Tomahawk, WI 8/13/2013 (Basicsmedia) – It was hardly over a year ago that Prem Watsa elucidated about how and why Research in Motion, now renamed BlackBerry Ltd (NASDAQ:BBRY) was a runaway success, a well-grounded “buy” and a potential turnaround story, notwithstanding its evaporating market share. Since then, the company’s fortunes (if they can be called that) have only faced misfortunes.

But Prem Watsa is an old-stager at flipping the coin and making it land heads-up.  In the mid-2000’s, his investment chariot Fairfax Financial, which is also an insurance holding company, was sitting at the lower-end of the market bets. Its dynamic head waited in the wings and composedly watched the U.S mortgage industry crumble.

The strategy monarch

Between 2003 and 2006, even as rivals gormandized on the housing-fed bullish market, Watsa purchased credit-swap defaults, the company’s profits planed and its stock shed 50%. However, by 2007, the market had begun flagging and Fairfax started scoring investment gains and raked-in profits in 2007 and in 2008.

Post that, as the markets were still vertiginous and investors were nursing their wounds, Watsa began cramming cash back into equities and ushered in a muscle-packed 2009. Since the C$100-lows that it stood at in 2006, Fairfax’s shares have brimmed over 4 times and 28 years down the line, the stock has risen 100-fold.

A turnaround that did not happen

Over and over again, Watsa has been called Canada’s rendition of Warren Buffet and now when Blackberry is at a crossroads, Watsa dons an impenetrable cloak that exhorts it might just be too early in the day to assess his decision to acquire a leading 10% stake in BBRY. At the current juncture, under Watsa’s vigilance, Blackberry has not been able to do a volte face.

The time factor

Fairfax had marked-up its stake in BBRY from a little over 2% to a notch below 10% in January 2012. Since that time, the company’s share price has shed around 25%. Market watchers and analysts who know how Watsa moves; aver that he is a dyed-in-the-wool long term investor. From this perspective, he has held a major stake in BBRY for a fairly short time frame in comparison to his standard investment-span. This is exactly why it’s too early to put a score on his BBRY investment.

On Monday, Watsa stepped down from the BlackBerry board, citing the likelihood of a conflict of interest, since the company had said that amongst other options, it was contemplating going private.

Strategy time

Fairfax has a market capitalization of C$8.7B. Analysts have opined that this makes it almost impossible for Watsa to purchase Blackberry out-and-out. However, there are others who are positive that Watsa is working sub rosa on this front. At this point of time, the investment-world has their lenses trained on Prem Watsa.

When I pan his long-term track record, keep his investment acumen in view and consider the fact that Watsa has bid Adieu to the Blackberry board, I feel that the quintessential Watsa will send a high-wattage current into the market very soon.

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