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Guru Focus Interview with FairFax CEO Prem Watsa


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http://www.gurufocus.com/news/146628/gurufocus-interview-with-fairfax-ceo-prem-watsa

 

Below is a brief excerpt.  My apologies if this has been posted before.

 

Fairfax has a worldwide insurance/reinsurance company operating in over 100 countries with $5 billion of premiums and about $8 billion of shareholders’ capital. Book value per share has compounded by 25% per year to $379 per share. Its return on common equity averaged 24% since 1985.

 

During the one-hour interview, Mr. Watsa answered many questions from GuruFocus users. He shared his thoughts on Fairfax, the economy, Europe, and his investments in Bank of Ireland (IRE), Research In Motion (RIMM) and Dell (DELL).

 

GuruFocus: Thank you very much for the opportunity, Mr. Watsa. We have never met you, but I feel that we know you very well because we have been following you for many years and write a lot about you. We know that you came to Canada at the age of 24 with $200 in your pocket. We know that you went to get an MBA and became an analyst in an investment company, and then your started your own firm and finally decided to go to insurance. And we also know that you signed your first contract agreement with Steve Markel on a napkin and then grew the business by 25% for 25 years. That's really tremendous.

 

Watsa: Good fortune along the way, lot of good fortune. And a lot of good people that I've been working with, and some people say fortune, I call it blessings. A lot of good blessings along the way.

 

GuruFocus: It definitely is not just simply luck, and we really want to learn from you. We have lots of questions from our readers, and many of them are your shareholders too, so lots of questions about Fairfax.

 

Watsa: The only comment I'll make is I will refrain from providing specifics on individual companies that we might be buying, might be selling, so I won't say any specific names but I'll tell you what I can.

 

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Thanks for the interview.

 

General board question: Did Fairfax decrease their hedge recently? Watsa noted they are at 90% hedged on the common stock portfolio in this interview. I thought I read a while back that they were net short. For some reason i had in my head that they were around 105% hedged, implying a slight short position as of just a few quarters ago. I could be mistaken.

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