Parsad

Barron's article. Type in the title in Google, and click on the first search return. You will be able to view the article. Cheers! http://online.barrons.com/article/SB50001424053111903533504579095501695880962.html?mod=googlenews_barrons#text.print

I didn't hear the conversation and don't know the context of the discussion, so I have no comment either way. I just find that some of the details of the conversation were missing, so it's hard to figure out the accuracy of what was said, especially based on the information filed. That's why I base my analysis solely on what is filed, rather than any conversation with an executive. The executives that I have dealt with in the past, I did so more out of friendship and curiosity than anything to do with the investment...be it Prem, Sardar, Patrick Byrne or Mike Pruitt. Cheers!

I'm still very confused by the comments that you guys are saying Francis is selling. He still has the same 513,000 shares in the Asia Fund for the last two years ending June 30th, so where are you guys getting your information from? Too many presumptions about why managers are selling without knowing the facts! There was some discussion about Tim selling part of his Rainmaker stake a while ago, but no one knows exactly why, so some posters came to certain erroneous conclusions. When you assume, you know what that means, correct? Don't guess about why managers are buying or selling. You have no idea if it is because the thesis has changed, or they are selling for tax losses, or selling to other entities to get them involved, or simply selling because they may want to retain liquidity or are facing some redemptions. Guess work is not analysis! Cheers!

I think you misunderstood. The $20M number is probably the taxable losses they are reassessing. They haven't discussed any possible actual numbers payable, so I find it hard to believe, as well as illegal, that he would tell you the number on a phone call. Here is the excerpt from the notes in the 2nd quarter report, as it isn't final and the process could drag on for some time. Cheers! Contingency In March 2013, an affiliate of the Company received correspondence from Canada Revenue Agency (“CRA”) proposing to issue a notice of reassessment with respect to the utilization of non-capital losses by the affiliate, pertaining to taxation years 2008, 2009, 2010 and 2011. The Company believes that it has reported its tax position appropriately. No provision has been made in these financial statements for additional income taxes, if any, which may be determined to be payable on ultimate resolution of this matter. Should CRA issue the notice of reassessment, the Company’s affiliate would be obligated to pay an initial payment of fifty percent of the reassessed tax amount plus penalties and interest, in conjunction with appealing the reassessment. The Company believes its affiliate has substantial defences in response to the matters raised by CRA and would vigorously appeal any reassessment. Nevertheless, the initial payment upon appeal, as well as the proposed reassessment by CRA, if upheld, would have a material impact on the Company’s financial statements and cash flows. Notwithstanding, the Company’s affiliate has the financial capacity to pay such amounts, if any. The likely timing to resolve this matter may take years. As of August 14, 2013, there has been no change in the status of this matter.

I think it's great, but the cap should be lower. I don't think you should be able to raise more than $100,000. The funds and success should be tracked somehow as well. How many great businesses were started on a shoe-string budget and funds from family and friends? I don't think this is any different, except that it isn't limited to family and friends. But it becomes dangerous when you solicit large amounts of money, and there is no way of holding people responsible. So, if there was some way to track people, funds raised, how they are utilized, and whether the business succeeds or fails, would be important. You need to keep the repeat offenders, scams, frauds and bad bets out of the capital markets somehow. Cheers!

If they get the guilty plea, that would bode well for Fairfax. Thanks to Shai for the link! Cheers! http://dealbook.nytimes.com/2013/09/24/sac-is-said-to-negotiate-settlement-of-charges/?_r=0

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers! He is one of the most respected writer in french about investing. He is a good friend of Francois Rochon at Giverny Capital. He is one of my favorite. Sometimes he is wrong but usually he is very good. He always write what he think. What do they say...those that can, do...those that can't, teach! Yes, I know I'm about to get lambasted by every teacher on here, but my point was how many companies has Mooney turned around? And not just Mooney...how many companies have I turned around? So, why the hell would I put my opinion out there in a major newspaper unless I had tried to do it myself first. Armchair quarterback! Cheers!

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers! Yeah, see what I mean? Ok, I get your point. Cheers!

Who the f**k is Bernard Mooney?! ;D How many companies has he turned around. Cheers!

Good question! Cheers!

It was very nice of him! John's done a great job at Manual of Ideas, so to be mentioned in the same breath was humbling and very complimentary. Cheers!

Good job by this writer for Gurufocus! Cheers! http://www.gurufocus.com/news/229743/2013-pabrai-investment-funds-annual-meeting-notes--chicago

This is semantics. Prem doesn't own all of Sixty-Two Corporation, so should we be concerned that he doesn't have enough at risk? I don't own all of Corner Market Capital, so should that negate how committed I am to making sure CMC doesn't lose money? I think this is somewhat irrelevant. Cheers! Look, you said management owns a third of the company, and I'm merely pointing out that this isnt true. Did I say anything else, like this company is a bad investment, or management doesnt have enough skin in the game? No. I'm perplexed as to why you are interpreting it that way. I'm merely trying to get the facts straight. My point was that they controlled 33% (at one point) and still own about 28% after the distributions to other investors...who are probably family, friends and children trusts. It's not like it's Sardar and he owns 1.5% of BH and controls 18%. It's just something that really isn't relevant to the actual thesis of the investment, and there was no intent to mislead anyone. Cheers! I beg to differ. Wouldn't you say having 33% direct ownership and, say, 15% direct ownership makes a big difference, especially when we're talking about a micro cap? edit: apologies for taking the discussion off a tangent. Yes, but you are talking about 33% and 28%! ;D Cheers!

This is semantics. Prem doesn't own all of Sixty-Two Corporation, so should we be concerned that he doesn't have enough at risk? I don't own all of Corner Market Capital, so should that negate how committed I am to making sure CMC doesn't lose money? I think this is somewhat irrelevant. Cheers! Look, you said management owns a third of the company, and I'm merely pointing out that this isnt true. Did I say anything else, like this company is a bad investment, or management doesnt have enough skin in the game? No. I'm perplexed as to why you are interpreting it that way. I'm merely trying to get the facts straight. My point was that they controlled 33% (at one point) and still own about 28% after the distributions to other investors...who are probably family, friends and children trusts. It's not like it's Sardar and he owns 1.5% of BH and controls 18%. It's just something that really isn't relevant to the actual thesis of the investment, and there was no intent to mislead anyone. Cheers!

+1 7.5% or even 15% arent garenteed just because you have a business model, or are happy with lumpy returns. I think Al's message missed the mark.... Well, historically they have achieved a 9.4% annual return on their investment portfolio… I thought 7.5% was conservative enough… But it seems I live in a bubble!! ;D ;D PS Actually, I don’t need a 15% compounded increase in BVPS… My firm will probably continue to post operating profits for many years into the future… (of course, this might be another bubble of mine!! ;D ;D) Therefore, a 10% compounded annual return from its stock market investments will probably be more than enough! To achieve such a result Fairfax must get a 4.5-5% annual return on its investment portfolio… practically half its historical result. That’s I think a good margin of safety… Of course, a good margin of safety, if you find yourself in bubble territory, might still not be enough!! ;D ;D giofranchi I can perfectly live of my income as an employee but that doesn't mean I have to be happy with lower returns in investments because it's just an "extra". I have my questions with the way Fairfax (or PW) presents the returns they achieved and the way Prem pounds the table about it in the annual letters. For example, is it correct to implement the first year of operations when that year achieved 180% return? Look at the CAGR when you remove the first few years (because those are irrelevant now anyway) and you get a clearer picture. Same goes for the last 10/15 years. It's just a lot more accurate when looking for future returns. Buffett doesn't exclude his early years when he was killing the markets, nor does Leucadia where they made a killing in their first couple of years. Investors, including board members here, take very short-term views of performance. You look at those two companies above, as well as Fairfax, and their compounding of book over 10, 15, 20, 25 years has been extraordinary. They get lumpy results when certain bets just kill it, and they buy things that fit their discipline. Leucadia's entire existence was buying turnarounds and it actually worked better than Buffett's purchases of quality businesses. Fairfax is buying in Canada because they are testing the waters in areas they operate...easier to integrate...easier to flex your reputation...start small...start with businesses you know. They've also stepped out and bought things like Thomas Cook India to expand and look for businesses there, but with people in place who know the region better than them. You are in the first inning of a nine inning game, and investors expect them to be swinging at every pitch like there will never be another opportunity. Crazy! Cheers!

This is semantics. Prem doesn't own all of Sixty-Two Corporation, so should we be concerned that he doesn't have enough at risk? I don't own all of Corner Market Capital, so should that negate how committed I am to making sure CMC doesn't lose money? I think this is somewhat irrelevant. Cheers!

Well, I have unconditional love for Prem and everyone at Fairfax, but I won't hold something to hold it. Otherwise you just create more risk in the portfolio if the margin of safety isn't adequate, and you give up opportunities that may be even better elsewhere. That being said, the average investor would be far better off holding Fairfax than any index over the long-term, and I would suspect will do better than if they even owned Berkshire Hathaway, simply because of size. As well, it's been three years of subpar performance because of their conservative stance, while markets have roared ahead. And now, you have the additional impact of significant acquisitions and deals that have gone sideways...Sandridge, Torstar, Blackberry...while insurance pricing has had a tepid recovery. So the amount of pessimism around Fairfax is pretty damn big when considering that the company is no where near the financial distress it has faced in the past, and is very well positioned to take advantage of others when the shit hits the fan. I don't know...sentiment on here may be a good contrary indicator. Cheers!

It was never 33% ownership by management, but by the entity they controlled...Madison Avenue Ventures. So yes, they controlled 33% of the stock, but 6M was distributed to "shareholders and associates" of MAV, who have not sold their stock, and the remaining 27% held in MAV plus distributions from the dissolved MAV entity, remain in control of management. But what does this have to do with anything?! Cheers!

I just did a quick check on SEDI.ca and it doesn't show any selling by management or directors. Brian Hayward (director) acquired a few thousand shares in 2012 and Orest Smysnuik (CFO) acquired 16,200 shares in 2012 and another 17,650 in May of this year. I'm not sure what to make of the transactions for Madison, which are listed as "conversion or exchange" and not "acquisition or disposition". just going by information circular they sold down nearly 18% of their holdings in the past year. not exactly a bullish signal? http://ca.finance.yahoo.com/news/madison-venture-announces-reorganization-shareholdings-213322648.html Don't automatically assume guys that people are selling when something changes. Dig deeper and do the research! Cheers! Yes, this is exactly the kind of info i was fishing for. Thank you. "The majority of the Glacier common shares distributed by the special purpose investment entity were received by shareholders of Madison and their associates and have not been sold." If the 6M shares were distributed to the shareholders, why is Aunger, Grippo and Kennedy reporting just 1M direct ownership in the stock? Because they are theoretically "beneficial" owners through MV. It's so that they show what their "direct" ownership is. You are trying to read into something, when nothing is really there. Cheers! I'm sorry, just a little confused or am not understanding you properly. Wouldn't the 6M shares now be considered direct ownership since they were distributed? Either way, they are not reported now under either beneficial or direct, so what is the reason for that? Those other shares were distributed to other partners in the Madison Ventures entity, thus they don't belong to the three board members or entities they control. Cheers!

I've bought and sold Fairfax many times since 2003. In fact, we sold half our stake several months ago to buy other stuff while retaining our cash position. But, now reading something like this after the BBRY acquisition and the amount markets have run up, I think the true contrarian would actually be buying Fairfax. I think I may re-establish my position with more of this sentiment floating around. Cheers!

Don't know. Cheers!

Cardboard, I think this is very unfair considering how fair Prem has been in virtually all aspects of life and business. We have no idea what a shitshow the BBRY board may have been, considering the results so far. Prem and Fairfax shareholders have the most to lose as the largest shareholders, so would you not assume that they are going to do everything they can to protect the investment. Results for BBRY have been horrible, so is it really a stretch of the imagination to believe that the board may have been moving too slow or dysfunctional? Not saying that it was...but it's a more likely possibility than Prem screwing over BBRY shareholders, especially since his average cost is $17 and he was working with the board to try and salvage the business. I think the Fibrek deal is also similar in that you don't know exactly what the inner workings were and what the whole conversation was, yet assumptions have been made that Fairfax was only interested in making a buck and it didn't matter how other Fibrek shareholder's felt. Just my two cents. Cheers! Yeah, but we knew the inner workings of ORH and Prem knew them even better than we did. And, did we get fair value for our ORH shares? Just sayin' :-[ So if the markets value something at a steep discount to intrinsic value, and someone offers more than the market price but less than the intrinsic value, then that isn't fair? If FBK, ORH and BBRY shareholders could get more, somebody should have offered more sooner. I don't think Buffett and Prem are in the business of paying full price for everything, otherwise their shareholders might get peeved. Cheers!

Actually, I would have been happy had Prem quietly made some money for me rather than making a high-profile, but very dubious acquisition. I really don't care if the rest of the world knows who he is. Just do a solid job on capital allocation....which unfortunately is an open debate right now. :( Well I agree with you on keeping the low profile, but Munger and Buffett are getting older, and the investing community will need quality mentors to continue lessons on investing, life, morality and economics. There are plenty of people out there worthy of that, but I think Prem deserves that recognition as well...especially for the quality leadership he brings, as well as the astute investment mind he and his team possess. Cheers!

Cardboard, I think this is very unfair considering how fair Prem has been in virtually all aspects of life and business. We have no idea what a shitshow the BBRY board may have been, considering the results so far. Prem and Fairfax shareholders have the most to lose as the largest shareholders, so would you not assume that they are going to do everything they can to protect the investment. Results for BBRY have been horrible, so is it really a stretch of the imagination to believe that the board may have been moving too slow or dysfunctional? Not saying that it was...but it's a more likely possibility than Prem screwing over BBRY shareholders, especially since his average cost is $17 and he was working with the board to try and salvage the business. I think the Fibrek deal is also similar in that you don't know exactly what the inner workings were and what the whole conversation was, yet assumptions have been made that Fairfax was only interested in making a buck and it didn't matter how other Fibrek shareholder's felt. Just my two cents. Cheers!

I just did a quick check on SEDI.ca and it doesn't show any selling by management or directors. Brian Hayward (director) acquired a few thousand shares in 2012 and Orest Smysnuik (CFO) acquired 16,200 shares in 2012 and another 17,650 in May of this year. I'm not sure what to make of the transactions for Madison, which are listed as "conversion or exchange" and not "acquisition or disposition". just going by information circular they sold down nearly 18% of their holdings in the past year. not exactly a bullish signal? http://ca.finance.yahoo.com/news/madison-venture-announces-reorganization-shareholdings-213322648.html Don't automatically assume guys that people are selling when something changes. Dig deeper and do the research! Cheers! Yes, this is exactly the kind of info i was fishing for. Thank you. "The majority of the Glacier common shares distributed by the special purpose investment entity were received by shareholders of Madison and their associates and have not been sold." If the 6M shares were distributed to the shareholders, why is Aunger, Grippo and Kennedy reporting just 1M direct ownership in the stock? Because they are theoretically "beneficial" owners through MV. It's so that they show what their "direct" ownership is. You are trying to read into something, when nothing is really there. Cheers!