Author Topic: 2018 shareholders letter  (Read 6107 times)

Spekulatius

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Re: 2018 shareholders letter
« Reply #30 on: March 14, 2019, 03:32:53 PM »

I am not concerned with the drop in holdco cash vs debt....they bought back more of their subs and they had a miserable year investing not unlike everyone else this time. I have argued and continue to argue their massive cash position and treasury position puts them in position to outperform the Markel’s of the world who got caught in quarter four of 2018. This has allowed them to fund AGT, Seaspan, Greek eurobank-real Estate merger funding if needed and to give Blackberry the courage to make a game changing acquisition and most importantly to me...to give Brian Bradstreet the ability to print cash (I like the corporate bond position and hope that he went bigger in quarter one...it is likely up 10 to 15%=$700m to $1b from dec 31). Fairfax and Prem’s gift are operating companies not stock picking. They are vultures....it has cost them lately but that’s how they built Fairfax. Bradstreet and the insurance companies give me enough confidence that they will create very solid operating earnings...the investing side needs to do very little to create big numbers from the 2018 low.

In quiet year this year...Fairfax should make $3b pretax.

MKL isn’t really cash constrainted, imo. Rather than adding bonds, how about reducing debt sndmoreferred. They pay about $350M in interest annually. I doubt adding some bonds at prevailing interest rates is effective vs just reducing interested rate expense ciampreferred or bond buybacks.
« Last Edit: March 17, 2019, 03:38:49 PM by Spekulatius »
To be a realist, one has to believe in miracles.


shalab

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Re: 2018 shareholders letter
« Reply #31 on: March 16, 2019, 01:52:46 PM »
1-2 Billion after-tax is difficult without gains from investments. (let alone 3B). I would take out income (net realized gain from investments) from equity/stock sales. Where will the money come from? It is one to dream big and another to make it happen.

Then you would have to assume that there won't be further dilution.

Overall, I don't see chances very bright to get 15% on equity on a continuous basis. It may happen one year because of gains in stocks or investment gains.

There are simpler and better opportunities out there.



I am not concerned with the drop in holdco cash vs debt....they bought back more of their subs and they had a miserable year investing not unlike everyone else this time. I have argued and continue to argue their massive cash position and treasury position puts them in position to outperform the Markelís of the world who got caught in quarter four of 2018. This has allowed them to fund AGT, Seaspan, Greek eurobank-real Estate merger funding if needed and to give Blackberry the courage to make a game changing acquisition and most importantly to me...to give Brian Bradstreet the ability to print cash (I like the corporate bond position and hope that he went bigger in quarter one...it is likely up 10 to 15%=$700m to $1b from dec 31). Fairfax and Premís gift are operating companies not stock picking. They are vultures....it has cost them lately but thatís how they built Fairfax. Bradstreet and the insurance companies give me enough confidence that they will create very solid operating earnings...the investing side needs to do very little to create big numbers from the 2018 low.

In quiet year this year...Fairfax should make $3b pretax.

Dazel

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Re: 2018 shareholders letter
« Reply #32 on: March 17, 2019, 08:42:20 PM »


I am okay with $3b pretax probably $1.3b first quarter...will go from there.
I donít agree with the crowd normally and have been wrong here before but not often...I am happy to be against the crowd.

Good luck to all!

Dazel

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Re: 2018 shareholders letter
« Reply #33 on: March 18, 2019, 06:26:28 AM »


I am aware it is a bold call and certainly would not bet the house on it...but Fairfax is coming from a very low level on Dec 31 2018...why not have 2019 be a big year for Fairfax...they are certainly due.