valuecfa

Repost of Jim Cramer's illegal tactics at his old hedge fun. For continuity of the subject of Cramer and CNBC, I though the clip should go here: http://blog.indecisionforever.com/2009/03/11/jim-cramer-admits-something-weird-to-some-weird-guy/

You might like this link too: How Charlie Gaspirino gets the scoop!

A nice summary of Jim Cramer's historical career: http://www.deepcapture.com/jim-cramer-is-a-complicated-man/

Investing in a company in which Michael Jordan (yes Air Jordan) was on the board of directors.

How Jim Cramer is allowed to practice financial journalism when a video like this is out there is insane: http://blog.indecisionforever.com/2009/03/11/jim-cramer-admits-something-weird-to-some-weird-guy/ This is how Cramer says to make money on Wall Street. At the end he says fundamentals don't matter, and the way to make money is to manipulate markets. If you're not doing that, then maybe you shouldn't be in the game. What a jerk! How does he not get a subpoena for this video?

Kyleholmes, Sorry, the file is too large to attach. Randianhero, Do you have a terminal at work? I wish my new office had one. The only one in my building is always in use!

Boy they sure did purchase a lot of MBS's. I have little experience with these, so i hope the team is confident in their analysis of these securities. Is that large Cheung Kong Hldg. a new purchase for ORH? It's right up there with Pfizer, kraft, intel, dell, jnj, as a top holding.

Exactly. ;)

Here is a short cut link to his just released annual report: http://www.berkshirehathaway.com/2008ar/2008ar.pdf

Anyone happen to catch this in the recently released annual report. I am surprised this isn't getting more attention in the media just yet. Starting with the last sentence in the third paragraph down from the top on page 93: "Now, our book value far understates Berkshire's intrinsic value, a point true because many of the businesses we control are worth much more than their carrying value. Inadequate though they are in telling the story, we give you Berkshire's book-value figures because they today serve as a rough, albeit significantly understated, tracking measure for Berkshire's intrinsic value. In other words, the percentage change in book value in any given year is likely to be reasonably close to that year's change in intrinsic value." ~emphasis on "far" is Warren Buffet's , not mine

I found this Jeremy Grantham chart of asset class returns particularly interesting: https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IICigUvyTzKY4fvr4%2f1GHIOwmkEsuoDtdni0roYHNiKsEWJWoxGecPkwcxsHM7uDiq24CADG8raiRnIaiHFJyrfBDVTp1qfXAkI%3d

Morningstar conveniently grouped together the recent shareholder letters/commentaries of some of the top asset managers. I thought some might enjoy them. http://news.morningstar.com/articlenet/article.aspx?id=269611#fairholme Cheers

To actually learn investing principles. It'll likely instill little confidence in potential investors, in my opinion (It's a shame). The main reason is so few investors know what it is or the difficulties in obtaining it (including many in the finance field). Far less known than the CPA designation for example. It will enable you to obtain a great deal of knowledge of nearly all aspects of the financial markets and will certainly help you if you are interested in getting into specialized fields like research analyst/portfolio manager/investment banker, etc... Like randian hero, I take level III this summer and highly recommend it if you have the time. Lots and lots of time.

I think Mr. Market is forgetting that we still have nearly 10% of our equity in credit default swaps. ;)

Just for reference and constructive criticism I thought some numbers might be helpful. In last years letter to shareholders one can see the historical, consolidated combined ratio figures for Fairfax Financial: http://fairfax.ca/Assets/Downloads/080307ceo.pdf It appears, from 1986 - 2007 the weighted average cost of float has been (2.5%) ~meaning the float has cost shareholders 2.5%. So while this is not a great number by any means, it is not terrible either. Something they can definitely improve on. "Our long term goal is to increase the float at no cost to our shareholders. This, combined with our ability to invest the float well over the long term, is why we could achieve our objective of a 15% per annum compounding of book value per share over time."

Thank you for the reply -O-. I'll be very interested to see how this investment situation develops in the coming weeks.

http://www.kbsradio.ca/news/13/880065 I don't follow Canwest and don't know much about it other than a quick wikipedia search. Fairfax already owns a good chunk of this debt loaded penny stock. At first thoughts, I don't want them to allocate too much more capital into newspaper/media assets (in addition to ABH) as I believe newspapers and some forms of media are somewhat of a slowly dying breed in the traditional format. As far as Canwest's other assets, i'm not sure what to think. Any Canadians have any thoughts (i'm not really familiar with most of their assets being American)?? I'm sure some of their assets are pretty well known up there, with some good brands. Maybe a purcahse/asset sale would be a good option for Fairfax, though i don't imagine their are many media companies with deep enough pockets too bid for them. Personally, at first glance, i once again would rather them stay clear from these types of assets...But i'm not well informed on this media holding. Any other thoughts??

"In general, a property casualty underwriters long-term goal is to have break-even underwriting..." That would be great!! Underwriting will sometimes get lumpy, and the team at Fairfax deserve our thanks for an excellent year. If the market turns hard (with no catastrophes) , CR will improve in the future. Those darn tail risks!

Well if you go strictly by book value at Dec. 31 2008 (the only precise number we have), then... book value per basic share increased to $278.28 at December 31, 2008. The current stock price is $300/share. This means that the company is selling for 1.08x book. If you want to put a multiple of 1.3x book on that, then the company is worth $362 per share. If you want to put a 1.5x book on that, then the company is worth $417 per share. Given that 1.) the insurance market is due to harden 2.) some competition is disappearing 3.) future corporate debt and equity returns are looking as attractive as they do (markets at shocking low historical levels, bodes well for the long-term future investment results) 4.) fairfax is one of few companies with ample spare cash for distressed/good companies (USG, etc.) I would put the value at around $400 - $415 per share. (But that's just me) Cheers, ValueCFA P.S.~ You may want to factor in some of the events since Dec. 31, 2008.

The combined ratio doesn't reflect the foreign currency hedges they had in place. It is listed in net earnings and other comprehensive income. So they weren't as adversely effected by the currency fluctuations as the reported combined ratios alone would suggest.

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Underwriting results in 2008 also included the adverse impact on claims reserves of 4.2 combined ratio points ($189.2 million) arising from U.S. dollar strengthening relative to other currencies, compared to a benefit from foreign currency movements in 2007 of 0.9 combined ratio points ($41.3 million). The company generally mitigates the impact of foreign currency movements on its foreign currency-denominated claims liabilities by holding foreign currency-denominated investments. As a result, the impact of foreign currency translation gains and losses included in underwriting results is generally mitigated in whole or in part by foreign currency translation gains and losses on investment assets included in net earnings or other comprehensive income. Of course if those Hurricanes never happened then we would be well under 100% combined ratio (consolidated)

(1) Excluding the effect of foreign currency movements, the 2008 combined ratios of Northbridge, OdysseyRe, Reinsurance - Other (foreign currency movements principally affected Advent) and Fairfax consolidated were 102.4%, 101.3%, 116.6% and 106.0% respectively. This, of course, is the full year currency effect. (emphasis mine) (2) Excluding the impact of Crum & Forster's lawsuit settlement in the first quarter and Crum & Forster's reinsurance commutation loss in the second quarter, the combined ratios in 2008 were 106.7% and 107.7% for Crum & Forster and Fairfax consolidated respectively. (3) Prior to giving effect to the above-mentioned foreign currency movements, the two above-mentioned items affecting Crum & Forster and catastrophe losses related to Hurricanes Ike and Gustav, the Fairfax consolidated combined ratio in 2008 was 96.2%. Cheers, and congrats on the quarter!

Agreed. I am thrilled that they continue to have superb timing/skill with their investment side of the business (and that they continue to surpass analyst expectations), but i would like for them to focus on some better underwriting. If they could do that, they would be the perfect stock. Congratulations, shareholders, on a fantastic quarter.

It all depends on when/if they sold their treasury bond positions. If they sold their treasuries toward december as opposed to october, that would increase earnings dramatically. The treasury chart during that one single quarter is just amazing.