Parsad

According to revised data, the current recession is the worst since the Great Depression. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=a5_5Vq2hV3EQ

I think the board is overreacting to the combined ratios at NB and C&F. You can't compare a company like Chubb to Northbridge or Crum & Forster. Chubb's lines of business are more diverse and they also write significant business outside of North America. A better comparison to Chubb is Fairfax's overall business, not its individual subs. Based on that, Chubb's shareholder equity has been flat for over three years. Fairfax's has doubled! Investors should also remember that insurance is a very cyclical business. There was a period from 1982-1992 where Berkshire's insurance business had nothing but combined ratios above 100% for eleven consecutive years! Today, I'm certain that any insurance analyst would agree that Berkshire has the finest group of insurance businesses in the world, and they do a splendid job of underwriting and managing expenses. Cheers!

Thanks Ragnar...very nice! Cheers!

What are you basing this on, Parsad? After talking and meeting him on numerous occasions. I've spent days with him at a time. His thinking. His positions in the past. His thoughts on markets. His temperament. His thoughts on managing investment capital. Cheers!

Updated article from the Globe & Mail on FFH's 2nd Q report. Looks like Fairfax is about to close on an insurer in China. Cheers! http://www.globeinvestor.com/servlet/story/RTGAM.20090730.wfairfaxprint0730/GIStory/#

Apparently, during Black Expo weekend in Indianapolis, the 24 hour Steak'n Shake was closed for maintenance...on the exact days of the Expo, and would be re-open again the morning after the event. http://www.youtube.com/watch?v=9c-ftqdYCF0 These types of optics, including the employee's hour/insurance issue from a few weeks ago, are completely unnecessary from a business-owner's point of view. Sardar did his best to downplay the issue and clear up the misunderstanding, but this type of incident can get really blown out of proportion...think about the whole Gates/Cowley/Obama incident last week. http://www.theindychannel.com/news/20241955/detail.html Anyway, let's hope that we don't see another of these things for a while at a Steak'n Shake. Cheers!

That was, by far, the shortest Farifax conference call I've ever heard! I think there were only three questions. Prem and Greg pretty much said...made money, great shape, insurance companies are alright, investors will be happy in the future, and markets move up and down so book will too. And then probably the most uninformed analyst I've heard (I'm pretty sure he was an analyst) asked the last question on where Fairfax should trade, what does the portfolio look like presently, and is the insurance market firming. Unless something goes wrong, I think we should get used to these short conference calls. Cheers!

I know Peter very well. He's a good manager, smart guy and a terrific person. His fund is small at the present time, not unlike ours, but it will grow over time. He has personal and family capital in his fund, so he naturally takes a very cautious approach. Cheers!

Oh yeah Eric! Maybe that's what Chanos meant. I completely misunderstood the poor guy. Well, I guess we'll have to take him off the lawsuit now. ;D Cheers!

I thought this thing was a "zero"? How could the greatest shortseller in history...the man who discovered the Enron fraud...with an uncompromising "negative correlation" to the major indices...be so wrong! Phhpppphtttt! I'll leave the humility to Prem, because he's a far better man than me, but Chanos can kiss my brown a**! I know Jo Ann would have loved this post. ;D Cheers!

I'm not sure exactly who these guys are, but there seems to be a gathering for Buffett disciples in Chicago on August 28th. It seems to be sponsered by Midway Capital Research, which was an investment company started last year. From what I see on the registration info, it costs $35 for registration and any profits made will be donated to charity. Perhaps other board members are more familiar with this gathering. Cheers! http://www.buffettconclave.com/ http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/07-30-2009/0005069194&EDATE=

I think the board hit it dead on with a $50-60 change in book value. Good stuff guys! Cheers!

CNBC article on Buffett's investment in BYD. Cheers! http://www.cnbc.com/id/32217969

I didn't expect anything else from Sardar...as I've always said, he's the real deal. It's great for the employee and in turn great for the new CEO of the company. Cheers!

After reading the post below by SharperDingaan, I thought this would be a very interesting and useful topic. I manage the family investments as a sideline, & am training 2 nephews in the darkarts of finance - hence the 'we'. Part of their training is that they can each make a BS/PL 'dance', & that they each have to present a new idea on the back of an envelope every quarter-end. If it survives the 20 questions, we put real money on it (a very small allocation from the main portfolio) They're at the table whenever the major decisions are made, & are there to ask questions & learn by osmosis. Once/year they have to present a business plan to a small businessman, buy some inventory, & then help in selling it through his/her store (preferably something edible in case they screw up) Real life experience, with 20% of their gross going to charity and another 20% going to travel. Taxation. They also read this board as well So what do you all do to teach family, children, friends or the general public about finance and business? Cheers!

That's awesome Sharper! What a terrific thing for them to learn while young. I especially like the presenting a businessplan idea and then actually putting it into effect...great stuff! On that subject, I'll start a thread on how people teach their family about money. Cheers!

With $40M in deposits waiting for future flights, Branson's SpaceShipOne has raised $280M to launch testflights. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=aNsbAEBcbqxA

I thought this article was funny. It seems as though municipalities and states are coming up with innovative ways to finance their budget deficits. A bill was proposed to tax marijuana...it was tabled for a later date. Oakland has actually already started taxing medical marijuana. Finally, a stripper "pole" tax of $5 per patron is being instituted. Dig yourself into a hole and it's ok to straddle moral lines to get yourself out...that's how the government works my friends! Cheers! http://www.cnn.com/2009/POLITICS/07/28/states.budget.crunch/index.html

I have yet to meet any individual who has used a screen successfully for years and done extraordinarily well. It takes more than a quantitative approach. Cheers!

The Vertex guys are smart guys...Jeff's office is a block from me, as is Tim McElvaines...we're forming the area of concentration in Vancouver for value managers! ;D I've had coffee with Jeff, and they know what they are doing...good guys. I think the $75 number is at the high end, but $50+ change in book is probably accurate. Cheers!

Thanks very much for posting Norm! Cheers!

No, Norm definitely would not try to mislead in any manner. He's on here and was on our old board for a long time, and I've met him many times in Toronto, at our dinners, the Fairfax AGM and our own MPIC Funds AGM. But I think the fact that his screens are difficult to apply to a real portfolio, indicate that screens are a starting point, not a place to finish. It's the same thing with Greenblatt. The "magic formula" sounds terrific and sells plenty of books, but you still need the emotional constitution to apply it, and that's why it is exceedingly difficult to replicate. Cheers!

Volatility is less of an issue when buying options. The primary concern is always the time arbitrage and the price you pay for them. Eventually, the options are worthless if not in the money, thus understanding the actual operations of the underlying business in the relative short-term is important. There is definitely a speculative nature to it, so you have to make sure you understand that. Your batting average will be significantly lower, but the payouts are much higher if you can find inefficiencies in pricing. It's also a very good way to mitigate short-term market risk...such as you buy a basket of call options in place of a basket of equity positions in a leveraged business. You could take four or five 5-10% equity positions or four or five 1-1.5% call option positions. The maximum you have at risk is significantly smaller, but remember that if you are wrong on all five positions, your options will be worthless at maturity. Cheers!

I think you'll find more information regarding real estate if you look at stuff Munger was involved with. I think "Damn Right" has some stories and so does "The Snowball". That was Munger's primary idea on how to become financially independent until he met Buffett. He continued investing in real estate, even after starting the Munger-Wheeler partnership and Berkshire. He still dabbles to this day. Cheers!

About friggin' time! I think some of the regulation that was truly needed will finally come into place. Unfortunately, the side effect will also be unnecessary regulation that is also added. Cheers!