cwericb

In no way am I suggesting that FFH management is, or should be, offering a dividend in an attempt to increase share price. I was only commenting on what exists. The fact that they DO offer a dividend makes the shares attractive to a wider range of investors. For instance there are any number of dividend funds out there who’s sole purpose is to invest in dividend paying stocks. I don’t know of any funds that purposely do not invest in dividend stocks. A lot of individual investors operate the same way. That is where the law of supply and demand comes in. The more people who want to invest in FFH, the more upward pressure on the share price. I believe that for many years Prem Watsa has been taking the same $600,000 yearly salary. That is a mere pittance (note: not to me!) in comparison to CEO’s of other companies the size of Fairfax. But management has chosen to offer a dividend rather than put themselves in a position whereby they must sell off shares every year to supplement their income. If they did not do this can you imagine the outcry that would follow every time Watsa sold shares in Fairfax? The same principle works for a lot of longtime smaller Fairfax shareholders who have a lot of their money tied up in Fairfax and do not want to have to liquidate shares every year for income. Others may not agree, but I am just fine with Prem taking his $600 K salary rather than soaking the company for untold millions every year. Essentially he gets paid the same as all of the other shareholders. That’s incentive and I am fine with that.

Munger, it is simply supply and demand. There are some investors who will not buy non-dividend stocks. Therefore if you don’t pay a dividend, you reduce the demand for those stocks by that number of investors. If you reduce the demand you tend to reduce the price. It has nothing to do with Markel, Birkshire or anyone else, it is simply the law of supply and demand. And yes there may be someone out there who will not buy dividend paying stocks, but has it stopped any of the people here that are complaining about the dividend?

I also suspect that dividends create demand, thereby increasing stock price. Some investors shy away from non-dividend paying stocks.

If I am right, it is just about exactly six years since the new board started.

"Yeah, sorry about that - I had an early transcript which said "is expensive". It's been corrected since!" Well thanks for clarifying that. Jeez, I was wondering what he was thinking.

Partner, I remember that Sanjeev went out to lunch one day and the stock price jumped, but how about refreshing the story for the newbies and the others of us who's memories are not as good as they used to be?

Congrats. You could be right about today's announcemnet but the fourth quarter results has likely had an impact. but another very nice day for shareholders.

Earlier in this thread I mentioned how there frequently seems to be a delayed reaction whenever FFH posts good results and based on that I bought in at about $510 a few days after third quarter results were posted. I believe Ericopoly did as well. The price jumped immediately afterwards. Some criticised that post, but now several days after the fourth quarter results were posted investors again seem to have a delayed reaction. FFH only eased up slightly but so far today it's jumped about $50 CDN.

Not really a fair comparrison. What happens if your stock drops by 50% and you lose your job? What happens if your stock drops by 50% and you do not have the funds to buy more? What happens if your stock drops to zero or close to it by bad management? Further, if your house drops and you lose your job, you still have to live somewhere. That is the difference. You are still going to have to pay either rent or mortgage payments. And, one other thing. Even in bankruptcies, few people lose their homes today.

“I fit in here. A decade ago, I could have afforded to purchase a home with cash on the west side of Vancouver. However, I rented instead. This allowed me to get aggressive in wealth building, both in investing and starting a business.” That is not the scenario I was comparing. Very few have the cash to buy a home in Vancouver. That is not the same as comparing a mortgaged home to renting. Yes, with cash you can compound it through investments. But the average person does not have that cash to invest, nor can he borrow it without collateral. He has to live somewhere and for most the choice is to either rent or buy. There also seems to be an assumption on this thread that all Canadians live in Vancouver, Calgary, Toronto or Montreal. Certainly prices in those cities are high. But the combined populations of those cities represents only one third of the Canadian population - two thirds of us live elsewhere where prices may not be as unreasonable. The extreme, of course is Vancouver. And it seems that people here frequently tend to reference Vancouver in their examples. In comparison to the rest of the country Vancouver seems dysfunctional when it comes to housing prices. But those prices are driven by a lot of unique factors not shared by most of the rest of the country. Vancouver prices are double the average and perhaps three or four times the price of many other areas of the country so it is a rather unique example. Now for those who believe that investments in the market and home ownership are essentially the same thing, try living in your investments. As I said previously, if home prices drop substantially, you still have a place to live. Perhaps the difference here is that I am talking about the average person, not wealthy, successful investors. Personally, home ownership has worked out well for me over the years. But I have never looked at my house as an investment, it is my home.

Yeah you missed my point. I’m suggesting that today’s prices may not be as out of line historically as they appear. A much higher percentage of today’s mortgage payment go towards actually paying down the debt.

Consider this 1. For those who have been renting over the past few years rather than owning - as of today, how has that worked out for you financially? 2. Do not apply principals of investing to home ownership. If the value of your shares drop by 50% tomorrow, half of your money is gone. Gone, disappeared, poof. If the price of your home drops by 50% tomorrow, you still have a place to live, its value to you is the same as it was yesterday. The drop in price is only a number. ... Is housing really more expensive than it was in the past? Years ago I paid a mortgage as high as 17.5% - and others paid higher. At that time you could pay your mortgage every month for five years and at the end of that period you had only reduced your total amount owing by a few hundred dollars. Nearly all of your payments went to pay interest. And that was with 20 year amortization rates. Today the reverse is true, most of your payments are going against the debt itself.

It is exactly two years since this thread started and back then ago the consensus was that Canada was in a housing bubble about to pop. Yet not only has there been no pop, but prices have continued to rise. I am not saying that there are no serious concerns nor am I suggesting that there may not be a pricing correction in the Canadian housing market. However, the Canadian market is not quite the same as in the U.S. and many other countries. A lot of people here have a reasonable amount of equity in their homes above their mortgages and many mortgages are insured by the Canadian Government (CMHC). In the past we have seen CMHC step in to help stabilize prices during a correction and when prices dropped in the past they rebounded fairly promptly. Remember the law of supply and demand. At one time we used to have nuclear families where 2, 3 generations would live in the same house. Now it seems everyone has their own house or condo. In general our population is well educated and many singles live in their own homes and condos. Today’s high divorce rates means you now need two houses where previously only one was needed. Immigration also drives our housing industry. Here is something else that seems to be overlooked. Our houses are more expensive to build and probably last longer because of that. They have to meet high snow load criteria, withstand high winds and very cold temperatures. That means a high quality level and makes them more expensive to build. Materials are also expensive because they must travel greater distances to and service smaller markets in many cases. Our houses must be very well insulated, require much more expensive heating systems, and because our houses are built tight we often require air exchange systems to keep the air fresh and humidity levels in check. So perhaps our housing is expensive, but there may be more value in them as well. Just my opinions.

Just thought I would re-post the original link that predicts participant's expected lifespan since some may have missed it http://gosset.wharton.upenn.edu/mortality/perl/CalcForm.html?utm_medium=Newsletter&utm_source=Personal%20Finance%20Reader&utm_type=text&utm_content=PersonalFinanceReader&utm_campaign=123555881

I hate to be pessimistic but you guys that think you may live to see 150 or 200 are really, really optimistic. Aside from that I wonder what the odds are of being hit by an asteroid, a tsunami, a massive earthquake, a new disease, a major war or the deadly repercussions of global warming? And if we are talking about the next 100 years what about the after effects of the collapse of our financial system.

Here's a thought... Longer life span will effect retirement age, retirement savings, pensions and government programs like social or old age security which are going to need to be addressed quickly. Not that many years ago, sixty was considered “old”. Anyone living beyond one hundred was a real rarity. Now most industrialized countries see a rate above 20 per 100,000 living beyond age one hundred. In Japan that number is fifty-six! If my math is correct, with a Japanese population of 127.3 million, that means there is over 71,000 people in Japan alone who are over one hundred. People in this age bracket could have well been retired for at least 40 years. How many present pension plans/savings/social programs are geared to support this? How many here are saving for a retirement that may last up to or beyond 40 years?

Hope you're saving your money tombgrt because you have a 25% chance of living beyond 94 years ! :)

This is pretty detailed. If a person knew just how long you were going to live, saving for retirement would be easy. Of course if you knew when you were going to die you would probably worry yourself into an early grave as you got closer to the date - invalidating the whole process. http://gosset.wharton.upenn.edu/mortality/perl/CalcForm.html?utm_medium=Newsletter&utm_source=Personal%20Finance%20Reader&utm_type=text&utm_content=PersonalFinanceReader&utm_campaign=123555881

"It is not relevant because they cannot dictate oil prices..." Perhaps they cannot dictate oil prices but they certainly can influence them.

"That is not relevant at all. First of all SA has huge reserves. Second, if you look at the game theory, it would not make sense for them at this point to cut production." I don't see how those factors would be irrelevant. I may be wrong but I believe that numerous times in the past SA/OPEC has cut production to support prices. This time they did not because other oil producing countries took advantage of this and let the Saudis take the loss in supporting prices.

Wellmont says: ... “don't look at what it costs SA to produce oil. look at what it costs to finance their society.” Exactly! Isn’t this what we should be looking at when discussing the price of oil, or where it’s going? It’s not the price of production, but the excess that has been supporting some of these oil producing countries. Oil accounts for 50% of Saudi Arabia’s gross domestic product, and about 85 per cent of their export earnings. Sure they may be able to produce oil at $30, but if they have been selling it at $100 that $70 difference has been supporting the county’s standard of living. But at today’s $45 oil, that $70 has already been cut to $15. How long can some of these oil producing (read oil reliant) states like Saudi Arabia, Venezuela, the UAE and others continue to allow the price of oil to drop before they have to cut production in an attempt to increase the price? Perhaps an oil company may be able to survive and break even with oil at their cost of production, but how long can a country that relies on the profit on that oil, continue when that margin is cut by 80% or more? How long before their citizens demand change? To me this would seem to indicate that we are very likely to see a bounce in the price probably sooner than later. The only problem that I see in this scenario is that I believe that one of the main factors behind low prices is primarily political, to punish Russia and to deprive Muslim extremists of funding. But how long will that last? That is my 1.5 cents worth (I’m Canadian).

Also............... Property held in a registered account such as an RRSP or TFSA is not included in Specified Foreign Property. Foreign investment property also does not include: 1) any property used mainly for personal use and enjoyment, such as a vehicle, vacation property, jewellery, artwork, or any other such property, and 2) assets used only in an active business, such as a business inventory or the equipment and building used in a business.

“ how do you evaluate the execution of your broker?” “I'm in favor of it.” Good one Gamecock! Reminds me of a commercial that used to run a few years ago that went - “For years I used a broker and the only thing that got broker was me”

Things have changed. Bought a new car two years ago. Previously always bought one or two year old with low mileage. But now it there seems that there is no longer enough difference between new and old. The same vehicle, two years old, was only about 15-20% cheaper (if that). But the new one is - brand new - has no miles on it and comes with a 3 year bumper to bumper warranty and 5 year power train. That's just not enough difference.

Probably sold out. However, you can still license his “least expensive strategy” beginning at just $900,000. http://seekingalpha.com/author/harry-long