Author Topic: 2017 Annual Letter  (Read 33173 times)

obtuse_investor

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Re: 2017 Annual Letter
« Reply #90 on: December 24, 2018, 09:51:36 AM »
Same situation here. I have been owning FFH for years. At this time (timestamp: S&P ~20% drawdown) I am not adding to FFH because relatively speaking, higher quality assets like BRK (and even MKL) are a better buy.

I just hope HWC is busy these days, carefully buying high quality assets.
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor


Spekulatius

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Re: 2017 Annual Letter
« Reply #91 on: December 24, 2018, 12:39:07 PM »
Same situation here. I have been owning FFH for years. At this time (timestamp: S&P ~20% drawdown) I am not adding to FFH because relatively speaking, higher quality assets like BRK (and even MKL) are a better buy.

I just hope HWC is busy these days, carefully buying high quality assets.

I haven’t added either, in fact I sold a few shares when there was a spike to $480 a few weeks ago. My concern is that HWC busy buying low quality assets. there are some dislocations in the credit markets, that they pot. could take advantage of, or perhaps just buy back their own preferreds (if that is possible).
« Last Edit: January 05, 2019, 11:33:50 AM by Spekulatius »
To be a realist, one has to believe in miracles.

shalab

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Re: 2017 Annual Letter
« Reply #92 on: December 25, 2018, 06:14:59 PM »
I too have cleared my FRFHF in favor of Berkshire. Berkshire is a high quality business which will find ways to deploy its tens of billions of dollars in money making ventures. Furthermore with the addition of buy backs, I can easily see Berkshire returning 10-15% per year in the next decade.

FRFHF has a huge exposure to BB which is cratering. It also has a portfolio of low quality businesses.

The attractive thing about FRFHF is exposure to India - which is a high growth market. GDP is expected to grow from 2.6 trillion to 5 trillion in the next decade. One simply has to open a brokerage account in India and buy Thomas Cook which is FRFHF's India arm. There is no need to own FRFHF. In addition, there are other investment vehicles available in India other than FRFHF.

Same situation here. I have been owning FFH for years. At this time (timestamp: S&P ~20% drawdown) I am not adding to FFH because relatively speaking, higher quality assets like BRK (and even MKL) are a better buy.

I just hope HWC is busy these days, carefully buying high quality assets.

I havenít added either, in fact I sold a few shares when there was a spike to $480 a few weeks ago. My concern is that HWC busy buying low quality assets. there are some dislocations in the credit markets, that they pot. could take advantage of, or perhaps just buy back their own preferreds (if they is possible).
« Last Edit: December 25, 2018, 09:13:49 PM by shalab »

chrispy

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Re: 2017 Annual Letter
« Reply #93 on: December 25, 2018, 06:22:04 PM »
Shalab, Fairfax India Holdings would check the boxes to what you are describing, right?

shalab

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Re: 2017 Annual Letter
« Reply #94 on: December 25, 2018, 09:15:13 PM »
Yes, Fairfax India will also work but I don't like their fee structure. One can do better by opening a brokerage account in India - it is a bit of a hassle but well worth the trouble IMO. My belief is that India will do a lot better than China in the next decade.

Shalab, Fairfax India Holdings would check the boxes to what you are describing, right?

ERICOPOLY

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Re: 2017 Annual Letter
« Reply #95 on: January 04, 2019, 08:27:06 AM »
Some of these holdings are attractively priced now... if they don't repurchase them, what will I be led to believe?


This is written in the 2017 letter:

While we realized $1.0 billion on the sale of these long term common stock holdings, these compound growth
machines resulted in us leaving $1.4 billion on the table. A costly mistake we will try not to repeat!


Dazel

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Re: 2017 Annual Letter
« Reply #96 on: January 04, 2019, 09:04:10 AM »


Yep I see it too....
I donít see any company more equipped to kill it on this mini crash....full of cash and short term bonds.

ourkid8

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Re: 2017 Annual Letter
« Reply #97 on: January 04, 2019, 09:16:33 AM »
I really do not see FFH deploying much of their cash as I have highlighted previously, their focus is buying back their Subs and using FCF to buyback stock.

Yep I see it too....
I donít see any company more equipped to kill it on this mini crash....full of cash and short term bonds.

StubbleJumper

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Re: 2017 Annual Letter
« Reply #98 on: January 04, 2019, 09:51:43 AM »
I really do not see FFH deploying much of their cash as I have highlighted previously, their focus is buying back their Subs and using FCF to buyback stock.

Yep I see it too....
I donít see any company more equipped to kill it on this mini crash....full of cash and short term bonds.


The deploying of cash would really simply amount to shifting insurance reserves from short-term treasuries into something else, possibly longer term fixed income or equities.  I have my doubts that a ~20% drop in the broad market would suddenly make FFH jump all over equities.  After all, it wasn't so long ago that they had their entire equity portfolio hedged, which would lead me to believe that they were worried about it being perhaps 50%+ over-valued and seriously at risk of a 1-in-50 or 1-in-100 year equity event.  Maybe they nibble around the edges and buy a few select equities.

Turning to capital management, I would agree that we should expect them to deploy more capital to buying the minority positions.  I am a bit skeptical about FFH's dedication to buybacks, but time will tell.  They've certainly already bought back more than I expected they would.


SJ

petec

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Re: 2017 Annual Letter
« Reply #99 on: January 04, 2019, 06:06:12 PM »
Some of these holdings are attractively priced now... if they don't repurchase them, what will I be led to believe?

Do you think they have a lot of capacity to add equity exposure? I fear theyíre close to their practical limit. The selloff they need is in corporate and long dated bonds.