Parsad

Satirical or not...the reason there is a Politics board is to keep this stuff there. Cheers!

Cardboard, if this type of crap comment shows up on another thread outside of Politics, you will be gone...think twice before posting going forward! Goes for others as well! Cheers!

Last chance to get your tickets for the dinner! Please buy in the next few hours, as we have to give the final number to the hotel tomorrow. Thanks! Sanjeev

Last night to get your tickets if you haven't. We have to give the final number to the hotel tomorrow morning, so please get your tickets in the next few hours if you haven't. Thanks! Sanjeev

We are very optimistic about ZED, but I also don't want you to assume things after reading the letter. You are on the right path, but the ownership stake has been diluted a little more than your assumption. Might be opportunity if anyone can accumulate shares without driving the price 2-3x. Given the mentioning of the liquidity event in the report, the paperwork must have been signed? otherwise is Sanjeev allowed to say it? Not signed, but they are actively pursuing it and expect it to occur some time in the 2nd half of 2019. These things some times have delays due to changes in circulars, exchange issues...but that is the target for both ZED and MyCare...ZED would be up first. This is the genetic catalogue asset (325 strains) that was purchased and the guy who now works for ZED as chief geneticist: https://cannabisindustryjournal.com/feature_article/adam-jacques-award-winning-grower-pioneer-and-medical-cannabis-provider/ https://www.eugeneweekly.com/2016/01/14/medicine-man/ This is ZED's chief of technology: https://cannabisindustryjournal.com/feature_article/the-c4-cannabinomics-collaborative-qa-with-dr-zacariah-hildenbrand/ More to come over the next few months! Cheers!

Annual report is already out on SEDAR. Letter will come out shortly...there are some things happening around ZED that we want to include in the letter. Cheers! We have that in there to have flexibility in our compensation options. We probably won't use it, as I don't believe options at the parent level are the best way to target or reward employees whose work is focused on subsidiaries. The options that we had in the past were issued under previous management...I'm not a big fan of options. That being said, as a very small company, sometimes you don't have a lot you can offer as compensation when base salaries are lower than the competition and you don't want to give up equity. Cash bonuses are an option, but if cash is tight in a subsidiary as it grows, the cash has to come from somewhere. I would recommend that every armchair quarterback out there, go and run a business for 3-5 years...you would learn an immense amount that buying and selling securities cannot teach you. You would be humbled, astounded and at times shake your head at what you see and learn. But it is a very interesting challenge with so many more variables than analyzing securities encounters! Imagine playing poker, but 20 hands at a time! Cheers! Parsad - you are in a unique (& unfortunate position) of having to defend & explain PDH on a public forum.. No CEO or manager is out there explaining their decisions to a bunch of groupies on a web forum . You should not be expected to participate in this thread to explain or defend your decisions. Don't you think it unduly influences how you make decisions regarding the company if you're always under the microscope? It's comical that you are insinuating that private companies don't get questioned or challenged regularly. All investors challenge management on their decisions, unless they are one in the same. Often times they are equally tough on themselves. Parsad is equally remiss to assume board posters aren't also running sizable companies or in management elsewhere. Some may be learning but many others are well established at this point. It is hard and I think this project has been a terribly tough ongoing lesson. Junto, why would you assume that when I said "armchair quarterback", I wasn't simply talking about myself? That I at times probably behaved that way before actually running a business. That it would be a good experience for others as well that spent alot of time analyzing securities, but not actually running a business...be it public or private. Cheers!

We've talked about his on occasion and read it in other papers, but here is another one from the Bank of International Settlements. The low interest rate environment continues to create distortions. Cheers! https://www.bis.org/publ/qtrpdf/r_qt1809g.htm

Another rumour: https://finance.yahoo.com/news/renault-aims-restart-nissan-merger-054654446.html I suspect FCAU is a piece that a few companies would want. Cheers!

He'll be fine. WWE or movies...he'll make as much money as he did playing football. Cheers!

Hi All, We are down to our last 20 tickets for this year's event. Please get them soon, as we will be out and will not be selling any at the door. Cheers! Sanjeev

Hi All, We are down to our last 20 tickets for this year's event. Please get them soon, as we will be out and will not be selling any at the door. Cheers! Sanjeev

Did Brian retire? No...no. But I suspect he's slowing things down a bit like Prem. A good question would be has Brian ever taken on a protege and who is it? Cheers!

The way it used to work before Wade Burton was appointed managing director was that they had 5-6 of the core group/old guard...Prem, Brian, Roger, Chandran, Sam & Francis (when he was there)...Tony Hamblin before Francis, etc. They would make the broad capital decisions after the senior analysts provided their reports. Prem would have the final say. Each of the analysts were given smaller amounts to deploy, while the old guard deployed the bulk of the capital and oversaw billion/multi-billion portfolios. They would also go through sessions on any capital ideas where others would try and kill the idea. If it passed, then capital is allocated. Today, I'm not sure exactly how it is done, but it may be worth asking at the next meeting. Paul is President of Fairfax, Wade is essentially the managing director, but some of the remaining old guard, including Prem, still oversee and provide advice. But I think the bulk of the capital decisions are now made by the next generation (Paul, Wade, Lawrence, etc). The one thing that Fairfax shareholders shouldn't worry about is succession. They've essentially passed on core duties now to Paul, Andy Barnard, Peter Clarke and Wade Burton. I think that eventual transition will be far smoother at Fairfax than at Berkshire or Markel. And in terms of the investing team...they won't be as good on the bond side as Brian was (but who in the world really is), but the bulk of them are Cundill proteges, worked for and with Fairfax's team and are very well-established value managers. Fairfax is extremely deep in nearly every part of their business! Cheers!

It's a paid subscription link, but the FT had an article about Elkann also pushing for a deal. Nothing imminent but it looks like the "moons might be aligned" as Peugeot's CEO commented. Cheers! https://finance.yahoo.com/m/db06b96f-f6f9-319d-95c5-3f8ae92ff77e/%5B%24%24%5D-fiat-chrysler%E2%80%99s-chairman.html

Do you think Sergio would've tried so hard to get a deal done with GM if he didn't think there was a reasonable probability of a deal going through? And he was probably a little bit more connected to the decision makers than we are... And that was before Trump. Consumers would benefit from auto consolidation. The industry spends well over $2 billion a week on product development, which is probably half duplicative. That gets passed on to consumers in the form of higher prices. This isn't a high margin business with the exception of pickup trucks. I think there would be zero problem getting a merger of GM + FCAU approved if FCAU spun-off Ram, which would be a pretty decent worst case regulatory scenario... And a decent chance you could convince the Trump administration that they want America to dominate the auto business. I agree with this sentiment. Cheers!

I doubt that a takeover of Fiat in Europe by the Chinese would go through, much less atakeover of Chrysler. The US government found a security risk with Canada and Europe supplying steel to the US so one can be sure that they would find a risk with a Chinese company buying a US car company. The problem with the car industry is that the pool of buyers is quite limited. I doubt that a GM Vhrysler combination would go though - maybe Ford Chrysler, if Ford gets into trouble, but if they do, how would they pay for Chrysler and Chrysler buying Ford defies the whole agenda of getting out of the car business for the Agnelli’s. I think a GM/FCAU or F/FCAU deal would be approved as the U.S. will eventually have to accept a fully consolidated U.S. auto industry to compete on a global scale. If don't believe in that and cannot accept it, then either combo would have too much market share in the U.S. regardless. In terms of a Chinese acquisition, you are probably correct in the current climate. But I would suspect the U.S. would not stand in the way if a trade agreement is approved, and Europe would have a hard time arguing in international courts that FCAU in Chinese hands would be a security or competitive risk to Europe. Cheers!

Yeah, that's what I thought. I'm intrigued even by the fact they said that they wouldn't accept a deal with a "large" proportion of Peugeot stock. They could do a leveraged buyout without much difficulty if they accepted 10-20% in stock and the rest cash. A deal with FCAU would be good for Peugeot, but FCAU could fit in with a number of other companies quite nicely...especially the Chinese! Not sure why they aren't making a concerted run at FCAU. Also, instead of selling Jaguar and Land Rover, Tata should do the leveraged takeover of FCAU and retain Jaguar and Landrover. With Maserati and Alfa Romeo, plus all of the cash and cash flow coming in from Jeep and Ram, they could easily support their luxury brands and have a strong footprint in North America. And of course GM...what is stopping them from making a deal with FCAU and taking a big chunk of the U.S. auto business. It might be tough to get through anti-competition reviews, but the U.S. needs to accept that they really need to go to a single U.S. automaker to compete globally with Volkswagen, a possible future combination of Daimler & BMW, Hyundai/Kia and a future super-competitor from China. Cheers! Would that get approved given the current trade tensions? I think it would. FCAU is a European company, not US. Justice Department may argue, but it would be hard pressed for courts to find it anti-competitive or a security risk. Cheers!

Annual report is already out on SEDAR. Letter will come out shortly...there are some things happening around ZED that we want to include in the letter. Cheers! We have that in there to have flexibility in our compensation options. We probably won't use it, as I don't believe options at the parent level are the best way to target or reward employees whose work is focused on subsidiaries. The options that we had in the past were issued under previous management...I'm not a big fan of options. That being said, as a very small company, sometimes you don't have a lot you can offer as compensation when base salaries are lower than the competition and you don't want to give up equity. Cash bonuses are an option, but if cash is tight in a subsidiary as it grows, the cash has to come from somewhere. I would recommend that every armchair quarterback out there, go and run a business for 3-5 years...you would learn an immense amount that buying and selling securities cannot teach you. You would be humbled, astounded and at times shake your head at what you see and learn. But it is a very interesting challenge with so many more variables than analyzing securities encounters! Imagine playing poker, but 20 hands at a time! Cheers! Parsad - you are in a unique (& unfortunate position) of having to defend & explain PDH on a public forum.. No CEO or manager is out there explaining their decisions to a bunch of groupies on a web forum . You should not be expected to participate in this thread to explain or defend your decisions. Don't you think it unduly influences how you make decisions regarding the company if you're always under the microscope? Hi Karthik, Great question and comment! One thing we did this year is I've stopped taking emails and calls from shareholders discussing the company or particular issues. I would much rather answer a question to a wide audience via the board, annual letter or AGM if I can, than on a one-on-one call or email. We aren't ignoring the individual shareholder...if it is a specific question regarding the shareholder's interest, filings, AGM, events, etc, it gets passed on to Marta (legal counsel) or Nicole (assistant) to answer. But if I can answer a reasonable question that regulations wouldn't have an issue with, then I prefer to do it on a forum like this to a broader audience of shareholders. And again, I apologize for the delay with the annual letter, but we are pushing things as far as we can so that we can talk about ZED. All I can say is that sometimes it's better to be lucky than smart! Cheers!

Yeah, that's what I thought. I'm intrigued even by the fact they said that they wouldn't accept a deal with a "large" proportion of Peugeot stock. They could do a leveraged buyout without much difficulty if they accepted 10-20% in stock and the rest cash. A deal with FCAU would be good for Peugeot, but FCAU could fit in with a number of other companies quite nicely...especially the Chinese! Not sure why they aren't making a concerted run at FCAU. Also, instead of selling Jaguar and Land Rover, Tata should do the leveraged takeover of FCAU and retain Jaguar and Landrover. With Maserati and Alfa Romeo, plus all of the cash and cash flow coming in from Jeep and Ram, they could easily support their luxury brands and have a strong footprint in North America. And of course GM...what is stopping them from making a deal with FCAU and taking a big chunk of the U.S. auto business. It might be tough to get through anti-competition reviews, but the U.S. needs to accept that they really need to go to a single U.S. automaker to compete globally with Volkswagen, a possible future combination of Daimler & BMW, Hyundai/Kia and a future super-competitor from China. Cheers!

Annual report is already out on SEDAR. Letter will come out shortly...there are some things happening around ZED that we want to include in the letter. Cheers! We have that in there to have flexibility in our compensation options. We probably won't use it, as I don't believe options at the parent level are the best way to target or reward employees whose work is focused on subsidiaries. The options that we had in the past were issued under previous management...I'm not a big fan of options. That being said, as a very small company, sometimes you don't have a lot you can offer as compensation when base salaries are lower than the competition and you don't want to give up equity. Cash bonuses are an option, but if cash is tight in a subsidiary as it grows, the cash has to come from somewhere. I would recommend that every armchair quarterback out there, go and run a business for 3-5 years...you would learn an immense amount that buying and selling securities cannot teach you. You would be humbled, astounded and at times shake your head at what you see and learn. But it is a very interesting challenge with so many more variables than analyzing securities encounters! Imagine playing poker, but 20 hands at a time! Cheers!

We already have that in place. If I get even one complaint of politics entering into a non-politic board/thread, I investigate. If it is something blatant, then it is removed (not moved). If it is something that is mentioned in passing, then I leave it. So the more complaints I get about a post, the more likely it will be removed. Politics should stay in the Politics section, and those that don't want to waste time with politics, always have the option (which is very easy to do and works extremely effectively) to ignore the Politics board altogether. If we don't have the "Politics" board, then I will be constantly getting complaints about politics in the Investment sections. The manpower needed to monitor that on a free site would no longer make the site free. Cheers!

I agree with you on all counts. I would also suggest that any interest (whether in part or whole) for FCAU, means that a competing offer could also come. FCAU is probably one of the best smaller auto companies available for consolidation, especially with all of the cash, low debt and strong U.S. cash flows. I was off on my timing about a deal getting done before December...but I wouldn't at all be surprised if something happens before July. Cheers! Can Peugeot even do a purchase of the whole company for cash? If it’s for shares then they probably sell off on style and the premium would be small, because Peugeot trades cheaply to begin with. I would sort of like them to take the Fiat operation, even if they pay very little or zero, because I don’t think it’s worth anything. Machione could fix Chrysler, but he couldn’t fix Fiat in a 10 year economic recovery and Italy (Fiat strongest market) is falling into a recession and is unlikely to get any better. They could do a leveraged deal for the whole thing. After you pay the one-time dividend, and the special dividend from Magnetti, there is still $4-5B left from the deal which was going into research and development. FCAU is also sitting on a ton of cash. So they could do a leveraged deal for cash after borrowing about $10-13B...I don't think a stock deal would get done or approved by Elkann unless there was like a 80-100% premium to the current price. But they could probably do a leveraged cash deal for a 40-50% premium now. Cheers!

I agree with you on all counts. I would also suggest that any interest (whether in part or whole) for FCAU, means that a competing offer could also come. FCAU is probably one of the best smaller auto companies available for consolidation, especially with all of the cash, low debt and strong U.S. cash flows. I was off on my timing about a deal getting done before December...but I wouldn't at all be surprised if something happens before July. Cheers!

Is that what's intended though? It's my understanding that it makes sense for Peugot because of the diversification in geographical exposure. I think it's doubtful they'd just take Fiat and leave the American brands behind as that doesn't achieve the goal. They would ideally be looking for a merger, but adding complementary pieces would be fine too...as long as the deal works. Cheers!

Hi All, I made a mistake in the original post...I had the date as April 3rd. The correct date, which has been updated on the original post now, is April 10th...our usual time slot the night before Fairfax AGM. Thanks! Sanjeev