Watsa is a long-term conservative investor who makes investments based on value relative to price. His record so far has been outstanding and it is not unreasonable to think he can at least produce returns in excess of the risk free rate. This cause for optimism can be summed up by Watsa himself, who said in his 2009 Letter to Shareholders, “For the first time in more than a decade, we are very excited about the long term prospects of our common stock investments and believe that these investments have been purchased at prices well below their intrinsic values. This, of course, does not mean stock prices cannot go lower! Mark-to-market gains or losses on these investments will make our book value more volatile, but in the next five years, these investments should be a major reason for our success”.
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