYSE listing. My guess would be that Buffett bought Mitsubishi Corporation (8058) and not MUFG (8306/MUFG) nor Mitsubishi Heavy Industries (7011). Mitsubishi UFJ Financial Group - Wikipedia "MUFG holds assets of around US$2,459 billion as of 2016 and is one of the "Three Great Houses" of the Mitsubishi Group[6] alongside Mitsubishi Corporation and Mitsubishi Heavy Industries. It is Japan's largest financial group and the world's second largest bank holding company holding around US$1.8 trillion (JPY 148 trillion) in deposits as of March 2011.[1] The letters MUFG come from Mitsubishi and United Financial of Japan."

I like how Prem took some of the wording word for word from BDT mission objective on its site: "Founded in 2009 by Byron Trott, BDT serves as a trusted advisor to closely held companies and owners with world-class capabilities across a variety of areas, including M&A, capital structure optimization, strategic and financial planning, family office, philanthropy and social impact, and next generation transition and development. BDT Capital Partners provides family- and founder-led businesses with long-term, differentiated capital. The firm has raised over USD 18 billion across its investment funds and has created and manages more than USD 6 billion of co-investments from its global limited partner investor base. The firm’s affiliate, BDT & Company, is a merchant bank that works with family- and founder-led businesses to help them achieve their strategic and financial objectives. The firm has offices in Chicago, New York, Los Angeles, London and Frankfurt."

This is key here. After all, the whole point of the 'hard market' was for them to invest their capital, for a future return, which we have not see (mostly?) yet flow through P&L as earned. Incidentally, further growth potential (or lack thereof) in the insurance side of the business will impact intrinsic value and not current book value. So BV can be continued to be used as the proxy for the floor for here and now.

To those saying higher valuation are somewhat justified due to lower interest rate, Jeremy Grantham would say, you are using an inflated asset (bonds) as a yardstick to determine if another asset class (stocks) are in bubble. To those saying (mostly on Twitter), US printing press will take US to the ways of Weimar Republic, I would say comparing the current incumbent super-power with USD as reserve currency (allbeit one that is relative decline), to the Weimar Republic that at the time was coming out of revolution in 1918 that saw the Wilhelmian monarchy fall, that got the short end of the stick coming of Treaty of Versailles, is a far fetch comparison.

I don't know anything about re-valuation to the upside for associates in IAS 28. I am guess their accountants did all the legwork to get it here, ... but was just curious the accounting framework on this. If FFH was selling a portion of its stake, I could understand the mark-up on the rest. IAS 28 — Investments in Associates and Joint Ventures (2011) (iasplus.com)