Prem Buying - WoW!

[Bryggen]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

...and one to ask: ''is 15% a realistic expectation?''.

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share

[Parsad]

So comparing FRFHF with JEF for the past 10 years, I own JEF for the past 10 or so years and it has been a value trap for that long. When comparing the 10 year chart with FRFHF, I sees similar behavior. Parsad, I think you also follow JEF and they have been trying to transform it these past two years. I have not been adding to JEF because I don't want to sink new money to it although I am still patient in holding and so far it has been a pretty big mistake as far as opportunity cost.

Yes, we owned quite a bit of JEF in the fund before Covid...we sold about half when BAC fell to $18 and bought that.  We still own the rest of our JEF...it was bought around $18 as well a couple of years ago.

Like FFH, I think JEF is in great shape now, and has turned the corner.  Both should be trading at book value or better.  Cheers!

[Parsad]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

...and one to ask: ''is 15% a realistic expectation?''.

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

[Spekulatius]

If you didn't know when you bought, you might want to figure it out.  Cheers!

I decided to sell most of my position. I still have Fairfax India and willing to give that more time. Seems like they have a little more preference for quality assets in that portfolio, and I like India's 5-15 year growth potential.

The irony is that Fairfax owns a good chunk of Fairfax India, and more importantly, generates really nice management fees and performance bonuses from Fairfax India.  If Fairfax India does exceedingly well, Fairfax will benefit handsomely.  If Fairfax India does average, Fairfax will still benefit from the fees.  I  would rather own the asset manager!  Cheers!

https://tv.getyarn.io/yarn-clip/71cf3f54-184e-4143-b723-0bdce2921b4c/gif#LfJMAgFkOU.copy

[Bryggen]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

...and one to ask: ''is 15% a realistic expectation?''.

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

Feeling better... thanks for your always valuable input. Patience and trust are key here.
Let wait and see...and look back at this thread in 2-3 years!
cheers

[Viking]

I have once again started buying some FFH. I like the insurance businesses and we are definitely in an insurance hard market. That side of the business should do very well the next few years.

What is stopping me from backing up the truck? The investing side of the business. Based on the terrible results from the past 10 years. Having said that it does look to me like the worm is slowly turning. Atlas looks like the real deal and it is a massive position within Fairfax. Digit in India looks like another star and the runway is long; this investment alone could be another $1 billion home run for Fairfax over the next decade. I like Fairfax India and am ok with the volatility. Quess looks like a solid long term hold. I like some of the smaller equity positions.

Most importantly, the terrible performing holdings continue to shrink in size (Blackberry, Recipe, Resolute etc). They look more than discounted with Fairfax trading at less than 0.7 x BV.

It also looks to me like Fairfax has slowly been dealing with its Investing issues. The process started when all the short positions were removed after the Trump election win. Problem children are slowly being dealt with: Fairfax Africa, APR Energy being the most recent 2 examples.

I think Prem also mentioned on the most recent conference call that they are looking to continue to monetize some of their assets. (Blackberry would be ideal, especially in this environment.) Fairfax has been VERY creative over the years in this regard. First Capital and European Runoff are two large examples but there are also many smaller examples. I expect more to come in this regard.

So solid insurance franchise combined with improving investment results should get the stock back close to BV. Perhaps it will take a year or two. From current prices ($290US) investors might actually see a couple of 10-15% returns the next couple of years :-)

[Xerxes]

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

Parsad,
While this may seem like a great trade in the next 2-3 years. I think the narrowing the discount will only come on the back of a rising book value, so you would get a double-lift in absolute and relative terms. But then what ...

Do you see it as having a real "growth" engine once the discount narrows ... past these relatively speaking low hanging fruits.

Maybe we should make it a thread. Where do folks see FFH ten years from now !!!!
- size of the float
- outstanding shares (hopefully 40% bought back)
- the size and growth of FIH
- the size and growth of Atlas
- book value
- share price
- hopefully Resolute and Stelco long gone. I like BB converts.
 
Can Prem pull a Microsoft out of his hat

[investmd]

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

Xerxes, would love to see this thread of where FFH is in 2030 and have it updated yearly

Parsad,
While this may seem like a great trade in the next 2-3 years. I think the narrowing the discount will only come on the back of a rising book value, so you would get a double-lift in absolute and relative terms. But then what ...

Do you see it as having a real "growth" engine once the discount narrows ... past these relatively speaking low hanging fruits.

Maybe we should make it a thread. Where do folks see FFH ten years from now !!!!
- size of the float
- outstanding shares (hopefully 40% bought back)
- the size and growth of FIH
- the size and growth of Atlas
- book value
- share price
- hopefully Resolute and Stelco long gone. I like BB converts.
 
Can Prem pull a Microsoft out of his hat