FAIRFAX FINANCIAL HOLDINGS $377.50 - Toronto symbol FFH

FAIRFAX FINANCIAL HOLDINGS $377.50 (Toronto symbol FFH: TSINetwork Rating: Average) (416-367-2612; www.fairfax.ca; Shares outstanding: 19.9 million; Market cap: $8.1 billion; Dividend yield: 2.7%) has increased its stake in Research in Motion, symbol RIM on Toronto. The company now owns 9.9% of RIM, up from 5.12%. RIM is a recommendation of our Successful Investor newsletter.

Fairfax is now RIM’s largest shareholder. The company’s chairman and founder, Prem Watsa, is also on RIM’s board of directors.

Fairfax’s large interest gives Watsa more sway over RIM. He now feels that RIM shares are at or near bottom. But either way, he says he’s taking a three- to five-year time horizon on getting a significant return on his investment.

Meanwhile, RIM’s recent weak results prompted it to cut 5,000 jobs, or about 30% of its workforce, and simplify its product lines. RIM’s balance sheet remains strong: it has no debt and holds cash and investments of $2.2 billion U.S., or $4.29 U.S. a share.

Fairfax Financial is still a hold.

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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