Author Topic: FFH BuyBacks  (Read 12324 times)

Smazz

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Re: FFH BuyBacks
« Reply #40 on: March 05, 2009, 09:49:04 AM »
lets not forget - as long as we are not buying (soon to be)insolvent securities and we are doing most of our buying now (and not 8 - 12 months ago like most happy feet) the downside is limited at this point and the upside could be explosive.

If youve owned the likes of FFH for some time you will have practice in patience.
Once again, it will be a matter of when not if.


Viking

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Re: FFH BuyBacks
« Reply #41 on: March 05, 2009, 10:00:51 AM »
I think it is also important to remember that volatility is the friend of FFH. They are active managers and have demonstrated they understand the current environment very well. It will be interesting to read the Annual Report this weekend to better understand the protection they have built it.

Also remember their competitors are also in the very same environment. As investment portfolios continue to get trashed and capital is reduced at some point the hard market has to arrive.

Last year I tried a strategy of piggy backing on the well publicized purchases made by FFH and Buffet. I did OK (roughly broke even). What I learned is their individual purchases were made with the total portfolio in mind and with hedges in place. This year, I am more than happy to be able to going back to buying FFH (and now BRK) directly and let Prem and Warren manage a large chunk of my money for me.

Partner24

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Re: FFH BuyBacks
« Reply #42 on: March 05, 2009, 11:29:09 AM »
We live in crazy times. Really crazy. Unless something very significant happen again (weapons of mass destruction attack or something very damaging like that), I would be surprised to see a crazy market like that again in my life. I'm quite happy to have red about Benjamin Graham, Warren Buffett and the likes. Otherwise, I'm not sure I would behave like I do now.

I'm looking forward with a lot of interest to read our FFH CEO's letter to shareholders. In times like these, it's good to read him.

Cheers!

ericopoly

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Re: FFH BuyBacks
« Reply #43 on: March 05, 2009, 03:49:50 PM »

The big source of confusion to me is how the other half of that bond portfolio is holding up.  If only 4b is in muni bonds, I assume the other 4b is in corporates.  I know corporates are getting hurt pretty bad, but they have 8b or 9b worth of CDS left to hedge those bonds.  Given that the muni side is pulling more than it's own weight with some gains, if the CDS does it's job we might have a net gain from the CDS hedges after factoring in the losses on the corporate bonds.  At this point, the size of the CDS notional coverage nearly mirrors their $8b bond portfolio -- finally it is truly a hedge.

I was surprised nobody asked them at all about the corporate bonds on the conference call.  They asked about the muni bonds, but not a peep as to whether the remainder ($8b) of the bond portfolio is in corporates.

Zorrofan

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Re: FFH BuyBacks
« Reply #44 on: March 05, 2009, 04:17:11 PM »
Not to blow my own horn (okay, maybe a little) I said that I thoguht Prem was too early in getting rid of the hedges. Hopefully the CDS will help offset some of the losses in equities. I also hope FFH is buying back stock right now. There are many bargins out there, but Prem might have heard of this little insurance company up in Canada that I think is a steal at this price.....

cheers
Zorro