cwericb

"Even after Friday's spike, neither Fairfax nor Aecon look particularly expensive: " Fully agree with you LC. I also have a position in ATRL which I have had for a couple of years and it is atill doing pretty well and I also plan on holding onto it as well.

Well, days like Friday just don't come along often (if ever) and I have to admit that I am still somewhat in shock. I am just a little guy who doesn't profess to really know much stocks and essentially I just buy a few and rarely sell. My portfolio has just 19 stocks and Fairfax represents slightly over 50% of my holdings so a jump of 9% yesterday certainly made for a very good day. But my third largest holding after Fairfax and Royal Bank is Aecon Construction (ARE). Yesterday Aecon jumped 18.7%. Further contributing to a great day, were five of my other stocks that each gained in excess of 2% on a day when when the Toronto Stock Exchange was up less than half of one percent. So with a lot of good luck and much help from this board through the years, (Thank you all!!), I am up 46.25% so far in 2024. Fairfax is still looking pretty good and I have yet to sell a share since I made my initial purchase in 2007 at around $215. (Yes capital gains is going to kill me.) But what I don't understand is seeing board members share their portfolios here and notice some where Fairfax is not listed among their holdings. I mean not only does the name "Fairfax' appear in the very title of the board, but COBF must contain the most detailed and thorough examination of any company listed on the TSX. PS. In 2006 I had never bought a stock. But in looking for an investment, I stumbled on one of the predecessors of this board set up by Sanjeev. Followed it daily for about a year and by late 2007 jumped into Fairfax with both feet, so I owe a big, big Thank You to Sanjeev and fellow members here.

I know what you mean, but perhaps not completely meaningless in this case. Track record is important here as there are a lot of investors out there, that as soon as they hear "Fairfax" they think "Oh yeah, thats that Prem Watsa guy. Wasn't he the Blackberry guy? And wasn't there something about hedging a while back?" I don't know how many times over the past few years I have seen this come up in discussions about Fairfax. So I kinda think that pointing out that FFH is outperforming its peers certainly doesn't hurt in this case. JMHO

Just my 2 cents worth, but it looks like Kirk and Leslie are headed north towards Europe and should settle down before doing any serious damage. Also, a serious hurricane in November would be somewhat of a rarity, however waters are warmer. Since hurricanes are now travelling further north, if we can just get a hard frost it will take a lot of the leaves off the trees and that would considerably reduce damage, plus a lot of the weaker trees have already fallen from previous hurricanes. The optimistic view.

TSX as of Oct. 02/2024 Fairfax Financial................. FFH.............. 52.76% Royal Bank......................... RY ................ 12.27% Altius Minerals.....................ALS ................ 4.68% Aecon Group...................... ARE ................4.63% Terravest Industries.............TVK................ 4.15% Stelco Holdings...................STLC ..............4.00% AtkinsRealis Group............. ATRL.............. 3.38% Berkshire Hathaway............ BRK.B ............2.44% Suncor Energy.................... SU...................2.06% Fairfax India........................ FIH.U..............1.98% Clarke Inc............................CKI ................ 1.91% Fortis Inc..............................FTS................1.23% Generac Holdings............... GNRC ...........1.08% Whitecap Resources ...........WCP ............ 0.73% Cenovus Energy.................. CVE ............. 0.69% Crescent Point.....................CJ................. 0.64% Saputo Inc...........................SAP............... 0.58% Cleveland-Cliffs...................CLF............... 0.35% Think I'm up around 36% 2024 to date. Dividends will add another 2% by end of year.

What truly amazes me is the number of members of CBOF who DO NOT own shares in Fairfax. Have often seen people share their portfolios and FFH is missing. Head scratcher for me.

Well, hurricane season runs June 1 to November 30 so we are well past the halfway point. This year it was predicted that we would see above normal hurricane activity, but that has yet to happen. (There is already a thread here specifically devoted to this.) Living on the Canadian East coast and having lived through both Hurricane Dorion and Hurricane Fiona in the past five years one tends to track these things fairly carefully. If we can just get by for another month or so we should be good for this year. When one finds that "Hurricane Alley" has moved north to include the island on which you live AND your largest investment is Fairfax, hurricanes do tend to get your attention.

Viking asked "But how many board members actually invested in Fairfax in 2020? Or 2021? Or 2022? Or 2023?" Perhaps there are a fair number of board members like myself who have passed on the opportunity to buy more Fairfax shares simply because we have watched our present shares grow in value to a point where Fairfax now form an increasingly larger and larger percentage of our stock portfolios. Personally I am slightly over 50%. However, as a small investor, I might be more tempted to add if shares would split to a more reasonable price per share. For instance a ten for one split would reduce share price to around the level of Canadian banks. JMHO

Putting things in perspective, here is a 20 year chart of Fairfax share price verses the Toronto Stock Exchange for the past 20 years. Factor in FFH yearly dividends and the company has done pretty well for long term shareholders over the years compared to the Canadian market in general.

The best way to get a feel for the details of the Fibrek deal would be to scan through some of the posts on the board at the time https://thecobf.com/forum/search/?q=fibrek&quick=1&updated_after=any&sortby=relevancy&search_in=titles

Yes you are correct in that, my bad, but it was Prem calling the shots. If I remember correctly there was a lot more to this whole mess than meets the eye. But I have a lousy memory and can't be bothered to read all the old posts on the matter so I will let the court judgments speak for themselves.

Re: Fibrek takeover, it seems pretty simple: 1) Shareholders of Fibrek took Fairfax to court because Fairfax underpaid shareholders. 2) The initial Court ruling found that Fairfax should have paid shareholders 100% more than they paid. 3) The appeal court found that Fairfax should have paid 60% more then Fairfax paid. 4) Not one, but two courts both found that Fairfax substantially underpaid Fibrek shareholders - and NOT by small percentages. Bottom line, Fairfax grossly underpaid shareholders for their shares and that to me, seems neither Fair nor Friendly. For some background: https://thecobf.com/forum/search/?q=fibrek&quick=1&updated_after=any&sortby=relevancy&search_in=titles

TVK

Like your way of thinking. Too overweight in FFH but looking for a chance for more TVK.

Share price down $150 in 2 days. Good thing we had a decent quarter. Not the first time Fairfax released good results on a crappy market day. Sucks. Oh well who knows where the bottom is in this market. Be embarrassing if Brett Horne and Carson Block turn out to be - never mind, lets not go there.

So bottom line, the Court found that the price paid by Fairfax should have been only 60% higher rather than double?

Yes the Fibrek case was neither fair nor friendly. But you don't have to take my word for it. Large shareholders sued Fairfax, took the matter to court and won. The Court found that the take over price was neither fair, nor friendly, nor legal. The Court also found that Prem's testimony was evasive and made no sense. If one reads the actual judgement I am putting the Judge's comments mildly. If memory serves me right, Fairfax appealed and also lost the appeal. In the end, the Court found for the Plaintiffs (the large shareholders of Fibrek) and adjusted the sale price to double what Fairfax got away with paying. Unfortunately that only applied to the shareholders who were part of the lawsuit and the small shareholders got screwed by Fairfax. Now we all make mistakes as did Prem in this case. But from the Fibrek take over many of us learned, or should have learned, that just because Fairfax may have a nice sounding motto i.e. "Fair and Friendly", a motto is no guarantee that all takeovers will necessarily be treated as such. "He who ignores history ...."

Just before we leave the Fibrek situation lets not let the passage of time distort what actually happened. From the Financial Post: Prem Watsa's 'mindboggling' explanation of forestry takeover prompts judge to award shareholders millions Testimony by Watsa was so problematic, judge awarded some Fibrek shareholders $13.5 million Canadian investor Prem Watsa was “purposely forgetful” and offered a “mindboggling” explanation in court testimony explaining why he backed a low-ball bid for a pulp mill in a sale to Resolute Forest Products Inc., a Montreal judge concluded in the seven-year-old case. Testimony by Watsa, chairman and chief executive officer of Fairfax Financial Holdings Inc., was so problematic it helped convince Montreal Superior Court Justice Michel Pinsonnault to award some Fibrek Inc. shareholders $13.5 million (US$10.2 million), plus interest. Fairfax “was in a blatant conflict of interest situation,” the Quebec judge said in his Sept. 26 ruling. “Watsa’s testimony was so vague and filled with so many uncertainties, unlikelihood, unsubstantiated denials and contradictions that it is very difficult for the court to give credence to the affirmations and explanations of the witness whose memory appeared to be failing on the most crucial aspects of his testimony,” Pinsonnault said. A spokesman for Fairfax disputed the judge’s conclusions, and said the company may appeal. “The decision distorts the facts, does not make business sense and unfairly characterizes Mr. Watsa’s testimony,” said Paul Rivett, Fairfax’s president. “All of Mr. Watsa’s statements were true and Fairfax acted throughout with honesty and integrity. We expect that the ruling will be appealed.” The case centred around Resolute’s December 2011 offer for Fibrek. Fairfax was the most important shareholder and insider of both Fibrek and Resolute, according to the judgment, having helped both companies survive financial difficulties in 2010. Toronto-based Fairfax agreed to sell its 33 million shares to Resolute for $1 apiece — locking in a price that dissenting shareholders considered too low. The judge considered the fair value of Fibrek shares to be $1.99, and found Watsa’s explanation for accepting less “mindboggling.” “It was obvious to the court that the witness was a reluctant witness not pleased to have to testify at the request of the dissenting shareholders’ lawyers who had accused Fairfax of being complicit with Resolute in the abusive hostile take-over bid scheme to the detriment and prejudice of the dissenting shareholders,” the judge said, adding that the court also found “that Watsa often appeared to be on the defensive and when pressed on crucial factual elements, the witness hastily took refuge behind ‘I do not remember’ or the like.” Watsa had decided that Fairfax would sell its Fibrek stake in February 2011, but didn’t want to do it on the open market, according to the ruling. So he seized the opportunity in May of that year to sell the stake to Resolute. The judge said the cash price was “of no significance” to Fairfax because it would convert the Fibrek shares into Resolute shares. The other shareholders were bound to a “conveniently” low cash price offered to and accepted by Fairfax, the judge said. Bloomberg News Doug Alexander Published Sep 30, 2019

"There are plenty of examples of people being involved with Fairfax subs that did not feel "fair and friendly" with the take-outs/take-unders/sale of share of the underlying investments you could have been coinvested with them on." Yup. I try to stay away from companies in which Fairfax is involved. However, more than once Fairfax has become involved with companies that I already own. Past history would show that the "Fair and Friendly" refers to the Fairfax side of deals and not necessarily the other side. Some of us have a long memory, but you only have to go back to the Fibrek situation to see how shareholders got royally screwed by Prem and Fairfax.

The Muddy Waters case against Fairfax would seem to have been a pretty obvious attempt to move FFH's share price lower simply to make a quick buck. Much of their BS 'facts' about Fairfax were almost immediately proved wrong and shortly after MW's short attack, FFH's share price continued on to set new highs. There should be some sort of a price to pay for that type of blatantly obvious effort to depress the share price of a company. If that wasn't an attempt to manipulate the share price, I don't know what would be. However anyone who was a fan of Carson Block should have had their eyes opened by that little fiasco.

For those who question Fairfax dabbling in the Canadian furniture industry, FFH has some experience in this space. Several years back Fairfax picked up a major Canadian furniture chain called The Brick, a name familiar to nearly every Canadian. Fairfax put Bill Gregson in to run the ship. Gregson shined the company up, turned it around and within 2 or 3 years Fairfax successfully flipped The Brick for a nice profit. I was following this closely at the time not only because I had shares in both companies but one of my kids was running The Brick's largest store at the time. So it is not like Fairfax doesn't experience in the field. These guys know what they are doing.

Really? Does anyone really think that the team at Fairfax just woke up really stupid the other day and decided to invest in some awful company? Might one suspect the team at Fairfax just might know a whole lot more than I (and probably every other person on this board) about the companies in which they decide to invest and their future plans for that investment? Remember that stupid pet insurance investment? And any idiot could see that getting involved in the terrible steel industry was going to be a disaster. Perhaps this seems a bit odd on the surface, but these guys just didn't suddenly get stupid. So personally, I just kinda trust Fairfax to know what they are doing.

Interesting isn't it that Cubans can pretty much travel the world while Americans are essentially restricted from traveling to Cuba by their government. Freedom?

"Disappointment" or impatience? Some time ago Prem Watsa clearly warned all of us that future results would be "lumpy" while building the company to where it is today. And that is exactly what happened. So I am not sure it is fair to criticize them for not concentrating on the price of their shares while doing that. The proof, as the old saying goes "is in the pudding" and the 'pudding' is the 300% share price increase we have seen in the past 3 years. Also it would seem a little disingenuous to look at Fairfax's performance during that 10 year period in isolation. Put things into perspective. During that same 10 year period, Fairfax actually outperformed the Canadian stock market. I guess in short, as one of those who stuck with Fairfax during those ten years, I have not been disappointed. Frustrated at times for sure, but in the end, not dissappointed.

With all due respect SJ, I think you are cherry picking dates. Let's compare apples to apples. If you want to take the January 2010 share price of $392, then we should take the January 2020 share price of $585. So if one bought FFH in January 2010, his holdings would have increased by $193/share - or by 50% ten years later. But add in the $100 from accumulated dividends and we get a total return of $293/share for a total return of 75%. But, if my figures are correct, during the same period the TSX Composite Index rose by only 45%. So during "the lost decade", Fairfax actually exceeded the performance of the TSX. But Fairfax wasn't exactly sleeping during the decade. They were building a company that from January 2021 to January 2024 produced a phenomenal share price increase of 300% in just 3 years. So I certainly wouldn't consider the decade as 'lost'. Two quotes come to mind: "Patience is a virtue" - William Langland "Results will be lumpy" - Prem Watsa