Author Topic: Fairfax 2020  (Read 206569 times)

petec

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Re: Fairfax 2020
« Reply #140 on: April 01, 2020, 12:15:57 PM »
In FFH, as early March 2020, in the letter to shareholders, Prem talk about his short duration bond portfolio not having any exposure to rising interest rate. How is rising interest rate was a concern in Feb./March in a world that was on the edge of getting toppled over by the compounding mathematics of COVID-19 ? it seems his macro point of view once solidified (through '16 Trump election) refuses to change.

But then again, I could be completely wrong, ;-) we could all be pleasantly surprised, when at the AGM in a few weeks, they reveal their hidden CDS hedges (ala Ackman) and reveal that now they are sitting on a massive realized gain. Gains that they plow back on those insurances business and their own shares …. with enough leftover to buy the rest of RPF that they don't own. That would be acceptable.

Prem can change views - he proved that when Trump was elected.

Very few people saw the Covid impact coming - my view frankly is Ackman got lucky, but I give him full credit for finding a way (unlike Prem) to hedge with little downside.

Fairfax is not about to report a big gain magicked out of thin air.

What is horrible for Prem, if he claims to be a value investor, is that he failed to pick up high quality value in 2010 and instead hedged a cheap market; and then turned on a dime when Trump was elected and decided that the economy was going to take off, but felt quality was too expensive and chose to express that view by investing in cyclical value which crapped out the minute a cloud appeared. It is a staggeringly poor series of decisions.

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Santayana

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Re: Fairfax 2020
« Reply #141 on: April 01, 2020, 12:16:20 PM »
I'm definitely not saying that liquidity issues won't prevent them from executing some things they may have wanted to do, but I don't think they are "swimming naked" as bearprowler6 suggested. 

mranski

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Re: Fairfax 2020
« Reply #142 on: April 01, 2020, 12:23:06 PM »
The comments about Barnard make me wonder about the reasons for Paul Rivett ‘retiring’ at a young age. It has to be a big negative to lose someone who was touted as Prem’s successor.

petec

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Re: Fairfax 2020
« Reply #143 on: April 01, 2020, 12:37:28 PM »
The comments about Barnard make me wonder about the reasons for Paul Rivett ‘retiring’ at a young age. It has to be a big negative to lose someone who was touted as Prem’s successor.

Yeah I wondered that.
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Xerxes

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Re: Fairfax 2020
« Reply #144 on: April 01, 2020, 03:14:37 PM »
In FFH, as early March 2020, in the letter to shareholders, Prem talk about his short duration bond portfolio not having any exposure to rising interest rate. How is rising interest rate was a concern in Feb./March in a world that was on the edge of getting toppled over by the compounding mathematics of COVID-19 ? it seems his macro point of view once solidified (through '16 Trump election) refuses to change.

But then again, I could be completely wrong, ;-) we could all be pleasantly surprised, when at the AGM in a few weeks, they reveal their hidden CDS hedges (ala Ackman) and reveal that now they are sitting on a massive realized gain. Gains that they plow back on those insurances business and their own shares …. with enough leftover to buy the rest of RPF that they don't own. That would be acceptable.

What is horrible for Prem, if he claims to be a value investor, is that he failed to pick up high quality value in 2010 and instead hedged a cheap market; and then turned on a dime when Trump was elected and decided that the economy was going to take off, but felt quality was too expensive and chose to express that view by investing in cyclical value which crapped out the minute a cloud appeared. It is a staggeringly poor series of decisions.

:-) now he has a chance to buy Berkshire at 1.05 BV or so

petec

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Re: Fairfax 2020
« Reply #145 on: April 02, 2020, 12:05:57 AM »
In FFH, as early March 2020, in the letter to shareholders, Prem talk about his short duration bond portfolio not having any exposure to rising interest rate. How is rising interest rate was a concern in Feb./March in a world that was on the edge of getting toppled over by the compounding mathematics of COVID-19 ? it seems his macro point of view once solidified (through '16 Trump election) refuses to change.

But then again, I could be completely wrong, ;-) we could all be pleasantly surprised, when at the AGM in a few weeks, they reveal their hidden CDS hedges (ala Ackman) and reveal that now they are sitting on a massive realized gain. Gains that they plow back on those insurances business and their own shares …. with enough leftover to buy the rest of RPF that they don't own. That would be acceptable.

What is horrible for Prem, if he claims to be a value investor, is that he failed to pick up high quality value in 2010 and instead hedged a cheap market; and then turned on a dime when Trump was elected and decided that the economy was going to take off, but felt quality was too expensive and chose to express that view by investing in cyclical value which crapped out the minute a cloud appeared. It is a staggeringly poor series of decisions.

:-) now he has a chance to buy Berkshire at 1.05 BV or so

Ha! Sadly he doesn't even have that. He can't add to equities and there's very little he can realistically sell to redeploy cash, because his stock picks are either 1) very undervalued, 2) illiquid, 3) sponsored by Fairfax, or all three. They will have to be very smart to make hay in this crisis, and I think their opportunity is in the bond market, not the equity market.
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TwoCitiesCapital

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Re: Fairfax 2020
« Reply #146 on: April 02, 2020, 10:13:05 AM »
In FFH, as early March 2020, in the letter to shareholders, Prem talk about his short duration bond portfolio not having any exposure to rising interest rate. How is rising interest rate was a concern in Feb./March in a world that was on the edge of getting toppled over by the compounding mathematics of COVID-19 ? it seems his macro point of view once solidified (through '16 Trump election) refuses to change.

But then again, I could be completely wrong, ;-) we could all be pleasantly surprised, when at the AGM in a few weeks, they reveal their hidden CDS hedges (ala Ackman) and reveal that now they are sitting on a massive realized gain. Gains that they plow back on those insurances business and their own shares …. with enough leftover to buy the rest of RPF that they don't own. That would be acceptable.

What is horrible for Prem, if he claims to be a value investor, is that he failed to pick up high quality value in 2010 and instead hedged a cheap market; and then turned on a dime when Trump was elected and decided that the economy was going to take off, but felt quality was too expensive and chose to express that view by investing in cyclical value which crapped out the minute a cloud appeared. It is a staggeringly poor series of decisions.

:-) now he has a chance to buy Berkshire at 1.05 BV or so

Ha! Sadly he doesn't even have that. He can't add to equities and there's very little he can realistically sell to redeploy cash, because his stock picks are either 1) very undervalued, 2) illiquid, 3) sponsored by Fairfax, or all three. They will have to be very smart to make hay in this crisis, and I think their opportunity is in the bond market, not the equity market.

+1

Good things opportunities will be abundant in both

gfp

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Re: Fairfax 2020
« Reply #147 on: April 14, 2020, 04:27:22 PM »

Santayana

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Re: Fairfax 2020
« Reply #148 on: April 14, 2020, 05:00:54 PM »
So now trading at something around 70% of book. 

Xerxes

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Re: Fairfax 2020
« Reply #149 on: April 14, 2020, 05:08:13 PM »
Thx

$2.9 billion plowed into high-yield.
That is 7% of the 40% portfolio.