Xerxes

I read it as two steps (granted it is not totally clear to me): - +$47 in book value by close of Q3 once Digit issues those new shares to the new investors, allowing FFH to re-value its stake (not clear if FFH participates or if there is dilution) - +$14 further when regulatory aspect goes through (Q4 or thereafter), allowing a higher % ownership, which implies that FFH is participating and adding more money. Again not clear to me

Thanks for posting the video; i thought i had no hope with CNBC firewall, but there was hope. Loved how the interview opened like that: "Think of how massively stupid that was ...."

Petec => "The transactions are subject to customary closing conditions, including regulatory approval, and are expected to close in the third quarter of 2021." On a different note, purely from an accounting point of view, can an associate be marked-up ? mark-downs are through impairment, just was not aware that IFRS allows marking up as well on an associate or a consolidated entity.

Globe & Mail incorrectly reporting this as "booked". I am no expert, but they could have included this release as part of their Q2 results in a few weeks. "Fairfax Financial Holdings Ltd. booked a US$1.4-billion gain after a subsidiary in India, Go Digit General Insurance Ltd., launched a US$200-million share sale at a valuation well above Fairfax’s investment in the four-year-old company." Fairfax books US$1.4-billion gain after insurance unit in India launches share sale - The Globe and Mail Viking, you cannot include Digit gain into your Q2 results of BV. Digit goes into Q3.

Lots of economic value created at Digit. Good stuff ! Hopefully the accounting windfall in Q3, does not get offset by (1) large one-off cat events in Q3 and (2) by shorts-gone-mad. Wait a minute, we don't have to worry about (2) anymore !! That being said, I wonder what is the point of the press release here. This is not even close yet. Or perhaps they intend to close the total return swaps soon, so want to capture as much call option as possible before un-winding the trade.

Thanks ! I think Sopranos started that unhealthy practice of having two parts to a last season that was a year apart.

Just finished the new season with Bosch. I am unsure if this last season has a part 2 to it. Enjoying Loki on Disney+

Viking, At least for Farmer's Edge it is confirmed to be an associate. If I had to guess, I would put Rocker in the same bucket. "Share of loss of associates of $113 million includes our share of loss from Quess ($125 million, including a $98 million writedown), Astarta ($28 million), Farmers Edge ($22 million) and associates of our non-insurance consolidated investments Fairfax Africa ($74 million) and Fairfax India ($25 million). Offsetting this was our share of profit of Atlas ($116 million) and Peak Achievement ($34 million) and $11 million in net profit from all other 12associates. COVID-19 was a significant contributor to the losses at many of our associates during 2020 due to the global shutdown"

I am unfamiliar with Kennedy Wilson just knowing that its somehow related to real estate. Kind of surprised to see that voting machine didn't even gave it a heavier valuation with all the hoopla about real estate. Any one had a take on this name KW ?

I tend to echo this point of view. I don't have any proof, but my gut feeling is that he never intended to sell BB back in Q1, even if there were no regulatory constraint. Totally, my gut feeling and completely unfounded. Maybe not for personal reason, but perhaps just for a vision that he wants to see through with BB .. and that vision cannot conclude by: saved-by-the-Reddit club. However, if he were to resign next week from BB board, than I think selling the stake is in the cards. Being on the Board of BB as an independent director, or owning a significant chunk of Resolute are supposed to be the "assets" that the FFH should be able to leverage; but sometimes i feel these are more "liabilities". Then again, Prem W. built a +$10 billion business from scratch and has been investments and building businesses for decades; that is many fold more than me, and net-net he has been far more right than wrong, otherwise we wouldn't be here.

Thanks for the in-depth review Hobbit. You are a credit to the Shire; i admit i focused on the bit about the airport mostly. On the incentives shown above, agree that the fees being structured on BVs (and not what the market ascribes) creates all kind of wrong incentives. That being said, as those fees are collected over time, there is an end line where FFH does well out of that paper investment based on what it can do with its marketable value rather than its accounting value.

There are two different things: (1) What is Prem pitching as a global thesis/story for FIH and (2) the reality. The Modi debacle did hurt the (1) argument, however thankfully the reality matter more than an investment thesis/story pitched to investors on conference calls. Modi' ascension some years ago had, I believe, put India on a different trajectory. i.e. there is no going back to the way things were even without Modi in charge. So I think we are safe on that specific front. Perhaps someone from the region can comment.

As a reference point, this 2 hours+ video posted on FIH website, had 719 views (less than a 1,000) since Oct 2020. That shows the level of interest in that part of the world from the investment community. Western corporation may be investing in India, but the investment community had better bargains at home since March 2020 per unit of risk. (1) Canada-India Business Council: Invest India 2020 - YouTube

It is unclear to me if the tender offer will be include FFH tendering its own shares in proportion of its ownership, in which case the 1/3 FFH - 2/3 (rest) ratio does not change. EDIT: Fairfax Financial Holdings Limited, the ultimate parent of the Company, has advised the Company that it will not tender any Shares pursuant to the Offer looks like i missed that

BYP did (IIRC) do a tender offer prior the formal offer from BAM some months later. Though that would be robbing FIH individual holders of its potential and should only be of last resort, after all the levers to close the spread has been pulled. In any case, I believe FFH structured its India entities for a specific reason the way it is now. Bottom-line, for me, i have no intention of selling FIH anytime soon. Those who bought in all the fanfare of 2014-16, if they overpaid, than that sets their ROI for the long term. At the end of the day, emerging market is emerging market, if one is unwilling to stay course, why did one got in in the first place.

Perhaps I ought to post this in the book section. I bought this last year based on a suggestion on podcast. It goes over the 1970s but primarily looks at the Great Bull Market of 1982-1999 and the subsequent bust. It is really entertaining, looks at inflation, the 'sadistic' bear of the 1970s that keep despairing the investors, and has lots of good gems in it. Berkshire is there as well (how could it not be). I have not finish it yet, but it is going fast. Bull!: A History of the Boom and Bust, 1982-2004 eBook: Mahar, Maggie: Amazon.ca: Kindle Store

So much for those hoping that FFH have some Grand plan on Resolute, involving restructuring, roll-up etc., and that we, mere mortals, just cannot see the masterpiece taking shape. FFH has some great things going for it, but finding partners for business outsides its area of competencies ain't one of them.

My comment was just a general comment on the first post and not related to anything you had mentioned. Unrelated but related = > Jamie Dimon: JPMorgan is hoarding cash because 'very good chance' inflation here to stay (cnbc.com)

I got no clue of any particular strategy, but as it happens to be, his portfolio has plenty of hard assets that will retain value. I know BRK has been borrowing by issuing long-dated bonds so that is good. It is the lack of having cash and lots of liability that will retain your wealth in a bad inflationary environment and not an abundance of cash. I guess the surplus cash for BRK would be to take advantage of a collapsing equity markets as a consequence of anything (including inflation), but it is not a preparation for inflation, in of itself. I would also distinguish between good inflation and bad inflation. The former (inflation with growth) is what you want and hope for and the latter (inflation with no growth) is what you don't want. If i am not mistaken the last time we had bad inflation in the 1970s, gold went up through a multi-fold monster bull market. That is the type of environment were gold does really well (when real wealth is being eroded). In fact Tobias C., recently on one of his podcast, made the point that the yellow metal that Buffett doesn't care about matched his own returns in the 1970s.

Good thread, I never understood what is the "core" holding in the spaghetti of "tracking" stocks. Even a drunk sailor can safely identify Brookfield's vertebral column: BAM. No such luck with these Malone's entities.

Torstar buyers set to book huge gain as VerticalScope goes public on TSX - The Globe and Mail "VerticalScope Inc. is set to go public Tuesday on the Toronto Stock Exchange at $22 a share, giving the digital media company’s largest shareholder, NordStar Capital LP, a stake valued at $173-million. That is almost three times the $60-million NordStar paid last year for Torstar Corp. (excluding unfunded pension liabilities), which owns the Toronto Star and 76 other daily and weekly newspapers across Ontario and which also included the stake in VerticalScope."

A highly recommend episode on carbon credit (second half). I had listened to Marin's last few episodes from 2018-19, found his views on commodities to be super interesting. This is his fifth appearance on TIP. The Best Performing Asset Is Not Bitcoin w/ Marin Katusa (theinvestorspodcast.com)

Thanks return of capital would be the non-taxable event. But would the adjustment on the equity base for the investor be any different ? vs. the taxable return on capital

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RFP is under equity accounting. The special dividend would be (I think) return of capital therefore lowering its cost base. From 2018 Annual Letter, when RFP last paid a special dividend of $1.5 per share. You see that the $46 million lowered the investment cost from $791 million to $745 million. If it was a regular dividend, would it be return on capital vs. return of capital. Is there an accounting difference in the treatment. I am not sure i know the answer. EDIT: i just remembered an additional point (but i need to verify), the equity earning ought to remove the dividend, so as to not double count since you already have the dividend in the earning stream. Resolute. We have invested $791 million in Resolute and received a special dividend of $46 million, for a net investment cost of $745 million. Our initial investment was a convertible bond purchased in 2008 for $347 million. We invested an additional $131 million prior to Resolute entering into creditor protection and most of the remainder during the period from December 2010 to 2013. Subsequent to write-downs and our share of profits and losses over time, at December 31, 2018 we held our 30.4 million Resolute shares in our books at $300 million ($9.87 per share). The current fair market value of these shares is $244 million ($8.03 per share). You can see that Resolute has been a very poor investment to date