FFH 2023 Letter

[Viking]

9 hours ago, Hamburg Investor said:

Agreed, @dartmonkey and @Dinar. 
 

Just to be clear: the nine times earnings is without the gains on the stock portfolio, without TRS and without (maybe) gains on selling of wholly owned businesses like the pet insurance businesses or IPOs. Assuming normalized earnings of 200 dollar per share (125 dollar in OE isn’t a normalized, but a minimum number) or a little bit less in year 1 gets us to a pe ratio a little bit below 6 and an roe of 21%. If stock markets tank in year 1 it will be way less of course.
 

If Watsa doesn’t reach roe way above 15% in times like these (hard market, value beating growth), than he won’t reach an average of 15% (that 15% isn’t tied to OE, @dartmonkey, so 15% of 29bn or 6bn would be including stock gains etc… That’s your point, isn’t it?!) over the longterm. 
 

Regarding that goal of compounding at 15%, I again and again read, that Prem hasn‘t reached it and Buffett hasn‘t reached his (former) goal and that these two and Markel won‘t reach returns like in the years up to 2007/2009 again, as they are e. g. too big. I think what those people miss is, that the years following 2007/2009 until 2019/2021 were really special and giving strong headwinds to all insurers (that’s why the valuations of those three came really down compared to pre the financial crisis). Soft markets, bad returns for value versus growth, low interest rates were a toxic cocktail for those three (and others). It was a very long soft market, growth has never underperformed value by such a margin and for such a long time (am I wrong?) and interest hasn‘t been lower (especially for such a long time). And yes, in case of Fairfax Prem wasn‘t really executing well; but that’s only part of the story. BRK and MKL weren’t either shooting the lights out and even if Prem would have done a perfect job between 2010 and 2016 (which he clearly hasn’t), the returns in those years would have been subpar in relation to historical returns too. And that’s not a coincidence, that all three performed with low CAGRs in those years, it’s structural. It’s the other side of the startup boom, it’s the other side of house prices and oldtimer prices booming, the other side of the tech boom, the other side of businesses not earning a dime getting as much cash as they wanted. What’s the point of float, if you get cash everywhere and as much as you want? What’s the point of float, if you have to pay the bank for holding your cash instead of getting a return? Historical float was a driver of roe at all three businesses, but that special sause literally disappeared in the lost decade.
 

But now hopefully it again all makes sense. Without that decade Fairfax wouldn’t been valued so low. I really feel lucky having found an above average business, reinvesting at 15% (or more) at a pe ratio below 6, while the market is valued 5 times higher.

@Hamburg Investor i agree that very low interest rates especially 2017-2020 negatively impacted the returns of the fixed income portfolio. The elephant in the room for Fairfax was the equity hedges / short positions. The equity hedges were in place from 2010-2016 and the last short position was removed in 2020. Over an 11 year period (2010-2020) these collective positions lost Fairfax an average of $494 million per year. This is when Fairfax was a much smaller company. Fairfax got the position size wrong. And the duration. That was straight out bad investing. 
 

I have also talked an nauseam about the many terrible equity investments made from 2014-2017. The first investment in Eurobank ($444 million - went to zero). Commercial International Bank - Egypt ($330 million - opportunity cost - dead money for a decade), Exco Resources, Fairfax Africa. APR, Farmers Edge and AGT. All of these investments performed poorly after purchase. Many needed more money from Fairfax to keep the lights on. A few needed more money multiple times. Some of these investments also needed management help. What i have listed here are a collection of terrible investments. And not because of zero interest rates or any external factor. Fairfax messed up. At the time their equity selection process was badly flawed. IMHO, Fairfax’s issues had nothing to do with value investing being out of favour.
 

At the same time, Fairfax was doing lots of very good things. Insurance was growing like a weed. The pivot was made in insurance in India from ICICI Lombard (position was monetized) to Digit (start-up was seeded). Investments in India were performing well - Fairfax India was launched. It’s like Fairfax was suffering from some bipolar corporate disease from 2010 to 2017. 

Of course, not all investments are going to work out. Fairfax’s problem in 2017 is too many of its equity investments were sub-par (remember, Blackberry and Resolute Forest Products were some of legacy investments that were the big dogs back then). 

 

I think something changed at Fairfax in late 2017 or early 2018. It’s like Prem had finally had enough of the crap and bs with the equity holdings/process. From 2018 forward, Fairfax has put a premium on buying companies that were very well managed. And financially sound (i.e. not likely to need more cash from Fairfax to keep the lights on). At the same time, Fairfax looked at its existing equity holdings and saw them for what they were - and then Fairfax got to work to clean up the mess. I think Prem also delivered the message - new capital would now be allocated primarily to the best opportunities/managers (15% return target was now expected). 
 

Six years later it is amazing the progress that Fairfax has made. Today, as a group, the equity holdings are well run. And they are profitable - meaning they don’t need money from Fairfax to remain a going concern. They are using retained earnings to drive their growth. Fairfax is also using retained earning to make new purchases and drive new growth. 2024 might be an inflection point for the performance of the equity portfolio (as a group). 
 

Are there still a few issues? Yes. CIB still resides in Egypt. There will always be a few issues in every equity portfolio. But the issues are shrinking is size every year. And the flowers in Fairfax’s equity portfolio are blooming and getting bigger every year. And new flowers are getting planted.

 

The quality of the insurance business has never been better. The quality of the equity portfolio has never been better. The bond portfolio is perfectly positioned. The management team is executing exceptionally well - capital allocation has been superb the past 5 years - regardless of what has been going on in the macro environment (actually they have been exploiting it). Size is not an issue for Fairfax (and shouldn’t be for the next decade). I am looking forward to seeing what kind of ROE Fairfax can deliver in the coming years - my guess is it will be better than most are thinking today. It really is stunning the turnaround they have pulled off the past 5 years. 

Edited March 11 by Viking

[glider3834]

I was hoping for a bit more guidance on how they are carrying BIAL & we got that from Prem in the annual letter

 

so my understanding from this is that implied normalized free cash flow (ex Airport City) for the whole of BIAL is ~US$263M ie Equity value US$2.5B divided by 9.5x (assuming here that Prem is talking about Free Cash Flow to Equity Holders (FCFE)  ie after interest payments)

 

I am guessing by normalised they are assuming the airport is operating at 100% of capacity? Would that assumption be reasonable? I believe T2 is expected to hit that level ~ 2026 based on AERA consultation paper forecast.

 

 

 

 

 

Edited March 11 by glider3834

[petec]

On 3/8/2024 at 11:41 PM, nwoodman said:

0x 2024 expected earnings or 8x 2025 expected earnings

 

I love how he has started putting valuations on the unlisted investments. Peak on 5x FCF - I had not guessed that.

 

On 3/9/2024 at 2:47 AM, nwoodman said:

Another horrendous investment by your Chairman. To make matters worse, imagine if we had invested it in the FAANG stocks! The opportunity cost to you our shareholder was huge! Please don't do the calculation! No technology investment for me!

 

While I love the mea culpa, I really hope this isn't the lesson they draw. Nothing wrong with investing in technology - just maybe not the place to go looking for value among broken entities.

 

On 3/9/2024 at 1:09 PM, MMM20 said:

Why doesn’t Prem account for the retained earnings of their mark to market investee companies when talking about Fairfax’s normalized earnings power? Of course dividends are only a small piece of what matters. He even mentions that the $15 dividend is only about 12% of FFH’s own operating income (IIRC) but doesn’t make this point for their mark to market investees, right? Normalized earnings power should be $150-200/share and maybe he just wants to set a lower bar? Or maybe he would argue it’s captured by the idea that they’ll sell stocks for gains over time?

 

Yes, it's captured in the gains, NOT in FFH's reported operating earnings, which is what he is referring to.

 

On 3/9/2024 at 6:35 PM, ValueMaven said:

Stupid idea - but what if FFH liquidated its $16B equity portfolio, and tendered for 2/3rds of the company outstanding shares ?  

Yes - you'd have serious taxes, but you'd get a huge spike in BV, EPS, and Float per-share.  Plus you'd have massive income generating from the bond portfolio. 

 

This would in effect wipe out their surplus capital at every insurance subsidiary, and get them into serious regulatory trouble.

[nwoodman]

8 minutes ago, petec said:

While I love the mea culpa, I really hope this isn't the lesson they draw. Nothing wrong with investing in technology - just maybe not the place to go looking for value among broken entities.

Agree it was kind of a strange way to conclude.  Micron, Ki and even Digit would suggest that it is in their wheelhouse.  

[dartmonkey]

19 hours ago, Hamburg Investor said:

Agreed, @dartmonkey and @Dinar. 
 

Just to be clear: the nine times earnings is without the gains on the stock portfolio, without TRS and without (maybe) gains on selling of wholly owned businesses like the pet insurance businesses or IPOs. Assuming normalized earnings of 200 dollar per share (125 dollar in OE isn’t a normalized, but a minimum number) or a little bit less in year 1 gets us to a pe ratio a little bit below 6 and an roe of 21%. If stock markets tank in year 1 it will be way less of course.
 

If Watsa doesn’t reach roe way above 15% in times like these (hard market, value beating growth), than he won’t reach an average of 15% (that 15% isn’t tied to OE, @dartmonkey, so 15% of 29bn or 6bn would be including stock gains etc… That’s your point, isn’t it?!) over the longterm. 

 

You are being generous - I expressed myself poorly in referring to the notion that these $125 per share in after tax operating earnings could just be called 'net income' and put Fairfax at 9x earnings. Fairfax is actually a lot cheaper than that: net incoome is a lot higher than just after tax operating earnings. Operating earnings include a guess at underwriting income and interest income, but they don't account for retained earnings from mark to market stock holdings or realized and unrealized capital gains when the share price of some of those stock holdings starts reflecting their increased intrinsic value (I'm thinking particularly of Eurobank and Fairfax India.) Here's the quote from the annual letter (p.7):

 

We can see sustaining our adjusted operating income for the next four years at $4.0 billion (no guarantees), consisting of: underwriting profit of $1.25 billion or more; interest and dividend income of at least $2.0 billion; and income from associates of $750 million, or about $125 per share after taxes, interest expense, corporate overhead and other costs. These figures are all, of course, before fluctuations in realized and unrealized gains in stocks and bonds!

 

But what I was trying to express, awkwardly as it was, is that I think Watsa is just telegraphing that there are $4b per year in pre-tax operating earnings that already seem quite likely for the next 4 years, based on the earnings potential of present assets. Apart from gains from the stock portfolio, there are also a lot of assets piling up on the asset sheet for the next 4 years, and these will generate their own earnings. In other words, we presently have equity of $21.5b, and expect $4b annual operating in each of the next 4 years from those assets. But in just 3 years, we should have $29b in equity; those extra $7.5b in equity will produce its own return in year 4, apart from the $4b that we expect from current equity.

 

I still don't think I've expressed this perfectly clearly, but the idea is that given the high returns on equity, 4 years of compounding should produce a lot more operating earnings than what we would get if all those earnings were being distributed...

[Hamburg Investor]

17 hours ago, Viking said:

@Hamburg Investor i agree that very low interest rates especially 2017-2020 negatively impacted the returns of the fixed income portfolio. The elephant in the room for Fairfax was the equity hedges / short positions. The equity hedges were in place from 2010-2016 and the last short position was removed in 2020. Over an 11 year period (2010-2020) these collective positions lost Fairfax an average of $494 million per year. This is when Fairfax was a much smaller company. Fairfax got the position size wrong. And the duration. That was straight out bad investing. 
 

I have also talked an nauseam about the many terrible equity investments made from 2014-2017. The first investment in Eurobank ($444 million - went to zero). Commercial International Bank - Egypt ($330 million - opportunity cost - dead money for a decade), Exco Resources, Fairfax Africa. APR, Farmers Edge and AGT. All of these investments performed poorly after purchase. Many needed more money from Fairfax to keep the lights on. A few needed more money multiple times. Some of these investments also needed management help. What i have listed here are a collection of terrible investments. And not because of zero interest rates or any external factor. Fairfax messed up. At the time their equity selection process was badly flawed. IMHO, Fairfax’s issues had nothing to do with value investing being out of favour.
 

At the same time, Fairfax was doing lots of very good things. Insurance was growing like a weed. The pivot was made in insurance in India from ICICI Lombard (position was monetized) to Digit (start-up was seeded). Investments in India were performing well - Fairfax India was launched. It’s like Fairfax was suffering from some bipolar corporate disease from 2010 to 2017. 

Of course, not all investments are going to work out. Fairfax’s problem in 2017 is too many of its equity investments were sub-par (remember, Blackberry and Resolute Forest Products were some of legacy investments that were the big dogs back then). 

 

I think something changed at Fairfax in late 2017 or early 2018. It’s like Prem had finally had enough of the crap and bs with the equity holdings/process. From 2018 forward, Fairfax has put a premium on buying companies that were very well managed. And financially sound (i.e. not likely to need more cash from Fairfax to keep the lights on). At the same time, Fairfax looked at its existing equity holdings and saw them for what they were - and then Fairfax got to work to clean up the mess. I think Prem also delivered the message - new capital would now be allocated primarily to the best opportunities/managers (15% return target was now expected). 
 

Six years later it is amazing the progress that Fairfax has made. Today, as a group, the equity holdings are well run. And they are profitable - meaning they don’t need money from Fairfax to remain a going concern. They are using retained earnings to drive their growth. Fairfax is also using retained earning to make new purchases and drive new growth. 2024 might be an inflection point for the performance of the equity portfolio (as a group). 
 

Are there still a few issues? Yes. CIB still resides in Egypt. There will always be a few issues in every equity portfolio. But the issues are shrinking is size every year. And the flowers in Fairfax’s equity portfolio are blooming and getting bigger every year. And new flowers are getting planted.

 

The quality of the insurance business has never been better. The quality of the equity portfolio has never been better. The bond portfolio is perfectly positioned. The management team is executing exceptionally well - capital allocation has been superb the past 5 years - regardless of what has been going on in the macro environment (actually they have been exploiting it). Size is not an issue for Fairfax (and shouldn’t be for the next decade). I am looking forward to seeing what kind of ROE Fairfax can deliver in the coming years - my guess is it will be better than most are thinking today. It really is stunning the turnaround they have pulled off the past 5 years. 

You have done a terrific job in the last years and here again laying out management decisions of Fairfax were really bad from 2010 to 2016. I totally (!) agree with that. And I am exactly referring to that in my post, while I have to admit, not having named those again. But the reason why I haven’t is simply, that those bad management decisions have been dicussed here so many times and most people gere (including me) seem to share this critic. So why repeat once again?

 

And there is a lot of use in looking first and foremost at the business itself and on management; in fact this is, what we can understand and make analysis and decide, if we want to invest or not. 
 

At the same time there are external factors that - at least in my view - can‘t be predicted, regardless how deep our analysis goes. Nobody knows were interest goes to in the next few years - and yet it has a big influence on businesses and on markets and valuations.
 

It’s hard to predict, where interest rates are heading to. The reason is simple: It makes a big difference, if 9/11 happens or an oil shock, a world war occurs (or just a local war), if a bubble bursts or if a financial crisis occurs. There may be some people that can predict some of those things a few years before they happen, but I clearly can’t and I think I am not alone with that view on my competences. That’s why I see no use in trying to predict interest rates etc. And that’s the reason why I don’t build my investment decisions on such external things. A good stock with a moat, a high roe over the longterm etc. will perform good over time, regardless the swings of interest rates etc.
 

Still there is some use in looking back, especially when people try to interpolate the business and stock results of a decade into the future. People bought the Nifty Fifty in 1972 at pe ratios of 50 and more, thinking that the decade before had shown, that those were good investments. But those strong growers of the 1960ies weren’t performing perfectly good, when the oil price shock came, interest rates exploded in the next decade etc. 
 

So all I wanted to say is this: The 2010s clearly weren‘t the decade of the insurance sector (especially for the ones investing in non-growth-stocks like BRK, MKL or Fairfax) in terms of a. business performance and b. of stock returns. 

 

Anybody trying to interpolate the returns of the next ten years on the basis of the last ten years in my eyes misses an important point: The years after the financial crisis were the opposite of supportive for the insurance sector as a whole. You won’t find another decade were the three were performing that poor in comparision to the market since the 1980ies; both in business and in stock performance.
 

And yes, all three named were much smaller in the 1990ies and that too helped the three outperforming the market (with the exception of the internet bubble times; Buffett was critized than; but that wasn‘t a whole decade). But there’s another layer and that’s a cocktail of low interest rates (making float nearly worthless), a long soft market, (tech) growth beating value.
 

Fairfax was the worst performer of the three due to bad management decisions; but a second part of the story is, that neither Berkshire nor Markel left the S&P500 in the dust like in the decades before 2007. And the same headwind Berkshire and Markel faced, Fairfax had to face too.
 

And for all three the headwind of after 2007 has changed direction and has changed into a tailwind now. Not only has Fairfax done the right things; on top of that the soft market has changed to a hard market and I wouldn‘t describe Prem being a tech growth investor historically (look at his annual reports of the last years, where he laid out his view on tech stocks and their valuations), so this clearly was a headwind too. And yes, the growth stocks again dominate the media, but e. g. Eurobank is performing good now too and not in the years before with lower interest rates.

Edited March 11 by Hamburg Investor

[Hamburg Investor]

5 hours ago, dartmonkey said:

 

You are being generous - I expressed myself poorly in referring to the notion that these $125 per share in after tax operating earnings could just be called 'net income' and put Fairfax at 9x earnings. Fairfax is actually a lot cheaper than that: net incoome is a lot higher than just after tax operating earnings. Operating earnings include a guess at underwriting income and interest income, but they don't account for retained earnings from mark to market stock holdings or realized and unrealized capital gains when the share price of some of those stock holdings starts reflecting their increased intrinsic value (I'm thinking particularly of Eurobank and Fairfax India.) Here's the quote from the annual letter (p.7):

 

We can see sustaining our adjusted operating income for the next four years at $4.0 billion (no guarantees), consisting of: underwriting profit of $1.25 billion or more; interest and dividend income of at least $2.0 billion; and income from associates of $750 million, or about $125 per share after taxes, interest expense, corporate overhead and other costs. These figures are all, of course, before fluctuations in realized and unrealized gains in stocks and bonds!

 

But what I was trying to express, awkwardly as it was, is that I think Watsa is just telegraphing that there are $4b per year in pre-tax operating earnings that already seem quite likely for the next 4 years, based on the earnings potential of present assets. Apart from gains from the stock portfolio, there are also a lot of assets piling up on the asset sheet for the next 4 years, and these will generate their own earnings. In other words, we presently have equity of $21.5b, and expect $4b annual operating in each of the next 4 years from those assets. But in just 3 years, we should have $29b in equity; those extra $7.5b in equity will produce its own return in year 4, apart from the $4b that we expect from current equity.

 

I still don't think I've expressed this perfectly clearly, but the idea is that given the high returns on equity, 4 years of compounding should produce a lot more operating earnings than what we would get if all those earnings were being distributed...

One could see, what you meant; and I agree, that compounding within that 4 years is a factor, that Prem hasn‘t adressed in his letter, but we should be always be aware of. The $125 per share in 2024 will give extra returns in 2025. And the result of that will give extra returns the year after and so on. This is not linear.

[MMM20]

On 3/11/2024 at 4:55 AM, petec said:

Yes, it's captured in the gains, NOT in FFH's reported operating earnings, which is what he is referring to.

 

Right, so projecting gains in the equity portfolio is not an aggressive assumption whatsoever, contrary to what skeptics and bears might say. Accounting for mark-to-market investee retained earnings - full lookthrough earnings rather than just the piece paid out as dividends - in our normalized underlying earnings power really is the most accurate way to think about it. Investors trying to get the big drivers right should be aware of this (and I'm sure most here probably are) because it's something like a $500mm-$1B difference nowadays. It's not a trivial point. I wish Prem would lay this out in the letter but I understand why he doesn't.

 

Edited March 13 by MMM20

[Crip1]

On 3/11/2024 at 4:10 AM, nwoodman said:

Agree it was kind of a strange way to conclude.  Micron, Ki and even Digit would suggest that it is in their wheelhouse.  

This did not look as strange to me as it did to you I thought it was intended more tongue in cheek than anything else.

 

Years ago Prem was criticized, and I thought the criticism was valid, or not owning up to mistakes. That's one thing that Buffett does consistently, and he's done it for years. If one goes back 10 to 15 years when the future did not look quite as positive as it does now, being humble to that level may not have been a good idea to attract new shareholders. Buffett, on the other hand, has had insane levels of success so humbleness is not scare off potential shareholders.

 

This paragraph and the overall tone of the letter seems almost like a maturation of the company. There seems to be less selling going on and more simply reading the news.

 

All of the above in my humble opinion.

 

-Crip

[nwoodman]

@Crip1 it was more the final line “No technology investment for me!” that we were referring to.  No arguments from me in terms of contrition, and even closure on an era.

[petec]

7 hours ago, nwoodman said:

@Crip1 it was more the final line “No technology investment for me!” that we were referring to.  No arguments from me in terms of contrition, and even closure on an era.

 

Exactly. I absolutely agree on the humility and learning from lessons. I just thought this was an odd way to end the para. If it was tongue in cheek, fine, although I would have preferred him to lay out exactly what he intends to do differently in future. Is it really no tech investments? Or is it: only tech investments that have strong fundamentals and deep competitive moats, rather than those facing rising competition that only look cheap based on backward-looking metrics. 

 

Anyway, I am splitting hairs. The letter was excellent and a testament to all the hard work that has been done to create these results.

[Thrifty3000]

2 hours ago, petec said:

 

Exactly. I absolutely agree on the humility and learning from lessons. I just thought this was an odd way to end the para. If it was tongue in cheek, fine, although I would have preferred him to lay out exactly what he intends to do differently in future. Is it really no tech investments? Or is it: only tech investments that have strong fundamentals and deep competitive moats, rather than those facing rising competition that only look cheap based on backward-looking metrics. 

 

Anyway, I am splitting hairs. The letter was excellent and a testament to all the hard work that has been done to create these results.

 

Or, was Prem saying that he wouldn't be initiating tech investments, while the rest of the team is free to pursue tech opportunities as they see fit? That's how I interpreted it since they still have other tech investments in the portfolio.

 

[ourkid8]

1 hour ago, Thrifty3000 said:

 

Or, was Prem saying that he wouldn't be initiating tech investments, while the rest of the team is free to pursue tech opportunities as they see fit? That's how I interpreted it since they still have other tech investments in the portfolio.

 

 

That's how I interpreted it.  That means, the core positions won't have any tech since Prem will need to approve.  However, Wade / Lawrence and the other managers shouldn't have any issues buying tech in their portfolio.  

[investmd]

Have held the stock for close to 2 decades - despite frustrations of 2010-2020 era. IMO, annual letters always read like the author is exuding positivity, not necessarily humility. Good to see the mea culpa this year on Blackberry. 

 

I do find it surprising that Watsa didn't discuss the MW short. I understand taking the high road approach in order to focus on the company's earnings. On the other hand, an annual letter is meant to convey the highlights and lowlights since the last letter. Treating the MW's short as a "non-event" doesn't seem appropriate given the news it attracted - especially for a company that has been hit hard by a previous shorting attempt. 

 

If I recall correctly, the other interesting omission in this year's letter was no discussion of stock buybacks. In previous letters he has discussed Singleton's approach to reducing share count, hinting at future stock buybacks. 

[Daphne]

The MW short took place in 2024

[gfp]

I do think the impact of the short report was evident in the increased line by line detail on what the valuations were on each balance sheet mark.  A lot more detail than prior years and the intent was obviously to show that these valuations are not crazy reaches.

[Xerxes]

53 minutes ago, investmd said:

Have held the stock for close to 2 decades - despite frustrations of 2010-2020 era. IMO, annual letters always read like the author is exuding positivity, not necessarily humility. Good to see the mea culpa this year on Blackberry. 

 

I do find it surprising that Watsa didn't discuss the MW short. I understand taking the high road approach in order to focus on the company's earnings. On the other hand, an annual letter is meant to convey the highlights and lowlights since the last letter. Treating the MW's short as a "non-event" doesn't seem appropriate given the news it attracted - especially for a company that has been hit hard by a previous shorting attempt. 

 

If I recall correctly, the other interesting omission in this year's letter was no discussion of stock buybacks. In previous letters he has discussed Singleton's approach to reducing share count, hinting at future stock buybacks. 

 

I am actually glad he didn’t mention them. They don’t deserve recognition. 

[Blugolds]

4 minutes ago, Xerxes said:

 

I am actually glad he didn’t mention them. They don’t deserve recognition. 

 

The Lion doesn’t concern himself with the opinions of the gazelle

[Haryana]

 

Exclamation count almost doubled to 57 this year but nobody is complaining!

 

"Nothing that a $1,000 share price won’t solve!"

March 5, 2021
V. Prem Watsa

 

[gfp]

12 minutes ago, Haryana said:

 

Exclamation count almost doubled to 57 this year but nobody is complaining!

 

"Nothing that a $1,000 share price won’t solve!"

March 5, 2021
V. Prem Watsa

 

 

Clearly we are back from the doldrums of exclamation point frugality

 

[longlake95]

4 minutes ago, gfp said:

 

Clearly we are back from the doldrums of exclamation point frugality

 

 

looks like a perfect buy signal in 2021...

[Xerxes]

4 hours ago, Blugolds11 said:

 

The Lion doesn’t concern himself with the opinions of the gazelle

love it !!

[Jaygo]

I just finished the letter. I won’t add much to  the more sophisticated diagnosis above but man what a way to encourage the people who work under you.
 

Prem is pumping his people up and at the same time he is putting their names out there to ensure accountability. 
 

I felt the letter was directed more for his people than for the shareholders as it just exudes his pride in the people and their individual organizations. 

If I worked there and read the letter I would see a bright future and clear path to moving  to bigger roles just by how he talks about people and their independent org structure.
 

It gives me the impression that Prem recognizes that he is not the goat and a great team can replicate a great individuals performance.    
 

Top notch letter Prem!