Author Topic: Fairfax 2007 of Today?  (Read 2416 times)

wescobrk

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Fairfax 2007 of Today?
« on: December 05, 2017, 11:38:01 AM »
What is the closest thing to Fairfax back in 2007 to make money on the way down but not utilizing puts of the S&P?
I don't want to have a clock running as a put would.


Uccmal

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Re: Fairfax 2007 of Today?
« Reply #1 on: December 05, 2017, 03:37:52 PM »
Fairfax went down as well so it was not a good bet going into the crash.  I bought some FFh at the very bottom in March 2009.  There is no company that went up when the market tanked like it did. 

I suspect the reasons why all companies drop in market crashes are two fold:
1) General fear the world is ending.
2) Margin calls cause people to have to sell whatever they can. 

FFH fall 2008: 300 - down 50 from its recent high.  Up to 400 by January, then back down to around 340 on March 9.  Back up to 400 where it sat for 5 years - Cdn. Dollars. 

So while FFH made money from the crash the stock did not reflect that. 

GARP tending toward value

cwericb

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Re: Fairfax 2007 of Today?
« Reply #2 on: December 06, 2017, 04:56:33 AM »
Bought FFH at $228 in 2007. Have no regrets.

Wanted to buy it earlier at under $100 but didnít have a trading account back then. Once the account was set up FFH was the first stock I purchased and have added to it from time to time.

When I compare FFH to BRK.B since 2007 the charts appear to show that FFH considerably out performed, but then I may be missing something.

I think FFH is still as good as anywhere to have money invested.

Dazel

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Re: Fairfax 2007 of Today?
« Reply #3 on: December 06, 2017, 06:15:14 AM »

Uccmal,

You should probably check your numbers....the bottom in late 2007 was $195...which carried into 2008...for a low of $211....of note the low of 2006 was $100....
In 2008 Fairfax hit $390....depending where you were in those numbers you had some of the greatest outperformance over the market in history. Most stocks were down 50 to 70% and the financial stocks that Fairfax competes against were down 80 to 90%!
While I agree Fairfax fell asleep at the wheel for awhile in 2010 to 2015 that outperformance made some of us very wealthy. Not just because of the huge returns from Fairfax but I was able to buy everything for 20 cents on the dollar in 2008-2009 because I was flush with a 50% return. My old buddy Ericopoly made many multiples of that by using options.
Canít let it slip by that Fairfax biggest win was not biblical it was. Itís the greatest investment I have ever made comparably thanks to the Fairfax team. My personal account was up 100% in 2008.

Fairfax strategy this time is large cash reserves as Buffett is doing...and deflation hedges that may be forgotten for now but certainly will hedge a deflationary scenario if it were to happen. Have you seen the worlds debt? Or buy Bitcoin LOL. I donít see anyone preparing for debt deflation so I do not have anyone in my sights to hedge...other than Fairfax and cash. Realistically in our current scenario we would likely see inflation pick up to cause debt deflation afterwards...which is likely why the yield curve is flat and European rates are still very much negative!

Dazel.

petec

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Re: Fairfax 2007 of Today?
« Reply #4 on: December 06, 2017, 07:40:10 AM »

When I compare FFH to BRK.B since 2007 the charts appear to show that FFH considerably out performed, but then I may be missing something.


Bloomberg suggests FFH compounded at 6% over the last 10 years and BRK at 7% - but then FFH also yielded around 2% on average over that time (and more like 3% on the Dec 2007 share price) so FFH has outperformed BRK on a total return basis. It's also performed bang in line with the SP500 on a total return basis which is pretty incredible when you consider the hedges, how well the SP500 has done, and how incredibly stupid some people think FFH are ;)

Uccmal

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Re: Fairfax 2007 of Today?
« Reply #5 on: December 06, 2017, 09:17:41 AM »

Uccmal,

You should probably check your numbers....the bottom in late 2007 was $195...which carried into 2008...for a low of $211....of note the low of 2006 was $100....
In 2008 Fairfax hit $390....depending where you were in those numbers you had some of the greatest outperformance over the market in history. Most stocks were down 50 to 70% and the financial stocks that Fairfax competes against were down 80 to 90%!
While I agree Fairfax fell asleep at the wheel for awhile in 2010 to 2015 that outperformance made some of us very wealthy. Not just because of the huge returns from Fairfax but I was able to buy everything for 20 cents on the dollar in 2008-2009 because I was flush with a 50% return. My old buddy Ericopoly made many multiples of that by using options.
Canít let it slip by that Fairfax biggest win was not biblical it was. Itís the greatest investment I have ever made comparably thanks to the Fairfax team. My personal account was up 100% in 2008.

Fairfax strategy this time is large cash reserves as Buffett is doing...and deflation hedges that may be forgotten for now but certainly will hedge a deflationary scenario if it were to happen. Have you seen the worlds debt? Or buy Bitcoin LOL. I donít see anyone preparing for debt deflation so I do not have anyone in my sights to hedge...other than Fairfax and cash. Realistically in our current scenario we would likely see inflation pick up to cause debt deflation afterwards...which is likely why the yield curve is flat and European rates are still very much negative!

Dazel.

My numbers are fine for the times I indicated. 

And I was right there with Eric on the options.  But they paid off the most in the summer of 2006 when the lawsuit was announced.  I was mostly out of them by '07. 

I dont know how to assess how any one stock will perform during a major crash.  My observation from 2008/09 is that everything goes down no matter what their financial position, some more than others. 
GARP tending toward value

Dazel

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Re: Fairfax 2007 of Today?
« Reply #6 on: December 06, 2017, 09:42:53 AM »


Uccmal,

I know you made a fortune on Fairfax over the years and you were instrumental on this board. Congrats and thanks for your effort!
My only point is that many are downplaying what has been done at Fairfax I was certainly not calling you out. Cheers.

Dazel

Cigarbutt

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Re: Fairfax 2007 of Today?
« Reply #7 on: December 06, 2017, 10:09:20 AM »
Looking into Fairfax again.
At the stage where am trying to reconcile the "on the offensive" stance versus cash levels.
What does it mean?
Interesting times.

cwericb

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Re: Fairfax 2007 of Today?
« Reply #8 on: December 06, 2017, 12:02:23 PM »
Pertinent thread. I feel I am probably sitting on too much cash right now. My largest holding by far is FFH as well as some reasonably well balanced mutual funds.

But when I look at people who are making 15-20% or more in the market I get a little uncomfortable with that much cash. Therein lies my interest in the question posed here.

However, my thinking is that at some point reality will prevail and Mr. Trump will be gone.

When that happens I think it may precipitate a major (overdue) correction. And remember, the longer the time between corrections, usually means the deeper the correction.

But this is just the way I see things in my little mind. In the meantime I am comfortable trusting FFH but ask myself if I want more shares at the present level and I donít like having too many eggs in one basket.

Here is the 10 year chart for FFH vs BRK.B if I can get it posted.
« Last Edit: December 07, 2017, 06:15:07 AM by cwericb »

petec

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Re: Fairfax 2007 of Today?
« Reply #9 on: December 07, 2017, 04:58:46 AM »
I think that chart might be comparing BRK in USD against FFH in CAD? I only say this because I get a different relative outcome when I draw them both in USD.