A_Hamilton

Petec, just so you know I think you are comparing some apples and oranges figures (this is due to the way FFH presents things). The $662 million FFH refers to is the market value of the common equities at 12/31 being less than the fair value by $662 million as laid out by Prem on page 10 of the annual report (due mainly to Eurobank and Quess). The $712 million figure that was mentioned by Jen Allen on the call corresponds to the Investment in Associates fair value over carrying value at 12/31/20 as laid out on page 72 of the annual. The biggest driver between these tables is the private insurance holdings (Eurolife, Thai Re, Go Digit) and then FFH India. FFH's comment on the call and then in the annual letter was that the fair value of the common as laid out by Prem on page 10 of the annual is now above that of their carrying value. These are very different statements so just want to be clear there. A good portion of Q1's gains (to the extent market stays up) then will simply go to having the carrying value and market value of the common equities be much closer.

I don't think it would be the wrong response to exit if Prem didn't sell unless there were some kind of blackout period having prevented FFH from trading. I agree too with Petec's point that a lot of this is about the fact that the company could use some higher capital levels to take advantage of the hard market. They are somewhat fortunate so far that the hard market is stronger outside of catastrophe reinsurance because their just isn't the balance sheet to write that substantially right now and end up with 140% combineds for a few quarters if you get a bad hurricane season.

Where are you coming up with 5 days? I have never seen a 13D amendment issued later than one day after a change of 100 basis points or more change in position size. The SEC rule is that you must file promptly. Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply. Per SEDI Wade Burton sold some shares today and Roger Lace sold some last week. It is going to be a very hard conversation if two senior members of Hamblin Watsa sold shares but Prem wouldn't let FFH sell any. Holding out hope FFH used a total return swap to reduce their notional exposure and somehow convinced themselves via their attorney that they don't need to file an amendment as the TRS is cash settled and not a security. But I'm thinking that is a long shot at this point.

Just look at the 13D. https://www.sec.gov/Archives/edgar/data/915191/000110465920101936/a20-30061_1sc13da.htm FFH owns $330 million of converts at $6 for 55 million shares. Then they own 46.583 million common.

Especially when you rewrote your convert. This.... 7$/share wouldn't have been anything previously with Fairfax's ability to convert to 50 million shares @ $10. But now Fairfax gets to convert into 55 million shares @ $6 - meaning they're ~$100 million in the money for bonds that wouldn't have been worth more than par back in September. Have you (or has any board participant) calculated FFH's break-even on its full investment in BB? It's mostly irrelevant because you cannot change your entry price, you can only choose whether to exit, but I am a bit curious. My mental guess would be about $10/sh, but that's just the result of faint memories of past discussions and accounting for the new conversion privilege for 55m shares. The prospect of exiting the BB position on a break-even basis (or gasp! a profitable basis) is encouraging. It's been a long ten years. <EDIT> Answering my own question, here's a bit of work that Valuehalla did a few years ago: https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-2017-15646/msg320753/#msg320753 SJ It's much higher than this. You'd have to look at old NAIC filings, but FFH didn't only own common equity it bought in the high $40's and low $50's, but also owned total return swaps long in RIMM / Blackberry. Glad there is the potential for a positive result form here.

Anyone else notice subordinate voting share count is actually up YoY? 27,242,281 at 9/16/2020, 26,067,450 at 9/16/2019. I hadn't noticed that, but after you flagged it, I pulled up the Q2 financials: https://s1.q4cdn.com/579586326/files/doc_financials/2020/q2/FFH-2020-Q2-Interim-Report-(Final-Milestone-July-30-0451-pm).pdf On Page 21 of the Q2, it says the June 30th subordinated share count was 26.3m shares in 2020 vs 26.9m shares in 2019. It's not exactly Teledyne, but at least it looks like the share-count is going down slowly... SJ My point is just that it looks like FFH has been issuing treasury shares in Q3.

Annual news. They must file one every year on the off-chance that they wish to repurchase shares. It's just a formality. SJ Thanks for cooling my excitement ;) So, when and how would they report actual share repurchases? FFH usually makes mention of the repurchases in its quarterly financials. Alternatively, if you don't want to wait until the financials are published, you can look for filings on SEDAR or this site is a good option: https://www.canadianinsider.com/company-insider-filings?ticker=FFH SJ Anyone else notice subordinate voting share count is actually up YoY? 27,242,281 at 9/16/2020, 26,067,450 at 9/16/2019.

From what I understand, Ryan Reynolds is a minority shareholder and he is staying on as a shareholder of American Aviation. The rest of business (Davos) is mostly owned by Fairfax and the Sokol Family. Not sure how much is owned by who, but it looks like Fairfax and the Sokol Family are selling. Cheers! Thank you. I looked at Odyssey's NAIC filing and at 12/31 it had a $15 million investment in Davos that had generated losses bringing it to ~$9.5 million. I haven't dug through the other subs'/not knowing how much ownership ORH got for $15 million makes it tough to know, but would be nice to see a couple of dollars bump to BV in Q3 from this.

I think you need to tax effect the loss that you are embedding, but this is how I think about it as well.

Does anybody know how big FFH's stake is in Davos and then how big Davos' stake in Aviation Gin is? Aviation just sold for $335 million plus an earn out that could value it at $610 million. https://www.yahoo.com/entertainment/ryan-reynolds-aviation-gin-line-132816393.html

If Berkshire had sold out of WFC, surely they would have had to file a 13D to indicate that their stake is below 5%? I think he probably sold quite a bit of WFC, but I wouldn't be surprised if he blew out JPM entirely. Out of all Berkshire's financials, JPM are probably the most exposed to unsecured consumer lending, which is probably not a place where you want to be in this environment. You are missing the fact that a company can go over 5% and be a 13G filer. This is a passive investor who owns over 5%. A 13G only needs to be filed once per year within 45 days of year end. There is no incremental filing needed until you get to a position over 10% or intend to become activist (then you'd need a 13D for activist and also become a deemed insider and Form 4 filer if over 10%).

No no...$769.2 is available to all shareholders of Fairfax. Preferred shareholders received $11.2 million, so available to common is $758/26.98= 28 million. Or page 19 of the interim report in Note 12.

It all comes from the Federal Reserve's Survey of Consumer Finance. These guys extrapolate the data to get to percentiles. It's pretty crude.

You do know that FFH via Brit/Allied World/Odyssey Re writes catastrophe reinsurance and we just had Harvey/Irma/Maria/multiple mexican earthquakes all in less than a quarter, right? The gains are great, but need to look at the right side of the balance sheet too.

Since on July 5 FFH closing was $444 usd that's floating ratio of $ 12 / 444 = 0.027027 So 0.027027 + 0.030392 = .057419 AWH had about 86M shares out so * 0.057419 = 5M new shares of FFH after conversion 23M + 5M = 28M shares Gary, They provided the final ratio in the press release below. http://www.fairfax.ca/news/press-releases/press-release-details/2017/Fairfax-and-Allied-World-Announce-Final-Exchange-Ratio-for-Exchange-Offer/default.aspx

Too IIFL up 55% in Q2. $95 million USD increase in fair value ex the stake in FFH India.

I'd say that FFH is so geographically diversified that there are few cats that would really affect their consolidated CR. Maybe if we had another Katrina, or if we had a repeat of the four horsemen of the apocalypse (Charlie, Frances, Ivan and Jeanne), it would make a difference. But what was the impact of the wildfires in Fort MacMurray? Pretty small, despite the devastation. They've bought significant catastrophe cover for medium sized events. Reinsurance markets are so soft right now they are becoming a buyer of cat cover rather than a seller. Go back and look - Fort McMurray would have been a larger for FFH absent its re cover.

No. It was Steven Mnuchin.

Ticking time bomb. Who knows if a real estate bust will directly affect these banks' capital position or if ROE's will come down dramatically when CMHC needs to be bailed out and Canadians demand that these banks hold more capital so that they can't use regulatory arbitrage via CMHC to extort huge amounts of profits from the citizenry. Probably better off shorting the C$ so the 20-30% ROE's don't blow you up in the interim period before the bust. Next 10 years for Canadian banking very likely to include vast capital builds and retrenchment from interesting forays into the U.S., LatAm and the Caribbean. Seen this movie before.

There is definitely that possibility. However, this would show up in the loss & lae/commissions or other SG&A. So when reported you'd see the losses.

Come on... it's ok to say it was over 100%. Fairfax Asia and Brit certainly didn't need their currencies converted. Ouch: I don't know why Prem said Canadian dollars here on Northbridge. It doesn't matter what currency its in, the combined ratio for Northbridge (or any other entity) is the same. Here, 98.6%.

Federal courts randomly assign UNLESS it is an organized crime case. Then, there is a specific federal judge who has accepted that duty and he/she receives 365 24/7 protection from the U.S. Marshal's service.

Are you implying that they will do more than 10-12% compounded if interest rates stay low? If only it were really that easy. Why would anyone buy any of these stocks if they did not expect at least 10-12% compounded for long period of time? So, yeah, I think he's implying this and I would imply it too for the ones that I hold from this list: aapl, bac, brkb Although I don't hold wfc, axp, ibm, xom, I can see reasonable scenarios where all of them return >10% for coming 10+ years. I can see those scenarios too (and own axp, wfc, and brk). But stock markets have done 7% give or take compounded over the very long run. So to assume that big, established companies - even very high quality ones - will deliver a 3-5% premium to this against a headwind of rising rates seems pretty punchy to me. Don't get me wrong, I'll be delighted if it happens. But it's not my base case. BAC, WFC, AXP, BRKB are all beneficiaries of rising rates. No headwind there. The problem isn't what if rates "stay low," it is what if rates go lower similar to Europe and Japan. If we see negative rates the banks are going to trade at and be worth meaningful discounts to tangible book value.

I hope for this and hope that the compromise candidate is currently relatively obscure on the national stage.

Awesome, thank you! Just what I was looking for!