Parsad

Not necessarily. They could issue shares and build up a war chest as others have mentioned. They could use the inflated price and acquire other operating businesses that have cash or generate a ton of free cash. They could buy put options on BB. As long as they use this inflated price and monetize in some manner that is beneficial to Fairfax and BB, it's a win. But they have to work quickly! Cheers!

Imagine... unloading BB and buying BRK at today's prices. So simple yet so unlikely. You guys make fun, but the fact remains that since 2016, BRK is up 75% to date, while BB is up 140% to date over the same period. Whether it's market exuberance, Robinhood accounts, investors recognizing that BB is not the same BB, or capital flowing to cheaper stocks from overpriced stocks...BB has done better than BRK. My point is that Prem spent 12 years as a portfolio manager then another 30 years running an insurance holding company/investment company...you really think he can't do better than BRK going forward with the universe available to him and the universe available to Berkshire? If so, why the heck are you posting on here...trolling Watsa?! Cheers!

Cubs, Greg is gone now. You're next if you don't stop the political posts. Zero tolerance going forward for board members, so everyone else, pay attention! Cheers!

Yeah, it's coming. I delayed it for our 19th Anniversary next month. I thought that would be more appropriate and a fresh start with Politics gone after the inauguration. New year, new start for everyone, and hopefully a much better year than 2020...in terms of Covid...not the rise in the stock market! :D Cheers!

it's non-recourse to BH, so I could see them filing BK at some point if need be. They've already pulled alot of cash out of the business years ago and put it into other things like Cracker Barrel. There are other options. They could sell part of SNS...and retain some of the stores, as well as the new self-service express locations they want to build out going forward. Cheers!

I'll be shocked if this works. Service was terrible when they had employees. Probably will be more so now that they're going to do without 1/2 of them. The food is good. Raise prices and make a better environment to eat it in so people are willing to spend it. That's what would get me back. McDonalds has shifted to this model. With self-service kiosks and their mobile ordering app, they've cut significant costs. It's the direction of the future. It's also pandemic proof, because you remove the cost of having a full-service restaurant with a lot of inside seating. You can fit smaller restaurants into small sites as well at reduced build-out costs. I never go into McDonalds anymore. I drive up to their mobile app pickup spot, order on my phone, and the food comes out in 7-10 minutes...fresher than the drive-thru, customized, and they get the order correct more often. I think it's the right idea, but they've put themselves in a tough position financially to move forward with it. Anyway, I sold my shares back in December at $120. Cheers!

It was $12.30 back in 2019...I would imagine it's well below that now. Cheers! https://finance.yahoo.com/news/fairfax-financial-holdings-thinks-blackberry-121239544.html

The big boys got the cash; but even the big boys wont waste capital on something that is not something, which what Blackberry was few years ago. Big Techs are not in the business of private equity, where they would buy company and surgically remove what they really like and sell off the pieces. They need to have jewel already polished and in a presentable form, and then ,,, they will pay top dollar and open their checkbooks. That is what John is doing. FFH started as a value investor in BB, but as the initial bet went off, it confused itself/role with that of a passive private equity. If you were to read Watsa' comment about BB back in 2013 in his letter, you will see how irrelevant those comments are today vis a vis what BB looks like today and where it is going. If you were to read Buffet's comment on Apple in late 2016 when he started to swing his bat at Apple in slow motion, you will see his comments are valid 4 years later and in fact have aged well. So definitely the initial thesis was off for BB and Watsa was wrong as he has freely admitted. But that "wrong" is now sunked, and now that you are in the cusp of really getting traction on that investment on the business front, and i am not talking about the short-term non-sticky YOLO, it is not time to exit BB in the way they exited Overstock. Or for that matter when they sold Johnson & Johnson and other holdings higher on the quality ladder. They seem to leave a lot of money on the table. Sure, they can use derivative intelligently as previous posts to lock in some gains. For BB only, I (the short complainer) authorize the intelligent use of shorts to offset a partial downdraft from here. As for position sizing, although myself, I complain about position sizing when it comes to FFH and its market timing (i.e. Stelco), I also admit what i like about FFH is the concentration in its common equity bets. BTW i believe we are still far from the breakeven price for FFH on the commons. I believe it is $17 USD. +1 Generally agree that selling to a party that has some synergies is the best exit strategy at the best price. I certainly hope FFH is able to do so, but if they're not currently entertaining those discussions, it could be worthwhile to consider the current rally as an encouraging environment in which to trim the position in - subject to regulatory approvals and etc. There has been multiple discussions on FFH's average price on BB. I believe all of those discussions end up with a breakeven cost of ~$10 for Fairfax's common equity. This is largely the result of doubling/tripling the position back in 2011/2012 time frame when BB was ~$6-7/share. I believe there is an interview with Prem floating around somewhere from around that time that also confirmed the $10/share breakeven. I believe that's correct. Also with the convertibles at $6, the average cost would come down even more. Regarding BB's crazy run. I bought Overstock.com at $2.99 back in March, and I also bought a ton of LEAPs. I sold out between $20-30, because I thought that was where fair value was. But the sucker went all the way up to $110+, which would have been a 80 bagger for me on the LEAPs and 40 bagger on the equity. Even back down to $60+, it's 2-3X what I sold at. So stupidity knows no bounds. BB could go to $40-50. I would hope that Fairfax as value investors would take their original capital off the table before that peak, but sometimes holding on is the right way to go after you've taken some money off...look at Tesla shareholders! Cheers!

Generally its the former...the LP would be left with $1.8M. If the GP reinvests their fees, then there would be X number of units issued to the GP at the month-end unit price of Y. All of the units would be priced at Y at month-end. In this case, the LP would have $2M in it, but a higher number of total units. If new capital now comes in, it would be brought in at the price of Y. The fund would now have to achieve above the monthly hurdle on the total number of units before new capital came in, but after the GP reinvestment was made...so the watermark is actually $2M. If no reinvestment by the GP, but new capital comes in, then the high watermark would be $1.8M. Cheers!

Who do you think is going to make more money over the next 5 years? Someone buying Berkshire today or Fairfax today? When Fairfax hit four times book in 1998...if someone didn't sell, that's their foolishness. Just like investors not taking advantage of discounts over the long-term. If you are a value investor, you never fall in love with any stock...no matter who the manager is. At some point, you sell and move to other discounted investments. Cheers! Someone buying Markel. ;D Possibly. I think it needs to get a bit cheaper...like back in March/April. It's small enough to compound faster than Berkshire. Otherwise at current valuations, I still give Fairfax the edge. Cheers!

Who do you think is going to make more money over the next 5 years? Someone buying Berkshire today or Fairfax today? When Fairfax hit four times book in 1998...if someone didn't sell, that's their foolishness. Just like investors not taking advantage of discounts over the long-term. If you are a value investor, you never fall in love with any stock...no matter who the manager is. At some point, you sell and move to other discounted investments. Cheers!

Quarterbacking is the easiest thing in the world to do, until you actually are the quarterback. Then you hear all of the bullshit from the Sunday morning couch quarterbacks about what you should be doing. Cheers! Yea...that would be true if there wasn't tons of people doing live play by play during much of the timeframe in question. Except there has been. Look at the difference between this and Berkshire. People start salivating every time there's speculation Buffett might be buying something new. People hold the breathe every time Prem does the same and are basically just praying for breakeven with half of the portfolio. Thats a big reason for the discount in the market. That discount has created wonderful buying opportunities for both short-term and long-term FFH shareholders. When was the last time someone could buy Berkshire or even Markel at similar discounts...2008/2009? Your deference to Fairfax's supposed ineptitude actually helps investors in Fairfax, because those big cyclical swings drop the price to below intrinsic value relatively regularly, and then it generally rebounds to higher historical prices. That's value investing! Cheers!

Quarterbacking is the easiest thing in the world to do, until you actually are the quarterback. Then you hear all of the bullshit from the Sunday morning couch quarterbacks about what you should be doing. Cheers!

We don't know if the stock is moving on momentum, or perhaps there is something in the works. Let's leave it up to the investment team to decide what to do. Because if something is happening, they would have a better idea of the upside. Either way, things look a lot better now than they did six months ago. Cheers!

Shareholders will benefit this time because we get to keep the cash (reserves are in excellent shape with redundancy in their book again last quarter) to buy back stock as they did in 1990. Their best investment at these stock levels is to participate in the hard market, monetize non core assets and buy back their own stock..that’s it. Couldn't agree more! The fact that virtually all asset classes are fully valued, they will probably get the opportunity to also exploit the bond and equities market over the next 12-24 months. But they don't need to do that to hit their targets...it would just be icing on the cake, just like the return of market price to book value. Cheers!

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share. It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose. If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years. Cheers! The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns. ...and one to ask: ''is 15% a realistic expectation?''. I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations. yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;) Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount. Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him. And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years! Cheers! What is the thesis on ATCO? David Sokol I think that was the original thesis, but Bing Chen is an extraordinary manager himself too. Very impressed by what he's been able to do, how he leads and his investment/finance acumen. Sokol picked a winning CEO! Cheers!

Ironically Greg, a number of us called the housing bubble...and we did buy at the bottom of March...but we've made other mistakes that cost us at different points of our career. Just like you call out Prem and Fairfax for doing poorly...they were in there at the same time Michael Burry was...they were called crazy too for a couple of years. But that doesn't mean those same people have to share the same views on other matters...even Buffett and Munger don't agree on many things. Which one is the crazy one and which one is the genius? Now, I would recommend that people go back to talking about Tesla instead of political matters. The fuse has shortened significantly about political posts being in the wrong section, because alot of people can't let go of it. Cheers!

I guess I was the only one following Office Depot for the last two and half years. We bought at a pre-reverse split price of $2.25 or $22.25 today in 2018...sold the whole position today at $43 on the Staples announcement...28% annualized. Value stocks have been on fire since the middle of October, and continue to do well into January. Cheers! https://finance.yahoo.com/news/staples-seeks-buy-office-depot-135258702.html

Congratulations! Lovely, lovely voice! Keep encouraging her and good luck. Cheers!

It should also be noted that this hard market is a global phenomenon. Not simply regional like during after a Gulf Coast hurricane or Italian earthquake. You combine catastrophe losses, with underpriced premiums in many regions where global warming is taking hold, and a global pandemic...zero interest rates, overinflated stocks, fully priced bonds...you get arguably the greatest hard market in recent memory! You bet it will. For a good 2-3 years or so until you start to get private equity, hedge fund, institutional capital coming in down the road. Cheers!

The rotation began back in November...alot of value stocks have been rising since then. Our portfolio shot up some 45-50% in the 4th Q and 1st Q 2021 so far. Where you have you guys been? Ironically, it began just as we started to get some large redemptions in September/October...typical! Cheers!

So far the score is out of student loans, asset management, credit cards, and expanding their IBD. I think going into IBD is a net-negative and shows Scharf's Wall Street envy. Story is always the same for these firms trying to break in... try to get in when the market is ultra hot, stay perennially in mid-bottom of the league table, in 10 years time say that IBD results are too volatile and masking profitability of underlying business, divest or exit. See Amex/SLS, KKR, Citadel, Nomura, DB, UBS etc etc They should just buy Jefferies. Wells gets a great IB management team and a terrific mid-size investment bank ready to grow, but one that understands operating and economic risk. Cheers!

Happy New Year all! Best in 2021! Cheers!

The only dependable part of the Steelers game all season was Rothlisberger until they went into the mini-slump. Their defence isn't what it used to be, so I think they are vulnerable...same problem with Seattle. As long as their star quarterbacks are playing well, and their defence is playing ok, they have a shot. Whereas I think both Kansas and the Bills are very well rounded teams this season...from their quarterbacks, offensive line, defensive line, special teams, running game...both teams are well balanced to go all the way. I think it was almost guaranteed that Kansas would repeat until Edwards-Allaire got hurt. Not only was Mahomes playing well, but the running game with Leveon Bell and Edwards-Allaire was almost unstoppable. Add Kelce as arguably the best tight end in the game taking over from Gronk...well, they looked damn good! I was expecting more from Lamar Jackson this year. I thought they had a really good shot as well, but Jackson is the one who is a little more erratic this season, even though he's still putting up good overall numbers. Then there's Tom...Tampa looked rough from game to game early on, but they are really coming on with good defence. Never count Brady out! The saddest story is the Jets have started winning...just as they were about to win the draft lottery and get arguably one of the best quarterback prospects in the last decade...and that's saying ALOT! Poor Jets fans! Cheers!

Hi Greg, I fully understand your feelings. I have no problem if he attacks Prem, me or whoever. But he knows he's been warned countless times about keeping politics/religion/non-investment topics out of other boards/threads. He wanted to piss me off by quoting me...on religion...while the subject was Fairfax in the Fairfax thread. You don't do that. Yeah, once in a while you'll post outside of the Politics thread, but for all intents and purposes you do try to follow the rules, no matter how blunt you get. Cubsfan does too...LC and the liberal contingent do too. But Cardboard not only ignores the rules, he is often the instigator and I've had tons and tons of complaints against him...that I've ignored because he posted here so long. But I can't ignore it forever. If he's purposely going to be a dick, so be it...he's gone! Cheers!