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

To: moat who wrote (1429)	5/7/1999 2:27:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 4690

Fairfax. I did the work on this about three months ago, so the details are fuzzy. Reposted from value thread. I recall a chairman's letter designed to pull all the strings of a Berkshire investor. But without the substance. They have insurance operations which are mediocre at best, awful at worst. Management is booking income in some creative ways to hit the ROE targets. And the 41% growth in book value per share came primarily through issuing shares at above book value, not through the business. The guy has had a run in a bull market, but has booked the gains as net income (i.e. he has sold all his winners) to make the return on equity number. You really have to dig through the financials, because the Chairman's Letter, which is apparently all Cramer read, is a work of fantasy. The stock is overvalued, quite possibly by a lot. JJC