Crip1

Rammstein is obviously known for the visuals at their shows, but I think that reputation overshadows their music to an extent. Like you, I am a fan. Among other things, they incorporate keys into hard rock/metal as well as anyone, and far better than most. -Crip

Among other things, this board is a lot more of "This is what I am doing, and here's why" vs. "You're an idiot if you don't do this or that". I'm still holding but if you find other investments which have better risk/reward profiles, more power to you. That said, do you care to elaborate on the better opportunity? -Crip

I would think that management does something akin to a Monte Carlo simulation on the TRS position on an ongoing basis to assess the risk potential and damage projections related to the TRS position, and possibly to create one or more “escape routes” should a more damaging scenario play out. I mean, one would think they do similar type analyses as part of the insurance business as a whole to avoid risk concentration. The fact that the TRS deal is leveraged so, even moreso than a large investment, suggests that if a confluence of negative factors do occur, the damage can be substantial. -Crip

I stand corrected. All the same, with 84K shares traded, that means about $90M of shares traded have resulted in excess of a $1B market cap hit. -Crip

Are you seeing that volume on TSE?

Just over $1K shares traded today on the US OTC market, total amount of those trades at current prices is under $1.2M. 6% share price decline applied against $26B market cap means a decline of roughly $1.6B if market cap. So, $1.2M of trades resulted in 1.6B of "lost" market cap. Yawn. -Crip

Add to the Blackberry holdings and then buyback depressed shares...BRILLIANT!!!! -Crip

Sure speculation: This actually reminds me of years past when, after a good quarterly earnings release, the share price would move higher 3-4 days later…it was like clockwork. This fits the modality of a thinly followed stock where there are not immediate responses in the market like one would see with a highly followed stock. Almost like “Hey…look what happened a couple days ago…” and, if that’s the case, the fringe market watchers may not see the benefit of the Sleep Country transaction. -Crip P. S. Also worthy of note is that the volume on the US OTC market is 600 shares as of 1:00 Central time, about 12% of the average daily volume of 4,000+.

Personally, this is not a matter of a lack of trust. It's simply a matter of clear candid communication as the press release seems to be somewhat ambiguous. -Crip

With the FT job I rarely get to watch business television (CNBC, Bloomberg), but taking a couple of days to accompany my wife to a conference affords the opportunity to catch a broadcast or two this week. Some of the things one hears are mindboggling. Among them over the past two days: "It's a stock-picker's market" - Really...you mean that there are times where one does not need to be able to pick stocks? "It's one of those industries where you need to stick with quality" - OK, let me know an industry where one shuns quality. "If you don't know what you own, sell some of it" - I simply don't know how to respond to this. I am sure there are countless others, but the stuff that passes for "expertise" is astounding. -Crip

Surprised by this. Yes, an 8% return in 2 weeks is stellar, and chances are pretty good you can get back into this position 5% lower than it is today. Ironically, it was one of your posts that compelled me to leave everything in Fairfax and not take some profits off the table. -Crip P. S. Please don't take this as a criticism in the slightest. Far be it from me to criticize anybody else as I've made more than my fair share of mistakes. Any I especially would not criticize someone whose skill and analysis is far better than mine.

The net is that it increases debt service by about $24M/year, a little over $1/share per year. The benefit of a pretty attractive interest rate for the next 30 years is substantial. Candidly, I was a little surprised to see this. -Crip

Long time owners of Fairfax will remember the name BSilly from way back when. He was one of the best voices of reason back in those days when Fairfax was under attack by short sellers. Too bad that his musings are few and far between on this board. Thanks for finding him on Twitter. -Crip

I would THINK that the investment committee modeled this out and continues to update the model to gauge how various changes in share price impact the swaps. And, of course, that model would need to be multi-dimensional to account for what would happen with a super-cat that would double-hit the company by driving the share price much lower at a time when cash would not be as readily available to buy the depressed shares. My expectation/hope would be that when looking at all the possible outcomes, we're looking at "heads I win, tails I don't lose much". -Crip

First and foremost, as a US citizen I appreciate you saying that. Regrettably, IMHO, there are far too many US citizens who use the right of free speech to do far more bi***ing and far less appreciating (this may prevalent in other countries, but my frame of reference is too limited to speak on this). Don't get me wrong, criticizing in order to try to make a positive change is admirable, but along with criticizing, one should be grateful for the opportunities afforded. -Crip

i do not have an answer to this question as I have more knowledge of FFH and Chubb, but taking a step back, this is not the first time we've encountered a "would you rather have X or Y?" in our investing lives. Assuming that the analyses on both show both to be good investments and we can't figure out which is better, it makes more sense to buy both and continue to monitor both. If one of the two look to be executing better than the other (business performance, not necessarily the price of the stock), then sell the underperformer and double down on the other one. This makes a lot more sense to me than an "all or nothing" choice between two good investments. -Crip

For those without a full position in FFI, looks like we're being given a buying opportunity today. -Crip

In and of itself, the persistent discount is not nearly as much a concern as is company performance. The same can be said for Fairfax, incidentally, in that I am less concerned about the multiple to book at which it’s selling but more concerned about whether book value is increasing and, assuming so, at what rate. The discount to BV obviously has a positive in that buying back shares by itself increases BV for the remaining shareholders. On FFHI, if we assume the discount goes on for the indefinite future, then the discussion becomes, assuming one wants exposure to this market, whether it’s better to invest in FFHI or one of the India-centric ETFs. We’re ultimately asking ourselves whether FFHI will deliver alpha. My theory is that FFHI performance will be far more lumpy than the ETFs and that, at some point, price and BV will converge which provides a buffer if alpha is not delivered. -Crip

Fairfax is about 33% of my "investable" holdings, closer to 25% of total holdings (the difference being that company-sponsored accounts are not self-directed), so if I qualify as "others with big positions", here goes. I was tempted to sell but didn't for a couple of reasons: I really don't have any ideas that I know as well and feel as comfortable with. Buffet once quoted Mae West "Too much of a good thing can be wonderful". In the past my brain has short circuited when positions have increased...I was anchored to the past stock price and would sell a large portion of my position figuring it would be available 20-30% lower and I could buy back then. It's worked at times, but hasn't at others. Bottom line is that if a holding is not grossly overvalued, the risk-reward of that strategy doesn't make sense. -Crip

Guessing it's a combination of Inconsistency-Avoidance Tendency (#5 of Charlie Munger's Psychology of Human Misjudgment) and the fact that any indication akin to "I was wrong", no matter how refreshing it is in real life, is a resume-killer in the profession of Equity Analysis. -Crip

First and foremost, thanks for the update...definitely appreciated. Treasury rates peaked in October, and they've not "done much since"...nicely done. After hitting the valley around the start of 2024, have been slowly rising since and then rocketed higher over the past week. It would really be interesting to know if they are going to use this decline in pricing to push out duration. -Crip

The question of whether or not we we fully understood Fairfax is complicated to say the least. Below are a few aspects of Fairfax along with some commentary: · Did we foresee the interest rate environment? I don't think so. · Did we foresee the hard market continuing as long as it has? Again, I don't believe so. · Did we think Fairfax was executing well and was well positioned? For the most part, yes, we did. We may have under estimated how well they were executing, but we did see that the company was in a much better place. Many things have gone well for the company over the past four years, some of those things were within their control and some of other things were outside of their control. To the question of whether or not we understood what Fairfax was four years ago, we likely didn't. Part of the reason was the exogenous factors that, as investors, we never want to assume that everything's going to be wonderful because that doesn't always work out. To your point about underestimating the company, we likely did, but healthy pessimism was part of the reason. While typing this, something else popped into my head. Viking, you've been commended many times over for your analysis of Fairfax, and said commendations were definitely deserved. One other aspect of your posting that was really impactful is talking me out of being "grounded" to a stock price from months past. Many times in my investing life I've sold part of a position with the theory that a recent run-up was temporary and that I could re-buy at a price 10% of so lower than the current price. I was tempted to do that with Fairfax, but you reasoned me out of it. I really appreciate that. -Crip

Not 100% sure of that. The video of "Help me dig up dirt" suggests more than a short-term short and distort deal, but it may be a matter of "Hey, we orchestrated a 10% drop last time, let's try it again"...the "cost" was a 2 minute video which, clearly, isn't much. -Crip

Yeah, clearly an element of Skip Bayless for you sports fans out there or Jim Cramer at play in that accuracy is of secondary or tertiary importance compared to showing bravado and being bombastic/memorable. Saying something stupid is OK as long as people remember who said it. I mean, seriously, fake Canadian accents, cartoons and TicTock video clips? Only compelling enough to drive out the weakest hands with volume no higher than normal. On the other hand, part of me wishes it was more successful. Their initial report allowed me to buy and sell in a period of less than a week which reduced my net cost per share by $18.50…I’d not mind doing that again. -Crip.

Part of the benefit would presumably be not having to talk about the share price any more. It's now "out of sight, out of mind" so if it does go fully belly up, it's a non issue. If, by the grace of God, somehow it starts making money, it could be sold eventually not unlike the Pet Insurance business. Improbable, but not impossible. -Crip