Munger_Disciple

Awesome! Can't wait to read it. Happy Thanksgiving to you & family @gfp!

I think there is another "political" risk for BIAL as well. I am not sure the Indian Govt wants a "Foreign Entity" especially a Canadian one to control one of the most important gateway airports to the country in the long run. I often wonder if this is the real reason for the delay in Anchorage IPO and the value FIH carries BIAL stake on its books.

Thanks @Parsad!

Thanks @gfp! So Prem & his family own roughly 1.267 million FFH shares on an as converted basis. That comes to an economic interest of 5.92% of FFH. Initially I was looking for information on Sixty Two in the annual report but much more detailed & better information is available (as you pointed out) in the proxy.

Question for @Parsad, @gfp or other shareholders about the Sixty Two Investment Company. I get FFH owns roughly 50% of the underlying company shares but does Prem & his family own the rest or are there other shareholders of Sixty Two that have minority ownership in it? Thanks

Excellent point about the all important "margin of safety". It's easy to overlook its necessity & importance in the case of Fairfax because of recency bias where everything went well for them (no major surprises in the insurance operational side or investing side). That won't always be the case.

Yeah BV may be understated but it seems like FIH shareholders are waiting forever for payoff while the fees never sleep (I am not unhappy that FIH is paying those fees to the mothership FFH in which I am a shareholder). I agree though that FIH may be a good trade here until BIAL value gets recognized if it happens relatively soon. Personally I like to keep it simple & just own the mothership especially because I am a US resident.

FIH stock should rationally trade at a discount to BV IMO. You have the manager charging 1.5% management fees + incentive fees on BV. So let's call them total fees equal to roughly 2.5% of BV per annum on average. Capitalizing the fees at a 10% discount rate gets you to a fair value equal to 75% of Book.

Don't forget the 1.5% annual management fee. That's a whole lot of fees over 10 years. That's why I own the mothership, the recipient of such fees. Honestly I don't even understand why FIH exists as a public entity. Seems like a lot of frictional costs for public retail shareholders of FIH. FFH could have got one of those Canadian pension funds as an LP in a private partnership with the mothership as the GP to invest in India & avoid all of this and all the additional costs associated with being a public entity. But what do I know?

Another problem with charging fees based on book value (as opposed to stock performance) is that the management is not very much incentivized to close the gap between book value and market price. So they can keep collecting fees regardless of how the stock performs.

Fair point! The only other similar incentive comp structure is for Todd & Ted (designed by Warren & Charlie), but with just $1mm salary.

Does charge a management fee (AUM used to be as high as $900mm) in addition to incentive comp, so it's not like he is starving by any measure. He has been & continues to be a huge cable bro (CHTR/Liberty 23% of assets): https://www.dataroma.com/m/holdings.php?m=MP and that's probably a big factor for his bad performance which caused all the redemptions & will likely result in closing of the fund.

Don't know much about Bancroft (other than that he once worked for GEICO in the investments area) but his fund seems to be in a liquidation mode. Either he is about to close shop or his investors are bailing or both. AUM went from $600mm at the end of 2025 to $194mm now in 9 months, a huge drop.

Yes, that's the additional advantage to your own "manufactured dividend" unlike the one-size-fits-all standard dividend, 100% of which is taxed.

Well done @gfp! And you didn't force me to take one either

Let the buybacks begin baby! Caveat: assuming no other attractive internal use for deployment

I was not referring to you or anyone else by name. Sorry if you took it the wrong way. In stead, I was discussing people (as a category) who seem to really want a dividend w/o understanding that there is a cost to it, when they can simply manufacture one easily that's far more advantageous for them. This would also enable each shareholder to take the "self manufactured dividend" at a time of their choosing w/o forcing others into it.

But that's not how the market is valuing BRK shares; it's currently valuing $1 inside BRK at $1.58.

Exactly! It's amazing how many people mindlessly clamoring for dividends cannot understand this basic math. Make your own "dividend" anytime you want, when you want/need cash, by selling a few shares which are valued at roughly 1.5 times book. You will come out far far ahead.

I agree it's one of the worse articles by Bary. The dividend emphasis is crazy; most BRK holders want anything but a dividend. Many months ago, I pointed out an error to him via email in his (at that time) latest article & he didn't thank me or anything. He initially insisted he was right until I sent him backup material when he reluctantly admitted the error. Bary also seems to be making up stuff about Ajit's retirement w/o any hard work talking to reliable sources etc that a good reporter is supposed to. Ajit is made from the same cloth as Warren & shareholders are lucky that he loves his job & continues to add huge value to BRK. I hope he keeps on working for at least a decade.

Andrew Bary on Berkshire in Barron's: https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-stock-4a63d0e3?st=aTaSE4&reflink=desktopwebshare_permalink Not much new, but this caught my eye: Besides Abel, Berkshire’s most important executive is Ajit Jain, 74, the head of insurance operations, a brilliant insurance risk assessor and a Buffett confidant for nearly 40 years. He may retire in the next year or two. Potential replacements are the Berkshire insurance executives Kara Raiguel of reinsurer General Re and Joe Brandon of Alleghany. I hope it is pure speculation by Bary & wish that Ajit stays running insurance biz well into his 80s or longer. And I don't think Abel will start doing quarterly calls despite Andrew's suggestions.

Exactly!

Plus Warren is telling all the Wall Street a$$holes (PE, IB etc.) chomping at their bits to break up BRK after his tenure to "f**k off". Thus the reference to "the next hundred years".

I would go one step further than you. Even if BRK underperforms the S&P 500 index slightly over the long pull let's say over the next 10-20 years, I would be a very happy & content BRK shareholder.

If you are so unhappy with it, just sell & move on.