Munger_Disciple

I will be there also. -Sreenr

Thanks for a warm welcome to the group & valuable feedback.

Oldye: The combined ratio includes charges for estimated losses and underwriting expenses. I agree with you that the combined ratio for any given year, while important, will not tell us the whole story for an insurer. However, a table of combined ratios for the past N years (N>=10) will present a pretty good picture of an insurer's underwriting effectiveness. If the insurer took uncompensated risks, this table will look ugly.

Thanks for your suggestion of accounting for the impact of CAT loss in the underwriting results over a period of time (good as well as bad). I have reviewed Fairfax's underwriting results for the past 10 years, and I think there is room for improvement especially when compared to Berkshire. I think Prem sounds so much like a younger version of Warren that I have no doubt that he will only get better with time. Thanks also to others for their comments.

I am a relatively new member to this board. I have read most of the publicly available information about Fairfax, Prem, etc. I have also found this board to be very informative and the discussions to be of high quality in general. As I see it, the following are the things I like about Fairfax: Positives: 1. Prem is smart, humble and seems a very capable investor. As a fellow alumni from the Indian Institute of Technology, I am very proud of his accomplishments to date. 2. Prem owns ~10% of the stock, his salary at Fairfax is reasonable, and takes no stock options. Therefore his interests are completely aligned with those of the shareholders. I know of very few company CEOs other than Berkshire that can claim this. In most of the companies the management enriches themselves at the expense of shareholders. 3. Prem's track record of increasing Fairfax's book value to-date is very impressive. I have however the following concerns as I evaluate Fairfax as a potential investment: Concerns: 1. The insurance underwriting results appear to be not very impressive. I also did not like the excuses provided in the 2009 AGM presentation (except for this loss and that loss, etc., the results would have been great) for poor underwriting results. i am hoping that (given that Prem is a smart CEO) they will improve upon these results in the future. 2. Fairfax appears to have a very large premium revenue compared to book value (almost 2x). This may put them in a potentially adverse situation in the future if there is a significant loss. 3. While the overall investment results are very impressive, they seem be making (small) investments in very iffy situations like Bowater, Canwest, etc. It seems to me that given the steep drop in equity markets, you can go first-class in terms of quality of companies invested in. I do not quite understand the thinking here. I respect the opinions of all the members on this board, so your feedback will be greatly appreciated. Regards, -Sreen Raghavan