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Francis Chou – The Investment Guru That You Never Heard Of; Comment On ABH, WPI,


biaggio
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Thanks for sharing biaggio. Great read. When I skimmed through his shareholder letter I found this.

 

REDEMPTION FEE: We have a redemption fee of 2% if unitholders redeem their units in less than

two years. None of this fee goes to the Fund Manager. It is put back into the Fund for the benefit of

the remaining unitholders.

 

Talk about shareholder friendly. I guess Sanjeev is right. Chou is one of a kind!

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Thanks for sharing biaggio. Great read. When I skimmed through his shareholder letter I found this.

 

REDEMPTION FEE: We have a redemption fee of 2% if unitholders redeem their units in less than

two years. None of this fee goes to the Fund Manager. It is put back into the Fund for the benefit of

the remaining unitholders.

 

Talk about shareholder friendly. I guess Sanjeev is right. Chou is one of a kind!

 

You got that right!  Or at least in a very small group that includes Prem and a few others.  :)

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The best way to describe Francis is the way I see him:  Clark Kent to the outside world, and Superman when it comes to his depth of knowledge in investing.  He has one of the most mild-mannered personalities you will ever meet, and he will never do anything to hurt or insult anyone.  But his investment mind is superb and one of the best I know. 

 

Everyone at Fairfax holds Francis in very high esteem.  I don't think there is anyone who could ever dislike the guy.  Incidentally, for all of you folks who enjoy our annual dinner, he's instrumental in getting all those people to show up, along with Prem.  I consider both my mentors, as well as Tim and that f'n crazy Pabrai that some have recently jeered!  Cheers!

 

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Sanjeev,

 

Why did Francis leave Fairfax?

 

When Fairfax was trying to simplify their business because of all the criticism around the complexity of the company, one of the things that someone was critical about was that Francis was a vice-president at Fairfax while running the Chou Funds, and Fairfax was an investor in the Chou Funds as well. 

 

Even though Francis was not receiving compensation for working at Fairfax, they decided it was better to make sure there was no way anyone could be critical of the relationship.  So Francis gave up his position there and runs only the Chou Funds.  Fairfax remains an investor in the Chou Funds, so they are arms length. 

 

That doesn't mean Francis has no influence on the investment process at Fairfax.  I'm sure they talk about investments all the time with him, and mutually desireable ideas come along all the time...for example Abitibi debt, Level 3 debt, etc.  If they also ever needed him for anything, I'm sure it would take no prodding at all for him to assist them anyway he could.  That should alleviate concerns for those that believe the hierarchy at HW is getting a little long in the tooth!  ;D 

 

As one of the largest individual investors in Fairfax (and he's got all of his shares he bought at $3), I would love to see Francis on the board one day if there ever was an opening.  He's smart as a whip, a brilliant investor, understands insurance, and his ethics and humility are unparalleled.  Cheers!

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Sanjeev,

Any ideas about his position in MannKind?

 

He spoke about it at the dinner I believe when someone asked him a question on it.  He said that it was cheap, but primarily a bet on the CEO, who poured millions and millions of his own money into the business and the insulin inhaler.  Hasn't worked out the way he wanted it to at that point, but he was still optimistic.  Can anyone else remember what he said exactly?  Cheers!

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