Cardboard

Too bad that they won't be able to question the mother. She had to be a little weird don't you think carrying 3 guns to defend herself in a nice and safe neighborhood in Connecticut? Regarding Canada and the right to defend yourself, I stand by my argument Doc75. It is not popular misconception. If you read carefully what is written in the excerpt of the law that you brought up, it will not be hard at all to demonstrate that you could have resolved the matter otherwise. These events always happen quite suddenly and it is very hard to prove that you were in absolute danger of death or severe harm. There is almost always an element of "offense" to this or vengance vs pure defense. Having a gun to your head during a burglary would not count according to the law. Moreover, you are not allowed to carry loaded weapons in public or in your car. To acquire hand guns legally is very difficult and handling much more restrictive. So you really can't defend yourself according to the law with weapons that would match the ones held by the tugs outside of your home. If you defy the law and kill someone in absolute self-defense on the street, you will do jail time, I guarantee it. Even the cops get in trouble shooting criminals. Cardboard

"Gun control laws will not eliminate mass shootings it will reduce there incidence, end of story." Maybe but, Montreal proves otherwise. I can't think of any other North American city with 4 mass shootings in just over 20 years. Can you think of any? This despite some of the tightest gun laws, especially to get access to assault weapons. Maybe it is just an isolated case and that there have been fewer mass shootings overall in Canada on a per capita basis? Remember that you need 1/10 the occurrence and I doubt it is the case, although I don't have stats on it. Better gun control will reduce what I tried to explain and what Parsad mentioned: per capita number of gun-related injuries or deaths. Unfortunately, that part gets into the self-defense mentality in the States. The majority of people down there who buy a gun (hand gun, shotgun or otherwise), purchase it to defend themselves, not to go hunting. There is a mentality that you can self defend yourself. Up here in Canada, if you kill someone even if proven that you did it in self defense or to protect your own life, you are subject to a sentence of 3 years in jail. I can't think of too many up here who go buy a gun to primarily protect themselves. It is mostly to go hunting. We are being raised with the idea that you can't do your own justice. It is a very different mentality. The other thing that is truly screwed up in the States, is that some States are now legalizing pot which will mean more consumption and less control over other drugs also including chemicals or pills. These things have been proven to help develop disorders in younger adults such as schizophrenia. If you want more trouble, keep having more of these in society and I guarantee you that the number of mass shootings will skyrocket. The guns, they will always find them one way or the other. Cardboard

Gun controls won't prevent mass shootings and what happened in Montreal proves it. In 1989, Lepine shot female engineering students at Ecole Polytechnique with an assault weapon. There was a public uproar and much tighter gun controls were implemented especially on arms with military background. In 1992, Fabrikant goes on a shooting spree at Concordia University. In 1995, registration of all firearms is passed into law. Fast forward to 2006 and Gill enters Dawson College with an assault weapon. And this year, Bain kills one on election night after trying to enter the building where the PQ was celebrating its victory with an AK-47 which jammed. That is four mass shootings in what I would consider a very safe city if I am to look only at the number of total homicides in a given year. When I lived in the States, I could not comprehend how many homicides were occuring on a weekly basis. So I assume that gun control may reduce the number of death committed by people trying to defend themselves or victims of theft, but that it won't do a thing against insane individuals shooting blindly. I agree that looking at our society, our values, the media and things like video games in which the goal is to kill as many as you can, could do a lot more to prevent these horrors. Giving a goal to people, a sense of responsibility and the need to sacrifice a bit of your own pleasures for the good of society and others could do a lot. The hero generation understood that, it has been downhill ever since. Cardboard

Well, I enjoyed Joe challenging him this morning about how he accummulated $50 billion of wealth without ever really paying 35% income tax. Sure, he would pay it going forward on his $100,000 salary and on his personal portfolio whenever he sells or receives income/dividend, but it amounts to nothing really when you compare to how much his wealth goes up overtime tax free. Joe acknowledged his great gift to charity, hence that these organizations are likely a better avenue for his wealth than to the IRS. There was also some talk about the payroll tax like some members have discussed on this board. Anyway, it did touch on many points that many of us discussed here. So after listening to this conversation, I am kind of divided. You have the rich who never pay much tax and then give to charity tax free and you have the rich who receive more income over time via capital gains who can either spend a lot, which should go back to society in some ways, or that can also give to charity. So why should we tax more one vs the other? Is accruing wealth without selling a more moral avenue than selling securities once in a while? Wouldn't be better to have a very large consumption tax on pricey items and a large death tax over certain amounts? Cardboard

"How anyone can support a tax scheme where the wealthiest pay less tax relative to their income than the middle class is beyond me. You can argue until you are blue in the face but it defies logic. Buffett is right: we need some kind of minimum tax for incomes over a million dollars. I don't know if that's 30% or 50% or whatever but it needs to be done. " You don't need a new minimum tax to fix that or another complication in the tax code, you simply need to eliminate the capital gain rate. Make it normal income or maybe at a lower inclusion rate like we have in Canada to still compete with other countries. The tax code is already progressive, so the rich will pay more for sure. However, since you are an investor and making capital gains (you are rich, but not as much as these guys), you should in fairness still see a similar adjustment at your own tax bracket. And, that gets exactly to my problem with this whole discussion. Why targeting only higher rates for people above X and Y. That is class warfare. Targeting a minority. That comes from the same guy who called them "fat cat bankers". Everyone should contribute to the national effort and yes, I think that some of the "poor" should get a good kick you know where. Cardboard

It is like I told you, search further. Go before the Obama era and you will see. Cardboard

"These are the same arguments battered around whenever Buffett post an article. Nothing to see here...." Completely untrue. I have never seen so many negatives or debates about what Warren is saying since he has entered this: tax the rich mantra. When Warren talked about pensions being unfunded, the need to expense stock options, controlling the proliferation of nuclear materials and the trade deficit (remember Squanderville and Thriftville), I don't ever recall seeing such debates on this site or the predecessor. On the contrary, the vast majority held a thumbs up. The reason why it is not working this time around is that he is not proposing a clear cut solution to the problem, but a band-aid or one that looks awfully in line with the Democrats agenda and not with common sense as it used to be. You know when I think that Warren stopped discussing bold and smart solutions? Once Obama put a medal around his neck. It seems to have acted as a dog's medal or a leash. Cardboard

To the uninformed, Buffett makes it sound like that "carried interest" is somehow a new evil that needs to be taken care of immediately. What he fails to mention, is that he would never have had the career that he has had without it. He would never have been as rich as he is today if he had been subject to a 70% tax rate on effectively investment counsel type of work during his partnership years. Instead, he was taxed at 27.5% on his cut of the money that he made for others using carried interest. It is also interesting to read in the biography by Lowenstein that Buffett knew the tax code inside and out. Why is that? To ensure that he paid as much tax as possible or to exploit some aspects of it? Totally legal, but who is he to lecture people today on carried interest? Here is a good article about carried interest by the way: http://www.bloomberg.com/news/2012-01-30/if-carried-interest-irks-you-don-t-get-it-commentary-by-william-dantzler.html So what should be proposed instead is to raise the capital gains rate on everyone, but here again, I would love to know what were States tax on capital gains at the time. If they were 0% in Nebraska at the time, then the difference with someone living in New York State currently is not that dramatic with a combined 24%. "Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P. " While it is better than the numbers today, it still does not cut it in my view and these 2 numbers should be reversed to at least repay some debt over time. Just like it would be done at Berkshire or with any good family. I am quite disappointed by Buffett going down the route of simply taxing more to fix issues and to apply it on the very rich only. While I am not a beneficiary of "carried interest", not American and certainly not in the very rich category, it is clear that the governments down there are spending well beyond their means. And I am certain that a very large chunk of it is going to waste. What is next? Seizing assets from the rich to help pay for all these entitlement programs. It will be the only way to raise revenues if this thing goes too far, since the rich will simply do like Buffett and never sell any stock to not trigger taxes. Cardboard

Tough to argue with his logic. Not totally there with him on global warming, but burning fossil fuels creates pollution which is harmful to us so we should be looking at cutting it anyway and we need it for fertilizers, plastic and others. So what we have are developed economies fighting pain with higher debt, stimulus and entitlements while the globalization of skills create more capable workers competing for the same goods in a finite resource world. Gets pretty clear that you will need higher skills to retain your standard of living or become a dividend counter as he mentioned. It is also pretty clear that it could lead to financial ruin and conflicts with 7 billion (and growing) extra-consuming hungry selfish mammals. However on the energy front, I think that the increase or adjustment is close to being done. It was driven by costs as he said so non-reversible. Nowadays, it takes on average 1 barrel of oil to extract 3 while it used to be 1 for 100. But IMO, the equilibrium is now being or about to get reached with alternative sources of energy. Solar for example is "infinite" supply and the cost to extract it is now getting attractive and falling. They are also working on solar panels that will convert water directly into hydrogen for use in combustion engines or with fuel cells. I can see a day not too far off where it will make sense for me to put some solar panels up on my roof to generate power and I live in a very low cost area for electricity. My largest worry is around water since there is no known substitute. Aquifers are going to be depleted someday just like oil reservoirs at the rate that we are pumping them. Imagine the impact on the world of getting back to the Dust Bowl era. True that the oceans are untaped, but it will be very expensive water to get at or an unproductive activity to obtain at a higher cost the same commodity (or of lesser quality) that we have today. Many humans won't be able to afford it or the food that it will help produce, so unfortunately they will die. No bacteria or species grows to infinity, so despite our intelligence it seems that the planet is going to put the brakes on our rate of growth via affordability. Cardboard

If Buffett is looking for an elephant in the insurance industry, I have along with the U.S. government and many others, AIG available at $60 or $70. A bargain relative to Chubb. If he is not able to pay or willing to invest $100 billion now and still interested in owning a stake in a well managed company, then he could always spend almost $8 billion to purchase the remaining stake held by the U.S. government and maybe buying another $5 or $6 billion on the open market. He would then own 26 or 27% of the company paid at half of book value and as Berkshire grows larger, he could acquire the rest eventually like he did with GEICO. Cardboard

http://www.reuters.com/article/2012/10/13/goldman-gupta-letters-idUSL1E8LCLEW20121013?type=companyNews&feedType=RSS&feedName=companyNews&rpc=43 So if you make donations or help some people, then you should see lighter sentences for breaking the law and hurting other people? Just trying to take the logic further, so a 3rd degree murder by an unknown and one committed by a known philantropist should be treated differently? Cardboard

"Obama is pretty popular up here, after 8 years of Bush." I think he is pretty popular to the majority of folks because of an image: peaceful, likeable, young, defender of universal healthcare and bringing hope and change. This is the early Obama or back in 2008/2009. Most of these folks don't follow politics and have no idea how Obamacare works, what he has done during his term or how bitter Obama looks today. Personally, I think he is very divisive and I really don't like the wind of class warfare that he has pushed around the world. What the U.S. president says or do has an impact around the world and I see the impact in my own province, dear old Quebec. It is ugly I tell you, not something that you ever want to see in your state or province and we are not at all in recessionary conditions! We have 3 leftists parties out here and the one that got elected is akin to Chavez. Based on what has been done so far, the goal seems to be: tax the rich, push for the French language so that the people are unable to move or learn what is going on elsewhere, and support with programs whatever constituency gives them votes: students, environmentalists, etc. Populism at his worse or communism if you will. Fortunately, the people are already waking up after just 2 months following the election and the opposition is getting ready to overturn this government. I can only imagine how bad it would have been if they had been a majority which looked like a possibility at some point on election night. So be careful what you wish for. While the U.S. and the rest of Canada is nowhere near Quebec in terms of socialism, I am afraid by the trend and the poverty that results from it over the long term. It won't do much to me since I am mobile, have pretty much left atmosphere (as described by Ericopoly) and will leave if things gets too much out of hand, but I like my fellow citizens and know that their well being won't be serve by giving them a bunch of carrots while these carrots are being paid by deficits that can't be possibly paid back. I also included a chart to show that we keep repeating pretty much the same mistakes overtime during times of duress. http://money.cnn.com/2012/10/01/news/economy/millionaire-taxes/index.html Cardboard

"This too shall pass!" That is unless we keep digging deeper. Although I am trying to be an optimist, I tend to be more a realist and like Moore I am quite concerned about 4 more years with Obama and the long term consequences. The debt situation and the overall mismanagement of government (and it is not just Obama, but Congress and previous administrations), could reach a point of no return or a tipping point as described by Simpson, Bowles and Blankfein on CNBC around lunch time today. We can't keep making promises that are unmanageable to simply garner more votes, stimulating forever and risking the future. I think that Romney and his team have a deeper sense of urgency to address these issues. If the guy is there just for the honors, we will find out pretty quickly, but he appears sincere IMO to help things out. Also, we see companies everyday that are falling by the way side due to technological changes, finance mismanagement, fraud, etc. Why would it be any different for governments and civilizations? If one looks at history, it is filled with failed empires. It took a lot of time in each instance to happen, but eventually it happened for all of them. So I tend to cringe when I hear Buffett who keeps saying that America's best days are ahead. While I have no doubt that they are going to be better, how much better is the part that he fails to identify. And if we keep adding debt faster than GDP growth over time, then at some point there is a tipping point and it likely won't be better days. On growth, I am quite concerned about this never ending quest for growth, although Romney will not do anything about that. IMO, growth goes hand in hand with population growth and the need to meet basic needs. As described by Grantham recently, exponential growth always stops at some point. Can demographics and this insatiable need for energy, food and other resources become so scarce or expensive to affect this growth rate seen in recent decades? While I support the idea of technology helping us to meet some of these challenges, the numbers become mind boggling over time. At just 2% growth rate in the world's population over the next 100 years, we would be around 50 billion. In 200 years, it would be 370 billion! Maybe that some will live on a different planet by then. I guess that we would have no choice with these kind of numbers. Cardboard

How can you not enjoy showing up at work in the morning when you are welcomed by such a smile! http://money.cnn.com/gallery/magazines/fortune/2012/10/11/40-under-40.fortune/33.html Cardboard

In any case, it seems to me that some of the atheists on this thread surely sound like extremists and are adamant to make their point heard. Based on the tone, to them you are an idiot if you are Jewish, Muslim, Christian, Hindu or whoever else believe there is something after death. You have something to prove while they don't. They have the exact science, they are smarter than all the philosophers and scholars since the beginning of time (hence my mention of Pascal). I also don't understand why they even support Obama since he always finishes his speaches with: "God bless you, God bless America." Where is the atheist public figure? Well, maybe that he is just hypocrite to garner more votes and by 2016 we will be in a communist state which are quite favorable to that. On Pascal, I know he was a mathematician genius and since he must have spent a fair bit of time thinking about the topic, I would assume that portion of his logic must be relatively sound. He must be at least as elaborated as some of the posters here whom I am sure are no where near genius status. Some of these same fellow might also want to revisit Socrate and see if they are as smart as they claim. Cardboard

This discussion is somewhat interesting, but sad at the same time. I mean, I often read about that investment being too hard to understand and what not and now you want to talk and spend a lot of time about the meaning of the universe and God??? Do your really think that science will ever explain it fully someday? I think not, since the beginning of time, we keep finding new things and IMO, it may well continue on forever. For example, if the universe is a fixed area then what is on the other side? On the other hand, can you imagine something that has no boundary? Just the fact that I am able to think about that stuff makes me dizzy. What is that thinking capacity in our brains? Can it really shut down when our body stops being energized? The truth is that no one knows what is after, you can only "believe" in some solution of what is going to happen. Pascal made a wager in the 17th century. You might want to read about it. Some people will say it is garbage, some will call it brilliant, but nonetheless, it is trying to put logic into the argument of the existence of God vs not. This guy was likely more intelligent than any of us here and he did not seal the deal based on some rebutals that I have read and this was once again in the 17th century! So you guys might want to get back to investing and let each individual decide how he or she wants to conceptualize or imagine life or not after death. Relative to morality and society, I think that we have to abide by some form of code of conduct to avoid anarchy. It may be derived from some religion or philosophy, but at the end of the day it has to include some form of respect for each individual and provide enough "good" to satisfy the great majority at the likely detriment of some. Cardboard

Well, let me apologize Giofranchi. I thought based on previous comments that you were a money manager with clients. Fund of funds make me angry since they often charge large fees to effectively let money being managed by someone else instead of telling their investors to invest directly with the true managers and to skip the intermediary. Obviously, I totally misunderstood your situation. In your case, it would certainly make sense to focus on stocks and funds that you could hold for a very long time even if it means sacrificing some returns. You don't have the time to keep rotating from one cheap stock to another all the time which means a fair bit of research and essentially being an active portfolio manager. At the same time, I really don't understand why you worry so much about macro or spend any time on it since your focus is on the long haul. Cardboard

I find it hilarious when "investors" say that they can understand Fairfax, but can't understand AIG. I think it means either that they have not tried at all to understand AIG or they don't understand Fairfax. It is also funny to read someone defending an investment in Fairfax or GLRE, but staying away from investments with much larger discount to intrinsic value due to macro concerns. What happens to the value of defensive bonds in a macro free fall and with a company that has essentially no equity exposure (AIG)? We are back to buying yesterday's favourite or so called jockey stocks. It is a form of value investing, but one that excludes the most promising opportunities because someone is unwilling to find these most promising on their own and is instead relying on someone else to do the investments. I hope Giofranchi that you are not charging huge fees to your investors for essentially riding someone else coattails or investment abilities. You should be paid for having discovered the "investors" for them, but after that, to keep charging a fee year after year seems wrong. It goes back to your earlier comment that you could not understand why Ackman would tear apart MBIA financials while on vacation in Tuscany. He was simply trying to be the best for himself and his investors and truly loves investing, finding new ideas, the best ideas. Not riding someone else coattails. Cardboard

Have you ever seen a soft landing in any economy especially after a boom of this magnitude? All signs point to a hard landing and I see it in the price of copper, oil and zinc everyday. They are not participating in the rally, but remain elevated due to this global currency devaluation process. So China is one big issue, then you have Europe essentially in recession already with a big decision on Sept 14 regarding Greece. Then you have the U.S. which is not showing much growth at all and will have to deal with certainly some type of cuts in December or the fiscal cliff. What about Israel and Iran? Then you have this: http://www.cnbc.com/id/48774736 So every major economy is showing next to no growth, saddled with debt, oversupply, etc. Major decisions are to be made for every one of them this Fall. The picture appears very bleak, at least it is easy to picture something, somewhere going wrong. Then you have the S&P sitting a the high for the year and less than 10% away from its all time high. The VIX is at multi-year lows, the number of names on the 52 week list is very low. It does not sound like a time to be brave or to be fully invested. It smells like the S&P doing its last hurrah before a major turn in sentiment. There are pockets of opportunities as discussed daily on this board, but not enough to build a diversified portfolio and I want to keep dry powder this time around, unlike 2008... Cardboard

CRM should be an excellent short and eventually this company will be hated by the Street. AMZN is the same thing or growth at any cost and into any direction. The game will stop once people starts to truly question if they will ever make money. Both companies keep telling us that they need to gain market share and that eventually they will suddenly stop spending and profits will surge. This is not how companies or humans operate. When sales growth or demand slows it will be because competition will have increased or saturation has been reached. Either way, that is not when gross margin increases. Even if they cut SG&A and marketing at that point, the best they will do is to maintain current profits. There was a nasty article in the WSJ last night about CRM lack of profitability yet the stock is still holding strong. This morning Piper Jaffray came out with strong support saying that the backlog would be strong in H2. Their price target is $207 or a $29 billion market cap. The analysts are the main problem with all these momentum stocks. They keep increasing price targets, they never look at profits, only sales growth matters. The way they act, it almost seems that they are pumping the stocks for the benefit of someone else who is holding or trying to create short squeezes. Cardboard

I did quite well with FFH options in 2006, but did not buy far out of the money LEAP options. Instead, closer to the money and with shorter duration. Not sure if it was a much safer bet. The situation at the time was really a bet on the hurricane season and 2006 turned out to be one of the weakest on record. It was preceeded by KRW in 2005, but also don't forget the 4 hurricanes that hit Florida in 2004. At the time, there was a constant barrage in the media about the oceans becoming warmer due to global warming and that these two terrible years would keep on repeating forever. While I say that, the flaw in the shorts logic is that even if 2006 had turned out to be bad for hurricanes, the company would not likely have gone under. There was already too much improvements in place at Fairfax from the weakest point or late 2002. It was a point of the time where you would scratch your head and wonder why there was such weakness in the stock price or what info your were missing. Kind of like BAC or AIG today. However, if 2006 had been bad for hurricanes, I believe that the notion of permanently more hurricanes would have taken hold and kept pressure on reinsurers valuations and the like. It would have likely made Fairfax show a break-even or loss for 2006 and it is possible that Ericopoly's bet would not have paid out near as much with more pressure on the share price for a much longer period. So IMO, similar risk and reward exists with AIG today or with these $50 calls Jan 2014 that you pointed out Mephistopheles. If there was $60 calls or at book value, they would likely trade around $0.60 now or a leverage of 100 times book as per Ericopoly's calculation. So it is higher than the 70 times of Fairfax, because the price to book value is 0.57 time instead of 0.64 time with Fairfax or price to strike. The question really is, would you put a significant portion of your net worth into $60 or even $50 AIG Jan 2014 call options? Ericopoly did hedge his bet with in the money options. There is always the risk of another recession or of Europe imploding between now and then. Valuations are also quite different than they were in 2006, but is it possible that big caps bargains like AIG will disappear within 2 years? It is another scratch your head type of discount in part due to the government who is selling tons of shares at any price (like FFH shorts) and the Street holding on to buying. If you look at the share price lately, they can't seem to resist anymore. It was not easier at the time to pull the trigger on these FFH options. So the "bet" makes sense, but you have to look at what happens to your situation and accept the consequences if these options expire worthless because your timing was simply off. You will not get the same leverage with the warrants converting at $45 and expiring in 2021, but you can be sure that your "premium" will remain more or less intact for a long time even if the stock prices languishes until 2014. Cardboard

I was wondering if any of you has any experience with the overall process of filing and being a dissenting shareholder on a proposed acquisition in Canada. The way I understand it, you need to have the shares registered under your name and to send a very simple one page letter telling the company that you are dissenting to the proposed acquisition and requiring the company to pay you the fair value for your shares. They then have 10 days following the acceptance of the resolution by other shareholders to make an offer to dissenting shareholders. If there is no agreement between some of the dissenting shareholders and the company, the remaining dissenters go to Court where fair value will be determined by experts. 1- If you believe that the shares are worth more than what is being offered based on sound analysis, what is the risk to receive an offer lower by the company or the Court than the proposed acquisition price? 2- Based on my understanding, all costs are borne by the company. Is that true? Should you consider legal advice? Cardboard

I am no longer a Fairfax shareholder since quite a while since the turnaround has been accomplished and it has been reflected in the market price. I have found other opportunities that I believe will deliver higher returns over the foreseable future vs Fairfax today. Mr. Watsa is certainly not betting the ranch with the RIMM investment. However, it is a sizeable investment relative to their book value while there is a possibility that this company could end up in bankruptcy in a few years. They are now producing losses which was not the case just a few months ago and it may accelerate from now on. They do not carry a lot of cash vs their size compared to an Apple, so as time goes on and with no product that I can call a real breakthrough, they can get into distress faster than people can imagine. While the company will retain some value for its patents and contracts with the Pentagon and others, there might be little left for shareholders the more they wait. Typically, when I make "risky" investments where there is a real risk of total loss, they tend to be smaller than my other investments in the portfolio or equal, but not significantly bigger than most. My reasoning is that if the risk is so great, that normally, the price is so low that the upside is enormous on a turnaround. If it does not work out, then I have not lost a large chunk of my portfolio cripling my performance. If you look at the last 13 F of Fairfax, the biggest investments are: AbitibiBowater, Johnson & Johnson, Level 3 Communications and Research in Motion. Other than J&J, it is not what I would call great "look through earnings" as Buffett would like to point out. While value investing is contrarian in nature, I think that the size of these investments is borderline obsessive, especially with the significant averaging down in RIMM. We are talking around $800 million in cost here? While it is true that Fairfax carries a very defensive portfolio with a lot of cash and derivatives, I see a huge difference between market risk and specific investment risk. I have never heard someone mention that RIMM could go down if the economy tumbles or if there is some panic in Europe. The company carries its own share of risk for survival at the moment. So even if you hedge fully your investments against market risk, there is a real possibility that RIMM goes to near zero and that your market hedges gain no value at all or even lose value. The same goes for ABH and LVLT. Moreover, these things tend to go down much more than the general market when it hits some air pocket. Cardboard

Actually Giofranchi, IMO this reasoning is very wrong and I would be worried to read that as a Fairfax shareholder knowing the hard past with 2 acquisitions or investments if you will that nearly destroyed the company. They are not like a hedge fund managing $24 billions in assets. If they lose the entire investment here, it is not only a loss of $400 or so millions to their portfolio, but also to their book value which is really what they own. The debt, policyholders liabilities to fund these investments beyond book value are not going away with the loss. If he truly believes that a RIMM investment will work out then fine, but comparing its size to the overall portfolio and kind of hinting that it is no big deal or some small potatoes then I disagree. Cardboard

Why would fresh money buy Fairfax which trades over book value while you can buy AIG at half of tangible book? And, with a manager that is committed to buy a massive amount of stock back from a crazy seller with cash that they have or are getting? You may say look at the investing record or look at the bond gains that are coming, but what about the losses in RIMM, LVLT, ABH, DELL. These are in the 100's million $. They will negate most of the bond gains. And what about underwriting income? Any better than AIG or the rest of the industry? Fairfax has been a refuge ever since 2008-2009 or since the massive CDS gains. People feel safe in there. How much time can change??? I think that people should ask more what is next to create book value growth and what if speculating in bonds and derivatives no longer works as well as in the past? It is not priced for perfection, certainly not, but there seems to be a built-in premium for these hedges which are far less than risk free. It may still be a good investment, but just remember that there is competition out there for your hard earned dollars in terms of rate of return. BAC is another one. There is a ton of stocks being discussed on this board regularly that will deliver IMO, more value to their owners in next 3 to 5 years than Fairfax. Cardboard