see on page 13 of our quarterly report, that’s page 13 of our quarterly report, the fair values of our investment in associates is $1.752 billion.

Versus a carrying value of $1.409 billion.

And unrealized gain of $343 million not on our balance sheet.

Also, we own 75% of Thomas Cook, 74% of ridly, which are consolidated in our statements, unrealized gains on market values a as of October 29, 2013 on both these positions is approximately $146 million.

That’s total unrealized gains, not reflected on our balance sheet is $490 million.

Finally Europe properties and investment.

With outstanding management where we have increased our investment through their rights issue has another unrealized depreciation of $141 million as of October 29th, 2013. And that also is not included in our balance sheet.

So when you add all of that, we have a total of $631 million of unrealized gains that are not on our balance sheet.

Of course, all of this works out in the long term, so take these mark-to-market fluctuations as just that, fluctuation that’s will have no impact in the long term.

The worst mark-to-market loss we’ve had was in the fourth quarter of 2011 of $915 million.

Again, when the Russell 2000 significantly outperformed the S&P 500 (INDEXSP:.INX). As I’ve said before, the Company held in excess of $1.1 billion of cash, short-term investments and marketable securities at the holding Company level at September 30, 2013. We continue to be approximately 100% hedged in relationship to our equity and equity related securities, which include convertible bonds and convertible preferred stock.

We continue to be very concerned about the prospects for the financial markets and the economies of North America and Western Europe, accentuated as we have said before by potential weakness in China.

As we have said now for some time, we believe there continues to be a big disconnect between the financial markets and the underlying economic fundamentals.

As of September 30th, 2013, we have over 30% or $7.2 billion in cash and short-term investments in our portfolio to take advantage of opportunities that come our way.

As a result, in the short term our investment income will be reduced.

Unknown Speaker

Just wanted to find out in regards to the BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) offer, wanted to see if there was any update, I believe the deadline’s coming up on Monday, so just wanted to see where things stood, if there was a chance for a possible extension or just wanted to get a little of understanding on that situation.

Thank you.

Prem Watsa

thank you for your question.

As you know, we cannot make any comments on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) as we have a bid for the Company.

So we really can’t make any more comments on it until, as you say, November the fourth.

So thank you for your question.

Next question, please.


Thank you.

(Operator Instructions).

There’s a question from Paul Holden with CIBC.

Your line is open.

Unknown Speaker*

Thank you.

Good morning.

Unknown Speaker*

Wanted to ask you about Northbridge.

So if you look at the accident year combined ratio for Northbridge, I mean, 2013 has been another tough year, granted some of that has been related to cats, but I think even if you factor that in it’s still not a great year relative to your other underwriting businesses.

You mentioned that competitive conditions remain challenging so that’s probably fair. So sort of a three-part question for you on Northbridge.

A, do you see any early signs that competitive conditions in Canadian P&C are easing, i.e.
are rates starting to firm following 2013 cat events?

B, are there Company-specific actions that you’re taking that could lead to an improved accidents year combined ratio in 2014?

And C, would you ever consider trading this asset for a higher margin business in a different market?

Prem Watsa

Thank you, Paul.

First of all, yeah, the accident year combined ratios are high, I think ran at 115%, but you’ll notice there was — we have very significant reserve redundancies.

So our reserve accident year combined ratios are high but on the other side, our redundancies are also high and so we’re very careful in our reserving and over time that accident year combined ratio will reflect the underlying conditions.

But we’re very, very careful in terms of reserving.

We want to be sure that the reserves are appropriate.

In terms of your first question, in terms of the industry changing, Canada’s always lagged the United States.

The US first moves up and then Canada follows.

We have had the catastrophes, Calgary floods, the Toronto storms. Rates are not going down.

They’re going up some.

And we think it will improve over time.

And this applies to the United States too.

Of course in some areas like I was talking about Zenith, workers’ compensation, many, many companies in the United States have taken reserve increases, big reserve charges have been pretty well in the course of being put into runoff and so the price increase that Zenith enjoys is in the 15% area.

You have to have not written a lot of business during the soft markets to be able to take advantage, like Zenith is doing today. So we think that will follow in Canada too.

In Canada, we have our Northbridge segmenting the markets and being more focused on certain target markets and so we think over time our combined ratios will be well below 100% under Sylvia Wright’s leadership.

Northbridge, Fairfax, Asia, Odyssey, any of them, Brazil.

Annual report, none of our companies are for sale.

Any of our subsidiaries, insurance subsidiaries are not for sale, going to hold them forever.

Secondly, Fairfax itself is not for sale.

I said it very clearly to companies.

I have in my voting interest, I consider it to be a controlling interest and I said to our shareholders that if someone comes in with a price twice today’s price, I wouldn’t sell.

This is our 28th year.

I’ve said that four or five times over that time period.

Noun None of our companies is for sale.

Because of that, we enjoy a huge amount of loyalty from our people.

I said this also before.

The Presidents of our companies who have run our subsidiaries, we’ve never lost one President, never lost one President who has been successful in our operation.

We’ve had retirement early on in our 28 years.

We’ve had for.

We’ve had people that would leave us but people who have been successful have been with us for a long time.

Andy Bernard the better part of 20 years, Brian Young, the better part of 20 years, on and on and on. Sylvia Wright’s been with us the better part of 20. It’s a competitive advantage we think to have our subsidiaries owned forever,

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