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Prices still rising.............. CBC News: April house sales surge 17% in Toronto, 37% in Vancouver Huge demand for homes and tight supply make for a seller's market in both cities The Toronto Real Estate Board reported 11,303 house sales in the Greater Toronto Area in April, and a five per cent surge in new listings as buyers decided to test the market. The average selling price rose 10 per cent year over year to $635,932, with a detached single-family home in the 416 area code region selling for an average of $1,056,114. Residential property sales in Metro Vancouver reached 4,179, compared to the 3,050 sales in April 2014, and up 2.9 per cent from March, which also saw record sales numbers. http://www.cbc.ca/news/business/april-house-sales-surge-17-in-toronto-37-in-vancouver-1.3061755?ref=fh,content.ighome.com

“Agreed. Give us at least the 40 cents/share that Mercer offered us and we were denied.” Yup. Fairfax is my biggest holding and they are a great company and all that, but some here believe they can do no wrong. However, there are a lot of us on this board who were stung by what happened with Fibrek and won’t soon forget it. As a shareholder I hope they did nothing illegal, but Fairfax’s moto is “fair, friendly acquisitions” they just never stated to whom. Rather hypocritical in my humble opinion. Thanks Quebec for the references as I look back at those pages from 2011and see how many contributors to this board were involved with Fibrek and who are still active here.

This investigation was announced last August. Why is it news again in April when it seems nothing new has been released - or did I miss something? August 1, 2014, WSJ, etc: “Fairfax Financial Under Investigation for Alleged Insider Trading” May 1, 2015, CTV News, etc: “Fairfax under investigation for insider trading” Was May 1st a slow news day or something? Given all this, there was a certain bad smell about that deal and at the very least it added a dose of reality to the “Fair & Friendly” aspect of Fairfax. That is the reason why I try to avoid buying companies in which Fairfax has an interest. I doubt there was personal wrongdoing on anyone’s part, but it was a nasty deal. There were a lot of unhappy Fibrek shareholders and I can't help but wonder if some of them have pushed this investigation which, whatever the outcome, doesn’t add anything to Fairfax’s reputation when you keep seeing headlines like the above.

My experience with deflation primarily involves interest rates and the real estate and construction industries. I have seen mortgage rates run from around 8% up to 20% and back down to where they are now. When interest rates were escalating quickly, people were in a hurry to buy or build before the rates went higher. When interest rates began to drop sharply, people would tend to put off major purchases waiting to get a better rate. It was primarily the periods where rates would temporarily stabilize that people would make their decisions. From this experience, my take would be that if prices start to deflate people will tend to delay major purchases waiting for better prices or for prices to stabilize. Of course this doesn’t apply to items like food, but it does apply to things like clothing, household appliances, vehicles, etc because people will try to get just a little more use out of what they have today before they buy. To suggest that people do not wait for lower prices really doesn’t make much sense. How many people will wait for something to go on sale before they buy? Of course there is a certain segment of the population that is wealthy enough that they don’t have to wait - but even those people may say, well if that yacht looks like it may drop from twenty million to fifteen million if they wait a few months, well....

I'm not sure people are being critical so much as being surprised at the move. I for one, look at this as an interesting development because Fairfax knows what they are doing. This may have been the plan from the start or it may be that they have something else in mind. I am sure we will find out what their game plan is shortly. But there is no justification to try to second guess these guys when none of us have access to the information Fairfax has so how could any of us be qualified to second guess them? As far as share price is concerned, it is simply a poll indicating what other investors think - and we all know how inaccurate some polls can be.

Market sure didn't seem to like the news. FFH.TO down 4% today. Wonder what they have up their sleeve?

I usually type the message in a word processing program (which also spell checks) then just copy & paste through “Reply”. But yes, I still will run into a time out when I forget. But “CTRL A” & “CTRL C” Then go out and back into Reply & then “CTRL V” will quickly copy & paste your reply back in.

That graph shows the Canadian house prices went through a period of 10 years where housing prices were stagnant -all during the 1990's? Boy I don't remember that - (edit) I guess that depended on where you lived.

Ben, I am playing devil’s advocate with many of my comments. I also agree with much of what you write. None of us have a crystal ball - unfortunately - the best we can do is make educated guesses. However, I would point out one unique point in investing in a house. Unlike most investments, it is an investment that you can use, enjoy and live in as the market settles out. What I don't understand is why people seem to assume that Canada consists of just Vancouver, Calgary, Toronto and Montreal. Prices in those cities are very high and while some or all of those cities may see a housing correction, that does not mean that the same correction will necessarily take place in all of Canada. Remember that those cities only represent about one third of the population of Canada. Two thirds of Canadians live elsewhere.

Couple of thoughts. It’s fine to sit out what is likely a bubble, but since this thread began (Feb 2012) how much have average house prices increased in say, Vancouver. Lets say 30%? So if prices suddenly drop by 25%, wouldn’t you still have been better off to have ignored Turner’s warning and have bought in 2012? One other thing. A while ago I suggested that one MAY have been better off to investing in a home three years ago rather than in the markets. Some disagreed. However, they may not be taking into account that the “profit” in the market is taxable when you sell. The “profit” in your home is not.

The subject of this thread was Garth Turner’s prediction of the imminent collapse of a real estate bubble in Canada. But this thread and his comments originated over three years ago.

"Maybe do an instructional youtube video on how to rotate your hand 90° for better videos." Great idea !!! AND we could put it on IQ tests. "Show which rectangle fits your TV/computer screen best, vertical or horizontal."

No argument there at all, but many people always use portrait/vertical to shoot everything - particularly videos.

Re: shooting video and pictures in vertical mode instead of horizontal... “It's a consequence of using the phone in portrait mode 95% of the time for almost every other task on the phone.” Yes, I realize this, but are people’s minds stuck in neutral? I mean really, if you are taking a picture or shooting video - turn the phone around it is not a complicated procedure. I guess that is what separates someone who takes photographs from someone who is simply trying to document something - but really do people put no thought into the end product? The funny part of this is that people will complain about picture quality and then shoot vertical and reduce the size and quality of their photo by about 50%. Go figure? As Crip says: This drives me absolutely crazy.

Agree with what Cageyone says. Why would anyone who wants decent photos use a phone? I have a pocket Fuji with an SD card that I often cary and a Panasonic FZ-70 for more serious photos. But a phone camera is only for when you don't have anything else and just want a quick shot. PS. Why is ist that almost everyone shoots video from their phone in verticle mode rather than horizontal?? Jeez its not rocket science that screens are formatted horizontally. Sorry, just a pet peeve.

You don't mean those Rolling Stones. Everyone knew those guys would never see 30. Sex, drugs, rock n’ roll and hard livin’ would surly kill them all in their 20's. Oh wait, they are still alive? Must all be in a nursing home by now. What? They’re still touring? Can’t be. They must all be in their 70's. Wonder if they eat sugar? They surely tried everything else :)

Fully agree with Parsad and Green King Why on earth whould anyone expect Prem to be right on every single investment, every single time? He may be one of the best investors out there - but he doesn’t have a crystal ball. And as has said before, he may have his reasons for investing in SD that are vastly different from yours. He may well be delighted to be see SD’s drop in price. As far as the Fibrek saga is concerned, there are differing opinions on it and there those here that are probably better equipped to give a critique on it than I, but the story and opinions are well reflected on the threads on this board. It is a good dose of reality for anyone that sees Prem as some warm, fuzzy, sweet little old guy who doesn’t have a ruthless bone in his body. It is a true “cautionary tale” for those who invest alongside with Fairfax. Investing in tandem with FFH is not necessarily a great idea. He may have ulterior motives for investing that are not only different than ours, but may be directly opposite to our goals. And, ‘long term’ in their eyes could be decades. If I invest in a company that Fairfax has invested in like Blackberry, it it only makes me look more closely. (kfh227 - probably right on about BBRY) PS: as for “Rule #1: Don’t lose money”. Horse Apples! That’s a nice “goal” but if anyone has been able to put that into practice 100% of the time they must be invested in GIC’s at 1%.

"even I have never had a stock pick go to zero" Oops, wish I could say that :) Okay Lucky, if you want an education in understanding how Fairfax operates, see if you can find an old share price chart for a company originally named SFK Pulp, later called Fibrek. Go back to the prices in the mid to late 2000's and then read the 47 pages on “SFK Pulp” in our board here: http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/sfk-pulp/ Then follow that up with the 72 pages on “Resolute Forest Products Commences Takeover bid of Fibrek” http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/resolute-forest-products-commences-takeover-bid-of-fibrek/ Or perhaps just the last 72 pages if you are in a hurry.

That brings up a very valid concern that I have about Fairfax. What happens to Fairfax if we get hit with a couple of huge catastrophic events? Actually that should probably read "When". But that is probably a subject for a thread of its own if someone wants to pose the question.

I find it ironic that over the past year or so some people think Watsa’s investments in Blackberry, Sandridge, deflation hedges, etc, etc have been terrible, terrible investments. The financing of the acquisition of Brit is all wrong and the fact that Fairfax issues a dividend is a terrible move that makes no sense. However, people said the same things about his Credit Default Swaps back a few years ago. But then they paid off big time helped make FFH into what it is today. When Watsa doubled down on Blackberry at around seven bucks it was the dumbest, stupidest thing ever! Obviously the company would be toast within a few months. But now it’s pushing $14 and is looking better every day. Inflation was about to take hold and those hedges were going to cost a fortune, but I haven't heard much complaining about the hedges lately. And SD? Well who knows? But what investor or group is right all the time? Some times these things take years to pay off and some never do. But these combined “mistakes” don’t seem to have hurt the share price which has risen by 17% in the U.S. and 29% in Canada in just four months. Don’t get me wrong. Criticism is healthy. But I think we should not expect Fairfax’s performance to be 100% right, 100% of the time, and to have their investment strategy clearly obvious to everyone immediately. Sometimes these guys do these investments for reasons that fit into an overall plan that is not so clear to us mere mortals. So my take on all of these “mistakes” is to not get fixated on their individual investments and just look at their overall progress. PS. One rule that many of us here have learned over the years. Be very, very careful of buying into any company in which Fairfax invests. Their objectives and timeline are unlikely to be in line with yours.

I agree 100% with what Watcher just said and to add to that... This dividend debate has appeared in numerous threads over the past few years and there may be a certain basic misunderstanding on this subject as several posters are not Canadians. Fairfax is a Canadian company. Aside from Canadian’s Registered Retirement Savings Plans, where dividends and capital gains are sheltered, we also have certain tax advantages that apply to dividends from Canadian companies. 1. Canadian tax payers receive a tax credit that applies to dividends earned from Canadian companies. 2. Canadians also have Tax Free Savings Accounts. In a TFSA we can invest a certain amount in a company like Fairfax and pay not taxes on dividends or capital gains. Between the dividend and 30% increase in the Canadian share price in the past few months, this has worked well. Also I would like to point out that no one here is offering anyone advice on owning shares in Fairfax. It is simply a question of why own shares in a company if you disagree adamantly with one of their basic methods of operation? I think that a good number of shareholders actually agree with Fairfax issuing dividends instead of paying huge salaries and bonuses. Senior management gets exactly the same compensation as every other shareholder and thereby provides the ultimate incentive for performance. Also this Brit acquisition may pay off in other ways as it will probably raise awareness of Fairfax as a world class player in the insurance industry.

You know this is really simple. If I disagreed so adamently with the way a company was run, I wouldn't be invested in the company. There are many of other companies out there that don't offer dividends and pay their execs salaries of millions of dollars plus obscene bonuses and then when the companies get in trouble they fire the execs and pay them even more to leave. Long ago Fairfax made the dicision to operate in a different and a very transparent way. The policy set 15 years ago is ultimately fair to all. As far as the Brit deal is concearned I get the feeling that it was something that came about very quickly and FFH handled it in a way they decided was best. If you don't trust or don't like the way management operates, why would you be invested?

Over time, all the Canadian banks are pretty much the same. For every customer that RBC pi$$es off and loses, they pick up another customer that one of the other banks pi$$ed off.

What about RBC & DS?

In general Prem is attempting to make all Fairfax shareholders partners in the company. How many other CEO's have not taken a raise in 15 years? While some here have posed very good reasons for not paying dividends, Fairfax is an exception.