cwericb

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

Yup, well aware of that chart as a long term investor in Fairfax (since 2007) who has yet to sell a share. But what has bugged me over the years was all the bitching and complaining on here about "Fairfax's lost decade" and the poor decisions FFH had made (hedges). So I am just wondering where that "lost decade" is on this chart? Furthermore, one might suggest that this "lost decade" (if such a thing existed) was actually time well spent framing the company into what it is today. Also, what some here may not realize, is that over the years there were several times when markets tanked, yet Fairfax share price stayed constant or actually increased balancing off shareholder's losses in the rest of their portfolios and helping shareholders sleep at night. Just my humble two cents worth.

Luca, let's face it, any of the thousands of members can say they have XXX million shares no matter how many shares they actually control, so it really only takes a couple of posters to say they control 100,000,000 shares to throw the numbers way off. You have no way of knowing if they even have any shares at all in the company. And that's just members of the board never mind guests, who may enjoy screwing with the numbers.

55.1% Fairfax, 2.3% Fairfax India. Relative to my stock portfolio.

Just my personal opinion, and I have said this before, but I think a 10 or 20 to one stock split would open up Fairfax to a whole lot of smaller investors and I also believe it would have an immediate positive impact on share price. However it is probably not in the cards, perhaps due to misplaced ego? Share price for Canadian banks split every so often and mostly run in the $75 - $150 range, so why shouldn't Fairfax? I have not seen any negative effect on the banks. Most small investors eventually become larger investors, but when one single share runs in the $1,500 range one would expect that a lot of people just give Fairfax a pass. With a share price in that range it makes it difficult for the little guy to adjust his holdings up and down because you have to do it in $1500 increments. A split would also make it easier for an investor to divide their Fairfax holdings between their different accounts - TFSA, RRSP, RESP, etc. I bought my first Fairfax shares at around $200, but if the shares were in the $1,500 range at that time I am not so sure I would be a shareholder today. A lot of people on this board hold Berkshire shares, there probably would be a lot fewer shareholders here if there were no ".B" shares. Doesn't the same principle apply?

Bottom line here, right after the MW report was released there were several posters who did not regularly post on this board, if ever, and who crawled out of the woodwork who argued that MW was a very reputable firm and were legitimately exposing the shady practices of Fairfax. One could go back and supply quotes, but why bother.

Alright, I know most of you guys are probably way too polite to point this out but I’m not, so here goes.... I am sure that some here noticed a sudden influx of new posters on this board immediately after Carson Block came out with his ill-informed garbage about Fairfax. Seemed like these new posters just couldn’t restrain themselves in pointing out that Muddy Waters / Carson Block had confirmed and exposed their ‘suspicions’ that obviously there was something shifty about Fairfax. Carson Block was beyond reproach and a force to be reckoned with. Some suggested that the $160 share price drop was only just the beginning. One even suggested he wanted nothing to do with FFH as the price drop had a ways to go yet. Well, if their appearance was driven by jealousy from not buying FFH sooner, it seems their error was compounded by not taking advantage of that substantial and very temporary dip. Unfortunately, as Fairfax once again set new highs, the rest of us will just have to bite the bullet and put up with the fact that ... well ... we will have to pay more income tax on our Fairfax profits. Meanwhile Mr. Block's insights remain ... let's say, Muddy.

I agree, I doubt they would have the balls to actually confront Fairfax on the facts. However. I believe at the last quarterly meeting only one question was received and recent meetings haven’t drawn a lot of interest from analysts. Fairfax has built up a bit of an image of being just a boring old insurance company so perhaps MW has done us a favour. Because, the MW report has actually focused a lot of international attention on Fairfax right before the annual meeting. As BNN said “...the whole saga makes the company’s next earnings report, scheduled for Friday of this week, a must-read. So, we will.” As Oscar Wilde put it: “There's only one thing in the world worse than being talked about, and that is not being talked about.”

Putting things in perspective, isn't share price presently back to where FFH was about three weeks ago?

I was wondering the same as he previously admitted he didn't know much about Fairfax - which I found surprising given the name of this board and the fact that he has been a member for a couple of years. He seems to have formed a snap opinion of Fairfax based simply on the MW report. There is a wealth of information on these pages if he really wanted to offer an educated and informed opinion on the subject. It is always good to see contrary opinions, but when they are obviously and admittedly ill informed then they serve little purpose.

Thank you. Ditto this.

Many Fairfax shareholders are now concerned about FFH being overweight in their portfolios. Obviously the reason we are overweight is primarily due to the excellent performance of the share price. Unless one believes Fairfax shares are going to suddenly reverse direction, being overweight is not necessarily a bad thing. I have owned shares in Fairfax for 17 years, not sold a share and added over time. Looking back over the years, yes there have been periods when the market surged and FFH shares did not. But people tend to forget that there were also quite a few periods when the market nosedived while FFH shares surged or maintained their value, and that often helped me sleep at night. I am just a dumb average joe and by no means a sophisticated investor. Had I traded in and out of Fairfax over the years, there is no way I would have been able to predict when to have bought and sold to my advantage. So for me at least, I am not going to sell my shares simply because the company is doing so well. JMHO

New high ($1302) this morning and high volume (nearly 200,000 shares traded). So far.