Rare Prem Watsa Interview: "We Talk If We Have Anything to Say"

Diane Francis of the Financial Post in Canada conducts a rare interview with Prem Watsa, Chairman of Fairfax Financial Holdings (FFH/NYSE). As you doubtlessly know if you read this blog, Watsa keeps a very low profile nearly all of the time. So any time he agrees to field a few questions is a treat for those of us looking for wisdom from a truly successful investor.

In fact, she asked Watsa why he was talking now:

“We put our heads down and worked hard and have gotten results. Once in a while we will talk if we have anything to say.”

Watsa says he started worrying about the credit markets back in 2003, and the impact for housing, auto loans credit cards. If that rings a bell, it should. Among the John Templeton articles I've linked to since his recent death was one in which he was visited in 2003 -- and Templeton was concerned about the housing market.

That those two great minds were thinking alike isn't too surprising, since Templeton has been a big influence on Watsa:

“I met with him, beginning in 1978, every year and would go down to see him in his Lyford Cay home in the Bahamas. He was a long term investor and was very prescient about markets. Like him, I take the long term view, buy the best and short the worst.”

The biggest thing making me nervous for holding stocks the next few years is when I read Watsa say this:

“You have to be worried a few years ahead of time, then take long term views and positions. History shows that there are 100-year storms and 50-year ones. In 1929, a 100-year storm, only 10% survived the market crash and it was only those who were negative in 1925 and did something about it. Back in 2003, there were signs this would happen.”

Followed by this:

“The 100-year is a Depression. The 50-year is what happened to Japan in 1989 to 2003. We don’t know yet.”

Meaning he doesn't know what this is we're in with regards to the markets. The linked article is worth printing out and reading in its entirety. And then re-reading.