Fairfax Financial Shareholder's Dinner & Annual General Meeting

[Parsad]

Fairfax Financial Shareholder’s Dinner

 

Well, it was one heck of a couple of days this year.  Alnesh and I arrived around 5:10pm on Tuesday for the dinner and there were already five people seated in the empty room!  

 

We started to put together the name tags when guests started to flow in.  If it wasn’t for one of our directors, Glen Rollins, and one of our attendees from the very first dinner, Enrico Visentini, we would never have been able to greet people and get them their nametags.  Before 5:30pm, the room was more than half full!

 

By the time the dinner started at 6:00pm, we had total attendance of 85 people, with another 6 people who paid, but could not attend at the last minute.  They donated all of their dinner fee to “The Crohn’s & Colitis Foundation of Canada”.  Dinner went great and everyone thoroughly enjoyed themselves.  In attendance were former Fairfax analysts Wayne Cadwallader (now at Elkhorn Partners LP) and Martin Van Blerk (Baobab Fund).  

 

Alnesh and our other director, Andrew Cooke, went table to table selling raffle tickets.  They were completely sold out in less than half an hour!  Around 8:00pm we had to reorganize part of the room, and arrange the seats so that they would be ready for our guest speakers at 8:30-8:45pm.

 

Vinod Loganadhan, Fairfax’s Director of Administrative Services, came into the room to retrieve me.  He said to come with him to the front.  I went over with Vinod, and to my surprise there was at least ten people, and in front of them all was Prem.  He was facing the other way, and when I walked up, he turned around and I just wrapped my arms around him and yelled out “Prem, I can’t believe this!”  I quickly shook hands with everyone, including another big hug for Francis, and then said for them to wait there while I got the audience ready.

 

I tried to play it down, as if Fairfax somehow couldn’t send too many people this year, but I was told my poker face was terrible.  In walked Prem and the crowd started clapping.  One executive after another was brought into the room:

 

- Prem Watsa (Fairfax)

- Francis Chou (Chou Funds)

- Paul Rivett (Fairfax)

- Brian Bradstreet (Hamblin-Watsa)

- Sam Mitchell (Hamblin-Watsa)

- Peter Furlan (Hamblin-Watsa)

- Mohnish Pabrai (Pabrai Funds)

- Bill Gregson (CEO - The Brick)

- Richard Garneau (CEO – AbitibiBowater)

- Marc Bertrand (CEO - Mega Brands)

- Tom Ward (CEO – SandRidge Energy)

- Bill McMorrow (Chairman & CEO – Kennedy Wilson)

- Mary Ricks (Vice-Chairman – Kennedy Wilson)

 

While Fairfax’s own AGM is really a showcase of their insurance and investment executives, this was more a showcase of the great managers at Fairfax’s investee companies.  I believe this was just the tip of the iceberg, as Prem now continues to build Fairfax in the Berkshire model, and will add fantastic non-insurance businesses to the portfolio.  

 

Never in my life have I heard or seen such a group assemble for a third-party function such as this.  Each of these CEO’s are superb talents on their own.  For them to take the time to come to our dinner, simply shows how much respect they all have for Prem as a leader.  And just as importantly, how much respect they hold for the smaller shareholders of Fairfax Financial!

 

Our normally expressive Hamblin-Watsa guests were unusually quiet, as Prem gave the floor to the investee CEO’s.  Thus it seems with the quote from the annual report, and this year’s dinner, that the next 25 years of Fairfax will have an additional focus of acquiring non-insurance businesses.

 

Prem and his team answered questions for about an hour, and then thanked everyone and excused themselves.  As they left, hordes of people rushed after them taking pictures, and trying to shake hands and ask questions.  In fact, people rushed out so quickly, that the three raffle prizes we had (autographed books by Prem), had not been drawn.  So I quickly drew three tickets and read out the number over the microphone.  The numbers were:

 

- 0501971

- 0501993

- 0501997

 

So if you have the winning ticket, please mail it to my office with your name, address & email, and I’ll mail you the book prize.  Thanks very much to Pat Hios, Prem’s executive assistant & JoAnn’s best friend, for the prizes.  We raised over $11,000 in JoAnn’s name for “The Crohn’s & Colitis Foundation of Canada” this year…over double last year!  This would not be possible without everyone’s support, so thanks for helping support the dinner.

 

Francis Chou and Brian Bradstreet stayed for about another hour answering questions for the small scrums that had surrounded each of them.  I had to finally usher everyone outside, as the restaurant was well past closing.  I’d like to thank them for doing that!  It really meant a lot to the “diehard groupies” as Charlie Munger would call them.

 

We started this dinner six years ago with nine people and Francis was our first speaker.  Now it’s grown to 91 people and we had 13 speakers!  I’d like to thank Joe Badali’s  Restaurant for all of their hospitality over the last six years.  Unfortunately, we are going to have to move the event to another venue, as the sheer size of the group is now too large to gather comfortably at the restaurant.      

 

It was always my dream to get the main man himself out to the dinner, and I can’t tell you how much it meant to finally see him there.  He’s been a massive influence on me, and the way I run my own company and investment funds.  I’d like to thank Prem and everyone at Fairfax for attending.  There is no way to measure the amount of loyalty he probably gained from all the shareholders in attendance.  It was a show-stopper and something no one will forget!

 

 

Fairfax Financial AGM

 

The crowds were pretty big this year.  The lobby of Roy Thomson Hall looked fuller.  Not sure if the crowds were significantly bigger or just that the lobby area was reduced with booths from various affiliates of Fairfax…be it insurance, charities, etc.  I expect the number of booths to increase year after year!

 

The meeting started with Prem coming on stage and warming up the crowd with an amusing joke.  He then thanked the shareholders and especially the employees of Fairfax.  We were then shown a short video covering some of the chapters from the “25 Years of Fairfax” book.  It was a very nice video and showed the cohesion within Fairfax during the good and bad times.  

 

Prem then went through the usual rituals of the AGM within five minutes.  Before that, he thanked a number of people including Rick Salsberg and Mason Hawkins.  As usual, he went around to the various insurance subsidiary heads and had them update shareholders on the year.  Andy Barnard was introduced as the new head of all of Fairfax’s insurance operations.

 

A review of Fairfax’s year through a slide show was next.  I would expect the slides to be available on the corporate website soon enough.  And then the Q&A session with Prem was conducted, and lasted at least an hour and a half…if not more!  I don’t take notes at these things anymore, as I try and focus at the time to absorb as much as I can.  Needless to say that I highly recommend you attend if a significant portion of your portfolio is in the company.    

 

Outside, Prem was once again engaging shareholders at the hor d’oeurve and cocktail reception.  Shareholders were also able to talk to many other Fairfax executives.  All shareholders received a copy of the book on the way out.  I don’t know what they plan on doing going forward with the book, but as soon as I know, I will post it on here.  Cheers!

 

[link01]

 

 

- Prem Watsa (Fairfax)

- Francis Chou (Chou Funds)

- Paul Rivett (Fairfax)

- Brian Bradstreet (Hamblin-Watsa)

- Sam Mitchell (Hamblin-Watsa)

- Peter Furlan (Hamblin-Watsa)

- Mohnish Pabrai (Pabrai Funds)

- Bill Gregson (CEO - The Brick)

- Richard Garneau (CEO – AbitibiBowater)

- Marc Bertrand (CEO - Mega Brands)

- Tom Ward (CEO – SandRidge Energy)

- Bill McMorrow (Chairman & CEO – Kennedy Wilson)

- Mary Ricks (Vice-Chairman – Kennedy Wilson)

 

While Fairfax’s own AGM is really a showcase of their insurance and investment executives, this was more a showcase of the great managers at Fairfax’s investee companies.  I believe this was just the tip of the iceberg, as Prem now continues to build Fairfax in the Berkshire model, and will add fantastic non-insurance businesses to the portfolio.  

 

Never in my life have I heard or seen such a group assemble for a third-party function such as this.  Each of these CEO’s are superb talents on their own.  For them to take the time to come to our dinner, simply shows how much respect they all have for Prem as a leader.  And just as importantly, how much respect they hold for the smaller shareholders of Fairfax Financial!

 

Our normally expressive Hamblin-Watsa guests were unusually quiet, as Prem gave the floor to the investee CEO’s.  Thus it seems with the quote from the annual report, and this year’s dinner, that the next 25 years of Fairfax will have an additional focus of acquiring non-insurance businesses.

 

 

 

thank you for the terrific summary!

 

as you said, it was very surprising but particularly gratifying to see so many of the top managers from ffh's investee co's show up. i'd say that that kind of support goes a long way in showing how much prem & his team inspire respect & goodwill in equal measure, a la buffett. its a pretty rare thing to behold, at least to that degree.

 

i hope you're right about prem being poised to adopt the brk (& now mkl) model of acquiring non insurance businesses in the next decades to come!

[Liberty]

Thanks for the summary, Parsad, and thanks for all your work in organizing this and creating this amazing online community.

 

And of course, thanks to Fairfax and the other CEOs and investors who came. sounds like it was a blast.

 

If any of the people who went and had a chance to chat with the FFH people could give us their summaries of what they learned, that'd be awesome for those of us who missed it.

 

Thanks!

[Partner24]

That's a great review Sanjeev.

 

I've went to one diner 2 or 3 years ago. We were 20-30 persons I guess. One thing to remember is that it was great for FFH shareholders to meet and greet. I see that now, you have a lot of speachers. That's great! But I wish that the "meet and greet" part will never be forgiven. It's, to me, a very important part of these diners.

 

Needless to say that I highly recommend you attend if a significant portion of your portfolio is in the company.

 

Indeed. I've asked a question when I went to the AGM. The answer's been satisfying and I hope that, like Prem said at that meeting, that they always get that lean years "deeply anchored" in their minds. ALWAYS HAVE A SOLID BALANCE SHEET. Then, rule number 1: don't lose. Rule number 2: don't forget rule number 1.

 

Cheers!

[Uccmal]

An interesting historical note:  I was asking Brian Bradstreet if he knew Dr. Michael Burry at the time of the events in the big short.  He said he spoke to him regularly back then but had never met him face to face.  They had a some money invested with Dr. Burry, and had offered to buy all of Burry's disgruntled partners out, but Burry wasn't interested in letting his (ex) partners off the hook.  Brian had good things to say about Burry.

 

Brian is always really interesting to talk with because he has deep working knowledge of all aspects of the business.  Very bright fellow.

[Myth465]

Parsad congrats and thanks. You really have built an interesting network of people.

 

Brian Bradstreet seems like the Ajit Jain of FFH. I dont think people realize how deep the FFH bench is.

 

[bluedevil]

Fairfax has posted the slides from its 2011 Annual Meeting.  http://fairfax.ca/Theme/Fairfax/files/2011%20AGM.pdf

 

Some great slides on the level of debt in the United States.  I do not, however, understand the slide (#31) on the velocity of money.  Can someone help me out with the point there?

 

Also, I did not want to have to beg for someone to post their notes of the AGM, but it looks like we've gotten to that point: please please please. :)

 

 

[sdev]

 

Also, I did not want to have to beg for someone to post their notes of the AGM, but it looks like we've gotten to that point: please please please. :)