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AIG was a AAA company not so long ago... How can we trust these guys? When you take a look at a rating, you think that able people have reviewed the books and gave an appropriate rating based on a good knowledge of facts and risks. Maybe they are very good in other industries, but in financials...

Few years ago, I took a look at this business. There were reserving issues and other stuff. An insurance company might look cheap, but the problem is you can easily fool yourself because you never truly know the true cost of service sold immediatly and a significant part of the book value is based on actuarial reserves calculations...so the actual book value is never fully known. You need to have faith in their estimates. It was something tough with Fairfax. Year after year, you had these reserve developments. It wasn't an easy situation. Were they just pushing the problems forward or were they truly honest? I tought they were truly honest. If I had serious doubts about Prem's credibility and honesty, I would have sold all of my shares. In the end, I decided to pass the KFS opportunity. I prefer to stick with the ones that I admire and like most, even if some other opportunities look cheap.

That's good news for their competitors! ;)

Good portfolio management question. I believe in meritocracy. If a business intrinsicaly perform than the others, it's prospects still look good and the price is fair, I prefer to keep them rather than sell them. You can compare that with horses. If a horse run faster than the others and don't need a lot of food, you should give them a field to run. If a horse don't run, but eat a lot, you should prefer to sell it to somebody else. Or, for Canadians investors, you can compare that with hockey players. An employer that I had was an ex goalkeeper in the NHL. He used to tell me that when somebody want to put some pucks in the net and he's good at it, you give him ice. When business managers want to prosper and they are good at it, you give them cash. So, to me, Fairfax is actually the crown jewel in my portfolio and it's still fairly cheap, so instead of selling them, I keep buying some. Fairfax weigh for 35% AT COST in my portfolio. I'll try to keep that percentage, unless I find a better business to own (unlikely), it's long term prospects are deteriorate or the price become too expensive. Cheers!

I wasn't excited about Swiss Re, because when I looked at his assets, there is several stuff that I didn't understood. It wasn't plain vanilla stuff. But since that it's where the puck is going to be that we have to focus, here is a good quote about where the puck is probably going to be in few years from now: "The company became too clever and too sophisticated for its own good. They were dreaming up all these wonderful things that look great on a stochastic model and everyone lost touch with the basics of the business. The goal now is to become a boring reinsurer." Tim Dawson, equity analyst at Helvea, reponds to Swiss Re's 2008 results.

I've red some sections of the book, not all. I wasn't really interested to go as deep in Warren's personal life. However, in the chapters I've red, I don't remember to have found something shoking or something that has diminished my admiration to him. We're all humans.

I know a company that was sollicited to go public. My first reaction has been: "There is so much bums in Wall Street. You shouldn't do that". Naked shorting is just one of their tool. There should me far more control over the activities of these hedge funds cowboys. They don't play on a fair basis. They are not investors. They see the market as a chaotic casino where they can cheat and harass everybody around them to make a quick buck. May God forgive them.

It's quite shocking. If only 20% of what is said is true, it's enough to be really concerned about what's happening in our financial system.

"He did not succeed in stabilising the share price at an acceptable level". That's idiot indeed.

Well, 5 years is not enough, and even if it was, given the actual condition of the industry, 10% CAGR over the last 5 years is great. And if I take the long term view, over it's last 20 years, MKL book value per share went from 9.22$ to 222,20$. And finally, since it is where the puck is going to be that interest me most, I think that Markel is well positionned to thrive when the insurance market will finally begin to harden more significantly.

Seems to be simple and user friendly. Thank you Sanjeev!

"Someone tell me again why Markel deserves a premium multiple?" Because it has a great long term track record of book value per share CAGR and because you don't value a business only by using it's last year financial results...; Because it is more likely to have it's reserves stated too much conservatively than the contrary; Because it has an investment leverage to equity of more than 3 and it's float has so far been at no cost overall.