Author Topic: Fairfax 2018  (Read 105381 times)

petec

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Re: Fairfax 2018
« Reply #50 on: January 14, 2018, 12:25:40 AM »
I was surprised (and encouraged) by Prem's comments after the election.  It sounded like and I think most would agree, that FFH was ready to play offense.  I don't know the exact numbers but it seems like FFH have added almost NO significant equity long positions to their portfolio's.  Portfolio is still mostly cash well over a year later.  What gives?  Valuation?

Basically yes. Prem was actually very clear that "offense" didn't mean they were suddenly bullish on the market. It just meant they were cutting their losses on the hedges and would wait in cash for great opportunities.

They have done quite a bit since, but more in the pref/warrant+convertible portfolio rather than equities.


Dazel

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Re: Fairfax 2018
« Reply #51 on: January 14, 2018, 04:30:29 PM »

Petec I disagree.

Prem said

I am bullish on global markets and growth especially in India and developing markets because the U.S growth is going to pick up and animal spirits will return.

-They made the biggest acquisition by far in their history completed in July..taking the investment portfolio to $40b

-They sold the majority of their long term bonds and said interest rates will rise...in other words we will wait to buy bonds

-They started Fairfax Africa

-they added to Fairfax India raised debt and bought more investments

They added another $250m in Greece

-had record investment returns for 2017 from two big sales

-started an Insurance company on their own in India

-invested about another billion in convertible preferred shares

They have been very busy they just are not buying U.S common stocks at 20x earnings....but have shown bullish moves on global growth which they have been right about so far.

To me again the bullishness has kept them away from the bond market which will move the needle more than anything else when they re enter....when others head for the exit....thatís not far away. The 43% of the portfolio in cash will be headed for bonds at the right price.


dutchman

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Re: Fairfax 2018
« Reply #52 on: January 14, 2018, 05:02:52 PM »
Near-term earnings will be well below the companyís long run earnings power, for sure.  I think this plays out over 5+ years though.  Good one for the patient, but who's patient? :)

Dazel

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Re: Fairfax 2018
« Reply #53 on: January 14, 2018, 05:40:25 PM »


I once again disagree. Dutchman.

Can you tell me how Markel got to a $1000 a share? What investment genius decisions did they make? They have very good insurance operations and a decent investment return on the investment portfolio.

New Fairfax is an operating company that do not need spectacular macro calls... they do not need a lot to go right to perform well. Will they have a great investment in the next 5 years that will standout and pop the shares probably...5% return and underwriting  profits will take pretax earnings to around $3b. Thatís this year...not the next 5.

The math works.

shalab

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Re: Fairfax 2018
« Reply #54 on: January 14, 2018, 06:00:11 PM »
FRFHF still has CPI derivatives on which it is losing money. Furthermore, FRFHF is a family business in the mould of Indian business houses. If you look at Tata, the family has owned it since 1800's. SD has done some good analysis on how these are setup so the next generation will benefit.



I once again disagree. Dutchman.

Can you tell me how Markel got to a $1000 a share? What investment genius decisions did they make? They have very good insurance operations and a decent investment return on the investment portfolio.

New Fairfax is an operating company that do not need spectacular macro calls... they do not need a lot to go right to perform well. Will they have a great investment in the next 5 years that will standout and pop the shares probably...5% return and underwriting  profits will take pretax earnings to around $3b. Thatís this year...not the next 5.

The math works.

Dazel

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Re: Fairfax 2018
« Reply #55 on: January 14, 2018, 06:40:42 PM »


Shaleb,

Tell the board what the mark to market value of the he CPI derivatives are carried in the book value is please and how much possible downside there is to a value of zero please.


Dazel

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Re: Fairfax 2018
« Reply #56 on: January 14, 2018, 06:54:25 PM »

Page 14 of the third quarter report Shalab.
The hit has been taken as for that Tata family? Really?
« Last Edit: January 14, 2018, 07:09:09 PM by Dazel »

Dazel

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Re: Fairfax 2018
« Reply #57 on: January 14, 2018, 07:02:19 PM »


Waiting Shalab letís us know what that downside is on the CPI derivatives and please explain your bizarre Tata reference.

dutchman

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Re: Fairfax 2018
« Reply #58 on: January 14, 2018, 07:10:25 PM »
i think he's saying it deserves a big discount because it will be handed over to watsa's son who may not be the best steward?

thanks for your posts Dazel, I'm learning a lot.
« Last Edit: January 14, 2018, 07:22:25 PM by dutchman »

shalab

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Re: Fairfax 2018
« Reply #59 on: January 14, 2018, 07:39:10 PM »
In Indian business houses, control is passed from one generation to the next - shareholder is a lower priority - that is all.

CPI derivatives - let us see how things look like in Q4.

I still own some FRFHF but the number is significantly lower than it was a few years back. It has been a good decision. I haven't bought back yet.

i think he's saying it deserves a big discount because it will be handed over to watsa's son who may not be the best steward?

thanks for your posts Dazel, I'm learning a lot.