Author Topic: Time to buy Fairfax again?  (Read 88407 times)

racemize

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Re: Time to buy Fairfax again?
« Reply #270 on: May 14, 2015, 12:25:17 PM »
Ha, that's what I get for thinking the post before last was still current.  I'll see myself out.


cwericb

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Re: Time to buy Fairfax again?
« Reply #271 on: May 14, 2015, 05:32:13 PM »
Article in Seeking Alpha today:
Fairfax Financial: Intrinsic Value Exceeds Market Price
http://seekingalpha.com/article/3184136-fairfax-financial-intrinsic-value-exceeds-market-price
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undervalued

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Re: Time to buy Fairfax again?
« Reply #272 on: May 14, 2015, 10:14:16 PM »
Which shares do you guys own? FFH.TO or FRFHF? It looks like InteractiveBroker only offers FFH.TO? The price is higher for FFH.TO. Is this because it's in CAD instead of USD?
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

giofranchi

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Re: Time to buy Fairfax again?
« Reply #273 on: May 15, 2015, 12:52:15 AM »
All you Fairfax bulls please help!

Aberhound,
Watsa has prepared Fairfax to thrive in an environment with the following characteristics:
1)   Stocks go down and stay down for a long time (with equity hedges that appreciate more than the decline in their portfolio of equities),
2)   Treasury yields keep going down (with the 10yr bond yield approaching 1%),
3)   And deflation setting in.
If this environment never materializes, Fairfax will make some money imo, but not much.
Therefore, it is simple enough: do you think 1) + 2) + 3) might ever come to pass? Or do you think there is no risk at all?
If the answer is: no risk at all, then stay away from Fairfax right now.

Cheers,

Gio
« Last Edit: May 15, 2015, 01:07:57 AM by giofranchi »
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racemize

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Re: Time to buy Fairfax again?
« Reply #274 on: May 15, 2015, 04:09:01 AM »
Which shares do you guys own? FFH.TO or FRFHF? It looks like InteractiveBroker only offers FFH.TO? The price is higher for FFH.TO. Is this because it's in CAD instead of USD?

FFH.TO is in CAD, but is the main exchange that it trades under.  I would definitely buy it there through IB.

Packer16

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Re: Time to buy Fairfax again?
« Reply #275 on: May 18, 2015, 06:11:47 AM »
All you Fairfax bulls please help!

Aberhound,
Watsa has prepared Fairfax to thrive in an environment with the following characteristics:
1)   Stocks go down and stay down for a long time (with equity hedges that appreciate more than the decline in their portfolio of equities),
2)   Treasury yields keep going down (with the 10yr bond yield approaching 1%),
3)   And deflation setting in.
If this environment never materializes, Fairfax will make some money imo, but not much.
Therefore, it is simple enough: do you think 1) + 2) + 3) might ever come to pass? Or do you think there is no risk at all?
If the answer is: no risk at all, then stay away from Fairfax right now.

Cheers,

Gio

Gio,

I think in the deflationary environment you describe Fairfax will survive but not thrive.  If they have to use the hedges in any major way there exposure to EM (and associated declines in markets and equities) will more than offset any gains from the hedges.  If you look at there investment portfolio they have billions of equity exposure to Greece and India in addition to the businesses they own in the countries.  The hedges IMO are just that, protection against adverse market movements in their distressed investments, but not a proactive bet on a decline like the CDS were.

Packer
« Last Edit: May 18, 2015, 06:14:52 AM by Packer16 »

klarmanite

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Re: Time to buy Fairfax again?
« Reply #276 on: May 27, 2015, 02:40:33 AM »
Interesting to note that MArkel sold ALL of their shares in Fairfax in the last quarter, as you can see here: http://whalewisdom.com/stock/ffh
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giofranchi

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Re: Time to buy Fairfax again?
« Reply #277 on: May 27, 2015, 02:50:30 AM »
Gio,

I think in the deflationary environment you describe Fairfax will survive but not thrive.  If they have to use the hedges in any major way there exposure to EM (and associated declines in markets and equities) will more than offset any gains from the hedges.  If you look at there investment portfolio they have billions of equity exposure to Greece and India in addition to the businesses they own in the countries.  The hedges IMO are just that, protection against adverse market movements in their distressed investments, but not a proactive bet on a decline like the CDS were.

Packer

In such an environment imo the contribution from their equities + equity hedges portfolio will pale in comparison to the contribution from their bonds portfolio and their CPI linked contracts.
I might be wrong, though... ;)

Gio
Portfolio: AAPL, AMZN, BABA, BOSS, BRK.B, FB, FFH, FIH.U, FINX, FWONA, GOOG, IBB, JPM, LBRDA, MKL, NKE, QQQ, SFTBF, SMH, TCEHY, V, XBI, XT