Partner24

I've red the further posts since the last time I've writen something. As I've already said, as this board grow, it might be harder and harder to keep it's long term culture intact (respectful, pragmatic, long term oriented, less Wall Street oriented, etc.). It's just my two cents, but we must remain vigilant, because if we don't, it's culture will get really diluted and we'll lose our footprint in the World Wide Web. Cheers!

rick, I guess it's also a matter of humility. I guess See page 10: http://www.fairfax.ca/Assets/Downloads/100305ceo.pdf Someone to beat that? How many so called "sophisticated professionnal" investors have beat that long term track record? Some, but surely not a lot! It's not very usual for an individual investor who studied value investing to delegate the investment decisions to someone else. I try to focus on the after tax long term return, not my ego, and frankly, so far, that policy led to satisfying returns with FFH http://www.google.com/finance?chdnp=0&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1284407160000&chddm=771628&chls=IntervalBasedLine&cmpto=TSE:.GSPTSE;INDEXSP:.INX&cmptdms=0;0&q=TSE:FFH&ntsp=0 and I've been able to finance a home without the need of CMHC, do some work on it and keep 50% of my money for retirement. That being said, it's also a matter of time to spend on research. I don't have the time to search for enough ideas. It would be a different story if I was doing that full time. Cheers!

Fairfax is the leading horse in my portfolio in terms of intrinsic value per share gains over the last few years (and Mr Market did take notice), so it's high. One of the basic teachings of Peter Lynch is to not cutting the flowers and watering the weed. So I let the flowers grow, unless: - They've reach full intrinsic value - I've found something more interesting (and no, the grass is not necessarely greener on the neighboor yard and I can sit quietly in one room without the need to buy or sell something). - The long term prospects of the business are not good enough anymore Fairfax have not reach full intrinsic value, I didn't find a clearly greener yard yet and the long term prospects of the business are still good enough to me. And since I don't manage money for others, I have the full liberty to handle swings in stock prices without feeling that I'll lose some part of my paycheck, so I don't need 30, 20 or even 10 names in my portfolio. Just a few is quite enough to me at this moment. Cheers!

Hi jimmer, Welcome to this board! how would you get to that 10%? With my pay checks! ;D Seriously, do you feel confident enough that you are getting good value enough by buying Fairfax now? I don't know if Fairfax will lose 10%, 20% or even 50% of it's actual price. That is something that I've never been able to predict (and fortunately didn't tried neither!), so I can't help you with any buying strategy except for finding the actual offer attractive or not. Cheers!

56,8% no so far... No wonder why Fairfax is having a substainable discount to intrinsic value, it's shareholders are too cheap! ;) Where are you, Jim Cramer?! ;D

Bronco, I never owned WRB because in my book, they are very good underwriters, but they do not have the same talent at investing. To me, insurance is two sides of a coin. Underwriting and investing. Both can makes you rich or "kill" you. So I have to be at leat confortable with both, but I would prefer to be confortable with underwriting (very low or no cost float) and very appealed with investing. Investing can truly helps when you are in a soft market. Just take a look at FFH book value per share CAGR over that soft market period. Cheers!

Too bad the SEC isn't as sophisticated Indeed!

Invest now? I think that the intrinsic value of FFH is far higher now than it was few years ago. Yes, the stock somewhat followed the economical progress that FFH made, but it was dirt cheap at the beginning. So, even if FFH is near a multiyears high, to me, the price/intrinsic value is still attractive today. In the future, I think that people will look at what the P&C insurance sector stock prices on a chart and, some will say "Gee, they were lucky then", especially at some of the best like FFH, MKL, WRB, etc. "Luck" is the opportunities that the market gives you to buy or sell something. "Success" is somewhat related to not sucking your thumb. But I guess it is also a matter of the margin of safety that you ask for. With FFH, the margin of safety that the market actually provide is enough to me. I would be happy it they were thousands of FFH kind of businesses and managers out there and I could choose the cheapests of them all, but that's not the case. That being said, at the actual price, I'm confident that in 10 years, I'll be happy with the return that I'll have with FFH. Just my own opinion. Cheers!

Few reasons: - Trustable and friendly people - Skilled long term investors - Low cost - The return I had since the last 7 years! - Simplify my investing life.

Some friends wanted to start an investment pool nearly a decade ago. One wanted to invest in technology, I wanted to invest in property and casualty insurance. How do you match these needs? Invest in a tech stock that provide services for insurance companies? ;D I guess that the risk with these pools is the "follow the crowd" mentality. Actually, the "crowd" want to buy low yield treasuries. Cheers!

A guide to accounting basics and a good and simple book or two about value investing. If you want stock selection results fast, I would use past stuff, but by hiding names. I guess I would take Coca-Cola in the 20's, 30's or 40's and name it Fizz Bubble Company, a at that time very popular tech companies with "Motor" names in them, some retailers, etc. with the financials and the charts, asking them to make a choice between 15 companies or so, and then see the evolution of them year after year and readjust their choices if they want to. They would see the evolution of these companies (financials, significant news, stock price) year after year. After 10 years or so, then I would choose the winner. You could do things like that with a mix of compagnies in a given industry too.

It looks that we have a partial answer as to what insurers will be doing with all the excess capital that is out there... share buybacks. Makes sense to me, unless their reserves are understated and they'll need that capital to cover the additional costs over time. Some keep dry powder because they think that some competitors will be in trouble and the opportunity to invest their capital at attractive rates will be interesting. Time will tell. So far, we're still in the "soft market" chapter. Cheers!

Hi bargainman, This observation of mine wasn't directly related to his compensation or ownership % of the company. I haven't seen the details yet about these. Cheers!

I've digged a little bit deeper in their last annual report. They convertible bonds and payment in kind outstanding wich will eventually dilute common shareholders. See note 26 on page 51. I haven't seen the details so far http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzg0NjEwfENoaWxkSUQ9Mzg2MTc4fFR5cGU9MQ==&t=1

So far, so good! If it starts to get out of hand, we can always limit the number of members, so it won't be problem. Indeed. For the "old timers" here, do you remember the time when we were at MSN and lotsofcoke was talking about Marvel (he once said something like "it was ringing like a cash register"), mungerville and his very wisdom words about a lot of stuff including the naked shorters (he once said something like "my CFA analysis tell me that they are toast"), some Mohnish Pabrai posts (no, not a nickname ;-)), when Shai managed the board and met Buffett at his school, etc.? I'm glad that we have some of them still posting here like uccmal, the "they will get the cup in 2010" crip, sleeplesstwindaddy, etc. I felt that this board was the nearest thing you could find about long term fundamental value investing on the World Wide Web. I think that most of that culture is still intact, but I fear we get somewhat "intoxicated" about macro predictions and analysis these days. You can find macro predictions on every street corner...it's a commodity. But long term fundamental value investing, that IS SCARCE. I hope that we'll be able to keep that focus over time. That's one of the reasons why this board is unique. Cheers!

We have over 800 members and that will double over the next two years! Great Sanjeev! If that happens, what will be important is to try to keep the culture that we have enjoyed over the last years intact. Cheers!

smith is def an enigma. generally i prefer ceo's who are open, straight forward, & forth coming, but its hard to argue with his track record In investing, being less open can basicaly mean two things to me: 1) the guy wants to keep it's best ideas secrets to buy things cheaper and get more returns 2) the guy wants to hide stuff to shareholders because...well he has something to hide and it doesn't smell good. On surface, Mass might be very cheap, but in the end it's a "if you don't know jewelry, know the jewelrer" situation. I like the value creation ability that he has (long term track record), and if he's a crook, so still he hasn't fully realized his masterplan, so that helps. But I don't like doubts like that. I've learned to let doubts speak louder over time. On the other side, I've lost some very significant lucrative opportunities in the past because of them. I guess that's life, but I hate these dilemma >:( By the way, thanks Roger.

Ahaha good one! :)

beerbaron wrote: Why is it that the threads that people spend most time on are macro threads? Look at the amount of reply on this thread and on the Negative market sentiment thread... It's somewhat strange. I don't remember having seen something of this magnitude over the last 7 years on this message board. You don't bring food by watching The Weather Channel and make your self-made rain prediction for the next day. You bring food on the table by putting your fishing rod into the water and catching fish. Everybody should keep their eyes on opportunities , because there is some very interesting ones out there, and then keep their head cold and take the long term view. People can worry about top-down stuff, but basicaly Berkshire Hathaway business model is all about bottom up, or long term value fundamental investing if you prefer. To paraphrase a BRK Chairman letter from my memory, what matters is to build an ark, not predicting rain. You build an ark by buying quality and attractively priced stuff. Think about the BRK backed municipal bonds that FFH bought, some high quality and cheap big caps, etc. That IS building an ark.

I guess I understand deeper why a lot of investors don't buy stocks when they get historicaly cheap. Part of the reason might be because they get somewhat intoxicated with macroeconomical fear. They see with binoculars and get affected with presbyopia. When they get specifical offers that normaly someone would jump on with their two feets (some big caps, some P&C insurance companies, etc.), their fear make them ask for more because they think that it will go lower. Just a guess, but having been on this message board since more than 7 years now, I don't remember a lof ot times when people where writing about macro stuff as much as now.

Here is the Bidvest Group financial results for 2010, wich were impressive given the actual economical context, and an interview with it's CEO Brian Joffe (who's been at the helm since 1988 I think). The results: http://financialresults.co.za/2010/bidvest_audited2010/ The Brian Joffe interview: http://www.moneyweb.co.za/mw/view/mw/en/page299364?oid=503432&sn=2009+Detail&pid=287226 Like I said recently, Bidvest is one of the most uncovered and underfollowed success story that I know. I guess it might be because they mostly do not buy common stocks, but private businesses, or it's South African roots, or it's very boring industries in wich it's subsidiaries operate into. But in my book, it's in the Fairfax and Berkshire class. Some quotes from the interview: I think that the movements in markets and the opportunities and life changes more dramatically day by day, as compared to what it was two year ago. Also, two years ago, I think that many of the mistakes that were made were covered up by, obviously very buoyant, circumstances and today it's very transparent, very clear, what goes wrong. So, one has got to adapt to that and I think there are more opportunities, potentially, even now because it's a question of you versus the competitors, not necessarily you versus the market at the moment. I think we still, as I said, aren't out of the woods, from an economic point of view. I think money is still reasonably short, not that it's short, you've just got to pay the price for it. I think that we see that there are quite a lot of opportunities coming and we just thought that we should be conservative at this time. one of the things that I'm very conscious of, we could expand the business significantly in a very short period of time, if we decided to advance significant credit in our group. We haven't opted for that particular routing because at the end of the day, we want to have a good and quality, sustainable business over time. Look, certainly if I had to evaluate myself, by in large I'm a conservative manager, if you want to put it that way. For me, it's a question of finding the right opportunities and doing the right things. I think on that basis, you land up with the right result. I just think from a group perspective and I'm just repeating myself again, I think we've always been conservative. When the opportunities come, then I think people may see and evaluate us in a slightly different way because if you make an acquisition, then of course you may be perceived as being less conservative.

I wish I could find a very cheap protection against the price declines of housing price decline in Canada (like FFH bought few years ago with their CDS).

You have a beautiful family smallcap. twacowfca, keep spreading the word and sterilizing. These are wonderful tasks. Few decades of living and accumulating wealth is a tiny fraction of eternity. That's something I try to keep in mind from time to time (but should do it more frequently). Cheers!

Good thread. Family and friends dinners, work on the house, wine tastings, taking some walks, some religious social implications, read and post on this message board, playing with kids. Cheers!

Charlie wants to cut the time spent on meetings?