investmd

I'm aware of previous work by Ioannidis and it is high quality. While he hits the mark in saying we are making decisions without data, this article is off side in that he offers no proposed solution. We can see a tsunami coming off shore. The only tool we have to possibly prevent a disaster is social distancing. This article https://www.statnews.com/2020/03/18/we-know-enough-now-to-act-decisively-against-covid-19/ offers a friendly response to Ioannidis' and conclude with "no choice but to buy time with social distancing"

Investmd....I understand your frustrations totally. I have studied Fairfax in-depth for well over 20 years and invested in the shares almost as long. I concluded a few years ago that something was very very wrong. Despite all of my considerable efforts I could not get to the bottom of the problem. in the end I concluded it was not one or two problems but a myriad of problems that could not be corrected/overcome. As a result I started to sell off a portion of the shares I owned until I reduced the overall share position to a much smaller portion of my overall portfolio. I can assure you that I never looked back. My only regret....not selling all of the shares that I owned. I enjoyed going to the annual meeting and related activities which included meeting up with old friends that I had met along the way but let's get serious these reasons are not enough to keep me invested in the stock. So for what its worth....start selling off your Fairfax holdings. It will hurt to do so but in the end you will not regret it. Others will disagree with this recommendation but a growing number will agree. Good luck! Bearprowler, thank you very much for sharing your experience and words of support. I've been following and accumulating shares in FFH for 15 years and going to the meetings...and probably drinking the KoolAid. I hadn't thought of selling at these levels. However, your advice resonates. Thanks.

Hmmm...Canada does have an advisory against international travel, does have recommendation for self quarantining for 2 weeks post international travel, doctors have been requested not to travel abroad so that they can be present to help treat, governments have mandated that schools be closed in New Brunswick, Quebec, Ontario & Manitoba, there is no formal entertainment going on - restrictions on gatherings have been placed...@ the grassroots level in Canada I find no one is shaking hands, meetings are being cancelled, there is alcohol based sanitizer everywhere.... Hospital capacity is what it is. However there are plans in place for closing OR's and turning them into ICUs if necessary. Bank of Canada has slashed interest rates, government has issued liquidity. Overall, from what I can see Canada is doing an exemplary job. Re the bolded part: investmd, I don't know where you live. Here in Ottawa, our surgery wait times are already unacceptably long. Turning ORs into ICUs will make them even longer. Hip and knee replacements can wait, I guess. What about cancer? The Ottawa Hospital is struggling to meet Ontario target times for certain types of cancer surgeries. My understanding is that OR availability is the main bottleneck. You seem to think that turning ORs into ICUs is not a big deal. Why is that? Clarifying, yes, turning ORs into ICUs is a big deal. However, in case of pandemic the most urgent have to be taken care of first. Elective surgery may be cancelled for many reasons including the fact that they don't want people coming in for elective surgery to get infected with the coronavirus. So outpatient procedures may continue, but procedures requiring hospital stay may be cancelled. We are not there yet. My point is that Canada is doing an excellent job of trying to be prepared and flattening the curve. So far so good.

Hmmm...Canada does have an advisory against international travel, does have recommendation for self quarantining for 2 weeks post international travel, doctors have been requested not to travel abroad so that they can be present to help treat, governments have mandated that schools be closed in New Brunswick, Quebec, Ontario & Manitoba, there is no formal entertainment going on - restrictions on gatherings have been placed...@ the grassroots level in Canada I find no one is shaking hands, meetings are being cancelled, there is alcohol based sanitizer everywhere.... Hospital capacity is what it is. However there are plans in place for closing OR's and turning them into ICUs if necessary. Bank of Canada has slashed interest rates, government has issued liquidity. Overall, from what I can see Canada is doing an exemplary job.

Points I took away from FFH 2019 Annual Letter: 1. The letter lacks integrity. Starts with 2019 was a great year for FFH and continues mostly with unbridled optimism throughout. Reality is shareholder return for 5 & 10 years have been terrible - he doesn't openly admit it and doesn't admit frustration with it and lay out a plan to change it. If one cares for their shareholders, he would be more contrite about the returns he has delivered. 2. Ends letter with : "Over our 34-year history, we have always operated at Fairfax with a small team which, with great integrity, team spirit and no egos, protects our company from unexpected downside risks and which takes advantage of opportunities when they arise". Well, after reading a decade plus of his annual letters, I've changed my mind - he's not showing integrity/honesty and his writing has consistently exhibited egotistical behaviour and FFH has not been able to take advantage of opportunities like others have. 3. Insurance business is doing very well, has improved significantly and is successfully generating no cost float and is the jewel of FFH 4. I’m glad that he has openly admitted that BB, Exco, and Resolute were mistakes – he is more open about this today than in the past 5. Believes, “India is the best country to invest in long term”. OK, but no explanation as to why. Not genuine. 6. Believes Modi re-election will turn around Indian economy. Again, no explanation as to why especially given that was the thought at time of Modi’s first election and it didn’t come to fruition. Again not genuine in his writing. 7. Over 5 years intrinsic value has compounded by <5%/yr & share price <1%/yr. Over 10 yrs: IV - 3.2%/yr & share price at 5.2%/yr. Prem’s only comment on stock price is : “In last 4 years stock price has not gone up with intrinsic value, but it will happen again” - with no explanation. What about the fact that IV is only up 3.2%/year over 10 years? 8. On investments: “shows that Fairfax’s investment results have been consistently very good since inception, with the exception of the 2011 – 2016 time period, when we treaded water” - how can he say “consistently very good” as investment returns over 33 years have been 8%/yr and over past 10 years have been <5%/yr ? Isn’t the point of his investing prowess to do better than the index? How can he say “very good”? 9. “So when the correction happens (and it may be happening as we speak), we expect value stocks to provide better protection on the downside”. A week after the report comes out, we are in a correction. From what I see, when there is a correction, everything goes down – BRK & FFH are down just as much as tech stocks. 10. Committed to buying back shares over next 10 years Being optimistic is one thing. Not being in touch with reality and getting people to invest in you/your business by shrilling dishonest optimism is getting to be on the Ponzi scheme side of things. As a long term shareholder, I am so disappointed in this man. @Sanjeev: You have been a big supporter and believer in Prem Watsa’s honesty and integrity. This website's name is in homage to FFH. Watsa has shown his belief in you and invested in you. I’d appreciate your thoughts to above comments. Would also love it if there was a way to get FFH to reply.

Noticed this post was started in 2013 and 7 years later it's still on sale! Kind of like Fairfax financial. Ouch. Compared to 2014, WTI is down 50%, whilst a lot of Canadian oil patch equity is down >90%. Companies are still paying dividends. Thesis: IF companies are able to survive at WTI of $50, then equity price will rise substantially when WTI price rises. In the meanwhile, I bought a basket of TOU, PEY, HSE, VET, ARX. They are paying out an average dividend yield of 7-8% at today's prices. World oil consumption is still increasing. Downside risk is that world reaches peak oil consumption & wti doesn't spike. Then oil producing countries may try to monetize their residual assets and open the taps...

Unfortunately 2019 only exacerbated the underperformance - 1.3% return for Chou Associates in a year when markets were up 25-30%. Five year annualized return is negative 1.3%. What boggles my mind is that he is a very bright investor - much more astute than I - and still has returns like that. What bothers me is that he doesn't explain in his letters why his returns are so much below expectations. 10 yr annualized 5.5% & 15 yr annualized of 4.5%. After over a decade in the fund, I did exit. However, I hope for him, his thesis and his investors that he does have a really big bounce back year soon.

Above suggestions of Thinking in Bets & Education of a Value investor are books I have enjoyed. For 2019, my most interesting reads were: Fiction : A gentleman in Moscow - read the whole book with a bemused smile on my face. Favourite line : when protagonist was asked what his profession was he replied "It is not the business of gentlemen to have professions". Non Fiction: Deep Medicine by Eric Topol - role of AI in healthcare of tomorrow and LifeSpan: Why we Age and Why we don't have to by David Sinclair - leading Harvard biologist on why ageing is a disease and how it can be treated.

Thanks. The price history at close for past 5 years that you shared, suggests if one was holding since Dec 2014, annual return has been about 2%/yr (from dividends) in generally a bull market. Wow! Will take a substantial run up in price to justify for those of us who have held.

Dazel: thanks for starting this thread at the beginning of the year and stating your conviction. It's 12 months later and I'm curious as to whether there have been adjustments to your thought process. In another post in January you stated "2019 is all about earnings....good or bad. It is time for Fairfax to perform...if they do not I will accept it and move on. If it sounds like a broken record I appreciate the skepticism from all..." In some ways FFH has performed - insurance side has done well, Seaspan & Eurobank - couple of their largest equity holdings have done well in past 12 months, BUT FFH stock price is essentially flat and I believe selling below book value. So what are your thoughts to close out the year?

Thanks for insights kab60,thepupil & SharperDingaan. thepupil: agree 85basis points seems like for an ETF like fund - happy to pay good fees for good returns - 1-2% annual fees regardless of returns doesn't sit well given how challenging it is to beat the market by >2% SharperDingaan - interesting play you suggest. However, my understanding has been that the worst thing for the UK about Brexit has been the uncertainty. Now that there is a clearer picture that it is going to happen, could the Pound not strengthen?

Looking for advice on investing in GBP. I'm based in Canada and tend to invest in a) equities like BRK, FFH, BAM & b) managers with zero fee partnership structures - Pabrai Funds, Aquamarine, ROMC & Austin Value Capital. My wife has some money in the UK and she wants me to invest it, but she wants investment to stay in British Pounds. Looking for insights from this group of value investors as to what I can purchase in GBP that could compound at 8-15% over several years - equities that I could buy on the FTSE or bright managers in the UK with value add. Could stay consistent with my current theme or diversify. Thanks!

ValuePadawan, once you've seen a securities lawyer, please do update this post - would like to know outcome of discussion. Thanks

Following up on results 6 months after this post on top 4 FFH positions: Eurobank - UP 17% Blackberry - DOWN 44% Seaspan - UP 10% ICICI Lombard - UP 16% (& recent FFH exit) FFH share price over last 6 months - DOWN 11% All of us are likely keen to see result of if/how FFH uses large cash position from recent ICICI Lombard sale to drive value for FFH.

A dozen years ago bought into the FFH thesis of science of pricing insurance properly that generates float that can then be invested by astute people - the Warren Buffett of Canada philosophy. Have just kept accumulating shares. Looked to generally "buy the dips" , but add yearly, have bought as low as C$300's and as high as C$700's over about 12 years. Always waiting for the stock to outperform. As a result of adding to the position for a dozen years, I have a large position (approx 7% of assets) in FFH with average purchase price of C$498 (today's price=$585). Overall, I haven't lost money, but have deployed a significant portion of assets for a long period of time that has compounded at a rate that is below my expectations (8-12%/year over long periods of time) even after taking in the annual dividend of USD10/share. Does this patient value investor stay the course given the amount of time and resources deployed and hope against hope that Watsa does something to appreciate stock value?? Feeling particularly down after the always ethical, investor friendly, strong EQ personality of Watsa has taken a hit with recent news of court behaviour. This is superimposed by now getting tired of him always talking about 15% compound growth and not delivering. Went through similar thought process with Chou Funds before finally making decision to part ways. Am hurting/struggling with sell side discipline of stay the course (stock is undervalued, there will be an inciting event, Eurobank investment will appreciate, investment process will be improved, Indian investments will pay off, there will be significant stock buy back at these prices...) vs. is the nugget now better deployed elsewhere? Had big hopes for this position.... Would love to hear from some of the FFH bulls who have been passionate on this site. Thanks for your thoughts,

Couple of definitions I like: To know if something involves skill, see if one can purposely lose at it? ie - coin toss - one can't purposely lose; chess --> one can lose. It is a gradient in that there are things that involve v. little skill and others that involve more. If you can't purposely lose, then it doesn't involve skill. Luck = when opportunity meets preparedness - my favourite definition in the English language. There is often opportunity, some can't recognize it, others can't act on it. Those who can recognize and act are considered by others to be "lucky".

+1 for Toronto & Montreal as highlights for a visit. Toronto is a vibrant cosmopolitan city with great coffee shops, restaurants, theatre. Montreal is different than anywhere in N. America - it is full of joie de vivre, totally happening, bustling; equally if not more vibrant restaurant scene, great walking city - worth checking out.

Liberty, Chesko, I'm a fan of Peter Attia but even as a medic I do find his podcasts to be very technical for non medical audience. Am (pleasantly) surprised to see his podcasts being favourites in an investment thread. Are you in the medical field? The Jason Fung episode totally changes our way of thinking of diabetes - I like the idea of time restricted feeding but we need some caution as the science is not there - yet. However, the risk of TRF in healthy adults is uber low. I started about a month or two ago and I'm liking it. Maybe we need to start a thread on Time Restricted Feeding?

I too am excited to see what life will look like 50 years from now. Looking at what life was like in N. America in the 60s/70s - coming out from the Civil Right Act to use of technology in our lives to connectiveness across the world to drastic reductions in world poverty, advances in women's rights, movements towards racial equality - I'm keen to learn how we live in the coming decades. In order for some of us to make it another 50 years, might need advances in longevity research - a very interesting, emerging area of research. Be well!

Interesting. Thanks for following up on this Partner24. Wisdom of the crowd was wrong in 2009. If the same poll was conducted today, probably everyone would say either <10% or 11-15%. Wonder if we would all the wrong again....hopefully.

Do you have a time frame for expected re-rating to 1.5x book? 3-5 years? Have been thinking of similar returns for past decade. Hasn't played out yet.

Thanks for sharing this insight. It's a strange buy for Chou as in my opinion he usually seeks deeply undervalued/distressed stocks with a 2-10x potential. FFH doesn't fit that bucket. Maybe in the Chou RRSP, he is restricted to buying Canadian equities. I don't think he bought FFH in his flagship Chou Associates fund?

I take that back. Am getting deeper into the Matthew Walker podcast with Peter Attia - it is very good. Until now there has been a lot of hearsay and generalization about sleep benefit. Now, Mat Walker is sharing that there is science and it is very interesting.

https://fs.blog/naval-ravikant/ - foundational values https://fs.blog/adam-robinson-pt1/ - why value investing doesn't work https://fs.blog/atul-gawande/ - medicine and making a difference https://fs.blog/barbara-coloroso/ - on parenting I read the Mat Walker book - found it OK and started listening to the podcast with Peter Attia but it hasn't grabbed me yet. However, Peter Attia is brilliant. My favourite Peter Attia podcasts so far are: https://peterattiamd.com/zubindamania/ - this is the podcast that got me listening to Peter Attia; 2 brilliant Stanford MDs who are burnt out with current health care https://peterattiamd.com/nirbarzilai/ - trying to understand the science of aging https://peterattiamd.com/samharris/ - Sam Harris is the essence of having a conversation https://peterattiamd.com/jakekushner/ - metabolism of diabetes and understanding glucose uptake appears to be linked with longevity research

This link is not active. Could you pls repost. thanks