Author Topic: Fairfax 2018  (Read 31428 times)

gary17

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Re: Fairfax 2018
« Reply #10 on: January 10, 2018, 07:49:08 AM »
I've got a rough adjusted book value at $448.5, which includes the $33 BVPS bump on the sale.  Is there more to adjust by?

I assume this is USD , not CAD !

thanks:)


racemize

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Re: Fairfax 2018
« Reply #11 on: January 10, 2018, 08:31:40 AM »
As discussed in another thread, the major stock holdings are doing well.  I quickly put this together but need to head off to work.  Only need the share count:

Ticker          Shares   11/2/2017   1/10/2018   % increase   Increase in BV
BB             96,700,000   $10.78   $14.40             33.58%   $350,054,000.00
RFP                   TBD          $5.85   $11.10             89.74%   
EGFEY               TBD           $0.44   $0.52             18.88%   
KW                   TBD           $19.55   $17.75             -9.21%   
IPI                   TBD           $3.91   $4.22             7.93%   
USG                  TBD           $34.45   $39.90             15.82%

From the Q3 report there are 27,940,806 - 166,300 = 27,774,506 effective outstanding.  That adds $12.6 to BVPS.

Dazel

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Re: Fairfax 2018
« Reply #12 on: January 10, 2018, 08:40:06 AM »

Gary yes it is.

I thought people were averaging down in bitcoin not paying attention...
Disclosure:I have bought fairly large everyday this week.

Dazel

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Re: Fairfax 2018
« Reply #13 on: January 10, 2018, 09:55:26 AM »

I am going to share Bradstreetís secret strategy that makes him maybe the best bond guy maybe ever.

Wait for it....patience....and he has math on his side he misses the bond losses and buys higher rates... I have seen him do this 4 or 5 times...albeit with smaller sums of money...but he has made billions doing it. You note he sold saving billions in cap losses in 2016 a week or two before yields spiked....

For the financial industry everyone cheers higher rates but they donít realize is tHat the immediate effect of higher rates are very large bond losses. The interest rate effect takes time as short maturities
Need to run off and they purchase longer dated higher yield bonds as they do.

Bradstreet when he feels he is right sells bonds usually at a profit and goes to cash and short term maturities (where we r now) so when rates spike higher Fairfax experiences small to 0 losses and he reallocates to longer dates high interest bonds. His market timing in this regard is unmatched...he ran into temporary trouble in late 1999...2000 with unrealized losses...these turned into massive gains that likely saved Fairfax from the shorts in 2003. And made me a small fortune(thank you Brad!).

He did it again in2008 selling treasuries at the top Andy buying 7% Berkshire guaranteed tax free Muniís...crazy good.

Now with almost $40b I get gitty thinking about what he can do in a rising rate environment. It is not just the cash flow....he has taken shorter term big profits on treasury moves...many times. He is the key to Fairfax $1000.



Viking

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Re: Fairfax 2018
« Reply #14 on: January 10, 2018, 09:57:26 AM »
One of the questions to Gundlach yesterday in his call was ďwhat bond would you buy todayĒ and his answer was the 2 year treasury.

He said if the US 10 year yield moves north of 2.63% then yields likely will keep going to 3% this year. We are at 2.58% today so getting close. He thinks the 3% level is the one to watch on the US 30 year; if yields move higher he said you can call the end of the 35 year bull market in bonds.

If is time to review what FFH is doing with their bond portfolio. Their positioning there may be setting them up for the next big investment gain. Everyone is looking at FFH and looking for gains in stocks as the next big catalyst in the share price; perhaps we are looking at the wrong asset class.

Viking

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Re: Fairfax 2018
« Reply #15 on: January 10, 2018, 10:08:47 AM »
I've got a rough adjusted book value at $448.5, which includes the $33 BVPS bump on the sale.  Is there more to adjust by?

I assume this is USD , not CAD !

thanks:)

How do people think about goodwill when calculating book value?

Dazel

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Re: Fairfax 2018
« Reply #16 on: January 10, 2018, 10:14:22 AM »
Viking You are.
Itís math....size matters....Bradstreet will be in charge of the bulk of the $40b....he called a Treasury top in 2016...he was right. No offence to Mr.Gundlach (I like him) and he manages more money than Bradstreet but his record is NOT even close to Brads. Check the numbers they will blow you away and that has Bradstreet holding cash for sometimes for long periods of time.

Prem and his team will do well but they will not be allocating the amount of capital Bradstreet has and will. This is what Longleaf refers to with Fairfax earnings power being under appreciated because of their large cash reserves. While most refer to Prem as he is the captain of the Fairfax ship...Bradstreet is the key to moving the portfolio needle.

Dazel

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Re: Fairfax 2018
« Reply #17 on: January 10, 2018, 10:18:34 AM »
You can forget book value for Fairfax right now it underappreciates their insurance operations....and the power of the$40b portfolio (that is 43% cash). First Capital was an example of this....was sold for 3xbook....without the benefit of the investments.

Dazel

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Re: Fairfax 2018
« Reply #18 on: January 10, 2018, 10:26:46 AM »


This is what Prem is taking about by the company being as cheap as it has ever been looking at intrinsic value. We will do best if Fairfax stays or falls from here and we get to purchase-shares  until Fairfax becomes fully invested. When that happens the market will realize what is there...they have been swimming with one arm for awhile.

buylowersellhigh

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Re: Fairfax 2018
« Reply #19 on: January 10, 2018, 10:29:38 AM »
Is there a gathering of CoBF members before the Fairfax Annual Meeting?  Usually I see a message posted.  Or too early?

TIA,
BLSH