Partner24

Seems like a "give a great baseball player a bat" move from MKL, not really different from the one done by Fairfax recently. Cheers!

Weapons of mass destruction in fool hands is the biggest single threat that I can think of over the long haul. It will not matter that much how much Fairfax and Berkshire will be worth if we'll always being affraid of being killed by them. Just my opinion.

At the actual level (meaty enough?) ;D

Buffett does what the article describes now, but he didn't back when he was running his hedge fund. He certainly was a bit more like Biglari back in the day when he had less money bargainman, Do you have some Buffett quotes or something to show us that? I don't remember having seeing him publicaly trying to replace managers of public companies by publicaly insulting them.

P&C insurers overall are quite cheap actually, and fortunately some of the better ones too! I'm quite confident that, in a decade or two, when we'll take a look back at the present time, we'll that it was a pretty good time to invest in them. But, you know, the rear view mirror is always clearer... I'll let you guess wich ones I'm very happy to own and would like to add shares ;) Lastly, I've been quite active recently, so I took a look at new "candidates" and didn't find any that are more interesting than the ones that I actually own. If you don't find anything more interesting, there is nothing more enjoyable to just add to what you're already own. . All men's miseries derive from not being able to sit in a quiet room alone. Blaise Pascal Cheers!

I look forward to having Sanjeev as the head of a publicly traded company setting the right example like Watsa and Buffett/Munger. Shalab, I wish that too. Please take that with a pinch of salt since I use only my memory here, but I wrote that to him here a few weeks ago. He basicaly said that it was not on his plan to do that (maybe a chairman, but not a CEO). I had a sale course back in January. The teacher was a veteran salesman. One of the many things he said is that a sale begins when the person tells you "no". So Sanjeev, I'm still looking forward for you to be a top manager of a public company. You can do it! With the attitude and talent you have, I'm confident that would benefit greatly from permanent capital given by long term value investors ;D Cheers!

Well, that was clearly a mistake even without the benefit of hindsight. No. First, most of the proceeds went to FFH. I've not compared their relative performance, but anyway secondly even if I would have made more money with these stocks, I have investment principles and do not want to compromise them. Someone could have said that it would have been a brighter idea to buy Nortel than Berkshire in the tech bubble period, and then just sell just before it begun to tank, but if you get into that "what if" game, your investment framework will begin to show some cracks. What is important is to clearly define where you are competent and, more importantly where you are not competent..., what you want, and more importantly what you don't want and then keep your discipline. I do not want to invest and partner with managers that I don't trust and/or don't like and don't take the rear view mirror to check what I could have earned if I would have not respected that invesment criteria. Regarding what my friend said, he told me that in private, so I'll keep that confidential. When someone trust me, I try to do my best to deserve that trust. Suffice to say that he's been faster than me on Sardar Biglari. My friend 1 - Partner 0 (just kidding) :) Cheers!

omagh, Many, many thanks to you. I really like your determination and your character on this. If this board get shut down again, even if it's many times, I'll always be your cheerleader on this! Keep up your good work! In retrospect it's much easier to see clearly now that Biglari was a smooth talking Buffett wannabe charlatan who lacks integrity, especially in his shareholder communications concerning executive compensation. I have to give credits to one of my very good friend. I've pulled the plug in 2008, but this friend of mine never had to pull the plug, because several years ago it tooks him just a few minutes to size what was wrong about Sardar Biglari and never put a dime with him and it took me approximately 2 years. Kudos to him! I owe him a bottle of wine. Cheers! P.S.: While Fairfax case over the last few years is a gem of learning, Sardar is one too. Very different story, but as worthwile as a lesson for any student of value investing. P.P.S.: I hope that SNS shareholders will vote no on his plan to legally put his fingers deeply into the shareholder's pocket.

Overall very satisfying results! ;D I agree with most of the members that expressed their disatisfaction about the "except for" comment. While I agree it is important to put the chilean event impact in context, but to cheer up about what would have been the results without that is another thing. But I'm used to that and don't expect that attitude to change. I take a look at the big picture and I'm very satisfied with it :)

My own valuation of MKL says that price to earnings is a little bit lower than 10X normalized earnings. But I guess that the premium accorded to Markel is relative to the conservativeness of reserves (wich has a very high impact on stated book) Again, I'm just guessing here, but people might fear less the "oopps" risk of Markel reserves than FFH. Remember too well the lean years that are still not too far away in time.

The only reason why I've never own any WRB shares is because of the investment side of the business. Nothing to compare with FFH and BRK indeed. That being said, they are still disciplined capital allocators and I like the fact that they are buying shares back. Makes a lot of sense to me.

It would be really interesting to have some notes about the AGM.

Very enlightening. Thank you very much onyx! The first thing that came in my mind is how poorly we compare to the rest of the group regarding underwriting. We're not on that chart because of our underwriting discipline and expertise advantages, but mostly because of our investing acumen. I'm not saying that I'm overall unsatisfied shareholder, but I must face the brutal facts of reality. That being said, there is a IF. The only thing that could change my mind is the reserves. If our reserves are conservatively stated and our competitors reserves are very understated, then that underwriting picture could change significantly. But that's just a IF, time will tell and you don't give medals to athletes before they get to the finish line. So far, we have not been the fast runner on that point. But I'm very confident that we deserve the gold medal on the investing front.

Leucadia top management overall track record is stellar, even when you consider the annus horribilis 2008. They have their own investment style. They historically bought so so businesses, turned them around and then sell them to more optimistic buyers. That model worked very well until 2008, when strong headwinds blasted weak businesses. Add to that the fact that they were optimistic about what emergent countries like China would do on the price of basic materials, and you had the recipe for blood on the street. But Leucadia survived and their top managers learned. Regarding their historical track return and poor 2008, that is were the puck has been. Where the puck will go? Leucadia has some size, but not as big as Berkshire. So they still have a decent universe of investment choices for long term capital appreciation. Then, they are now focused on building "fortress Leucadia", wich means that they are focused on long term quality assets to own instead of financial plays (cigar butts, from what I understand). And finally, regarding the succession issue, as far as I know, it is a subject that they talk about at each board meeting since quite a few years. I guess that they don't take that issue lightly. Suffice to say that I'm a happy shareholder and plan to hold my shares for the long term. This is my smallest position, but so far I've been satisfied.

"It seems that Mr. Biglari maintains a core group of devout owners who want to bow down to his name. Stock cheered the news!" So, Steak and Shakes shareholders collectively want to put the name of the actual CEO, who is not the funder of the business and do not have the majority of the stocks in his hands on the name of the business, to the name of the business itself. It's their vote and if they are happy with that ego thing, I have no personal problem with that since I'm not a shareholder of that business. There is a book called "From good to great" and there is a section that talk about the different kind of managers. I strongly prefer "level 5" managers. A level 5 manager is someone who search excellence by combining personal humility with very strong will. These managers tend to let their egoistical needs aside to build a great business. They are fanaticaly devoted to produce results, even it they have to take difficult decisions to do that. They tend to credit others for success, and look themselves in the mirror for failures. In 90% of the cases studied by the team of searchers, these "level 5" CEO's were already employed by the business when they were promoted to that prestigious task.

I wish 100% of their assets, not 30%, would be in it. I know that I'm dreaming ::)

As far as I know, they are very conservative with their investing. I like someone who is conservative, but to add a word to it: opportunistic. When there is blood on the street, it's great to be opportunistic enough to be greedy without losing conservativeness because you get great assets with a great margin of safety. Again, as far as I know, that's what's missing with Lancashire to me. Conservative/opportunistic value investing as well as conservative/opportunistic insurance underwriting. I'm really open and willing to get proven wrong on that point. Cheers!

Very good letter as always. Their equity portfolio returned 17% CAGR over the long term and they have only half a dozen stocks in it. Unfortunately, Plymouth is not a publicly traded company. Cheers!

Cost of capital? Never used that number, don't need to neither and don't think that I will use it once in my life. “Obviously, consideration of costs is key, including opportunity costs. Of course capital isn’t free. It’s easy to figure out your cost of borrowing, but theorists went bonkers on the cost of equity capital. They say that if you’re generating a 100% return on capital, then you shouldn’t invest in something that generates an 80% return on capital. It’s crazy.” Charlie Munger http://www.25iq.com/charlie-munger-quotations/

Fairfax settle lawsuit for 3.5 billions! http://www.bbc.co.uk/herefordandworcester/content/images/2006/03/29/april_fool_420_420x420.jpg

Funny picture. Thank you!

Thanks for posting these notes.

Congratulations one and all, and please know that while we have plenty of ignorant numbskulls here in the US, there are a multitude of others like me who respect and admire the hockey team and the country of Canada. All the best. -Crip Stephen, that's a very elegant behavior. No problem for some of your fellows US citizens. More than 10 years ago, I've been to Vermont, Maine and New Hampshire a few times by hitchhiking (I used to be more frugal...). I've had a terrific time over there. Most of the people I've met were warm, friendly and generous. I'll always remember my short stay at Meredith and a person who've done one hour more of car driving just to help me to get where I wanted faster. Cheers!

You can also see that in their equity portfolio. They've been able to buy quality assets at a discounted price. Because of the price, we have the margin of safety. Because of the quality, we have time on our side. Quality see the time as it's friend. Mediocrity see the time as it's enemy. Cheers!

Cheers! http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzcxMDU4fENoaWxkSUQ9MzY3OTk1fFR5cGU9MQ==&t=1