Partner24

Interesting. Thanks for the information.

Ok :) So that's Brian Joffe of Bidvest Group: www.bidvest.co.za His track record of shareholder's wealth creation over the past 17 years: http://www.financialresults.co.za/bidvest_ar2008/performance_glance_02.htm And, finally, Bidvest global footprint: http://financialresults.co.za/bidvest_ar2008/global_footprint.htm By the way, I'm very interested to hear some suggestions from the members of this board.

Brian Joffe of South Africa. Very interesting question, by the way.

And one the lessons I think they've learned in their 7 lean years is to maintain a high financial flexibility. So if they want to use that $ to extend their maturities and to increase furthermore their $ and liquid investments at the holding company level, then (to me) be it. I'll applause anyway. I'm not expecting any particular thing regarding that $. "Overcapitalized" might be one of the sweetest comment that I've heard regarding Fairfax. So I'm looking forward for FFH to keep being "overcapitalized" for a very long period of time ;)

I try to not comments on specifics decisions. I give a bat, watch the show and comment on the average. Cigar butts, value traps, however you call them...those are the kind of things that FFH has fallen into in their history. I'm far from being a fan for garbages that look like potential diamonds. One of the best way to describe value traps might be the midnight clock in the Cinderella story: She turned a pumpkin into a coach, mice into horses, a rat into a coachman, and lizards into footmen. She then turned Cinderella's rags into a beautiful gown, complete with a delicate pair of glass slippers. http://en.wikipedia.org/wiki/Cinderella Always remember that time is the friend of the great businesses and the enemy of the mediocre. When the clock ticks twelve times, the coach becomes a pumpkin, the horses become mice, the coachman become a rat and the footmen become lizards. Yes, there is some very rare exceptions to this, especially where there is a localized cancer and you have very skilled surgeons to remove it, but this is the exception and nearly 100% of people that fall into these traps might think that they have found the exception. Now, that being said, Fairfax, despite their usual potholes, have created overall some terrific wealth over time. Some of their stuff work, some of their stuff don't. What is important to them is to realize where they are very good at and where they are not good at. To rinse their cottage cheese, to learn from their mistakes and to focus on where their genius spot(s) is (are). That's one of the ingredients to become a greater company over time. Regarding that ORH buzz, like I said before, the FFH capital allocation decisions universe does not start and end with the remaining ownership of ORH.

Some highlights from these Prem's comments: - we have increased the cash and marketable securities in our holding company - These additional funds give us increased flexibility, including the ability to repay debt and other obligations from time to time. - we are committed to maintaining outstanding financial strength by always having a substantial cash and marketable securities position at the holding company level.

http://money.cnn.com/news/newsfeeds/articles/marketwire/0528995.htm "As a result of this offering, we have increased the cash and marketable securities in our holding company to in excess of US$1 billion. These additional funds give us increased flexibility, including the ability to repay debt and other obligations from time to time. This Canadian dollar bond offering is also a natural economic hedge for our Canadian dollar assets, in particular our 100% interest in Northbridge Financial. As we have said many times previously, we are committed to maintaining outstanding financial strength by always having a substantial cash and marketable securities position at the holding company level."

This late ORH privatization discussion is speculation at this point. Fairfax intends to use the net proceeds of the offering to augment its cash position, to increase short term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. As a FFH long term common stock owner, I have absolutely no expectation regarding that ORH privatization. What do I know is that FFH management team usually take very rational capital allocation decisions, so I give them a bat, watch them do their job and try to not shout "Hit it!" when a ball pass. So I keep all my FFH shares. What do I know is they'll do it if the deal makes sense for FFH owners. If they do not do the deal, I'll still be happy anyway. It's not like their capital allocation decisions universe begin and end with the remaining of ORH.

Thanks Sanjeev for the link! I'll always remember that period. We'll always have to remain vigilent on these issues. Cheers!

I'm not selling any single share. Fairfax is a long term holding and it's still far from being a fair price. They would have to increase the bid very significantly for me to consider any offer. Cheers!

Here is my 2 cents speculation about the 150 millions: it is for the 2012 debt. Extending the debt payment further. Increasing financial flexibility at opportunistic times. But who really knows? Not me. Time will tell.

To me, Markel is on the defensive mode. From what I read about them, they think that some competitors are underwriting business at very inapropriate rates. Consequently, they are shrinking their premiums significantly. Also, from what I see on their balance sheet and some comments I've heard, I came to the conclusion that they want to have a full loaded gun when the tide will come and some others will be naked. Cheers!

In my mind, you're right Sanjeev. From what I read, David Sokol seems to take more attention and place at Berkshire. I know, from what Warren said about him and the track record he shown, that Ajit Jain is a terrific underwriter, but I don't know much about him aside these comments. And for Warren son to take the Chairman role when he's gone, it's a terrific idea, especially if he's able to keep the culture intact after Warren is gone. Bill Gates is a visionary and a great capitalist. We're certainly in good hands also with him as a director and a significant stakeholder with his fundation. From what I red in the Warren CEO book, I felt at the time that even if the CEO role might be split, it might be David Sokol, Lou Simpson, Rich Stantulli and/or Ajit Jain. But, you know, Warren is far from having lost his marbles and new candidates might be added over time, so time will tell who will ultimately be the one(s). Cheers!

If I remember correctly from "The Warren Buffett CEO" book, Rich told openly that we would like to take the CEO job when Warren would leave. Again, if I remember correctly, he said something like "I would then call all the subsidiaries CEO, ask them what they were doing before I was at the helm...and them tell them to just keep doing it". Just my 2 cents, since it only comes from my memory and I haven't red the book since 4 years. Please correct this information if I'm wrong. Cheers!

Thanks for the link! It's nice to see some Prem interviews from time to time.

That was, by far, the shortest Fairfax conference call I've ever heard! Yes, me too! So here is the recipe for FFH to save on long-distance calls for the future FFH conference calls. 1- Make dust 2- Explain your dust comprehensively ;) Cheers!

- Underwriting discipline all across Fairfax. Looking at the expense ratio going up because of reduced volume of insurance business (underwriting discipline), don't look to reduce the staff significantly and want to retain talent. My personal observation: it's all about thinking over the long term (clap clap clap). - They have not hedged back their stock portfolio. Think that if they have choosen stocks properly, they and FFH shareholders will be quite happy in 4-5 years. There is still interesting investment opportunities in the stock and bond markets. Remind them the (1976-1984?) period. My personal observation: seem to be very happy with what they own actually. - Prefer a lumpy 15% CAGR than a smooth 12% CAGR. Personal observation: Me too! As always, be prepared to handle more difficult quarters and years. A stock portfolio is volatile and when you have a very significant part of your equity in stocks, then book value per share will also fluctuate accordingly.

If you take a look at the significant turnaround we have enjoyed at Fairfax over the last few years, the best quote to summarize the progress might be one from Bart Simpson: "¡Ay, caramba!" 8)

That's terrific SharperDingaan! That might be the best way to teach the kids about finance and business that I've ever seen. Cheers!

If a screen can beat 99.99% of money managers and it's reasonable to think that it will, over the long term, than it's terrific. Furthermore, it could save an investor a lot of time that can be invested elsewhere. So, basicaly I like that formula. The only potential problem that I see with it is the risk of permanent loss. I don't care about volatility that much, but I do really care about not having a permanent loss. Let's say that the stocks it filter get some terrific returns for decades, but one year they get a huge loss for a fundamental reason and you nearly lose all of your capital. Yikes! Cheers!

"The best way to become a millionaire is to become a billionaire and start an airline" Ahahah good one ;)

A step that took to long to take, but anyway in the right direction. Cheers!

Here is some articles about the canadian residential real estate actual situation. Maybe we're not as protected as we tought against a significant price decline... http://americacanada.blogspot.com/2009/07/cmhc-and-our-government.html http://marketdepth.typepad.com/marketdepth/2009/06/sell-the-banks.html

...but very open to listen the best single ideas of the others ;)

Here is the ticker symbol with the case explained: Found Financial Heaven ;D