Parsad

Works on IE11. Was not working for me on Opera. Ha, that's interesting! I just also found that out. Works on IE 11, but not Chrome. GAAATTTTEESS! Thanks!

Anyone having problems accessing the Livestream?

I am not arguing that the traditional hedge fund structure isn't a disaster. It's definitely very, very bad for investors. What I am saying, is that the bet wasn't even remotely fair. Buffett is an absolute genius who picked the right index to put a 100% weighting into at the right time. This was not luck, he did it because he is smarter than nearly everyone else out there and knew it'd be impossible to beat. Looking at the performance of the opposition, their returns weren't even mediocre, they were diabolical before the ridiculously high fee structure was considered. I take umbrage with his comment the fact that indexing is always great and that active is always bad (except presumably for himself and the 10 other people he talked about as being able to outperform). I'll tell you what's not fair. That no hedge fund manager wanted to stand behind the fees they charge. We know why too? They have no intention ever to beat anything. Seides obviously didn't know wth he was getting into. The 10 guys who Buffett was speaking about have returned something in excess of the index over the long term. Why? Because that's what they intended to do so. Using Buffett 's threshold for earning his keep as the proxy, the fee was after performing. That's fair. This was not about picking this versus that. Go to longbets.org and listen to Buffett's sermon last year or in the annual letter.It was about the ripoff called fees for nothing. Long haul's used car analogy captures the issue perfectly. At least you get a car. The hedge fund managers did quite ok over the period of the bet. We stand behind our fees...we don't have any, so there isn't much to stand behind! ;D I think if all managers used the model we use (Buffett's original partnership model), long-term you would only be left with those managers that can actually beat the S&P500. Not many...only handfuls! And those that just like reaping large fees would be actually working used car lots where they belong. Cheers!

Is this another way of saying Fairfax suffers from a conglomerate discount or was this in a different context? They are just saying that intrinsic value is significantly higher than book value. Some of their acquisitions under IFRS are being carried at cost, while the value is far higher...be it the intrinsic value or market value. Cheers!

I'm absolutely a believer that with the leverage they have, the insurance businesses they now have, and the investment team they have, they will get 15% annualized returns over the LONG-term. Remember, with that leverage and insurance operations that now consistently write at below a 100% combined ratio, they don't need stellar investment results like the past...they just need good returns. Many people, on here and elsewhere, always assumed that Fairfax's insurance businesses would never operate at below 100% CR long-term...well guess what! They have consistently added new managers, and some of the older ones are still young enough and very healthy enough to last another 20 years. They also know that they can outsource some of the investment work load now, instead of having to manage it all in-house as the core team ages. They have a deep team, and it will only get deeper as they get bigger and their reputation even more alluring to smart young managers and executives. I would recommend that they start to outsource to other good managers as the cash flows get bigger and bigger...give Francis more money...give Vito Maida money...I'm happy to manage more over time! ;D Cheers!

That's about right. Eric hasn't gone anywhere. He's enjoying retirement over the last few years...including learning to surf! He still reads the board and posts from time to time. Cheers!

Hi Everyone, The Fairfax AGM this year was fantastic as usual! I know many have been critical of the company over the last couple of years, but I think they are making a huge mistake in underestimating what is going on. The easiest way to see that there is a basic miscalculation of Fairfax is simply by taking a look at this year's lanyards and shareholder badge. If you opened up the badge, you could see the logos of many of the companies Fairfax owns, and this didn't include most of the insurance businesses. Literally, the badge looked like Berkshire nearly 20 years ago when I first began to look at the company. And the insurance businesses are getting better and better as a whole at Fairfax! Roy Thomson Hall is also getting too small for the AGM. I suspect we may have to move it to the Metro Trade and Convention Centre soon, as the number of booths and venues literally engulfed all of Roy Thomson Hall, including the outside courtyard area. Amazing to see all of the different businesses, organizations and people involved at Fairfax. Unfortunately, I was manning the Templeton Foundation book table for most of the morning, so I did not get to see the Fairfax presentation. I'm sure others can share comments on here. The presentation slides are available here: http://www.fairfax.ca/news/events-and-webcasts/default.aspx Once again, amazing what is happening at Fairfax...we are watching the wheel being replicated again...the brushstrokes and final painting will look different than Berkshire, but the similarities are definitively there! Cheers!

Hi Everyone, This year's dinner raised $30,798 for Crohn's & Colitis Canada. Thanks to all that supported and attended the dinner, as well as those that could not make it but contributed nonetheless! Big thanks to Fairfax Financial, in particular Vinodh Loganadhan, Pat Hios, Paul Rivett and Prem Watsa! Also thanks to Jeff Stacey for moderating the Fairfax panel. Thanks to: - Definitive Sound - Manulife Office - Ruby Yawney-Lougheed - AB Value Management - The Keg Restaurants - Cara Food Group - McEwen Group - Wayne Gretzky & his foundation - Milos Raonic - Dustin Johnson - Lauren Templeton & The Templeton Foundation - Dr. Ryan D'Arcy - Robin Speziale Finally, thanks to all of the volunteers, including those who helped organize the various events, pre-dinner meeting and our dinner! We had about 135 people attend. Fairfax brought their usual of 10-15 executives, managers and guests. Gary Shilling was there, and surprise guest Mason Hawkins. That panel was moderated by Jeff Stacey. Francis rekindled some excitement for all of the long-time attendees who remember the days at Joe Badali's, by bringing together a panel after the Fairfax panel of Brian Bradstreet, Sam Mitchell and Peter Furlan. All in all, it was another terrific year! Sanjeev

Oh, I agree it's not a fad. It makes long-term sense. But you have a congregation of capital of enormous size going into them. When a correction happens it will be bigger and faster. The recovery will also be quicker. Cheers!

This seems to imply that you believe that the Vancouver housing market is in a bubble, yet Premier has been investing in Vancouver real estate (which has been a correct decision based on price appreciation to date). What's your reasoning here? That the prices you're doing these deals at have such a large margin of safety that it doesn't matter if Vancouver real estate collapses while Premier is financing these developments? That Premier will get out before the bubble pops? I've been curious about that investment for months, so I was wondering if you could explain the apparent incongruity between believing in the bubble, but still investing in Vancouver real estate. The Kingswood projects we are in are on the lower end...townhouses between $650K to $850K. There is an enormous lack of supply in the townhouse market, unlike condos and detached homes over $1.5M. So while the townhouse sector would take a hit, it would not be affected like the condo market or detached home market. These projects will also soon be going to presales, and we have no other real estate projects planned. The main pain will be in all of these HELOCs with their variable rates...secured and unsecured...and the sudden increase in financing costs that the consumer will face. The average consumer does not even have enough in liquid assets to survive for more than a month if they lose their job. There will be no way they could support higher finance charges if rates moved up 2-3%. With increased consumer/auto loans and higher credit card balances, combined with their HELOCs, any economic recession or sharp increase in interest rates will impact the consumer's ability to service their debt load. To put it as bluntly as I can, I don't think I've seen Canadian balance sheets this leveraged since the 1981 crash in real estate. Interest rates increased to 18% back then from about 6-7%. We're at 2% and these balance sheets are stretched and barely serviceable. What happens if rates move just to average historical rates...4-5%? What if Canada faces hyperinflation because it has to support the Canadian dollar and interest rates move to 10%? Few people think about these things because they always seem so remote...until they happen! Cheers!

Could be Klarman remains incorrect. I just think there are certain systemic events that take much longer than expected to reach a tipping point. People could be making money hand over fist during the cycle, but that doesn't mean that the risk doesn't exist. If you have massive coordinated global quantitative easing combined with a broad concentration forming in index funds, I would imagine that could create such a circumstance where any change in policy or some sort of crisis, could result in a rapid correction as algorithmic trading systems kick in. Klarman may get the end result correct, while looking foolish for a very long time. Cheers!

If any of us were smart, we would have written the show "Billions" based on what happened, instead of Andrew Ross Sorkin beating us all to the punch. As good as that show is, I don't think they've still touched on many things we've seen that would easily fit into a season's worth of episodes. Cheers!

I just bought a BMW and my brother also bought one...both used...mine is 5 years old, his is 4 years old. They are in mint condition with very low km's. The lots are full of them! Why? Because people with increased equity in their homes, two steady incomes and low interest-rate loans/HELOC's are constantly buying and upgrading to new cars. If you visit Vancouver, you will see more luxury high-end cars on a per-capita basis than anywhere in the world outside of perhaps Hong Kong, Dubai and Monaco. 10-15 years ago, Range Rovers were rare, today they are a dime a dozen in Vancouver. That's partly because the company is producing more and better cars, and also simply Vancouverites feel rich with their homes compounding at 15%-20% a year for the last 10 years. You also have drug dealers, immigrants with luxury tastes, and entrepreneurs, but alot of the middle-class success is completely attributable to greater equity in their homes. I know how much alot of people make around me, and they aren't saving much. The ones living the good life are the ones investing in or tapping into real estate assets. There isn't much true liquidity and the everyday person is going big into real estate on the side. Whether you are a doctor, lawyer, accountant, retail clerk, etc...they are all trying to get into real estate. The number of people taking the real estate license course is off the charts. What will it take to correct? This is too big now. It will take a substantial increase in interest rates, or a collapse in foreign buyers. A tax on foreign buyers has limited effect unless enforced nationally. For example in Vancouver, they instituted the 15% foreign buyers tax, which affected buyers in Vancouver and all outlying suburbs. That just pushed the foreign money into other parts of the province, such as Abbotsford, Kelowna and Victoria. Or it went into local commercial real estate and prices are escalating there now too. But I suspect when this thing blows, it will be a much larger bubble than if they had pricked it a few years ago. Now it could prove to be quite painful for institutions and especially the average consumer! Cheers!

The funny thing is how Chanos and Loeb responded to the decision...that they were gratified by the court's well-reasoned decision. That decision only occurred because the New Jersey court had no jurisdiction over them...not that they were innocent of such claims. Cheers!

Hi John, In so far as I am biased and prepared for a downturn, I suppose. I was prepared by the summer of 2007 the last time. I got caught off guard over a year later when I thought the worst had past and did some stupid investments on the way down. Washington Mutual comes to mind as one. With inflows like what we are seeing into an overvalued stock market, things IMO are getting dangerous. Part of the problem is outside of oil cos. I am not seeing any value. And I am tentative with oil because it will get pulled down in a market crash, recession scenario. People have forgotten, as usual, how fast and how badly things can turn. As usual I am probably early but in this case it doesn't really matter. I am not losing any opportunity cost. Snapping up a bunch of blue chips in a downturn when their yields go above five or six percent is worth the wait. I'm firmly in the camp that any sort of congregation of investors in any one strategy will result in some sort of large correction. That correction in ETF's will simply take a much longer time to come to fruition, because you are talking about such a large overvaluation in the broad market...not simply in one sector. Seth Klarman talked about this two years ago in his annual letter. Can anyone tell me that the economic cycles for the stock market have not compressed with algorithmic trading, ETF computer trading and huge interventions in monetary policy? We've seen this accelerate in the last 15-20 years. As someone else said on here, Buffett and Bogle are correct long-term about index investing...but that is completely based on investors ignoring all emotion and simply holding or averaging into an index fund over the long-term. But that is not how portfolio managers or the average investor behaves, and certainly not how computers will behave, if their programming directs them to push a sell order with no triggers to stop a cascading market. I remember an encounter with a certain investment manager and his professor in Omaha, and we had a discussion on the markets. I said at that time I was concerned about systemic risk and agreed with an article that Larry Sarbit wrote about how even money markets would break the dollar level in such an event. It was why Sarbit was getting out of many financial investments, including Fannie Mae and Freddie Mac. The professor turned to his protege and asked him the question I posed. The protege thought about it for a moment and said that the likelihood of such an event occurring would be small because the treasury market was so large that a liquidity event was unlikely to occur to the money market industry on any given day. The professor agreed and there you have it! Two great intellects that clearly indicated how such an event could not occur. Well a few years later in 2008, money market funds for the first time in their entire history of some 70 years, finally fell through the one dollar mark. There is a reason why this Buffett quote is always on the inside cover of our annual report: “…Over time, markets will do extraordinary, even bizarre, things. A single, big mistake could wipe out a long string of successes. We therefore need someone genetically programmed to recognize and avoid serious risks, including those never before encountered. Certain perils that lurk in investment strategies cannot be spotted by use of the models commonly employed today by financial institutions. Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues…” Cheers!

That's the funny thing, I still rarely buy stuff from Amazon...maybe 2-3 times a year. Yet, I know people who shop there weekly, if not almost daily! Over time, I'm sure Amazon will get more of my shopping dollars, but for now, I think until they eliminate more of their competition, I won't be buying a whole lot there. Alot of people are still like me as well! Amazon is going to have to drive alot more companies out of business before that current P/E makes sense. Cheers!

lol! Thanks for the advice about how to handle and approach this brick, longinvestor! The Lady of the House will most likely shake her head again - Last time was when I bought both the English and Swedish version of the Investor AB 100 years Anniversary book. She did not understand why I really needed both versions. When I'm reading the financials of Svenska Handelsbanken AB - on/off - [244 pages], she asks me : "What's so interesting about that light blue old fashion community telephone book? - is it the Swedish verson this time, or the English?" ... John, it's a pretty fascinating read. My first copy, I read the entire thing that week! I just couldn't put it down because of all of the history, details, personal stories about Buffett, Berkshire, Omaha, investing, etc. Then you buy another copy say 4-5 years down the road, and read all of the new stories. Then buy another one 4-5 years down the road again, and read all the new stuff again. Plus, you'll go back and read some of the other stories over and over as well. As Longinvestor said, it's a great reference guide as the index in the back is very comprehensive if you are looking for a specific subject. Cheers!

We had about 20 people attend, not including the proxy scrutineers...12 were shareholders and 8 were directors, staff, management. There were at least 4 shareholders who are members here that attended...not including yours truly. The powerpoint will be on the website later this evening. I can't speak for the shareholders, but my impression was that virtually all left feeling better about where the company is headed...including both long-term and more recent shareholders. What I can say with certainty is that company morale is in a very good place in terms of goals, opportunities and prospects for PDH's future. Cheers!

I still consider Andy's book the ultimate bible for Berkshire disciples. Here is the link to the 2017 edition! I can't even remember how long Andy's been putting "Of Permanent Value" together, but it's well over 20 years now. Thanks for all your work Andy! Cheers! https://www.amazon.com/Permanent-Value-Warren-Buffett-Worldwide/dp/1681840723/ref=cm_sw_em_r_dp_w_dc_l657ybYTE9C4B_tt

What deteriorating fundamentals are you referring to? - We have no large pension liability. - Our businesses are headed towards cash flow positive positions rather than increasing losses when you back out the capital being spent on Sequant Re. - We have little in other liabilities. - We have a healthy and positive quick ratio compared to Sears. - We have other investments that are liquid or will be making large distributions over the next two years. - We have positive equity. - The intrinsic value of our Burnaby clinic business isn't even accounted for in our books under IFRS. You are incorrect in your comment about similarities. You are correct about proving that we are different...the proof is in the pudding for any business...not just PDH. Cheers!

If the answer is the same as an accredited investor in the US then you must have either $1M+ in investable assets or an income of $200K+ for the last 2 years (and expect the same for this year). I don't know if it being a Canadian fund changes things. I assume that becoming an investor in MPIC LP fund mean that you have to file foreign ownership with IRS? I think he has a U.S. entity, so it wouldn't be foreign. Correct. Cheers!

I thought I would just push this thread back up a bit...one of the best contrary indicators is this board itself. Pabrai is up well over 50% roughly since this thread was started. He's creeping back up to his high watermark. Cheers!

Hi Marlin, I emailed Andy to have him send me the book cover so I can post it on here, but I have not heard back. Can you let me him know that if he wants to have it on here, I'm more than happy to post it. Cheers!

Neither. Fairfax is the largest investor in MPIC Fund I, LP, which is the largest investor in PDH. Cheers!

I absolutely agree with you, in terms of being efficient. We've essentially dropped down now to about as low as we can go with the departure/consulting contract of our former CFO, our China GM...both inherited...brought legal in-house, etc. We have fixed costs that are far more significant than any TSX listing costs: - Lease for corporate and clinic - Insurance (general, E&O, D&O) - Registration, Filings, Press Releases, Licenses, Computershare - Salaries, Wages & Benefits - Audit & Tax Return Expenses The TSX-V listing will provide increased liquidity, visibility, allow U.S. shareholders to deposit their certificates, and decrease the spread between the U.S. and Canadian market price. Most U.S. brokerages do not recognize stocks listed on the CSE. This creates issues for all shareholders, but in particular U.S. shareholders, including MPIC Fund I, LP which is the largest shareholder. Cheers!