Fairfax strikes $4.7-billion deal to buy BlackBerry
Fairfax Financial is run by Prem Watsa, a cautious, methodical, "value" investor who has compounded Fairfax's book value by nearly 23%/year over the past <i>27 years</i>.[1]  (Fairfax's stock price has gained 19%/year over the same three-decade period.) His approach and track record are similar to those of Warren Buffett earlier in his career -- i.e., not someone one should normally bet against.<p>If Fairfax is offering to pay $4.7 billion to acquire RIM, Mr. Watsa somehow must have convinced himself that the value of RIM's business exceeds $4.7 billion by a large margin.<p>However, to me Blackberry looks like a dying platform suffering from <i>anti-network effects</i> (that is, fewer and fewer people use it, so fewer and fewer people want or need to use it). I don't understand how he gets comfortable with that number.<p>--<p>[1] See page 8 of Fairfax's last annual letter to shareholders: <a href="http://www.fairfax.ca/files/Letter%20to%20Shareholders%20from%20Annual%20Report%202012%20FINAL_v001_o7033s.pdf" rel="nofollow">http://www.fairfax.ca/files/Letter%20to%20Shareholders%20fro...</a>