Parsad

Hi John, We're quite fortunate. 95% of our partners have been with us through thick and thin. But we deal with individual familys, so they have a very different idea of a financial relationship than say fund of funds, institutions, etc. They are long-term! So, we are quite happy with the group that we have, and we look for more exactly like them. Cheers!

Parsad, you know I have the utmost respect for your money-management background, which is something you share with the great majority of the people on the board. But you also know that my background is different: I have started as a businessman and only afterwards I have looked at the stock market as a way to complement my strategy for building wealth in the long run. So, mine is the perspective of the businessman. And, according to Mr. Buffett, both perspectives, the investor’s and the businessman’s, are important, right? Now, given my background, I know personally many more businessmen than investors, money-mangers, or traders (if, of course, we exclude all the great people I have had the chance to meet on the board!). And all those businessmen that I know are alike: each one of them has built one business and runs one business: one and only one! And let me tell you that in their eyes I am the exception, the unconventional one: what are these stock market investments? They seem to ask. Why don’t you concentrate on your true business instead? And they seem to disapprove what I do. Now, it is true you will never read of them on Forbes or Fortune, because their businesses lack scale and will never grow very large, but, believe me, they otherwise have been and still are very successful! They have put everything they own in one single business and have been successful for many many years. In my world they are not the exception, they are the rule! And most of them have thrived! :) Cheers! giofranchi Gio, I am not your conventional investment manager. I'm probably the most improbable and most unconventional manager around...more like Francis Chou than Bruce Berkowitz! I have no degree, CFA, MBA or CFP. My view of the investment management business is as a businessperson, not as an investment manager. I know/knew both men...Biglari and Watsa...probably better than almost anyone on here. Watsa is no Biglari, and I can only be grateful for that. Cheers!

Most annual reports he will talk about something. Usually the letters are there to praise the managers...never himself. If you have not read the letters, then you should. From the 2003 Annual Letter: Of course, our big mistake at TIG was not recognizing that its MGA model would not work, particularly with one broker controlling 40-50% of the business. We should have shut or sold the MGA business years back and built on the much smaller individual risk underwriting operations. The losses at TIG resulted in a weakening of our financial position. You can rest assured on one thing, unless there are exceptional circumstances, we will not ‘‘give our pen’’ away. So overall, TIG Re definitely delivered the benefit that we saw in it when we made the TIG acquisition, but we cannot count TIG alongside our many very successful acquisitions, which include our Canadian companies, OdysseyRe and Crum & Forster. There are numerous other examples, but I just pulled that one because it was easiest to find. Cheers!

I think the problem is that people put far too much weight into reputation and forget that all of these people, Prem, Buffett, Obama, etc are human beings, and they will make errors from time to time, or situations don't work out the way that people hope. The grand plan since Prem got involved with the University of Waterloo, was not to eventually buy shares of Blackberry, watch the stock plummet, join the board as the business disintegrates, and then make an offer to try to save the company that eventually falls apart and look like a failure. If anyone thinks that was the grand plan, then you would be a fool! I remember two of my fund partners contacting me back in 2008 about their investments in Pabrai Funds. One was deeply concerned and wanted to pull his capital. The other partner, it was his parents who had significant capital with Mohnish, and they were uncomfortable and were considering pulling their capital. My comments and opinion to both were the same: The man hasn't suddenly become an idiot! There were some correlated investments that got hit during the worst economic crisis since 1929, and the fund is down almost 70% since the peak...there isn't a lot further to fall...yet the upside could be significant and they could recoup a large portion of their investment. The first partner sold everything at the bottom and walked away with a huge loss on his investment. The second partner told his parents what I said, and they held on to their investments, recouping all of their losses by having faith in the manager. My opinion today of Prem has not changed one iota from a year ago. The man is one of the most ethical investment managers and CEO's you will ever find, who has had a stellar LONG-TERM record of building wealth for himself and his shareholders. He has not only treated his shareholders ethically, honestly and with respect, he has earned the affections and admiration of his staff, not unlike Buffett at Berkshire. This is a relatively small investment in a company with over $30B in assets...I can only imagine the ridiculous furor that would surround him if this had actually been a huge investment. If anything, I'm more disappointed and discouraged by the small-minded, short-term memories of critical shareholders than the transgressions and debacle surrounding the BBRY investment. The reason being: I'm an investment manager for my partners. If I created such wealth for them, as Prem has for his shareholders, I would have to reconsider why I'm working for such ungrateful assholes! And the funny thing is, that type of thought would never enter Prem's mind. His goal is only to salvage the investment for these very same critical shareholders! This is the guy you are currently losing respect for! Cheers!

In a brief interview, Mr. Chen said BlackBerry had “different buckets of good assets,” including its business serving corporate and government customers, its secure network, its patent portfolio, BlackBerry Messenger instant messaging service and software developed by its QNX division that enables machines to communicate with each other wirelessly, such as systems in automobiles that can interact with dealerships. “We have all the ingredients to become the leader in that embedded machine-to-machine space,” he said. “I figure with our focus and [by thinking] long term, do the right thing today, a step at a time, I think we’re going to build tremendous value for shareholders.” Blackberry is changing its name to Cyberdyne Systems as well. Now we all know what is going to happen next...Skynet! :o Cheers!

True, but that's actually the investor's deficiency not the managers. Prem didn't put a huge chunk of his net worth, or Fairfax's net worth, into BBRY. It's also not entirely different than someone emulating someone posting on this message board, but ended up realizing they couldn't handle as large an exposure, or mis-read what the poster was trying to say. Cheers!

If they didn't get that tax reassessment at Steak'n Shake shortly after he took over, Steak'n Shake probably would have gone to zero, and the Lion Fund might have closed because it was nearly 100% in SNS. Do you prefer that type of behavior, or Prem's behavior to take a 2.2% position in a dying industry he feels has breakup value but doesn't work out? If both were running insurance companies, and at some point Biglari will, do you think a good insurance executive writes all or nothing policies or a diverse group of non-correlated risk policies? The former has a tendency to shine brightly and then blow up! Cheers!

Can't stomach it nor rationalize it. It's hard to understand why Prem takes such big bets/risks when there seem to be less risky or more predictable situations. It's easier to follow Buffet or BBerkowitz in their thesis than Prem/FFH. I think that explains the huge disappointement expressed today here. A lot of people thought Berkowitz was an idiot not long ago for his heavy investment in financials. Very few people thought they were less risky or more predictable than even Blackberry when he made those investments, but over time as legacy issues disappeared, the investments became more likeable and investors assumed more predictable. Cheers!

Not blind or crazy, but I have strong misgivings about Prem's entanglement with the BBRY "tar baby". I'm sure Prem at this point wishes he didn't have this entanglement either. But it is what it is, and either he salvages it or it goes to zero. He's not the type to give up, if that is one thing any shareholder should have learned by now. If things go wrong, he'll pay the price as one of the largest shareholders, then learn from the mistake and move forward. But he isn't going to give up, and this is scaring a lot of shareholders who can't stomach it. Cheers!

This is quite unfair! Yes, it's a mess. Yes, it didn't pan out the way everyone expected. But Prem and Fairfax aren't making money off the backs of other shareholders, nor are their egos making them do stupid things like naming hamburger restaurants or companies after themselves. This thing got screwed up, plain and simple! It makes up 2.2% of the entire asset base, and even if you assume Fairfax funds the entire $1B convertible, then it makes up about 7% of assets. Compare that to something like CBRL, which if it went the wrong way, could have cost BH shareholders 30% of their assets! Not a fair or rational comparison at all, and something that is based purely on emotion. Cheers!

Gio, Of his stock investments it represented I believe 22% or so of his portfolio as of June 2013. What happened to his Due Diligence? ...and where the entire stock portfolio, of which BBRY makes up 22%, is only 1/10th of the entire assets. So BBRY makes up 2.2% of all assets! Yes, this was a mess! Yes, I still don't know why they don't allocate such sums to other great businesses! But c'mon guys, stop over-reacting. Cheers!

Yup, silly. But the bank robber probably can't afford a cadre of lawyers to battle the government for another ten years. Do you believe that US is cutting Cohan any slack in this case? I think Bharara would really like to throw the book at Cohen but this is the best they can do with the scant evidence they have. If they had more damning/smoking-gun type evidence (like Raj Rajaratnam), I'm sure Cohen would already be handcuffed by now, rotting in a jail cell. He's smart/lucky to have not kept any meaningful trail that would incriminate himself - hence he created such a complex web of entities that mostly existed only to shield him from personal responsibility/liability, while concomitantly funnel all the profits back to him. That's why all his underlings go to jail while his capture is elusive, at best. To think about what his actions mean for the economy and the world - it's mind boggling. A single person's machination that constantly and consistently embezzled the market participants by obtaining access to market-moving information ahead of all others and acquiring all the monetary benefit of bringing such efficiency, but unfairly. For what little he has provided to the society, he now possesses the power to obtain goods/services and channel society's hard work/labor into pleasing his whims to the tune of $9,000,000,000. Just look at his trades: Link Yup, you are 100% correct. But that $9B is a lot of money with which you can twist the courts and give yourself a decade or more before the worst happens. I think they will turn Cohen fittingly into this decade's Milken. He will fund minions while endeavouring in his philanthropic efforts. A puppet-master for many puppets to come! Cheers!

LOL! Most of you guys are my friends and very smart investors, but you're letting your emotions take over here. When I tell you guys that you shouldn't have everything in Fairfax, you don't listen. When I tell you guys to temper your expectations, you don't listen. When I tell you the man and company aren't infallible, you say he should be. Now some of you have thrown the baby out with the bathwater! I've only owned Berkshire and Fairfax 100% twice...Berkshire back in 1999/2000 and Fairfax through 2003-2005. Otherwise, as valuations go up, the holding goes down...price drops, the holding increases. Never fall in love with any one investment! Currently, I own no Berkshire other than 1 share, and Fairfax makes up about 4% of the funds. But at some point in time, that percentage will go up...it may come because of you guys letting your emotions get the better of you! Cheers!

Yup, silly. But the bank robber probably can't afford a cadre of lawyers to battle the government for another ten years. I would guess from the rampant allegations made by the government...a majority of the company's profits and Cohen's wealth came from such activities if the government is correct in the number of participants they've nailed so far. Cheers!

Expected to be announced Monday. Cheers! http://www.cnbc.com/id/101164926

Hi Folks, We are getting to the finish line here on tickets! A maximum of 140 tickets this year. I will not be able to provide anyone with last minute dinner tickets or presentation seating this year, as we have limited space and the room will not be able to accommodate any more than that without making viewing for other patrons uncomfortable. If you plan on attending, even as a late straggler when Prem gets there, I recommend a ticket, as there will not be much standing room with Fairfax's guests there. Cheers! 2014 Fairfax Financial Shareholder’s Dinner The Fairfax Financial Shareholder’s Dinner we hold each year, is set for April 8, 2014 at the Fairmont Royal York in Toronto. We’ve always enjoyed support from Fairfax, and our last dinner was completely ridiculous, as Fairfax CEO Prem Watsa brought along 15 other executives, managers and CEO’s with him. The dinner is held in memory of JoAnn Butler, who was Prem Watsa’s executive assistant for many years. JoAnn passed away on May 12, 2009 from colon cancer, and she was instrumental in the success of our dinners each year. We raised almost $20,000 for “The Crohn’s & Colitis Foundation of Canada” in JoAnn’s memory last April. Fairfax Financial Shareholder’s Dinner Upper Canada Room - 18th Floor Tuesday April 8, 2014 Fairmont Royal York 100 Front Street West Toronto, Ontario (416)368-2511 Tickets are available directly if you scroll down the left side of the “Corner of Berkshire & Fairfax” website homepage at: www.cornerofberkshireandfairfax.ca Prices are the same as last year. - $75 for presentation only, and free water, coffee, tea, as well as available cash bar. - $150 for dinner and presentation. We have a limit of only 140 tickets this year, as the Fairmont Royal York did not have a lot of room available. So get your tickets early, as we will definitely be sold out pretty soon. If anyone is interested in corporate sponsorship of prizes, or any donors for prizes, please contact me at cornerofberkshireandfairfax@gmail.com. Thanks very much!

Thanks for posting the audio...much appreciated! Cheers!

Yeah, I predicted RIM's collapse and you called it "hubris". I have seen this rodeo before. I didn't call your prediction of RIM's collapse hubris, but any supposition from a quarter's worth of numbers smacked of hubris. Re-read the quote. Cheers!

I agree. You can't compare Apple to RIM. RIM has been a dying company for years. A dying company (even though it was blatantly obvious to many) who's management (and major investors) didn't even know it was dying. RIM didn't have to die, of course. It could have seen the threat and responded (in 2008, not 2013) and things might have been different. We could be talking about Apple vs. Blackberry today rather than Apple vs. Samsung. If some other company comes out with a device that is so different and unique that it makes the iPhone and iPad obsolete and useless by comparison. And if Apple's management sticks their heads in the sand, refusing to admit it has fallen behind, and does nothing about it. Then you can compare Apple to RIM. No one is comparing Apple to RIM. Only that once the eye does get off the ball, the drop is far more precipitous than many people think. Cheers!

I've seen a tendency among people,especially investors- if they don't understand X, they try to find a Y to compare it to. Then they look at what happened to Y and predict they same for X. Never mind that even though X and Y may have some things in common, they may be more different than similar. People simply don't bother to look under the covers to see what is different. I call this "reasoning by analogues". A similar tendency is just as noticeable in investors that espouse "this time it's different". The cases when it is actually different relative to history, are far fewer than the repetitive failures because it is actually comparable to history. It is like me saying Watsa is Paulson2. Yeah, they both benefitted form CDSs in 2008. Yeah, they both are having a bad year. But their investment approaches and values are completely different. And What the future holds for each of them is likely to be very different. I'm Prem's number one fan, but don't fool yourself for a second that this argument is not being made this very second. Even Fairfax knows it will be, because they did make a substantial macroeconomic bet. Apple will be held to the same torch. Cheers!

Awesome. A quick question Parsad: is it possible when writing responses to "quote" just selected areas, rather than "inserting quote" and then deleting what you don't want to quote? Maybe this is a vBulletin only feature, but on other forums, you can highlight the text and a dialog box that says "quote" appears and if clicked, only quotes that section of the message in the reply editor. Thank you! You can do it the way I just did your comments: Highlight the text, right click copy, paste in reply, and then highlight again and click the italics button. It won't include the name of the person you are quoting, but you will just quote what you want. Cheers!

Berkshire responds to an article: http://finance.yahoo.com/news/berkshire-hathaway-inc-news-release-210000294.html Cheers!

Oooohh, the media is going to be all over this one...some of the titles of articles to come: Blackberry Saviour Loses Big Betting Against Market Watsa Happening at Fairfax Market Bear Fairfax Growls to Big 3rd Quarter Loss Should Watsa Change His Macro Views? Watsa Wrong With Watsa? Buffett of North's Results Go South Here's to the chance to buy Fairfax under $400 again! Cheers!

Amazon. They were losing tons of money by plowing everything they could and more into their business. It worked! But this often not the case, rather than often the case. Cheers!

So much for Bill's retirement! ;D Also notice, that there was no comment by Prem Watsa, but instead Paul Rivett. Andy Barnard on insurance, Paul on non-insurance investments & Hamblin-Watsa...Fairfax's decentralized management will prove to be a competitive advantage over time, and will allow the retention of quality managers. Cheers!