Renowned value investor and CEO of Fairfax Financial (
is seeing substantial loss from his investment in
) so far. But he was buying more as recently as three months ago.
This is the holding history of Fairfax with Research-In-Motion.
started to buy Research-In-Motion in the third quarter of 2010.
He bought about 2 million shares when the stock was trading in
the $50s. He then added to his position as the stock price
collapsed to the $40s then $30s and $20s in 2011. The last time
he bought was January of 2012. He doubled down on his position
and bought another 14 million shares. We estimate that his cost
per share is around $30. He owns 26.8 million shares as of
January 2012, which is about 5% of the shares outstanding. At the
current price of around $12 a share,
has had more than $400 million of paper loss with his position in
apparently has full confidence in Research-In-Motion. He himself
joined the board. Averaging down is a method that Prem Watsa has
used over and over in the past to buy companies he likes at lower
prices. He shared this in his latest annual shareholder letter.
His latest success: his experience with International Coal (
), which he discussed here. He started buying the stock at $4.58
a share in 2006. He bought 21 million shares at the cost of about
$4.5 a share. The stock then dropped all the way to $1.2 a share,
and he bought another 24 million shares at about $2.5 a share.
Eventually the stock price recovered and he started selling at
$7.26 a share - he sold most of his shares at $14.6 a share.
The key to averaging down is to have confidence in the company.
Prem Watsa certainly displayed great confidence in the recovery
of Research-In-Motion. If you have the confidence, too, you can
now buy Research-In-Motion at much lower prices than Prem Watsa
To understand more about how Prem Watsa invests, and his current
view, please read GuruFocus Interview with Fairfax CEO Prem
Watsa.About GuruFocus: GuruFocus.com tracks the stocks picks and
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