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Stingy News: Watsa

A flock of value investors
04/10/16 Chou Value Investing Stingy Investing Watsa
"A flock of value investors from across North America will land in Toronto this week to hear what Prem Watsa, the CEO of Fairfax Financial, has to say at his firm's annual meeting. But they should think about one of the company's investments on their way there." [$]

Risky bet on Greece
06/10/15 Value Investing World Watsa
"The contrarian American billionaire Wilbur L. Ross Jr. made a bundle betting on the Irish banking system when it was down and out, and a similar wager on Cyprus now looks promising. But Greece may prove to be the toughest test yet of his knack for cashing in on eurozone crisis spots."

Prem Watsa tells his Horatio Alger story
05/23/15 Value Investing Watsa
"You know why I got that job? Because I got a call for a second interview, and the other three didn't show up."

Rock stars of value investing
04/12/15 Chou Value Investing Stingy Investing Watsa
"When Mr. Watsa takes centre stage on Thursday to opine about his company and the markets more generally, it will be interesting to get a measure of his bearishness."

Fairfax 2014 letter
03/14/15 Value Investing Watsa
"The CAPE (Cyclically Adjusted Price Earnings) Ratio for the S&P500 is currently at 28 times. It has been higher only twice before; both times ended badly. The first time was in 1929 and the second time during the dot.com boom of 1999 to 2002. The rising U.S. dollar (with over 40% of the average S&P500 companies' earnings coming from abroad) and the current record after-tax profit margins, combined with deflation, could result in significant declines in the earnings of the S&P500 companies - just as the index hits record highs. We say 'caveat emptor', and continue to be very cautious about our equity positions. I have reminded you many times in past Annual Reports of the warning from the distant past from our mentor Ben Graham: 'Only 1 in 100 survived the 1929 - 1932 debacle if one was not bearish in 1925'."

Newspaper stock, really?
03/28/14 Value Investing Stingy Investing Watsa
"Flint knapping was an important skill many years ago and then technological change made it obsolete. But, in a strange twist of fate, it has been making a bit of a comeback thanks to the Internet. It's now easy to learn how to knock out an arrow tip the old-fashioned way. While the Internet is a great boon to hobbies such as flint knapping, it's knocking the stuffing out of some businesses. Newspapers are a case in point."

A big day for value investors
03/28/14 Value Investing Stingy Investing Watsa
"Value investors are set to descend upon Toronto for the Fairfax Financial annual meeting. They're making the trip from all over the world to hear Prem Watsa, the firm's CEO, talk about strategy and investing in early April."

What would you do?
03/22/14 Markets Watsa
"Every investor has held his hand out in the dark and blindly touched the fine line between being very early and very wrong"

Prem's letter
03/08/14 Value Investing Watsa
"In this environment, with zero interest rates and high debt levels prevailing in most developed countries, giving them limited flexibility to react to unintended consequences, we think it is prudent to have a very strong balance sheet with a large cash position and to be protected on the downside. When problems hit, only those with cash and very liquid assets can take advantage of them. While it is very painful and costly waiting, we think your (and our!) patience will be rewarded."

Prem Watsa opens up about BlackBerry
12/08/13 Value Investing Watsa
"Bets on debt-ravaged Greece or ailing phone maker BlackBerry would make many investors flee, but for Prem Watsa both are part of a 'cautious' strategy he employs to manage Fairfax Financial's US$23.3 billion portfolio. Indian-born Watsa, 63, often compared to U.S. investor Warren Buffett, another self-made man, prides himself on a strategy of investing in stocks and markets others avoid."

Prem Watsa the Canadian Warren Buffett
11/03/13 Value Investing Watsa
"Fairfax, which has a portfolio worth US$24.1 billion, has gained 31% this year, compared with a 7.8% rise in the Standard & Poor's/TSX Composite Index. The investment firm has returned 13% annually over the past 20 years, mirroring the rise of Warren Buffett's Berkshire Hathaway Inc., according to data compiled by Bloomberg."

Market underestimates BlackBerry
09/29/13 Value Investing Watsa
"'The market's very emotional,' he adds. 'You'll find huge optimism when everything's going well, huge pessimism when things are not working out as well. And what we say is the truth is in between.'"

Fairfax meeting slides
05/05/13 Value Investing World Watsa
A few of their reasons for hedging...

Watsa no stranger to value
01/22/12 Watsa
"For someone who built an empire while dodging the media's spotlight, Prem Watsa is taking an unusually public role by positioning himself at the heart of Research In Motion's attempted revival."

FFH AGM Slides
05/01/09 Markets Watsa
Slides 26 to 31 and 33 are particularly interesting.

Fairfax contrarian cashes in mightily
03/28/09 Watsa
"Prem Watsa and his investment team have earned bragging rights for the next 100 years. They sidestepped most of a 50 per cent stock market crash. They bagged big profits by betting years in advance that stock prices would fall and companies would go broke. Meanwhile, their Toronto-based company clawed its way back from junk bond status to investment grade, and its share prices rose last year while most others fell."

The $2-Billion Man
03/26/09 Watsa
"Prem Watsa is the richest, savviest guy you've never heard of. He predicted the crash of '87, the Japanese collapse of 1990 and last year's meltdown, which he parlayed into a huge payoff. Now he's gobbling up shares at rock-bottom prices."

Fairfax Financial's 2008 coup
02/19/09 Value Investing Watsa
"The year 2008 will go down as one of history's worst, but it was the best year in the history of Canada's Fairfax Financial Holdings Limited. Its Chair and CEO, Prem Watsa, and his team, were among the few money managers who forecasted, and profited, from the economic catastrophe. As a result, Fairfax has become one of North America's 10 largest property and casualty companies."

Buffett of Canada buying stocks again
01/22/09 Value Investing Watsa
"A famed Canadian investor dubbed the "Buffett of the North" for calling several crashes and booms over the decades is dipping his toe into the stock market again."

Biggest meltdown winner
01/16/09 Watsa
"The danger signs are if any of the three disastrous policies from the 1930s rear their ugly heads again: tariff barriers; higher taxes to balance budgets or higher interest rates to support currencies."

Wall Street winner: buy now
11/28/08 Value Investing Watsa
"With the S&P drop year-to-date of 50% -- not seen since 1931 -- and how worried the investment community is, it just seemed to us a lot of fear may already be discounted in the stock markets. You can't say this is the bottom, markets are a discounting mechanism and certainly still can go down some; however, we thought it was an appropriate time to close our equity index hedges."

The reluctant CEO of the year
11/28/08 Value Investing Watsa
"Only a handful of financial companies worldwide are in better shape now than before this crisis started. Fairfax Financial is one of them. CEO Prem Watsa managed to make $2 billion and thumb his nose at his opponents at the same time"

The man who beat the shorts
10/30/08 Watsa
"Born in India, Watsa graduated from the prestigious Indian Institute of Technology and moved to western Ontario in 1972 at age 22. Penniless, he lived with relatives while getting his M.B.A. from the University of Western Ontario and moonlighting at night selling air conditioners and furnaces. After taking over, and renaming, an underwriter of trucking policies called Markel, he added a dozen property and casualty insurers, among them the well-known New Jersey firm Crum & Forster and TIG Holdings, once part of San Francisco's Transamerica. Taking over management of the investments, Watsa produced (according to Fairfax) a compound annual return from 1993 to 2007 on its stock portfolio of 19.5% (versus 10.4% for the S&P 500) and on its bond portfolio of 10.1% (versus 6.6% for a Merrill Lynch bond index). One of his earliest backers--and later a friend--was famed investor Sir John Templeton, who died this year at age 95."

Profit from panic
10/09/08 Stocks Watsa
"The "other Berkshire" is Fairfax Financial a P&C insurer headed by brilliant capital allocator Prem Watsa. Fairfax is about as close as you can get to investing in a company that does great in good markets and exceptionally well in disastrous ones."

CanWest woes may force Fairfax's hand
08/09/08 Stocks Value Investing Watsa
"Fairfax Financial Holdings Ltd. has made a name as a patient, deep-value investor in the mould of Warren Buffett's Berkshire Hathaway Inc., so the company has been surprised to find itself cast lately in the role of an activist player."

The next Buffetts
05/27/08 McElvaine Burry Cumming Buffett Watsa
"We hope that the greatest investor of all time has many, many good quotes left. But we also have to acknowledge reality. Buffett is 77 and even his steady diet of Cherry Coke and hamburgers can't keep a guy going forever. Investors who would like to put their money into Berkshire Hathaway, Buffett's flagship company, have to deal with the unpleasant fact that Buffett may be on his last lap or two as champion of the stock market marathon. That raises a fascinating question: who is the next great Buffett-like investor going to be? He or she must be a great stock picker, of course. But that's just the beginning. What distinguishes Buffett is not only his stock market acumen. It's also his willingness to state his opinions in plain English, his independent turn of mind, and his willingness to treat investors as if they were his partners."

The economic skies might be falling
04/19/08 Value Investing Markets Watsa
"Investors around world saw sunny skies yesterday, but Prem Watsa is still prepared for a hard rain. The chair of Fairfax Financial Holdings Ltd. boasts that Canada's top-performing financial-services company of the past year is sitting on a billion-dollar life raft of cash and marketable securities - in case North America has the perfect economic storm."

The Stingy News Weekly

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