FAIRFAX FINANCIAL HOLDINGS $417.01 -Toronto symbol FFH

FAIRFAX FINANCIAL HOLDINGS $417.01 (Toronto symbol FFH: TSINetwork Rating: Average) (416-367-2612; www.fairfax.ca; Shares outstanding: 19.9 million; Market cap: $8.3 billion; Dividend yield: 2.4%) now owns 5.12% of Research in Motion, symbol RIM on Toronto. RIM is a recommendation of our Successful Investor newsletter.

RIM has appointed Thorsten Heins as its new chief executive officer and a director of the company. Previously, he was RIM’s chief operating officer. The company’s founders and former co-CEOs, Jim Balsillie and Mike Lazaridis, will remain directors.

As well, the company has appointed Prem Watsa as a director. Mr. Watsa is the chairman and founder of Fairfax Financial Holdings.

Mr. Watsa should help RIM attract more accomplished, high-profile directors. To top it off, Mr. Watsa has a reputation as a canny investor. His investment draws attention to RIM’s value. We think this will increase the value of Fairfax’s stake in the company.

Fairfax Financial is now a buy.

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Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

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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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