1. cynicalreader's Avatar
    Here is the link:

    Fairfax boosts stake in RIM - The Globe and Mail

    What is Prem betting on to ensure adequate return?
    07-23-12 06:51 AM
  2. njblackberry's Avatar
    As he stated, he is "averaging down".
    Translation - we bought WAY too high, and have lost a ton of money, but we have faith.

    I still think the stock has a little lower to go - between 5.75 and 6 - and then will have bottomed out.
    07-23-12 07:12 AM
  3. andrew1953's Avatar
    Just curious as to why a newspaper publishing company would want to invest in a mobile phone manufacturer that has been losing large amounts of money on its share value?
    07-23-12 07:23 AM
  4. gbwalsh's Avatar
    Just curious as to why a newspaper publishing company would want to invest in a mobile phone manufacturer that has been losing large amounts of money on its share value?
    Newspaper publishing company?

    You might want to read that article again.
    menaknow likes this.
    07-23-12 08:01 AM
  5. OMGitworks's Avatar
    As he stated, he is "averaging down".
    Translation - we bought WAY too high, and have lost a ton of money, but we have faith.

    I still think the stock has a little lower to go - between 5.75 and 6 - and then will have bottomed out.
    Absolutely. I was wondering what he was going to do. I believe his average cost was around $28. No way this stock quadruples anytime soon. As with the 3 other rounds of stock purchases, I wish this was a signal he has great faith is RIM, but I suspect it is simply a financial calculation knowing that he either had to eat the $400M+ he is out or once again invest at much lower levels to try to get back some of the $400M. His average cost will now be in the $18.00 range depending on when he actually bought, perhaps closer to $20 if he bought earlier and this is a lagging report of the purchase as most of them are.
    Last edited by OMGitworks; 07-23-12 at 08:21 AM. Reason: typo
    07-23-12 08:03 AM
  6. njblackberry's Avatar
    I think his paper losses are higher - but I don't have any desire to sit down and figure it out. I wonder how he is explaining this to his shareholders... That's a large position to take in one company and he is investing a lot of capital with nothing (NOW) to show for it.
    07-23-12 09:08 AM
  7. morganplus8's Avatar
    Just curious as to why a newspaper publishing company would want to invest in a mobile phone manufacturer that has been losing large amounts of money on its share value?
    He bought into Futureshop and did a fantastic job of turning it around, of course, he made a bundle on that deal. This man sits on the BOD for God's sake, he knows "Watsa comin" for RIM and doesn't have to guess like the rest of the world.

    I am truly sorry for that pun, won't happen again. Me bad. The house is empty today, I'm alone and just typed it by mistake.
    07-23-12 09:26 AM
  8. TGR1's Avatar
    This man sits on the BOD for God's sake, he knows "Watsa comin" for RIM and doesn't have to guess like the rest of the world.
    I sincerely hope you are not ok with what you appear to be suggesting. He has to be very careful about using insider info in running his business or is rightly opening himself up to lawsuits.
    07-23-12 09:58 AM
  9. njblackberry's Avatar
    I certainly hope Mr. Watsa is not trading based on information not available to the public.

    http://www.insider-monitor.com/artic...ng-canada.html
    Last edited by njblackberry; 07-23-12 at 10:06 AM.
    07-23-12 10:03 AM
  10. menaknow's Avatar
    He is probably averaging down, that is all. Even if he has faith that the company will turn around and make tones of cash, why not lower the amount of you average stock if you have the cash?
    07-23-12 10:10 AM
  11. Thunderbuck's Avatar
    I certainly hope Mr. Watsa is not trading based on information not available to the public.

    Insider Trading in Canada
    It depends. Since he sits on RIM's BOD, of course he's privy to information that the public doesn't have access to. He's entitled to know about things like product roadmaps, specs, ongoing negotiations with content providers and carriers.

    For instance, Watsa could be privy to a new marketing plan, and maybe he's impressed and says something like "this is really going to turn things around!" and decides to buy. That's actually okay, because there's no guarantee that such a new plan actually WILL turn things around.

    If he's aware of a specific, significant event that the public would have no way of knowing (like a pending buyout offer, but there are many other possibilities), then regulators would want to look closely at this buy.

    Fortunately, the regulators track this stuff. There are only certain windows where insiders are even allowed to trade, and if something DOES happen there will be any number of parties looking at Watsa's trading history.
    bungaboy and morganplus8 like this.
    07-23-12 11:04 AM
  12. ptpete's Avatar
    It's good news but no matter how many shares he buys, it won't accelerate the rollout of BB10.

    The die is cast. Time is ticking and employees are cranking away trying to save their a**es. Go RIMM!
    07-23-12 11:30 AM
  13. Knightcrawler's Avatar
    This man sits on the BOD for God's sake, he knows "Watsa comin" for RIM and doesn't have to guess like the rest of the world.
    liked purely cuz of the pun
    Last edited by Knightcrawler; 07-23-12 at 11:52 AM.
    morganplus8 likes this.
    07-23-12 11:49 AM
  14. VerryBestr's Avatar
    I think his paper losses are higher - but I don't have any desire to sit down and figure it out. I wonder how he is explaining this to his shareholders... That's a large position to take in one company and he is investing a lot of capital with nothing (NOW) to show for it.
    Ummmm ... I think you can calm down and quit worrying about the relationship between Prem Watsa and his shareholders. Prem Watsa's main investment vehicle is named Fairfax Holdings.

    | Fairfax Financial - Wikipedia, the free encyclopedia

    As of December 31, 2010, Fairfax had total assets of approximately $31.7 billion, and its revenue for the prior twelve months was approximately $6.2 billion. Over the last 25 years (that is, since present management took over - until fiscal year Dec. 31, 2010), the company book value per share has compounded by 25% per year,[1] while the common stock price has followed the growth at 21% per year.

    Investors win some and lose some. He obviously wins more than he loses.
    morganplus8 and bungaboy like this.
    07-23-12 12:31 PM
  15. bungaboy's Avatar
    Prem Watsa bets his reputation on RIM

    TARA PERKINS
    The Globe and Mail
    Published Monday, Jul. 23 2012, 12:44 PM EDT
    Last updated Monday, Jul. 23 2012, 12:45 PM EDT

    Fairfax Financial Holdings Ltd. CEO Prem Watsa has a good reason for nearly doubling the firm’s stake in Research In Motion Ltd. He believes in the brains that are steering it, including CEO Thorsten Heins and founder Mike Lazaridis, who continues to sit on RIM’s board and has known Mr. Watsa for a few years.

    Mr. Watsa is not looking at this investment as a potential takeover play – he suggested in an interview that he thinks it will pay off in the next three to five years.

    Fairfax has undoubtedly had some investments go sour – for example, in the media business – but the company has a history of being fairly patient money and of often being right on its big calls. Those include selling half of Fairfax’s equity holdings prior to the 1987 stock market crash, buying options that insured the company against a fall in the S&P 500 just before the tech bubble burst, and betting against a number of large financial institutions prior to the subprime meltdown.

    Mr. Watsa is most known for such bearish bets, and he’s in the midst of one right now. By the end of last year, Fairfax had hedged its stock portfolio to the tune of 105 per cent – essentially gambling that the market broadly is in for some serious pain. It’s a move that has cost the company during the last couple of quarters, but Mr. Watsa was more than happy to accept the short-term pain and remained confident that it was the right call.

    The company reports its second-quarter profits later this week and, given that stocks are down a bit, Fairfax could see its equity bets come out slightly ahead this time around because of the hedges. Its investors will undoubtedly be interested in how long Mr. Watsa intends to keep those hedges in place, but given the news out of Europe and China my bet would be awhile.

    There is an argument to be made that the cheap price of RIM’s shares these days decreases the risk of Fairfax’s decision to double its investment. Based on the trading price of the shares at the time of writing of $6.80, Fairfax’s stake in the technology company is worth about $359-million.

    But that numerical figure does not express the gamble that Mr. Watsa is making on this bet. The man who has been dubbed the Warren Buffett of the north for his investment prowess is putting his reputation on the line, not only by stating publicly that he’s of the opinion the company has a good future but also by personally joining its board.

    Meanwhile, investors in Research in Motion don’t seem to be able to decide how much confidence to take from the news. Shares of the technology firm have seesawed since they began trading this morning.
    Stewartj1 likes this.
    07-23-12 12:39 PM
  16. anon1727506's Avatar
    So he has 31.7B is assists and is willing to risk a little over 1%.... not sure I'd call that "betting his reputation on RIM".
    07-23-12 01:02 PM
  17. BBPandy's Avatar
    So he has 31.7B is assists and is willing to risk a little over 1%.... not sure I'd call that "betting his reputation on RIM".
    He's betting his reputation because everything he bets big on always ends up making big returns. He has a reputation as being someone who rarely ever looses.. If he were to loose on RIM (A company that he has not only invested hundreds of millions in, but also joined the board) that would always be listed as a footnote when people talk about his credentials
    bungaboy likes this.
    07-23-12 01:52 PM
  18. BBPandy's Avatar
    What I found most interesting about that article.....
    Mr. Watsa said that RIM has been a leading innovator since the early days when it established the smartphone email service. Mr. Lazaridis, who was key to that, is “an innovative genius,” Mr. Watsa said. “And he continues to work with Heins on the next generation R&D.”
    07-23-12 01:59 PM
  19. bungaboy's Avatar
    I sincerely hope you are not ok with what you appear to be suggesting. He has to be very careful about using insider info in running his business or is rightly opening himself up to lawsuits.
    Do you honestly think the guy wouldn't have that covered ?
    07-23-12 02:01 PM
  20. abwan11's Avatar
    Prem is a hedge hog and was most likely hedged all way down with rim so be careful at calling his price average.
    07-23-12 06:22 PM
  21. hootyhoo's Avatar
    So he has 31.7B is assists and is willing to risk a little over 1%.... not sure I'd call that "betting his reputation on RIM".
    I'm no expert (but I did stay at a Holiday Inn once), but according to the Motley Fool, FairFax's investment in Rimm is 17% of their portfolio.
    07-23-12 07:04 PM
  22. Rickroller's Avatar
    What I found most interesting about that article.....
    I sincerely hope that Lazaridus is keeping his "innovative" fingers out of the BB10 pie. We've all seen what he's had to offer over the last few years.. And it hasn't been pretty.

    PS: It's "lose" not "loose"
    07-23-12 07:16 PM
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