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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (23913)	5/8/2006 9:07:33 PM
From: Madharry	Respond to of 78704

Analysts dont seem to like bad news very much and there has been lots of bad news surrounding this company of late. I read the COBs annual letter to shareholders, which seemed pretty candid. He acknowledged that the company has had seven very lean years as a result of digesting a couple of acquisitions as well as sustaining huricane losses over the past two years. In addition the company has been served by the SEC with regards to finite reinsurance stuff so there is an ongoing investigation. On the other side a lot of value investors have substantial positions here. So I though some regulars had reviewed this thoroughly. I followed somebody in to PVD today, and bought some L as well. Since I have been posting quite a bit about edv in the past here I should mention that I sold off close to 2/3s of my stake today when I read in a filing that the management contract had been ammended, offering management a bigger piece of the pie going forward. Details are in the edv thread. I still hold a good size position but I have lost a great deal of confidence in mgmt and am no longer willing to overweight them to the extent I did in the past. Still I have to remember that its been a great ride and a very profitable one.

To: Spekulatius who wrote (23913)	5/9/2006 9:28:27 AM
From: dstange	Respond to of 78704

re FFH Latest Note from Morningstar: Analyst Note 04-27-2006 Fairfax Financial Holdings FFH on Thursday reported first-quarter earnings of $9.10 per share, which was stronger than our expectations. Fairfax's results were driven by the solid 96% combined ratio in its ongoing insurance operations and $268 million of realized gains from its equity portfolio. The majority of these gains are related to Fairfax's investment arm, Hamblin Watsa, deciding to sell the remainder of its stake in California workers' compensation underwriter Zenith National ZNT in early 2006. In addition, while Fairfax's run-off (discontinued) operations produced positive earnings, they still required a capital contribution of $83 million in the quarter. We're somewhat pleased by Fairfax's overall results, but since we don't think they are sustainable throughout 2006, we're holding our fair value estimate at $266 per share. We continue to believe that Fairfax's underwriting profitability will modestly deteriorate in the coming months and that its European run-off operation will require at least $150 million of additional capital by the end of the year. That said, given the recent sell-off of the shares, we continue to propound that the margin of safety has increased to an extent that provides potential investors with a very favorable risk/return scenario.