Author Topic: Is it time to buy Fairfax?  (Read 8039 times)

thrifty

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Re: Is it time to buy Fairfax?
« Reply #20 on: November 10, 2019, 06:14:37 PM »
Thank you Viking. Makes a lot of sense to me.

In your 3 points above, we have an insurance company, a short duration long bond fund, plus an EM private equity fund(?) in one company?

I'm surprised that they don't have exposure to the toxic sh&t in energy such as NatGas or offshore. It seems that they are really good at getting themselves into something that's just about to go into deep depression.

One way to trade is to watch what FFX buys and wait for a year or two (or 10) to follow in. You either get it cheaper before it goes belly up or get a 3 to 10 bagger.

Are you doing that these days?


SharperDingaan

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Re: Is it time to buy Fairfax?
« Reply #21 on: November 11, 2019, 10:05:08 AM »
There's nothing wrong with just keeping it very simple, and simply buying/selling across the ex-dividend date.
Buy a day before the ex-date, take the USD 10 dividend, sit in the thing for a short period until the price recovers, and exit.
Done and dusted by the end of January.

SD

Viking

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Re: Is it time to buy Fairfax?
« Reply #22 on: November 11, 2019, 11:50:52 AM »
Thirfty, i used to closely follow what Fairfax was doing from an invesmtent standpoint (i also used to follow Francis Chou) and sometimes made purchases. I generally stopped about 4 or 5 years ago. Today i prefer large cap; quality; out of favour. Fairfax’s style is generally not a good fit for me these days (deep value... declining industries... sometimes declining companies). I am following their investments today more to understand how it is impacting Fairfax book value than to invest directly. Having said that Fairfax India does look interesting at $11.50...

Sharper, i agree, the upcoming $10 US dividend is another (small) near term benefit for current owners :-)
« Last Edit: November 11, 2019, 11:53:46 AM by Viking »

Cigarbutt

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Re: Is it time to buy Fairfax?
« Reply #23 on: November 12, 2019, 04:21:07 AM »
There's nothing wrong with just keeping it very simple, and simply buying/selling across the ex-dividend date.
Buy a day before the ex-date, take the USD 10 dividend, sit in the thing for a short period until the price recovers, and exit.
Done and dusted by the end of January.

SD
I have done this in the past, in a significant way, by initiating or increasing the position, on three or four occasions. Part of the motivation was because FFH was felt to be an anchor holding that could be held for the long term and part of the motivation was because I thought it was possible to take advantage of the temporary mismatch. I now come to the conclusion that I was wrong with the short term predictive power (process) even if the outcome has always been positive. Maybe others can do this effectively but I come to the conclusion that FFH price had a tendency to go up and luck explains the result. Your post though brought back a nice souvenir when I was planning to do this in November 2012 and, in fact, materially increased my position a certain day which was related to technical selling or something. Then again, if I were a brighter trader, I would have kept the trading chunk for longer as the realized gain on the incremental investment was about 20% vs 100% if I had waited another 2 years or so. Interestingly, I found that this was discussed in 2012.
https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-down-8-this-morning/60/
Edit:
Here's the link to the first page of the thread:
https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-down-8-this-morning/
I see that Viking indicated that he was back in the saddle again and felt that things looked good for the next year or two. Nice call!
As Yogi Berra said (versus decision making): When you come to a fork in the road, take it!
« Last Edit: November 12, 2019, 04:34:27 AM by Cigarbutt »

SharperDingaan

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Re: Is it time to buy Fairfax?
« Reply #24 on: November 12, 2019, 05:52:16 AM »
Other than a periodic annual 'visit' we aren't in FFH anymore.
Long time ago, I did a series of rolling 10-yr tests assuming a purchase the day before ex-date; and a resale at 2 weeks, 1, 2 months later - or 2 weeks after the Q4, Q1 earnings releases. Versus a simple full-yr calendar hold.

Ultimately the conclusion was that you had to be very specific on what you were trying to capture, and adjust your holding period accordingly. IE: Were you trying to capture dividend effect?, yr-end reporting effect? seasonality effect?, hurricane effect? and was FFH one of the better vehicles by which to do that?

SD
« Last Edit: November 12, 2019, 02:41:06 PM by SharperDingaan »

Viking

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Re: Is it time to buy Fairfax?
« Reply #25 on: November 12, 2019, 11:40:42 AM »
There's nothing wrong with just keeping it very simple, and simply buying/selling across the ex-dividend date.
Buy a day before the ex-date, take the USD 10 dividend, sit in the thing for a short period until the price recovers, and exit.
Done and dusted by the end of January.

SD
I have done this in the past, in a significant way, by initiating or increasing the position, on three or four occasions. Part of the motivation was because FFH was felt to be an anchor holding that could be held for the long term and part of the motivation was because I thought it was possible to take advantage of the temporary mismatch. I now come to the conclusion that I was wrong with the short term predictive power (process) even if the outcome has always been positive. Maybe others can do this effectively but I come to the conclusion that FFH price had a tendency to go up and luck explains the result. Your post though brought back a nice souvenir when I was planning to do this in November 2012 and, in fact, materially increased my position a certain day which was related to technical selling or something. Then again, if I were a brighter trader, I would have kept the trading chunk for longer as the realized gain on the incremental investment was about 20% vs 100% if I had waited another 2 years or so. Interestingly, I found that this was discussed in 2012.
https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-down-8-this-morning/60/
Edit:
Here's the link to the first page of the thread:
https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-down-8-this-morning/
I see that Viking indicated that he was back in the saddle again and felt that things looked good for the next year or two. Nice call!
As Yogi Berra said (versus decision making): When you come to a fork in the road, take it!

Cigar, as an update, i did sell 1/2 of my position on Friday (I was way overweight). I was happy to lock in a quick 8% avg return in less than 2 weeks. Very lucky. If the stock continues higher in the coming weeks i will continue to lighten up (as i am still overweight). As i said at the outset, Fairfax for me is a trade. As i continue to get reaquainted with the company i may hold a small position (5%) as a longer term holding (especially if i see sgns the global economy is stabilizing as we enter 2020 which would ge good for their equity holdings).

thrifty

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Re: Is it time to buy Fairfax?
« Reply #26 on: November 12, 2019, 09:47:34 PM »
Today i prefer large cap; quality; out of favour. Fairfax’s style is generally not a good fit for me these days (deep value... declining industries... sometimes declining companies).

Do you mind elaborating on the points above? Is it the personal reasons or you believe market force (such as passive investing) would ultimately benefit those companies' stocks?

Isn't the best money in deep value from cyclicals, commodities or some sort of distress regardless of the industry or company declining or growing? You just cannot hold them long term...

Saluki

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Re: Is it time to buy Fairfax?
« Reply #27 on: November 13, 2019, 08:18:38 AM »
I didn't see this until today...Looks like Mason Hawkins and the Southeastern guys started a podcast.  Here's one that they did with Prem Watsa :)

https://podcasts.apple.com/us/podcast/prem-watsa-insights-on-investing-underwriting-importance/id1434613123?i=1000431247358
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable

thrifty

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Re: Is it time to buy Fairfax?
« Reply #28 on: November 17, 2019, 02:32:36 PM »
Yeah they also interviewed CEO of Fedex recently. It is interesting to hear them saying how AMZN is taking the headlines and how they're spending big on replacing old fleets (projected to be done by 2020)
Anyone interested in Fedex at these prices?

Spekulatius

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Re: Is it time to buy Fairfax?
« Reply #29 on: November 17, 2019, 05:31:34 PM »
The podcast with Prem is way too much of a love fest for my taste. I haven’t listened to podcast with Smith from FDX yet but he feels a little bit delusional to me regarding AMZN in his CC.
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