Author Topic: What to do with Fairfax?  (Read 6641 times)

SharperDingaan

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Re: What to do with Fairfax?
« Reply #10 on: February 15, 2009, 06:44:19 AM »

Consider what the next one quarter EMV might look after FFH reports.

P(x1) of the price staying the same is fairly small, P(x2) of price rising is moderatly high (Q1 is where you make the $ for the year), & P(x3) of the price falling is moderately high (group think & great results temporarily boosted todays price). Multiply by the associated values (V1, V2, V3). But what if V1 is negative, & V3 is strongly negative ?

The point is that existing price growth is unlikely to maintain the same clip, & that the probabilities also assume no major change to the 'baked in' current market assumptions. There are many other coys where the odds are more favourable, but the specific company risk is higher. FFH options, sale/repurchase, etc. should be high on your list.

'Baked in' assumptions could also be changing. Manulife has just publicly asked officialdom for insurance similar to WEBs coverage for mono-line insurers, & for the purposes of covering acquisitions (releases reserves). Should it occurr it's highly likely that it will be offerred to not just Manulife.

Simple buy/hold may not be the most optimal any more



 


oldye

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Re: What to do with Fairfax?
« Reply #11 on: February 15, 2009, 02:43:08 PM »


so theres a chance the price move up and theres a chance the price will move down and its not likely that it will stay in one spot

 oh and buy and hold is dead...



oldye

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Re: What to do with Fairfax?
« Reply #12 on: February 15, 2009, 03:53:06 PM »
I always felt value investors make their money when they buy, during the last couple of years you'd be better off if you sold early and bought more during the summer but whats to say that this year there isn't significant multiple expansion during the summer? 

The absolute truth is that your returns will mirror those of the business's that you own over time, market timing isn't value investing.

Smazz

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Re: What to do with Fairfax?
« Reply #13 on: February 16, 2009, 12:19:34 PM »
Ive always stuck to the mantra that I wouldnt buy any of it if I didnt feel comfortable owning all of it.

Thats prob why my portfolio is so very very concentrated.

The only time I will deviate from this is for a timing issue. I.e. If I know there is going to be volitility and I will need some liquidity I make adjustments.

IMO, it should be more a timing issue rather than a quality/size issue.

Rules 1 and 2 should always be answered before going forward.

These guidelines (for me anyway) have rewarded me handsomely.
« Last Edit: February 17, 2009, 10:40:50 PM by Smazz »

Partner24

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Re: What to do with Fairfax?
« Reply #14 on: February 16, 2009, 01:54:54 PM »
Ive always stuck to the mantra that I wouldnt buy any of it if I didnt feel comfortable owning all of it.

Thats prob why my portfolio is so very very concentrated.


Well Smazz, IMO, that's far from being a bad mantra to have! When you ask yourself this question, you naturally end up having far less stocks in your list than otherwise, unless your circle of competence is very wide and deep.


ALLYCAT

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Re: What to do with Fairfax?
« Reply #15 on: March 03, 2009, 04:43:39 PM »
Well dfcanuck, I don't think you ever wished this kind of drop in faifafax  a month ago but you must be a bit relieved to get off near top of Mr Markets wild ride. How is your new diversified portfolio doing?