Partner24

Agree with Uccmal.

Well, I've discovered about Buffett when I was about 21 years old. The first stock I every bought was FFH in 2003. I guess what I regret was to focus too much on things like FFH, MKL, BRK and the likes. I should have took a closer look at very small businesses...cheap, growing, under the radar like PDRX. But that being said, things could have been far worse than owning FFH, MKL and the likes!! It's far from being a big regret. Also, I don't regret about saving a lot when I was in my 20's and had less expenses than now (kids, house, etc.).

Every single stock that I have is for sale...at a given price. Mr Market has to be turned to our advantage. If you don't find other good opportunities, you can always sell something, keep the cash and wait to buy it again later when it will come back to a good price.

Ok Crip, let's take the 15% ROE assumption. At 1.3 times book, it means that on a normalized basis, you would pay nearly 9 times the earnings that the business can generate. It is a fair price to you? What is a fair multiple regarding FFH? To me, the 1.7 figure is fair. There is certainly no absolute and I might be wrong, but that's my number. Time is a friend to me. When I get a business that can likely add intrinsic value at a satisfactory clip over a long period of time, I think twice before starting selling, but I'm very open to do it. I'm wondering if I'll finally get the chance to have this dilemma after all these years of patience! Cheers!

P24, Well, that's an interesting point to ponder. I want to say that it was roughly 2007 that Markel was selling for 2X book and, at that time, I contemplated selling a good-sized chunk of my holdings. I think they also got pretty close to 2x BV in 1999 as well. Ultimately I never did and it cost me dearly as I could have, a couple of years later, purchased some MKL for dramatically less. I promised myself that, even though I think MKL is a great company to own (and I know you do as well), that I'd sell half or so of my holdings if it was selling at 2x BV. I think that it is a reasonable conclusion that 2X book for MKL is a result of price getting ahead of value. As we are currently sitting at about 1.3x BV, we've got a ways to go. The same concept would seemingly apply to FFH but the specifics are not as clear to me. I cannot argue with your assertion that 1.7x BV being a selling point, but I cannot endorse it either. Do you have any specific calculation that says 1/7x BV is overvalued? Not trying to challenge you on this, just looking to understand. -Crip Crip, Regarding FFH, when I take a look at it's normal capacity to generate earnings with the investment portfolio (less the expenses) and a normalized return on it's equity calculation, using both methods, I get that 1.7 times book is a fair price. These are the two main methods that I use in evaluating an insurance business. Even at 1.7 times book, I would still keep some shares. Over two times book, I think that the buyer would be cheerful and would make me feel uncomfortable to keep it, unless something unusual that would boost book value in a short period of time would very likely happen with FFH. And I'm curious to know. In your mind Crip, what would be a fair price? Cheers!

"Fairfax: the multiple expansion is probably over." Well, nobody know for sure, but if the price to book reach 1.7 or so, I'll probably sell some shares that I kept since the last 12 years.

Obviously, it's far too soon to say that they were right. Even if time tells us that they were right, it is certain that they were too early.

Very good interview. Thanks!

Regarding the subs, I would be surprised if they would sell them. They have a business model that is quite similar to Berkshire and this have been a subject with Bidvest in the past. As far as I know, Joffe think that the conglomerate as a whole create better value than dividing the parts of it. Good results overall, as usual. Happy to be a shareholder of that business.

Well, I'll speak from experience. In my yound adulthood, I was a phone suicidal prevention care provider for a year. It was too tough to me. I will not get into details, but suffice it to say that when someone was talking openly about suicide in a short to mid term period frame, the ultimate psychological saving rope that was teached to us was to help the person realize how bad it would be for people who cared about them. Sympathy and some kind of sane guilt was a powerful tool that helped to save lives. This was not meant to be a permanent solution, but a saving rope that was useful. Maybe things have changed over the last 15 years or so, but it did help. So I don't know if rkbabang cultural social acceptation hypothesis is true, but it might be. Feel true empathy about someone pain doesn't mean that you have to agree with what he does with it.

Very sad indeed. That funny, talentuous, successful, positive etc. guy who commit suicide. Nobody is immune to sadness and depression. I feel sorry for him and all who loved him. I feel a little bit disapointed about what he did too. What kind of message does his suicide send to other people?

My god, only few posts about the FFH earnings release. Remember the 2003 era? ;-) At first sight, a good quarter. Underwriting seems to be in very good control now, but will take a look at combined ratios with the adjustments over time. Cheers!

Three characteristics of a great manager: - Honest and shareholders oriented (and I mean all shareholders as a whole...) - Energic - Competent If there is one that I feel that's missing (IMO), I keep my popcorn in my hands! ;)

Dear Crip, have you lost your marbles? ;) I'll always remember that quote: "The only time I made money with a crystall ball is when I sold it in a garage sale". ;D But I know what you ask is just for fun! 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. But that being said, I don't know what the general stock market will do over the next five years. But if I would be forced to do so, I would take the conservative side of the bet. Oh thanks Lord I'm far from being forced to go that way with my real money! Cheers!

Now it should be the time to sell some FFH. 1.3 times book. Correct me if I’m wrong, but with the $15 increase, Fairfax is selling at 37% above BV, a valuation not seen since before the turn of the century. Granted that Fairfax’ bond portfolio is seeing some significant gains since 31 March but, still, this is pretty “frothy” for Fairfax, which brings about a dilemma. Being that the Fairfax shares are in a retirement account and there will be no tax impact on selling these shares, I’m tempted to sell 25-50% of my FFH (Fairfax is my top holding, comprising close to 25% of my total) in order to replenish some dry powder for future opportunities, which may, in fact, be Fairfax should the price drop enough. So, is anyone else looking at this run-up as a selling opportunity? -Crip Hi Crip, that's a good question. I'm not tempted that much, but your question make sense. I would not sell in the hope of buying it at a cheaper price. Nobody can predict if FFH will see at 300's, 400's, 500's or significantly higher over the next few years. If you find a business that fit your criteria and is more appealing to you than FFH, your decision would intrinsicaly make sense, but no crystall ball can tell you if FFH will be cheaper down the road. Cheers!

That's what I tought too. I'll certainly take a look at them when they will get public. Cheers!

Plastics.

Thank you for you comments, especially those who are candid enough to admit they got cought. It's just fun. Having some is very cheap...most of the time, it doesn't cost us a dime ;D Cheers!

Retire at 80. http://ifail.info/wp-content/uploads/2013/10/april-fool.jpg?7945b1

NSA where are you? You guys spy everthing on the Internet, phone, etc. even the 100% innocent and well intentioned people, but you can't do the basics? What a shame. You should be fired.

Done. Thank you so much Sanjeev for the board. Frankly, I don't care much about technology, I care more about the people and the content. I was also very happy with it even in previous board. Keep up the good work. ;) Cheers!

And you can say thanks to Mother nature for the underwriting profit this year. If we had some major underwriting losses, it may have been a horrible year instead of a bad one. Cheers!

2009-2013: Berkshire, Markel and Bidvest: mostly no directional bet (big macro things), build the company with an ark that will do fine if we get some rain and fine if we get some drought (reach for the silver medal) Fairfax: directional bet, build the company with an ark that will do great if we get some rain and bad if we get some drought (reach for the gold medal). Fairfax positioned themselves as being very prudent and conservatives, but in fact it was not 100% the case. They had a pessimic view of the macro things, an optimistic view on on their own ability to predict them and they made a bet accordingly. I can't blame their own self-efficacy to do these things (they have a terrific track record on these things), but let's call a horse a horse. The sun shined over the last few years, we did get some drought and FFH performance over that period have been very so so. They didn't get the gold medal and are far from being on the podium 5 years later. Berkshire and the likes are having a good fundamental return (the silver medal). That being said, I was all aware of their respective strategies 5 years ago, the possible outcomes of them and I tell you it would very easy to look at the rearview mirror and position yourselves as victims, but all of you that were shareholders 5 years ago should have been aware of these scenarios and the possible outcomes related to them. That being said, Prem could have been more candid and call their directional strategy as a pessimistic bet instead of positioning themselves as the very prudent and conservative people. I'm happy to have a very significant part of my portfolio in other great companies like Markel and others that reach more prudently for silver medals and regarding FFH, I still keep my shares. I say that if things don't change over the next 2 years or so, FFH were not only far too early in their predictions and bets, but were also fundamentaly wrong. It's clear that they were too early and it did cost us a lot of money so far, not still 100% clear about being wrong. Cheers!

Thank you Ross!

Guys, please don't get overexcited. I want to buy the shares at a fair price . So this project is gonna be a mess ok? ;)