cwericb

As far as I can see Harry wrote two books - so far. One was 24 pages and the other 36 pages and I believe he was asking over $200 each which worked out to about $10 per page. Of course that may be a bargain considering it is billed as "The Most Powerful Trading System Ever Publicly Revealed". I didn't try downloading it but you might be able to download it here? http://collectingbooks.net/1559-you-re-welcome-planet-earth-the-most-powerful.html

I believe that Harry's book is free now giving credence to the saying "Advice is worth what you pay for it" ?

mrholty that was one of the most interesting posts that I have seen here for quite some time. Thank you for posting. To get back to the subject of concentrated portfolios, I think one really rolls the dice with something like that. Here’s a story I watched first hand. I may not have all the facts 100% as they happened, but here is the basic story. Some may recognize it. This occurred quite some time ago. My father was a branch manager for a very reputable Canadian financial institution for 30 years and was on first name terms with the senior executives of the firm. During his time he took advantage of every stock option offered. While these investments cramped the family financially somewhat, it was an investment in the future. The company was very successful to the point where there were expectations of a merger with one of the major Canadian banks. By the time Dad retired his holdings represented serious money which in today’s dollars would have eventually approached seven figures. Then came a new CEO with sweeping changes in mind. He embarked on a major expansion into the U.S and the stock continued to climb. But things didn’t quite go as planned, the stock price stalled and then began to slide. By this time Dad’s health was failing and as he watched the value of his portfolio drop maintained confidence in the company he had worked with for 30 years. He assured me that the drop was temporary. It’s not that easy to sell off something you have confidence in, even when logic may tell you otherwise. Unfortunately, not only did the expansion plans turn into a disaster, but other problems hit the company. At same time Dad started to show some mild symptoms of Alzheimers. And Dad wasn’t the only one with problems as shareholders began questioning the CEO’s mental status. The stock dropped to less than half its high. That may not seem too bad until you put it into dollars and cents. He was very depressed about this and kept thinking it would surly recover and yet the price continued its fall. He was losing sleep by now but the share price had dropped so far it was even harder for him to sell out and he just couldn’t make the decision to get out. After all this had been one of the more respected and successful companies in the country. I felt that if I continued to urge him to sell and then the price recovered I would never been forgiven. To cut to the chase, when the CEO took the stage at the annual meeting attended by many VERY respected men and women, he went into a rant laced with four letter words that left his audience speechless. By this time the company had reached the point of near insolvency. A new CEO or trustee was appointed and the company was broken up. The shares weren’t worth enough to buy a new car. Dad passed shortly after and while this wasn’t the cause, the stress certainly didn’t help.

My investments are split into two portfolios, one consists primarily of mutual funds and is partially managed by a “financial advisor” because I don’t have enough faith in my own abilities. The other is primarily stocks that I manage myself. The ‘professionally’ managed stuff is up about 7% and my own stuff is up about 15%. Now that would be fine if my self managed investments were particularly aggressive compared to the ‘professionally’ managed investments, but when the crap hits the fan the ‘professionally’ managed stuff always drops much farther and faster than my own investments. However, the markets have been so volatile lately who knows where things will be in a few weeks.

Never mind Amazon... Look at the effect technology is having, and will have, on city dwellers. Where I live, you can build a large brand new home on or close to a beach for about a quarter of the price of an older smaller home in say, Toronto, Calgary or Vancouver. We have high speed internet, fiber op, and good cell coverage nearly everywhere. More and more people are moving away from those high coast major centers to low crime and laid back areas such as we have here on the East Coast. Case in point. I recently met a couple who had moved here from Western Canada. They sold their expensive home out West and now primarily work from their newly restored home on a beachfront property here. He is in charge of staffing and equipment for a regional airline based in Western Canada. Between his computer and his cell phone (with a Western Canada area code) few people know that he is actually 3,000 miles away and not stuck in some downtown office in a major city. He spends about one week a month in his physical office out west. His wife also works from their home for another company that is located in a third province. So the impact I see from this is that as people move to the friendlier, less expensive areas of the country, prices will tend to equalize throughout the country. This will also have other impacts such as reducing traffic congestion, parking, and other related problems. This will not happen overnight, but the change in lifestyle will appeal to many. But to come back to Amazon, between Amazon and eBay, shopping is no longer limited in the smaller population centres such as we have here and that is just one more reason for a population shift.

Believe Norm is a board member here. Good article.

Not a jackpot perhaps but putting things in perspective, a 35% gain in the past 12 months is pretty respectable. One year ago FFH was at $424 C$, to day it is $575 C$. What makes it more significant is that FFH’s hedges still offers a fair amount of protection should the economy see a sudden down turn. On the other hand, that elusive 100% gain could disappear pretty quickly if the market dropped a few thousand points.

Its amazing how comments on this board can get so twisted from their original intent. The point here was simply an observation that, in a market that can react so drastically to some small rumor, that it is surprising to see that when FFH posts results - good or bad - there seems to be times when that same market can be quite slow to react when FFH releases results. This happened again this quarter. The observation from that is PERHAPS this may offer an opportunity to make money. I may have been under the erroneous impression that we were sharing observations to promote discussion and provide any insight into buying opportunities. Just my two cents worth. Like PETC, I would like to know what prompted ERICOPOLY to pick Monday as a point to buy such a large position?

"My goodness. Such confidence astounds me!" Well that confidence just made ERICOPOLY over $100,000 in two days and earned me about 8% in four days. I take it you didn't have the same confidence in FFH? :) "There's very little that's obvious in investing" So very, very true. That is the point of the post I made yesterday. There are very few occasions in investing that something seems obvious. In this situation it seemed reasonably predictable that FFH share price would rise again after the results. The results were better than expected and tended to indicate that FFH was on the right track and they also backed up their ratios from the previous quarter which was not necessarily expected. But the share price stayed relatively steady during the next day or so. But if I remember correctly there have been other times that the market has been very slow to react to FFH's results. So it was that delayed reaction that was surprising and afforded the opportunity to make a quick return. Similarly, if company A reported unexpected dismal results, wouldn't it be reasonably "obvious" that the share price would drop?

Yes… Obvious… Then why when I asked if it were time to buy FFH again I got almost ridiculed??! ;) Gio Not by me Gio. I read those posts too and there seems to be a bit of anti-Fairfax out there in some quarters. So be it. Glad I stepped in again and bought a few more shares. Some people are still holding the hedges against Fairfax. I see those hedges as a plus because they offer an unsophisticated investor like myself some protection against deflation. If we don't have deflation than FFH still has their investment income and their improving insurance performance.

"I'd say I waited until the last hour before my Monday purchase at $511:" - ERICOPOLY Wow - 3,000 shares! Congrats! Wish I had the confidence to have jumped in with both feet (but my feet will never be as big as yours) :) However, I am still satisfied with the gain on my few additional shares. But my point was, and I think you will probably agree, FFH posted good returns backing up the improvements shown in the previous quarters but the market once again seemed to be very slow to react. Also FFH seemed to have been slightly undervalued for the past month or so. It just seemed to be rather obvious that it was almost inevitable that there would be a quick jump in share price.

Crip I have noticed this for a while now. Results were out Thursday and they were probably better than expected so it wasn’t really rocket science to come to the conclusion that the share price would pretty well have to rise. But I have noticed this delay before and there seems to be a delay before the market takes notice and it often several hours if not days before Mr Market reacts. I have seen this happen enough that this time I put my money where my mouth was and bought some more shares shortly after the market opened Friday morning for about $510 (CDN). Now on Tuesday FFH closes at $546 on a day when the TSX was down one percent. That's a 7.25% gain in just a couple of days on a reasonably stable equity. Certainly I could have picked up FFH at a lower price prior to the third quarter results and gambled that the results would be good, but this was after the results were released making this buy almost a sure thing. Has anyone else noticed this? eb

Perhaps this has been mentioned already. You are pretty well fully invested, the market tanks and you are thinking of how much money you have lost, people start telling you what a great "investment opportunity" it is.

"The vaccines could be purchased with the enforcement savings from decriminalization of prostitution. That cost (enforcement/incarceration) is born by all but is due to the moralists insisting on these vice laws." But hey, here in Canada Peter MacKay, Minister of Justice, has announced that he is going to outlaw and completely stamp out prostitution. Good luck with that Peter, it isn't refered to as "the oldest profession" without good reason. It drives me crazy that we spend billions tilting at windmills and think we can use legislation and the police to outlaw all guns, stop prostitution, and ban the use of drugs like marijuana. Did we not learn anything from the prohibition era?

Happy Birthday and another Irish blessing - May you be in heaven half an hour before the devil knows you're dead!

Crip, I have also been tempted to dump FFH in the past simply because there have been times when we have seen some pretty large swings in the price. But you just never really know which way the share price it is going to go and if I sold out and the price went up instead of down I would find it hard to make the decision to get back in at a higher price. So I decided some time ago that FFH was a long term position for me. I have three - FFH.TO, RY.TO & BOX.TO and all have been good to me. From their past record and their ever increasing long term diversified investments I have confidence in the company’s growth and upside potential. But as Prem has said, returns may be “lumpy”. Additionally I also get some protection against a market downturn through their hedges. So It offers a decent potential for growth, some protection on the downside and on top pays about a 2% dividend which is as good as I can get in any guaranteed investment. You’ve been invested in FFH for a long time so you know all of this. Many times I have asked myself the same question as you until I decided to just put FFH on the back burner. When there is a substantial dip, rather than getting disappointed or questioning my strategy, I pick up a few more shares. I suspect that you are like me. I look at 500+ and wonder if I should cash in my chips, but then I remember that I have already made the decision a some time ago to just ride it out and see where this takes me. So far the ride has been good.

Hope my little bit helps, keep up the good work!

“Knowing that I have something in my portfolio that will mint money in the event of a severe downturn makes it a lot easier for me to be aggressive in other areas without worrying.” - zachmansell Exactly. Not being nearly as sophisticated an investor as many here, I feel that FFH is a good and simple way to help protect myself in the event of deflation and gain on the upside at the same time. So, for me at least..... 1) it provides an uncomplicated way to hedge against the downside. 2) it currently produces an annual dividend better than a GIC 3) in the seven years since I bought FFH the DOW has risen by 16% while FFH share price has increased by 122%. What about the future? Who knows, but FFH has made a lot of interesting investments, developed a world wide reputation with increased visibility, improved their insurance performance, and have expanded their presence in the global insurance industry. Works for me. Wish I owned more. eb

Just FYI that article was written back in Mid-January and I believe it was discussed here at that time.

Altius and a little Alderon.

Perhaps I am the only one confused by this, but I thought I would throw this out there in the hopes of improving the board. This board is Canadian based but has a world-wide membership. This can sometimes lead to confusion and misinterpretation when readers do not know what country you are from. For instance: Stock prices - are you talking about Canadian dollars, US dollars, etc? Recently there was confusion in a discussion on mortgages as rules differ substantially from country to country. The same applies to political discussions. On the topic of the Ukraine, I don’t know if we have any Russian members but their outlook might be rather divergent from that of an American. Stock symbols. CFX in Canada is Canfor Pulp, in the US it is Colfax. Or the reverse may be true. Blackberry in the US is BBRY but in Canada it is BB. Many here have set their country in their profile, but there are a lot of members who have not. Some may have not done that intentionally for their own reasons but if this is simply an oversight it can be easily rectified by.... Going to the menu just below the top of the page, click “Profile”, Then click “Forum Profile”, then select “Country”. Now your country flag will appear below your name whenever you post. eb

I probably should have made myself clearer. I agree that there is little to compare between Blackberry's situation and the situation at The Brick other than the fact that both companies found themselves in serious trouble. My point was that I believe that among Fairfax's many talents is an expertise for selecting the right people to go into a troubled company and make some bold moves and turn the company around. The Brick was nearly in a state of collapse when Fairfax put Gregson in. He successfully made a lot of sweeping internal changes at The Brick and it was definitely not just a situation where the economy came around and thus business improved. The Brick was failing long before the financial crisis hit. Between 2007 and 2008 share price fell from about $10 to $2-3 as they cut monthly distributions. (Unfortunately I know this the hard way). So far Chen seems to be making the right moves and the market seems to approve of what he is doing. Time will tell.

Like Blackberry, a few years ago The Brick was seen to be in its death throes and many thought the company was down for the count. Fairfax stepped in with financing, appointed Bill Gregson as CEO, made some major changes and had The Brick back on its feet within a couple of years. I have every confidence, despite what many here may think, that John Chen is a key step in the rescue and reformation of Blackberry.

Hayten, this board would be pretty boring and really, it wouldn't be of much use if we all agreed on everything. :)

My two cents: 1) This board is not 100% perfect 2) Of the 1800+ members there’s probably 900 different ideas of the perfect board. 3) Everyone has the right to form a new board. But form a new board and then find how many more think they could do a better job. 4) Once you have more than one board the community becomes fragmented and diminishes the value of both boards. Who has the time to follow several different boards? Could the board use improvements? I’m sure it could. But this is a work in progress that has evolved over the past dozen years. For those who want to create a new board I have three questions. 1) How many hours a week do you anticipate personally monitoring your board? 2) How many years would you commit to managing and improving your board? 3) How much of your own money would you devote to building and maintaining it? For those who are unhappy with this board you could try www.stockhouse.com Perhaps this thread should have startedthis way, "Is there some way we could volunteer to help Sanjeev improve this board."