Author Topic: Fairfax Valuation  (Read 6416 times)

petec

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Re: Fairfax Valuation
« Reply #10 on: February 19, 2020, 12:56:21 PM »
Iíve watched FFH for 15 years now and I sincerely have absolutely no sodding idea. Sorry.
FFH MSFT BRK BAM ATCO LNG IHG TFG CGT DC/A


nickenumbers

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Re: Fairfax Valuation
« Reply #11 on: February 19, 2020, 01:35:52 PM »
Iíve watched FFH for 15 years now and I sincerely have absolutely no sodding idea. Sorry.

Baaahhhhhhhh......... ;) ;) :P


Maybe some brave soul will hazard a guess.
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

obtuse_investor

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Re: Fairfax Valuation
« Reply #12 on: February 21, 2020, 03:27:38 AM »
Lol! There is so much truth in that.

FFHís business returns are highly variable year to year. Over medium (3-10yr) term they can range from terrible to outstanding. Effectively, as a long term shareholder youíre in for a ride. It will occasionally move like a rocket and other times it is a dud for years. The only reason to stay attached to the business is trust in management, which itself ebbs and flows.

Frankly, I donít know why I do it. :-)

I also know that when I feel incredibly down about this firm itís a time to buy rather than sell.

In short, I donít do a DCF on this firm because I am not smart enough. It would be garbage in and garbage out. 
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor

Jurgis

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Re: Fairfax Valuation
« Reply #13 on: February 21, 2020, 07:43:23 AM »
Isn't DCF - or just valuing on CF basis - for insurance companies inherently wrong approach?
« Last Edit: February 21, 2020, 07:46:09 AM by Jurgis »
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StubbleJumper

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Re: Fairfax Valuation
« Reply #14 on: February 21, 2020, 09:19:25 AM »
Isn't DCF - or just valuing on CF basis - for insurance companies inherently wrong approach?

Yep.  It's worth doing as a secondary approach to supplement a BV based metric, but it's not the best choice as a sole approach.  This is particularly true with FFH over the past few years with its lumpy earnings and with the varying quality of earnings (some years assets gained value which never hit the books, while other years gains were booked on assets without those assets having necessarily added much value in that particular year). 

Multiple metrics are a good idea, but a BV based metric is essential.


SJ