Prem Watsa Quotes
101 Prem Watsa Quotes
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[In 2011] Commodity price speculation will end…It will end, and for people who have speculated, it will end badly.
Prem Watsa
[In 2011] If you looked at 2008-2009 as just another post-war recession, then you would be very optimistic. You would say, ‘Things are going to continue to do well. Yes, the recovery is a little slower than it has been, but things will work out and you should be investing in equities.’ On the other hand, if you thought 2008-90 was, in insurance parlance, a once-in-50-years event, like the Great Depression was in the 1930s and like Japan is and was in the past 20 years, then you might say you have to be careful. Because stock markets from the bottom of 2009 have gone up more than 101 percent and interest rate spreads have come down dramatically, down to the levels (and perhaps even below the levels) of 2007 and 2008.
Prem Watsa
There is a lot of debt in the system.
Prem Watsa
We have done very well by having equities. We took our hedge out in 2008, and we added a lot more common stock and made a lot of money. By 2010, we put the hedge back and added a lot of corporate bonds. We went into 2008 with 75-80 percent in government bonds and cash, so we were able to take advantage of muni bonds and distressed bonds and government bonds in 2008-2009. We are just doing the opposite now.
Prem Watsa
[In 2011] Interest rates have not been so low since the 1930s, and in spite of all of that, the economy is not particularly strong. You can’t take interest rates below zero, and there is not a lot of support for higher deficits.
Prem Watsa
We were buying AAA tranches at 40 cents on the dollar.
Prem Watsa
By buying at 40 cents on the dollar we should still be able to get our money back. That is what we like: downside protection.
Prem Watsa
[On AA tranches] We never bought them at 101 cents on the dollar… But at 40 cents on the dollar, we picked them up.
Prem Watsa
I met John Templeton when I was 28 years old. For the next 30 years I kept meeting him at least once a year. He was just a fantastic mentor to us at Fairfax and was a
shareholder of Fairfax.
Prem Watsa
You are lucky if you have a mentor like John Templeton. During our meeting, he would spend half the time on investments and half of the time on spiritual matters. Of course, he spent more than 50 percent of his time on spiritual matters after the age of about 65.
Prem Watsa
[On Sir John Templeton] He was such a wonderful man and, for all practical purposes, perhaps the greatest investor of all time. He had a long, long track record, compounded at about 15 percent for maybe 50 years or something like that.
Prem Watsa
[On Sir John Templeton] He would listen. He would say things like, ‘Prem, what do you think about this?’ And I would tell him, ‘Mr. Templeton, I really want to hear your views. I don’t have much to tell you.’ And he would say, ‘No, no, I am very
keen on hearing what you have to say and what you think of something.’
Prem Watsa
[John Templeton] He would always take the long term view. I mean, during the first Gulf War, he would say, ‘In 18 months, the markets will not even remember this.’
So he had the ability to look right through current events, through current problems, and look at the opportunity on the other side.
Prem Watsa
[In 2011] The popular view right now is inflation. But today, our concern is more with deflation because of the amount of debt in the system.
Prem Watsa
We have a decentralized corporate structure, and this unleashes talent.
Prem Watsa
You allow people to do things that they never thought they could do and you allow them to flourish, and it is amazing what happens. We have seen it time and time again in our structure.
Prem Watsa
You have to always fight bureaucracy.
Prem Watsa
At Fairfax, it is all about investing the float. We have two skills, and both of them are worldwide. One is property casualty insurance, not life. The other is investments.
Prem Watsa
We went into India in 2000 with the ICICI Bank as a partner, and today, we write
US$1 billion in premiums as the largest private insurance company in India. There are a few government-owned companies that are bigger, but we are the largest private company.
Prem Watsa
Most importantly, not a lot more than 1 percent of Indian homes are insured. The opportunity is unlimited in that country, and we expect to grow.
Prem Watsa
Life is so coincidental. I had the great privilege to be taught under John Watson who’s trained all sorts of people on value investing.
Prem Watsa
Ben Graham differentiated between investment and speculation.
Prem Watsa
Never forget you’re owning a piece of a business.
Prem Watsa
Sir John Templeton he explained it like this… We take 10 oil engineers and we ask them to design a refinery. And it’s not an exaggeration but if you take their average design you’ll get a good refinery. And if you did a bridge… or any human activity, if you took a consensus you’d get a good whatever you were designing. But in the investment business because it’s a discounting mechanism, if you take 10 oil analysts and you asked them to recommend their industry and if they’re all positive on oil, then it’s likely that if you buy oil stocks you’ll be very disappointed. Because their opinions are already in the stock market. One person changes his mind, and stock prices go down.
Prem Watsa
If you follow the crowd you will get the results of the crowd.
Prem Watsa
[On earnings increasing uninterrupted when above it’s long-term average.] Can this experience be repeated?
Prem Watsa
[On speculation] My experience is that it always that it does come down it’s only a question of time.
Prem Watsa
If you’re a value investor. You’re looking for a dollar for fifty cents.
Prem Watsa
You have to go against the crowd. You have to go away from where everyone is going.
Prem Watsa
Ben Graham gave us the investment philosophy of our company.
Prem Watsa
We go wherever the values are… it might be commercial real estate, it could be… In 2008 it was common stock, everything was down.
Prem Watsa
Over the long term the company has to build shareholder value…
Prem Watsa
[On being told to read ‘Security Analysis’ by Benjamin Graham by his first boss] I did read it and I never talked about ‘Efficient Markets’ again.
Prem Watsa
[On ‘Security Analysis’ by Benjamin Graham] For me there’s always a test that if someones read it and believes in it and likes it, then I think you’re a long way to being a value investor.
Prem Watsa
[Security Analysis by Benjamin Graham] I’ve read that book many times.
Prem Watsa
[On Benjamin Graham] The three important things that he talked about for me at least were 1) Whenever you’re buying stocks you’re buying a part of a business… 2) You’ve got the stock market as a partner… (Mr Market) and 3) Margin of Safety.
Prem Watsa
Whatever you do in your investments, look for a margin of safety.
Prem Watsa
The three most important words in the investing business – Margin of Safety.
Prem Watsa
The idea that the consensus is quite often wrong is what Benjamin Graham had addressed in 1934 and why his philosophy will last for a long, long time.
Prem Watsa
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