Parsad

Even I can't take that away from Sardar...there was some luck, but he put in the work alongside others. The difference between being an operator and investment manager/activist is night and day...believe me I know and have learned! There are a couple hundred things happening that you are vulnerable to as an operator and decision making. As an investment manager/activist, that number drops to less than 25. Affinity for the Eurotrash lifestyle was something everyone knew back when it was just the Lion Fund alone, so no one can pretend that they didn't know he liked expensive things. For all intents and purposes, he's achieved what he was aiming to achieve...for the most part. Love and adoration like Buffett has escaped him, but hey, he's growing his own organic vegetables in the frickin' French Riviera, while eating a Steakburger, writing articles for Maxim magazine sitting on his yacht, before he rides his motorbike like George Clooney to Tuscany to his new Cracker Barrel Nouveau Bistro a la Biglari! Who's the f**king losers now...oh, is that my hand! Cheers! Extremely funny!! But with the stock in the mid-$60s, and BV (as per that article - I have no idea if this is true) pegged at $350+; at what point do we start taking a serious look at this. Frankly, until GAMCO, or someone really starts to suit this guy - I am sitting and watching from afar. I think you might need to get some type of revolt at the sub-companies before BH could be even broken up. Someone like Dan Loeb at Third Point could have a field day here and make decent money...There are no active fundamental managers in this - all Quant, and Passive. Even GAMCO hardly owns any stock. I bought a bunch back in March in the low 50's. Even with a SNS bankruptcy, the stock is worth at least $200 just with the other investments. I'm a value investor...if it's cheap, I will buy...even if it's Sardar. I'm just not going to be a long-term partner. When it hits $125-150 or so, I'm out. Cheers!

I've found it delayed and slow as well. I thought it was maybe just my network. I'll get our IP to check their server or reboot it. Cheers!

Even I can't take that away from Sardar...there was some luck, but he put in the work alongside others. The difference between being an operator and investment manager/activist is night and day...believe me I know and have learned! There are a couple hundred things happening that you are vulnerable to as an operator and decision making. As an investment manager/activist, that number drops to less than 25. Affinity for the Eurotrash lifestyle was something everyone knew back when it was just the Lion Fund alone, so no one can pretend that they didn't know he liked expensive things. For all intents and purposes, he's achieved what he was aiming to achieve...for the most part. Love and adoration like Buffett has escaped him, but hey, he's growing his own organic vegetables in the frickin' French Riviera, while eating a Steakburger, writing articles for Maxim magazine sitting on his yacht, before he rides his motorbike like George Clooney to Tuscany to his new Cracker Barrel Nouveau Bistro a la Biglari! Who's the f**king losers now...oh, is that my hand! Cheers!

https://www.mysanantonio.com/sa-inc/article/Has-San-Antonio-s-Sardar-Biglari-lost-his-touch-15393824.php Good article on the AGM! Slight mention of the farm near the end of the article. Cheers!

What have you been eating recently? My portfolio needs that you go out for lunch! SJ Frickin' can't until the restrictions are off. It's no fun when hot waitresses have masks on all of the time! Cheers!

Whenever I see a run of posts like this on Fairfax, the stock usually does well in the ensuing months...keep it up! Cheers!

i disagree with this comment specifically. I think 9-10% ownership is a huge incentive. Sure, this is not BRK level of ownership with Buffet. But if i compare to many other companies their CEO ownership is as low as 1%, it is really high. More so, what else is in Watsa's portfolio. Is it >90% FFH stock, if yes, than i think proper economics incentive is there on both dimensions. Personally, i would preferred no dividends as it gives the optics of cash-cow that all it does is to ensure the cash inflows is just enough to cover the cash outflows + $10 per share for dividends. But that is me. +1! Cheers!

i disagree with this comment specifically. I think 9-10% ownership is a huge incentive. Sure, this is not BRK level of ownership with Buffet. But if i compare to many other companies their CEO ownership is as low as 1%, it is really high. More so, what else is in Watsa's portfolio. Is it >90% FFH stock, if yes, than i think proper economics incentive is there on both dimensions. Personally, i would preferred no dividends as it gives the optics of cash-cow that all it does is to ensure the cash inflows is just enough to cover the cash outflows + $10 per share for dividends. But that is me. Yes, the key difference is that the typical CEO with a 1% ownership stake is not entrenched by virtue of multiple-voting shares and is at risk of being turfed if he pursues too many visible pet projects. That is possibly one reason why you will not see the CEO of Bank of America hive off $50m for his son to manage. It is probably also the reason why the CEO of BAC will not nominate his son and daughter to sit on the Board. If you are going to make use of multiple voting shares to retain control with a relatively small economic interest, you need to always be more Catholic than the Pope when it comes to using the firm's funds. SJ I think Berkshire and Fairfax shareholders know the difference between how these two companies are managed and the typical corporate structure of most corporations. You get what you get with Berkshire and Fairfax...that you will be treated equal to management, and that management has interests that are aligned with shareholders long-term. That some family influence or atypical culture will exist...be it Howard Buffett on the board of Berkshire or Ben Watsa on the board of Fairfax. Otherwise investors are welcome to invest in other companies where the culture is more agreeable to them. Cheers!

Why Silicon Valley's Biggest Companies are Investing Billions in India: https://www.cnn.com/2020/07/17/tech/google-facebook-india-investment-jio/index.html Cheers!

Well, yes, that is one potentially valid conclusion, and I generally view it as solid, sound advice. But, there is yet one more problem with an outfit that sometimes does not seem to respect its partners. That problem is that the controlling shareholder has, until recently, only owned 7% of the economic interest in FFH but is likely now up to 9% ownership of the economic interest. That arrangement once again creates incentive problems because it creates a situation where every dollar of FFH's money that the controlling shareholder channels to his pet projects only costs him personally 9-cents. This might be a potential explanation for seemingly strange decisions like hiving off $50m of FFH's investment portfolio to be managed by Ben Watsa. What is FFH paying Ben's firm to manage that $50m? Is it 200 bps per year? More? Less? Nobody on the outside knows. But, what we do know is that if it is 200 bps, that makes $1 million per year, and of that sum Prem would pay $90k to guarantee his son a job while the minority (majority) shareholders would pay the other $910k. Prem could have allowed his son to manage $50m of his personal assets, which would also have guaranteed Ben a job, but then Prem alone would be paying the freight on that. Is it the same type of situation with TS? As others have noted, the TS controversy amounts to chicken-feed in the context of FFH's operations. Giving Paul Rivett a sweet-heart deal on TS would only potentially cost a few million of FFH's dollars. But, is this a case where Prem is happily spending 9-cent dollars for the benefit of his friends? Who really knows at this point. I would hope that Prem provides an explanation at the next quarterly call. The problem with this type of personal conduct that gives the appearance of a potential conflict of interest is that it casts suspicion on both good and bad decisions. The charitable gifts that FFH makes are the same sort of thing where Prem is effectively spending 9-cent dollars. We like to believe that all of these donations are made with the most altruistic and best intentions. But, now, when an expenditure is made that is not perfectly obviously aligned with the duty of a fiduciary, it is hard to not have a niggling concern in the back of one's head that the expenditure might not really be in the interest of shareholders. SJ The "market" has responded to all of Prem's actions in the way that matters most; Fairfax's share price has gone no where. In fact, it is currently back to where it was at the end of 2013. Closing Price in CAD: Dec 31/13: $424.21 Dec 31/14: $608.78 . . . . Dec 31/19: $609.74 July 16/20: $424.41 It will take performance of 15% per year for the next 3 years to get us slightly above the price at the end of Dec 31/14! So this will be a 9 year period where the share price will have done absolutely nothing. There are many reasons for the under performance of the share price however I can't help but think that Prem's pattern of personal conduct has played at least a small part. Markel's price hit 2015 prices...WTM hit 2015 prices...Everest Re hit 2014 prices at their lows...this is irrelevant to whether an investment is a good investment or not. Whether FFH is a good investment now...especially compared to when it was priced higher. You know better than that! Cheers!

As a banker who has successfully turned around a bank and lived through a failed one, I strongly believe in banking that outsiders are needed to shift the dynamic in a struggling banking organization. Maybe it is anchoring in prior views or truly mismanagement, an outside view and structure can bring failing strategies to light, institute new ones, and investing in strong strategies. The independence of prior problems and troubles allows for more flexible and new approaches to work through the major rocks needed to improve the company. We will see how this turnaround progresses. I have no position in WFC but think it is trading cheap, but I am not convinced yet that they have a firm grasp on the problem and have presented a viable plan to solve given the regulatory challenges faced. As someone who has been working with people and companies with Tribal Leadership now for almost 8 years, I can tell you that most failing strategies are a function of a culture not aligned with the strategies. Most consultants just do change management without any actual transformation and ontological work involved which is where the culture shift happens. Without ever having been in the company, I'd be 99% it's a culture issue and if the culture shifted, new strategies would be created naturally as a byproduct of that. ...this is the last bastion of low-hanging fruit alpha IMO outside of super tiny net-nets which will always have an advantage due to limits of position sizing. The truth is I could with maybe 3 other people come in and make more of an impact in Wells Fargo in 1 month than they have in the last few years. The level of amateur hour is funny but also kind of sad. When I work with people, they assume I'm just another consultant and then their world gets rocked within 1-2 days. Did you just use this post as a platform to market yourself? Guy's keep posts related to topics. No shots. Cheers!

Stop defending him....this one is not even close.... The revised Rivett/Bitove bid works out for something like $60 million in total to acquire a company that has $70 million CASH on its books and NO DEBT and no unfunded pension liability plus it has various minority investments that conservatively will raise a further $100 million when they are sold. You're asking some shareholders to stop defending him, but have you or anyone asked Prem why he is supporting the Bitove/Rivett deal? You guys always talk about self-dealing at Fairfax...show me some frickin' examples. The only things you guys point to is Resolute and now this. Resolute was to the benefit of Fairfax shareholders. If the Bitove/Rivett deal wins, do you think there might be some long-term opportunity for Fairfax? And why are you pissed off at the investor and not Torstar management...they are the ones who should be explaining why they are supporting a specific deal to all shareholders. Cheers!

Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Charlie Munger has a yacht. https://channelcatcharters.com/about.html Although it is a cheapskate yacht really. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Both Munger and Pattison use it more for either their customers/clients or charitable events. Cheers!

They will be raising that dividend faster than you think. I expected them to take a big hit this quarter, and I expect another hit, but slightly smaller, next quarter. Things will start to normalize by 4th Q 2020, and I think the dividend/share buybacks will go back closer to normal 1st Q 2021. Their loss provisions this quarter were smack dab in the middle of JPM and C. WFC doesn't have a robust trading business like those two...that's why I would like to see them merge with someone to add that part. Even with these provisions, WFC, JPM and C increased their Tier 1 capital. WFC isn't my favorite bank...BAC and TD are...but in terms of upside potential, I think WFC is one of the cheapest investments period, let alone a major bank. Cheers!

First Kennedy Wilson/Fairfax investment under $2B loan portfolio: https://finance.yahoo.com/news/kennedy-wilson-fairfax-complete-first-100000592.html Cheers!

The subscription fee is only for those that want the upgraded services above and beyond the message board. Otherwise, they would have full access and use of the message board as they do now. So nothing would change for the majority of users or new users. Cheers!

Interestingly TD had allegations of similar issues to WFC in 2017 where sales advisors were selling products customers didn't know they applied for and issues related to tied selling etc. Its since moved past this. This year Scharf has hired two key executives from TD that were instrumental in helping the bank through those issues. That would also be a fantastic merger, but Canada won't let TD do that. Cheers!

Doesn't seem so shrewd to me. The vast majority of shares were repurchased at about $50, the share price today is less than half that. What's worse is that the share repurchase program is actually suspended at the moment, so no shares will be repurchased at these low prices. Don't get me wrong though, Wells does looks cheap, but even before covid, it looked a bit like it was on the ropes (Q3+Q4 of last year were not good quarters). Q1 of this year was bad, Q2 will also be bad. The momentum of the business here does not look good, so I've swerved it and decided to buy Bank of America. It has a similar valuation, but doesn't have the Wily E. Coyote, falling off a precipice feel that Wells does with its recent earnings and revenue. With that said, Charles Scharf could be the guy to turn this thing around. Would not bet against him, but BAC seems the slightly safer bet right now. WFC looks somewhat undervalued on P/B or P/E basis compared to BAC/JPM/UBS. But seems to me extremely undervalued if you look at Mktcap/Total Asset. I don't think the comparison are valid. BAC and JPM both have much larger investment banks attached to them. Maybe WFC is more comparable in business model to USB, which is down more than 40% for the year. That's actually a merger waiting to happen! Cheers!

Where do you get black box from? WFC discloses a considerable amount of data in their annual reports. The Fed provides extensive stress tests on the banks, including WFC, with a full breakdown of expected losses in adverse scenarios. Hundreds of analysts have sifted through banking data and the stress tests. If there is one industry that is a model of transparency, it would be the U.S.banking system! Cheers!

Yes, that will be in there. Cheers!

Yeah, not gonna happen. Even if you relegate both Fairfax and Berkshire to the garbage pile, understanding what they've done right and wrong will always be of intrigue to people...especially value investors. It's the very reason why Berkshire is called Berkshire Hathaway...learn from the past. And regarding Fairfax, Prem is now at the same point in time where Berkshire was 30 years ago...1985-2020....Berkshire 1965-2000. Berkshire grew book value at 23.6% annualized from 1965 to 2000, and Fairfax grew book value at 18.5% annualized from 1985 to 2020. To say that Fairfax is a mediocre company is like saying Mike Tyson was a mediocre fighter with a weak chin because he lost to Buster Douglas once! Cheers!

Carried over. So other than Politics, which won't be saved or archived, the other sections will be essentially the same and carried over. Cheers!

Wells for a long time to me seemed like an overvalued bank, trading often in and around 1.5-1.7 times book...even in late 2019 it was trading at 1.3 times book. It was making money year after year, and we found out eventually exactly why it was able to do that. Now the pendulum has swung the other way. No one wants to touch it. It trades at 0.6 times book and has spent the last few years fighting the government, paying off fines and overhauling its banking culture. Is it a bargain now, or was it overvalued 13 years ago? What would a true value investor say and do? Cheers!

Yes, Moynihan does not get the credit he deserves. He stick-handled BOA from has-been into a premier American bank just a tiny notch behind JPM. Arguably, the most important banking CEO in the last decade, because things could have gone very wrong with BOA. Very few in the hierarchy wanted him as CEO, because he was not charismatic, but he simply put his thick, Irish, head down and worked hard. I don't like excessive compensation for executives, but Moynihan deserved every penny! Cheers!

There will be a whole new site here most likely beginning September 1st. Originally I was aiming for January 1st, but we've moved that timeline up. I guess now would be a good time to address your issues: https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/cobf-new-website/msg422404/#msg422404 Cheers! Sanjeev