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- Underwriting discipline all across Fairfax. Looking at the expense ratio going up because of reduced volume of insurance business (underwriting discipline), don't look to reduce the staff significantly and want to retain talent. My personal observation: it's all about thinking over the long term (clap clap clap). - They have not hedged back their stock portfolio. Think that if they have choosen stocks properly, they and FFH shareholders will be quite happy in 4-5 years. There is still interesting investment opportunities in the stock and bond markets. Remind them the (1976-1984?) period. My personal observation: seem to be very happy with what they own actually. - Prefer a lumpy 15% CAGR than a smooth 12% CAGR. Personal observation: Me too! As always, be prepared to handle more difficult quarters and years. A stock portfolio is volatile and when you have a very significant part of your equity in stocks, then book value per share will also fluctuate accordingly.

If you take a look at the significant turnaround we have enjoyed at Fairfax over the last few years, the best quote to summarize the progress might be one from Bart Simpson: "¡Ay, caramba!" 8)

That's terrific SharperDingaan! That might be the best way to teach the kids about finance and business that I've ever seen. Cheers!

If a screen can beat 99.99% of money managers and it's reasonable to think that it will, over the long term, than it's terrific. Furthermore, it could save an investor a lot of time that can be invested elsewhere. So, basicaly I like that formula. The only potential problem that I see with it is the risk of permanent loss. I don't care about volatility that much, but I do really care about not having a permanent loss. Let's say that the stocks it filter get some terrific returns for decades, but one year they get a huge loss for a fundamental reason and you nearly lose all of your capital. Yikes! Cheers!

"The best way to become a millionaire is to become a billionaire and start an airline" Ahahah good one ;)

A step that took to long to take, but anyway in the right direction. Cheers!

Here is some articles about the canadian residential real estate actual situation. Maybe we're not as protected as we tought against a significant price decline... http://americacanada.blogspot.com/2009/07/cmhc-and-our-government.html http://marketdepth.typepad.com/marketdepth/2009/06/sell-the-banks.html

...but very open to listen the best single ideas of the others ;)

Here is the ticker symbol with the case explained: Found Financial Heaven ;D

"Jockey" stocks: 100%.

Very interesting. Thanks Sanjeev!

Very good points Dazel. To me, the main pros are BRK munis, increased allocation to equities overall, disciplined underwriting. The main con is the canadians "cigar butt" investments. The price depreciation of some of them reflect what's happening in the business and it is not only the result of a short term voting machine.

I remember a South Park movie song "Blame Canada". When I red the text of the article and remembered some insurance executives comments made over the last few months, I changed the word "Canada" for "AIG". Here is the original song (sensible ears beware, it's typical South Park stuff): http://www.metacafe.com/watch/428397/south_park_blame_canada/ So let's start a "Investors against AIG" group and blame AIG! ;) Jokes appart, AIG might, like some said, be one of the reasons why you see a substained soft market. Cheers!

There is also a good alternative to buy ORH...it is to not buy it. Balance sheet comes first. We already bought back NB recently and we have a decent margin of safety with our holdco cash to weather some storms if they were to occur. That is a huge asset to have. And, as a FFH shareholder only, to issue FFH shares to buy back ORH is not the kind of deal that would be the best use of our capital IMO. We would issue shares of a very diversified insurance business, both geographicaly and by insurance products, at a huge discount. Yes, we could get the remaining of ORH in return, but the ORH discount does not seems to be wider than FFH, so I don't see the added value here.

Very interesting. Thanks. Here is some other quotes found in the article and the "comments" section. The graveyard is full of irreplaceable people (producers, underwriters, consultants, etc.) Insurance is a business, not a charity. Past history is not always a good measure of what is to come Deal only with clients that are ethical, it will save you a lot of grief and the others are not worth the time. The client is always right, at least as long as they are a client, but know when to cut the cord!! Top Line for vanity bottom line for sanity (note: underlining is mine) "Paper Free in [insert year ending in 3 here]" One for the newbies: Underwriting is a trade where ignorance is actually a short-term asset. I've never seen 3rd-party 'consultant' recommendations make a company better. EVER. When you are absolutely certain; read the form.

This sad story, if true, underline two important things: - Try to live under your means - Be truly financialy independant and sound is far more important than to look wealthy

Oh, thank you so much Sanjeev for the link! I've spoke in the past of some people at Overstock, because our business also does a very significant part of our net revenues online. Overstock is a strong source of inspiration for me. I have a very high level of admiration for Patrick Byrne, now and few years ago when nearly everybody were telling that he was paranoid. When he was critized the most, I've said that he was my "CEO of the year". Frankly, those of have been here since a few years will know that I have respect for FFH and MKL managers, but I have to say that Patrick Byrne is even more to me then them. Not only he started an online business from stratch that now enjoy a very strong online brand recognition and a very high level of customer satisfaction, but he didn't let some hedge fund jerks playing with Overstock for a very long time. If he keep to win some small battles like he does, the benefits over the long term of his actions for our capitalist society might be tremendous! I am so grateful for having herd about these naked short selling stories, shorts attacks and The Fairfax Project. Maybe we would be a target for these jerks if I hadn't herd of that before. No one know the future, but suffice to say that we're still a private company. Cheers!

Thanks Sanjeev for posting this! If these Deep Capture statements are true and it's very reasonable to conclude that several people died because of that, I hope from the bottom of my hearth that these jerks will get a very strong class action suit. Cheers!

You don't build a great capitalist economy by always trying to "kill" companies by shorting them and spreading very negative and false point of views about them and their managers. Actually to call this repeated process as the "vulture" of our society would be an insult to vultures...at least they have the decency to wait for the corpses to be dead before having their free lunch.

In January, Moody's said, the museum's board voted for a more diversified approach guided by an investment advisor, and began a gradual selloff of Berkshire Hathaway, with the goal of Buffet's company making up half its portfolio instead of more than 90%. The rest will be invested in stock and bond funds. I haven't red the article, but if they decided to go from more than 90% of their portfolio in BRK to approximately 50%, it makes sense to me and I would have approved that as board member. But it doesn't mean that I would approve necessarely where they will invest the proceeds (funds....hum hum...wich ones!?). I understand that one shouldn't cut the flowers, watering the weeds, but that being said, 90% in a single stock, no matter how great the business, the management and the price is, is a very very high degree of portfolio concentration. Yes, Berkshire is diversified by itself, but 90%... That being said, if one would want to stick with that "90% in one single stock" policy, Berkshire would be a first class choice. Just my opinion. Cheers!

Brian or not, is pretty obvious for most of us that FFH is cheap and attractive (except for maybe the persons who sell ;) ). We have talented people here who follow the FFH investment portfolio and book value . For sure, it's not 100% accurate stuff because they do some estimates based on last data available, but anyway we get the big picture and, between the quarterly updates, that's enough to me to make my own conclusion with a high enough level of confidence. My family want to thanks Mr. Market for these interesting opportunities. We keep buying shares to hold them for the long run and we're happy with the actual offers. ;D Cheers!

Well, I believe in some sense of forgiveness, but like my mother usually say "Help yourself first and then Lord might help you". So, like you said Crip, a good way to start might be to tell some stuff that authorities don't know yet and help them stop the fraud bleeding of some of his "friends". At least, it would be some steps in the right direction.

I agree with al. Fairfax is actually quite cheap to me. I wonder who is selling at these prices and why. Remember, this board believe, on it's mean vote, that it will generate a total return on a CAGR basis of approximately 17% over the next 10 years. It would be a nice reward to just sit on your rear end and wait patiently. Time will tell (the vote was closed on June 10 2009, we'll see what will be the real return will be on June 10 2019).

Smazz, maybe in some way, but take it another way the "real" Michael Jackson like you call him may still live for decades to come. Cheers!

RIP Michael Jackson