Ladies and gentlemen, this is the Business Brew.

I'm your host Bill Brewster for programming Update V2 V1 was a banger of a show got uploaded.

Then I realized had no sound.

So here goes attempt to bound to also be a banger.

Now for real, it's not going to be that much, but I wanted to communicate with you all because sometimes I'll be listening to my favorite podcast and then it'll just kind of go dark and I'll say, huh, I wonder what's going on on the other end of that.

So here's what's been going on on the other end of this mic.

I recorded a podcast with David Thomas, author of the Fairfax way.

It was a good conversation.

I went to edit it and the file was corrupted.

So that episode did not happen.

At least it wasn't released.

I do recommend the book if you are going through Christmas presents and you say to yourself, self, they did not get me what I wanted this year.

Check out the Fairfax Way, especially if you're interested in insurance.

I think that that book does a great job giving you the history of Fairfax.

But you know when I say it that way, it's not that exciting.

I think that the reading of the early years, buying insurance companies for what looks like cheap valuations, appreciating how much time and and money and work was required to then re vamp those insurance operations and get them to an acceptable operating level.

The I guess Andy Bernard, you know, comes into that organization changes it a lot.

The appreciating where Prem comes from, appreciating how the the tenure of the people that are there.

I mean, it's just it's a solid book and you know, it's it's funny.

I I was not even open to the idea of Fairfax and this is, you know, dumb, but whatever it is until Charlie Nashef came on the podcast and then I was listening to the podcast and I said to myself, boy, that's pretty dumb.

Some of the things that I have gotten hung up on.

On the other hand, you know, so the the deflation hedge was a real, real drag and and cannot be sort of waved away.

It did follow a short on, you know, the GFC and housing.

So one can understand how they wanted to make another macro bet.

I would argue that it was structured wrong.

I think they would agree.

So, you know, it, it helped contextualize a little bit more of the history of the business.

And you know, I don't know, stock stocks ripping while they're acquiring companies and putting up combined ratios above 100 and then stock drifts down.

Now, you know, now it's it's sort of rebounded to at least in line with some peers below a lot.

But like Markell and it are roughly the same.

So common, common history with Markell.

So just a lot of stuff there.

Anyway, I wish that the episode had worked.

I'm going to try to do something similar, but different.

I don't know what the right way to go about.

What's the what do I want to say the right way to go about helping David Thomas promote his book?

Because I think it's a boat book that's worth promoting.

And I think if people are interested in business history, it's a read that they would enjoy.

So that's what went on.

Then we had Christmas.

So the pencils down for the most part until January.

I'm going to start getting some interviews on the books here shortly.

Hope you all had a wonderful Christmas with your family.

Had a solid one with mine.

The kids are happy.

I got a Gnu Enu which is basically a canoe with a tiller motor and I got it for a dollar and I got it 18 months ago and I sent it off to get fixed.

And it turns out that when you have a GNU and somebody has a real boat fixing operation, you go to the back of the line.

And I also didn't really care about getting the boat back, because I've always heard the best two days in a boater's life, or the day he gets a boat and the day he gives one away.

So I haven't been a real eager to dip my toe into that water.

But a Christmas miracle occurred, the thing came back, and I'll be damned if I haven't enjoyed dropping it in the water.

And driving around with a little 15 horsepower tiller motor, I feel like a kid.

And as long as I don't kill myself, that'll be great.

So I, I believe Progressive has a bid right now on the insurance.

So they may get a, a little bump, a $40 a year bump in the insurance revenue.

So build that into your models folks.

Anyway, what else?

Oh, the basic capital episode has really, I've thought about it a lot.

I, I think that there were some things said about Jack Bogle that I was not able to verify.

I don't know if they're true.

They may be true.

I can't verify them.

I the big question I have is, is the product legit?

And where I'm coming from here is a 30 year mortgage on a house.

I fundamentally do not think is the most productive use of debt for most people to build wealth.

So the idea of trying to get long term non callable debt to buy productive assets is something that intrigues me very much.

How it happens, why there's a spread between the individual and the portfolio of companies that they're lending to.

Those questions I still have many questions about.

My understanding thus far is that the the individual is in an LLC with basic capital and the individual is 20% in the LLC basic capital is 80% of the LLC and then I think that their equity, basic capitals equity is structured as a preferred equity.

So I gather that when you have 100% capitalization that maybe that reduces, I mean, I, I understand that that should reduce your borrowing costs.

I have some questions as to whether or not that makes sense when you're collateral is a pool of loans that traded a higher spread.

I, I just don't fully, I still don't fully understand why that financing spread exists.

Seems to me that a individual is a riskier bet than a private or a private credit company.

Unless the private credit company is really risky.

I don't know.

Again, maybe I don't get it.

I don't see how a pool of individuals is any less risk than a pool of private credit.

So I I got to figure that out.

I'll probably do a follow up episode, but I, I, that episode is very interesting to me.

So if you have any thoughts, let me know.

Also, if you have guest recommendations, I must say this, this may really, really come back to haunt me, but feel free to write at Bill at the business brew and I would like to interview interesting people.

And I mean, you, you basically know at this point, if you've been listening to me long enough, what, what interests me and what might interest you.

So Bill, at the business, brew.com and outside of that, have yourself a great New Year's, be safe out there and we will communicate soon.

The show will start rolling again here in 2026.