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So we have got all of that – those options available to us and I just wanted to continue to add to you like we say at all our conference calls and meetings, is that number one priority, Jeff, is to keep our financial condition really strong. So we won’t do any of those things at the expense of our financial condition. ...and that's terrific. Cheers!

As usual, that's a good interview.

After reviewing the quarterly results and looking what Fairfax has accomplished over the last few years, here's what a blue-collar worker had to say: "Yabba-Dabba-Doo!" Fred Flintstone

"And with fund manager fees, you're looking at more than 40% to beat it... unless you are the fund manager" Ericopoly, ahahaha ;D I will not double check your math, but anyway I trust you. So, is there anybody who want to put some chips on the 5 or 10 years poker table to beat that? Not me. If you want to play that game, I'm in the FFH side of the table ahahah ;) Cheers!

Unless we think the reserves are too low (and the the book value is overvaluated actually), I think Fairfax is cheap and 10 years from now, their owners should be happy. Can they compound book value per 12-15% over the next 10 years? How about: - a huge investment portfolio - managed by overall some of the better investors that I've ever seen - with insurance operations side under control - some underwriting gains with a hard cycle that's reasonable to think that will happen over the next 5 years (just ice on cake, you can ignore it if you want). So, it's a price to book of 1,5 would be a fair deal between the seller and the buyer? I'm in the "yes" camp. Will that happen over the next 10 years? I would be very surprised if it will not happen at some point. Is it cheap and attractive enough? Yes. So I've been buying lately. It it insanely cheap? No. We've been buying all the remaining shares of a private business lately. We didn't have any daily quote, volatility and anything like that. The fact that it's a private business 100% owned or a 0,00001% position in a public company doesn't change the most basic facts to me. I can handle a lot of volatility and anxiety if the deal make sense. What matter is the intrinsic value of the business. I've also been buying a home lately (after 5 years of waiting to get a good home at a decent price). The seller was in a hurry to sell so I did get a fair price. When you only have few days to make the deal on a home, not unlike volatility in the stock market, some people get too much anxious and let some deals go. I can handle some temporary anxiety and keep my head very cold if a deal make sense. FFH deal make sense. Like I said before I've been buying lately and would be happy to buy more at these prices (but will have to sell some since I'm funding 20% of the home). I know far too much that the few FFH shares that I will sell will be a good deal for the buyer (not me), but you know your children rather prefer to live in a good home than to have a stock certificate on the wall of their appartment bedroom. My 4 years old son took a look at the pool and raised his thumb with a smile. Cheers!

2008: breakeven The main reason: FFH

Thanks shalab for the review of your visit. Cheers!

As I remember it, there is three main subjects in this book: - The Davis family values and history, with a focus on Shelby C. Davis life and his relationship with his family members. - The markets (bonds, stocks, etc.) historical data and general investors humor over several decades in his long lifetime (and several people, included medias in general, who predicted some stuff were dead wrong in retrospect) - The investment style of Shelby C. Davis That being said, I've red it few years ago, so maybe I'm missing some important topics here. Cheers!

members of the original investor group that formed Symetra by acquiring a group of life insurance and investment companies from Safeco Corp. in August 2004 may participate in this offering as selling stockholders. Well, suffice it to say that I will let you guess on wich side of the transaction table I prefer to be (on the Berkshire side or the opposite side). Cheers!

I'm no expert in bankruptcy and big media liquidation situations, but if we don't at least get back our initial inve$tment, it will have been a classical value trap situation (i.e. you tought that you fund a diamond in a dumping ground, but only your eyes were shining, not the rock itself).

By the way, I'm far from being sure that any change will be really substainable going forward. So we should be able to keep that competitive advantage on our side 8) Lastly, on page 117, you get a list of 2008 asset distributions for top 25 P&C insurers. Guess who owns more than 50% of nonaffiliated common stocks of all the group on a cumulative basis? Berkshire (35.3%) and Fairfax (19.7%). Cheers!

A.M. Best monthly review has a very decent article this month about how the investment losses occured change how some of their managers rethink about how they invest. It's on page 66 or so. Odyssey re was the only one who had positive investment results in 2008 (see chart in page 68 that speaks for itself). http://www.bestreview.com/digitalversions.asp Cheers!

After that, the dividend rate will reset every five years at the five-year Government of Canada bond yield plus 3.15 per cent. Is it the case with Odyssey re preferred (U.S. equivalent)?

California borrowed $8.8 billion, selling notes at yields of 1.5 percent and 1.25 percent, which will be paid off by the end of its fiscal year that began July 1. My God, the yields are very low on an absolute basis!

The purpose of this exercice is to help realize what reasonable growth at a good price can accomplish. I guess a 30% discount to estimated intrinsic value doesn't attract some of the deep value investors out there and I also guess that 12% per annum growth doesn't attract some of the people that search for fast growing companies. But hey, if you can have both, you can achieve a very decent return. By asking for a high expected probability of 12% growth over the next 5 years, it might help to avoid some of the value traps out there and asking for at least a 30% discount it helps to avoid growth traps as well. At least that concept fits with me and I'm happy that someone, as an individual investor, turned 50 000$ into nearly 1 billion over approximately 45 years of investing by applying the principles above (and yes, with some leverage). Cheers!

Ericopoly, Lol ;) no there was no trap in that little exercice :) It would have been better to use the word "intrinsic value" twice.

Got it! ;)

- Wait until the price is right. If you like the business, but not the price, wait patiently. Davis used to say "Bear markets make people a lot of money, they just don't realize it at the time". Sometimes, it's all the market that goes bearish, sometimes that's an industry bear (banking in the 80's, health care in the 90's, etc.). - Keep your winners for the long haul. Buy them at a discount and when they reach fair value, keep them if they are winners that keep growing at a reasonable pace. Buy and hold: lower taxes, lower transaction costs, avoid frequent trading mistakes, etc. - Invest in great managers. - Ignore the rear-view mirror.

What are some of the basic Concepts if you dont mind me asking. Well, first of all, be frugal. It might seems obvious, but if you read that book, you get a feel that the Davis family takes that very seriously and you have some good real life examples in it. Then, regarding investing directly, it goes that way (I just underline some of the basics): - Avoid cheap stocks. Most "cheap" stocks deserve to be cheap and no CEO will say "Hey guys, our results will not improve over the next few years". - Avoid expensive stocks. Even it's a great business, don't overpay. Take a fast growing company that have a "high expectations" price tag and just one quarter of bad news is necessary to drive down the stock significantly. - Buy reasonably priced stocks at that grow at a moderatly fast pace. Ex.: 10 times P/E companies growing at 13% per annum. Better yet, sometimes you'll find fast growing compagnies selling at these prices, but because they operate in "boring" industries, they do not have a high price tag. Just a short math exercice here: if you buy a company that grows it's intrinsic value by 12% CAGR, you bought it at a 30% discount to it's intrinsic value and the shares trade at a fair price in 5 years. What is your 5 years return?

"I think the Davis Dynasty is one of the best books to read if you want to see how one individual compounded his weath by just owning insurance companies". dcollon, absolutely! Beside leverage, when I red that book, the light went on. I would not recommend this book as a start to learn about value investing, but when you understood the basic concepts, it's a terrific read. Some concepts fit with you, while other don't. Most of basic tenets of the "Shelby C. Davis way" paved my own little yellow brick road. Cheers!

Hmmm....Markel has compounded it's book value per share at a 17% CAGR over the last 20 years. It's not far from it's 25 years number, but I don't remember having heard Markel CEO's RECENTLY talk about confortably exceeding this return going forward. In a 2004 or 2005 interview with the Motley Fool, if my memory about that fact is not wrong, Steven Markel made some calculations and came to the conclusion that it might be able to compound book at a 19% CAGR rate going forward. He was with Tom Gayner in that interview.

Short, but interesting article about the actual P&C insurance cycle. http://www.istockanalyst.com/article/viewarticle/articleid/3497109 Cheers!

A recent article about some aspects of Bidvest business model and how it can handle the actual recession: http://free.financialmail.co.za/09/0911/moneyinvest/fmoney.htm With 80 000 employees, it has a head office that contains only 6 executives and no more than 12 peoples in all. Cheers!

The risk that you have when you want to privatize a company is that suddenly, the atmosphere become more charged, outside lawyers firm suddenly care so much about "fair prices" and some shareholders become very thirsty, while others new entrants want to speculate about how far they can stretch you on the price. That's not a situation that tend to help the potential buyer. Since the atmosphere is charged, he can fall into the trap of overpaying. So to avoid mistakes, it's a good idea to issue shares at their full intrinsic value first. But then, if you don't have sufficient cash on hands, what you should prefer? Buying big stuff by issuing debt or equity? If the debt might threatening the business life in the perfect storm scenario, you're better of having 3/4 X of something that has still some value than 4/4 X of something that is worth zero. That being said, like I said before, I prefer to be diluted at a fair price in the first place. Lastly, if you want to compare Berkshire and Fairfax solidity, let me ask you this very theorical and no numbers question: you want to buy a long term life insurance policy. You have only two insurers available, Berkshire and Fairfax, and the premiums are approximately the same. There is no reinsurance on any of them and no outside firm to garantee anything. Wich one would you actually choose? Frankly, I'm very confident that Prem and team made very significant steps in the right direction over the last few years. Their 2009 version is better than their 1998 version and it's where the puck is likely going to be that interest me most. In 2019, as a long term shareholder in the company, I'm looking forward to say that our balance sheet is stronger than ever, our intrinsic value per share over the last 10 years have compounded at a satisfying pace and our management team is also better than ever. Cheers!

The second important thing is to learn for your mistake and do your best to not repeat them in the future. That's the "rinse your cottage cheese" part. Discipline. What did I learned? First, to avoid very high gain potential, but at a significant fundamental risk "expense". So, since then, I did let pass some situations like that, and I effectively avoided some significant gains situations, but losses as well. I put more emphasis on the downside than before this experience. Now, back to Prem. Do you think guys he learned from his 7 lean years experience? From some value traps he recently falled into? I would guess that the answer is mostly yes. So far what I've seen with Fairfax is that they do care more than before on the solidity of our balance sheet. We're not a AAA company à la Berkshire, but we are in safer position than few years ago. Regarding FFH issuing shares since 1998, to me, it's a question of intrinsic value of what you give and what you get. If you issue shares at a discount to their intrinsic value for something that has less value in return, you're expanding your domain at shareholders expense. If what you issue has approximately the same value than what you buy, you're exchanging 4X25 cents for a dollar (fine with me, as long as it makes sense) If you buy something that has more intrinsic value than what you give, then your shareholders profit and it also makes sense.