Recent Posts

81

Fairfax Financial / Re: Fairfax 2021

« Last post by petec on Today at 04:15:19 AM »

USD450*1.14^4*1.4 P/B=>USD 1000. 

Basic Thesis: Underlying compounding in book translating to P/B expansion.  Similar to most I expect.  Underlying assets as pointed out by Viking (brilliant spreadsheet) and others are mostly moving in the right direction so I think book is greatly depressed. 

The thing that has really changed in my thesis is that Prem is starting to invest more in “roll your own”.  Digit being the perfect example, I would argue Atlas is another even though it is well established but new management is everything.    I much prefer him spying an early opportunity and providing a bit of mentorship and capital to grow something special.  Much better in my opinion to the “turn around that never does approach”.  Either way I think people do really enjoy working with him, this is half the battle.

Cheers
nwoodman

Thanks. I think that's broadly sensible as a "semi-bull" case. Certainly the capital that's been "created" in the last 6 months is very useful in a hard market and could kick-start something special. And I think we could see several of the big investments liquidated at a premium to their carrying values over the next 5 years. EDIT: the major coutnerargument is lower rates on float but I tend to think this ought to be offset by higher gearing as float grows in a hard market, and lower discount rates for equity leading (all else equal) to a higher p/bv.

I totally agree re: people enjoy working with him and that's half the battle. In fact probably the main thing that has kept me in this dog for the last decade is his ability to attract talent. It's astonishing to think that Digit, started only three years ago, is now a meaningful part of the market cap of Fairfax.

That said this focus on "roll your own" is not new. Most notably Fairfax did it with ICICI Lombard and First Capital, now both sold. I would argue they basically also did it with Recipe, FIH, and FAH. They have a long record of starting companies and building platforms.

82

General Discussion / Re: Canadian Prefs

« Last post by Rod on Today at 03:48:34 AM »

Any prefs out there that have caught your eye?

I like the Brookfield Office Properties prefs, BPO.PR.N and BPO.PR.P specifically. They are priced about $14 up from $10 but still very cheap.

83

Investment Ideas / Re: LNR.TO - Linamar Corporation

« Last post by kab60 on Today at 02:48:50 AM »

Take a look at John Deere, etc, for a perspective of the ag side. The auto side has rebounded, but of course there will be bumps. The Ag outlook is completely different now than it was fall 19, imo

Sure the outlook for AG is better, but it's a small part of the business and 2020 results and 2021 (estimates) are much lower than at the beginning of 2020 (Industrials down almost 50 pct. in 2020). But it's nothing specific to Linamar, auto OEMS and other auto parts suppliers are also higher than before covid19. Perhaps it's the nature of some cyclical businesses, that a lot of investors buy when things are trending in the right direction - despite absolute levels being lower. Or (flying and electrical) cars have suddenly become hot.

84

Fairfax Financial / Re: Fairfax 2021

« Last post by nwoodman on Today at 02:14:52 AM »

FFH will not outperform as a multi-bagger on an absolute sense even if there is a huge pivot to value, but may outperform on relative sense if all fancy stuff start to deflate a bit.

Xerxes this comment intrigued me.  I actually think many of Fairfax's investments could do 2-3x or more from these levels.  Very rudimentary analysis on my behalf but Iam estimating FFH could be trading at $USD1000/share in 2025.  The caveat as always is that they have to do sensible not "clever" things.  Guess it also depends what we call a multi-bagger,  in this day and age the expectation is set by Tesla so 20% compounding is pretty mediocre 

“What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so.” Mark Twain

cheers
nwoodman

Not disagreeing, but what's your back of the envelope route to $1000? And which currency are you talking, USD?

USD450*1.14^4*1.4 P/B=>USD 1000. 

Basic Thesis: Underlying compounding in book translating to P/B expansion.  Similar to most I expect.  Underlying assets as pointed out by Viking (brilliant spreadsheet) and others are mostly moving in the right direction so I think book is greatly depressed. 

The thing that has really changed in my thesis is that Prem is starting to invest more in “roll your own”.  Digit being the perfect example, I would argue Atlas is another even though it is well established but new management is everything.    I much prefer him spying an early opportunity and providing a bit of mentorship and capital to grow something special.  Much better in my opinion to the “turn around that never does approach”.  Either way I think people do really enjoy working with him, this is half the battle.

Cheers
nwoodman

85

General Discussion / Re: what are you selling today?

« Last post by formthirteen on Today at 01:43:34 AM »

1211.HK

86

General Discussion / Re: Coronavirus

« Last post by mattee2264 on Today at 01:29:00 AM »

 Perhaps the reason the UK is managing vaccinations at a decent speed is because we have a national health service so everything can be coordinated a lot more easily and politics has not been allowed to interfere with the allocations. Of course population density and a smaller population size probably help as well. And also we have the Oxford vaccine which USA passed on which is a lot easier to distribute.

87

Fairfax Financial / Re: Fairfax 2021

« Last post by petec on Today at 01:21:55 AM »

FFH will not outperform as a multi-bagger on an absolute sense even if there is a huge pivot to value, but may outperform on relative sense if all fancy stuff start to deflate a bit.

Xerxes this comment intrigued me.  I actually think many of Fairfax's investments could do 2-3x or more from these levels.  Very rudimentary analysis on my behalf but Iam estimating FFH could be trading at $USD1000/share in 2025.  The caveat as always is that they have to do sensible not "clever" things.  Guess it also depends what we call a multi-bagger,  in this day and age the expectation is set by Tesla so 20% compounding is pretty mediocre 

“What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so.” Mark Twain

cheers
nwoodman

Not disagreeing, but what's your back of the envelope route to $1000? And which currency are you talking, USD?

88

Fairfax Financial / Re: Fairfax 2021

« Last post by petec on Today at 01:17:28 AM »

Yea, the monster block trades over the last several days has me thinking buybacks may be back in a big way. I would've expected them to only ratchet up after closing the Riverstone sale but apparently not

I'm not sure I follow this logic. In my experience blocks tend to happen when there is a big seller, not a big buyer. You might be right but my guess is a couple of big holders sold through 2020, pressuring the shares to the valuation levels that got us all excited, and we are seeing the last few trades now. Hence the blocks, and the fact that the share price is rising as overall selling pressure eases. Just a guess.

89

Investment Ideas / Re: LNR.TO - Linamar Corporation

« Last post by RadMan24 on January 17, 2021, 11:55:25 PM »

Take a look at John Deere, etc, for a perspective of the ag side. The auto side has rebounded, but of course there will be bumps. The Ag outlook is completely different now than it was fall 19, imo

90

Investment Ideas / Re: MKL - Markel Corp

« Last post by nwoodman on January 17, 2021, 11:30:17 PM »

Discussion with Tom Gayner of Markel on a Podcast.
I found the second 30 min of the podcast super interesting.

https://www.listennotes.com/podcasts/we-study/tip332-long-term-investing-w--V9GLC_Dgbp/

Thanks, it was a good interview. Tom Gayner’s integrity shines through. Not bad value at the current price IMHO.  It was a line ball between BRK and MKL, I opted for a bit of diversification. They should both do OK (10-12%) compounding from these levels.  Set and forget

cheers
nwoodman