So you’ve been working hard, saving your pennies for that next value stock… but maybe you’re frustrated and want to feel richer now. Good news! For a bit over $2 you too can honestly say “Oh, I am part owner of a private California winery”. It will sound great at cocktail parties...Read More
Fairfax made news last year with its large equity and debt investment in Seaspan Corporation (SSW). David Sokol, Chairman of Seaspan, has been making sweeping changes as was normally the case when he was put in charge of Berkshire Hathaway’s ailing businesses such as NetJets and Johns Manville.
We recently came across this video where Sokol discusses how the container liner industry undergoing a structural change, and how Seaspan is trying to position itself for this change. Following this, we read Seaspan’s investor dayRead More
Investing-wise this year was likely exciting for you - it was for us. Whether you owned Canadian oil and gas stocks (yikes), were riding the marijuana train, or just paying plain old large caps swinging 20% month-over-month, your portfolio was likely… movin’. Of course there are those that bet their life savings on Bitcoins (yuck) or CryptoKitties (at least cute) and were hoping to pay their rent with it must have had even more excitement (but are likely not readers here).
2018 Lesson - Have your own compass
Recently we mentioned Guy Spier, friend of Mohnish Pabrai and manager of the Aquamarine Fund.
He is quite a prolific speaker but according to himself he is “probably best known for having lunch with Warren Buffett”. Back in 2008 he (along with Mohnish) paid $650,100 to have lunch with Warren Buffett (as part of the annual charity lunch auction). You can read his thoughts about the lunch here - https://observer.com/2015/12/my-lunch-with-warren-buffett-changed-my-life
His key takeaway was this:
The most memorable piece of wisdom that Warren shared that day was about the need to live by an “inner scorecard,” instead of worrying how others think of you. He illustrated this by asking: “Would you prefer to be considered the best lover in the world and know privately that you’re the worst—or would you prefer to know privately that you’re the best lover in the world, but be considered the worst?” It was clear that he operates entirely according to his inner scorecard, living and investing in ways that perfectly suit his personality and his values. For me, this was his greatest lesson.
2018 was a wild ride. And as we go through waves of fads, booms and busts it is important to have a central compass. The core theme of my own investing to date is having to go against the grain to find things that truly are cheap and not just a value trap. Of course, some out there rode Bitcoin and marijuana into the sunset and of course I wish them the best on their beach adventures. But I know I wouldn’t have been “right” or “wrong” but just lucky if I made money on those. And that’s just fine with me.
“It’s not greed that drives the world, but envy.” - Warren Buffett
Guy Spier 101
Guy Spier gives a good overview of his views on value investing in a 2016 talk and we definitely recommend you take a look. This was at the Ben Graham Centre for Value Investing.
Here’s the idea - #1 Take your existing team that already invests in India, #2 Start a new company, focused on India that combines your money and a bunch more public money, #3 Scale to more profits.
Prem Watsa - sometimes referred to as the Canadian Warren Buffet - is the interesting character who founded Toronto-based Fairfax Financial. He has quite the following, to the point of one of the larger value investing forums is named in admiration of Warren Buffett and him - www.cornerofberkshireandfairfax.ca
Now we won’t get caught up in the Fairfax history (side note: It’s quite an amazing story but sometimes their investments are a bit too macro for us). Today we’re focused on Fairfax India Holdings Corp (“FIH” or “Fairfax India”). Over the past year the stock, along with the Indian market in general, has taken quite a dip. And of course we here at CVI like dips (but prefer panics).Read More