Partner24

I've been a shareholder since approximately 5 years and so far I'm very satisfied. The business is boring, cash flows are positive, the balance sheet is great, the management is conservative, the stock price is very cheap. IMO, the intrinsic value is far higher than the actual market price. But since it is a pink sheet, I can't invest in it in a RRSP account, so the investment is limited. The only other boring, cash flow positive, cash rich and cheap company that I've found so far is CGA. If you have other ideas like these, I'm very interested to hear them. Regarding the cash returns to the shareholders, they did a stock repurchase in the past (was a great idea), then they declared dividends after that (good idea too). I would guess that they want to keep flexibility, so they don't declare those cash returns as a repetitive thing...

OMG. It must have been terrible to have a big project like that ends up with a liquidation. But you stopped the bleeding. It was a 10 feet pole, two birds in the bush, you name it... I don't care for the accounting loss. Profit is vanity, cash flow is reality. I'm happy to see that you'll now put all the focus on the other projects. The day that you generate positive free cash flows...is the day that we are independant from outside investments and safe.

Crip, I’ve got nothing out there screaming for me to buy so I’d look to keep this in cash and buy back in once valuations were closer to 1.25x. That's an option too. But since MKL price is fair to me, unless I find something more attractive for the long term, I'll keep. At this price, MKL is still more attractive than cash to me. I found other businesses, but these are very small and not like the MKL, BRK, etc. Regarding Brian Joffe, as far as I know, I don't know why he left. What I can tell is that he was not warm at all to the idea of cutting Bidvest into pieces. He had pressure from the media to do so...maybe from other people too (just a guess here). But there is a coincidence. When he left, I saw Bidvest take the fragmentation way. Just like Markel, I've red as many shareholders reports that I could find (in the case of Markel, got some by mail too), I've red as many articles and interviews available on the Internet that I could find, saw his compensation, wrote to him, etc. and in the end, he went to the "highly trusted indiduals" bin and I stopped searching for all that information on a regular basis. There's been a lot of interesting material on him lately, so if you Google him, you should be able to find useful information in order to make your own opinion. But since we share a lot of similar investment criteria, I would suggest you to do so. I will be interested to hear from you regarding him or any other company that you'll find interesting. Cheers!

A very very cheap stock. Lot of cash, low debt, generate free cash. Gives dividends. Conservative. But in the end, what will they do with that pile of cash? Stock buybacks? Dividends? Expanding the business? Keep it indefinitely?

Hi Crip, Been a shareholder too over more than 10 years and still happy with the way they manage the business. To me, the price is fair. I could sell, I could keep. Both are ok choices to me. If you sell, it depends on what you will buy with it. By the way, remember Brian Joffe from Bidvest? He has started a company that has a similar business model. Long4life. I may buy some shares. Cheers!

History repeating itself. Human nature at work.

They roamed around Earth until they discovered our stock markets and realized there wasn't any intelligent life here. My guess they left in 1999. Ahahahahah ;)

Hi Sanjeev, regarding the funding of the business operations and investments, you issued new shares from time to time. Now that the price of the shares have dropped significantly over the last few weeks, is there any change in the way that you plan to raise or use cash for PDH? Thank you.

Dazel, I guess it has to do with how Prem handled the situation over the last few years. They were calling for a bad economy for years and hedged and everything, then after a long bull market, they are in. Billions of dollars lost. Only main explanation: Donald Trump election. Wow... ...big lack of candor. When you're ego is so big that you can't even realize your mistakes openly, chances are in that you'll keep doing them. Ego can be a very very expensive thing that you don't see on the financial results. They also change the multivoting shares count, shareholders are upset and want to say no, and they come back until they win. I guess that some got pissed off by Prem's behavior. JMO. Cheers!

Well, for those of you who care to learn about happiness and what cause it, you may found this interesting. "What makes a good life? Lessons from the longest study on happiness | Robert Waldinger"

20% above 6% IRR? I'll pass this one.

Fairfax and Markel are two businesses that are operated differently. Markel look more like the "reach the silver medal" goal oriented. Don't speculate too much on macroeconomics and focus on the business model. Conservativeness with opportunity seeking. Easier to follow as a shareholder. Fairfax look more like the "gold medal" oriented business. More speculation on the macroeconomics. Can say one thing a year and the opposite the next one. Require more flexibility, tougher to follow as a shareholder. Can have terrific results for some years when it works, and mediocre when it don't. The road's been more volatile over the last years, but NOT better. Long term, difficult to say. Markel is easier to predict to me. Reach for and will probably get the "silver medal". Satisfactory results, but not terrific ones. 9%-13% CAGR is a reasonable expectation to me. Fairfax is tougher to predict. Will depends more on what Prem wants and feels to cook. I guess it should do fine too...maybe better, maybe worst than Markel. May be a more volatile road, but that does not necessarely mean that it will be a better one. From this point, time will tell.

Ladies and gentlemen, finally, we have the answer. MKL just hit 1000$ this morning. A very interesting graph (starting point: June 10th, 2014): http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=mkl&time=100&startdata-ipsquote-timestamp=6%2F10%2F2014&enddata-ipsquote-timestamp=7%2F3%2F2017&freq=1&compidx=SP500&comptemptext=ffh&comp=ffh&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=2&x=45&y=17&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=12 Still, I don't know what to say...I would guess it depends somewhat on what will happen with the general stock market. If it goes down, you'll likely see FFH do better on a relative basis than MKL. If it's the contrary, MKL should do better.

And the more solid the balance sheet will be, the less a jockey stock it will looks like. Same thing with free cash flow. Cheers!

In the corporate world, free cash flow is key to independance. PDH is more like a startup and live more on less on faith. More faith, dilution for a better price. Less faith, dilution for a lower price. Yes, we need to water the project...as long as it is very rational to believe that it will feed us with it's fruits before it's too late. You have to trust the jockey here.

Still a cheap stock in wich I hold a significant % of my portfolio. Great balance sheet. Cash flow positive. Conservatively managed. A stock buyback would have been a good choice, but I guess that the stock is so illiquid it would have been tought to do that. So a dividend make sense. Cheers!

Warren Buffet was asked about Sears when Lampert took the helm. He said something like "it is a hard business to turn around". Not exactly that, but that was the point.

Eddie Lampert was the "next Warren Buffett" a decade ago. Now people are having fun at him. Opinions about people are such a volatile thing...

That's a good discussion. When you have to raise cash by equity capital because the business is not independant by itself, than shareholder trust is your oxygen. It make sense to get listed to facilitate trading as long as the cost is reasonable. But depending too much on trust is far from being the ideal situation. Trust can be something very volatile. But I understand that PDH is a very small business with already many different investments that are not cash flow positive. So I understand that, for now, we need to give water and seeds. But there is ultimately no alternative to become a positive free cash flow business. A nice balance sheet with continuous free cash getting in is the ultimate ingredient to independance and health. And many small businesses, both private and public, are able to do that. Just take a look at PDRX as an example. Tiny business, far more liquid assets than liabilities and free cash flow positive. I am slowly, but surely building a position in PDH. Another member of my famility is also doing that. I have the tendency to be very patient. I can and will keep buying shares as long as the plan is to become a healthy and cash independant business and actions point toward that.

Well, Fairfax been my first trade ever. In january or february 2003, I bought some shares. I was so delighted about the price that I posted the transaction receipt on my kitchen wall. At times, FFH was nearly 40% of my investment portfolio. Now, more than 14 years later, I sold all my shares and I'm not a shareholder anymore.

Sanjeev, I understand the frustration. You do all this for free...with your heart and it takes both time and effort to organize this. I've went to the FFH AGM once (almost a decade ago), I met you and some other nice folks and keep good memories of this. Regarding the sharp drop in popularity, it's just a guess from my part, but I would not be surprised if some people are tired with what happened with FFH over the last years (multiple voting rights shares reissue, a sudden and huge change in macro forecast after an election, poor stock portfolio management, communications, etc.). Yes, actions speak louder than words. Nearly 30% of my own investment portfolio is invested in PDH. I work hard as a small business owner and a very significant part of the dividend that I'm beginning to get is invested in PDH. Thank you for your hard work Sanjeev.

Well said Cigarbutt. Their underwriting have improved very significantly over the years. That's a huge gain. But investing have been mediocre over the last years. We have the opposite situation than in the lean years period. I like the underwriting, I like Fairfax India, Africa, the investments in operating businesses like Cara, etc. but their cigar butt style investing haven't been good with a huge portfolio like they have now. And the ark that they built came at a huge price...billions. I've kept most of my investment, but I'm not adding to it anymore. Me too Fairfax been 40% of my net worth or so at times, but the % is gradually decreasing.

10 seconds? I did it in 1. Nice shot. You're even faster than me. ;D Yes, no one can do nothing faster than I. Like boosting your ego? :P Also, not sure your wife would happy about that ;D

10 seconds? I did it in 1. Nice shot. You're even faster than me. ;D

I'll pass. It's a 10 seconds decision ;)