giulio

FIH, EVO

Overpaying for an assets is always a bad decision and it ensures that you will earn suboptimal returns. Whether you are an investor or a ceo allocating capital, it does not make any difference. Munger is of course right because he's taking into account the return on incremental capital reinvested. In your case, I think it's worth noting that: 1) if your company has excess cash for a buyback it means that it does not have enough internal opportunities for reinvestment At 40% 2) shares of such a company will hardly trade at a low price. If bv = 100, 40% roe = 40 in earnings, at 15x this equal a price of 600. A buyback at this level equates to 6.7% yield, way lower than your starting 40%. 3) if a company earning 10% roe is selling at 0.5 bv a buyback would be the best course of action as it would yield 20%. You can Pay a very high entry price and still get value, it all depends on your assumptions about capital retained and roiic. There are qualitative aspects to consider of course. If you think high growth lies ahead don't be too conservative in your assumptions. But this does not mean that you can any price. It must incorporated in your estimate of fair value. I hope I have expressed myself clearly enough. Hopes it helps, love the discussion. best, G

The published 1982 up to 2021. Book is on amazon if you are interested. I would add to the list Ian Cassel and Paul Andreola. Best, G

I believe this does NOT refer to Fairfax ownership in the Meadow UK. FF Meadow Holdings is a sub of Fairfax, 100% owned through its various insurance companies as you listed. FF Meadow then holds a minority stake in Meadow UK, the actual company. Best, G

108K shares were bought back and canceled in October. Max price paid $15. https://www.sedi.ca/sedi/SVTItdSelectIssuer?locale=en_CA

Good for long term holders that some "investors" buy or sell without any regards for intrinsic value

I am of the opposite view. Given how hard they worked to set it up, the difficult regulatory environment and their long term view of India, I believe they will hold on to shares for a long time. They might sell some if valuation gets truly outrageous but they'll keep a majority. Possibly they will increase their stake if allowed to. Best, G

Thanks for posting this @SafetyinNumbers. Happy to share my analysis. I review my ffh valuation annually when they release the annual report. As I stated in the other thread, I like to use look through earnings and at fy23 I had IV at around $1800. Using Book value I get $1500 but I am aware buybacks are distorting the calculations. To reach the lower bound of IV the index addition would need to generate a 20% pop in price. If it happens, I WILL NOT sell any shares. The reason being that I would expect ffh to grow IV over time. Simple as that. At $1800 I might trim the position a bit as there are a couple of interesting ideas I would like to add to. Best, G

Small add PRM

And it is still VERY cheap! Probably their 50+% stake in BIAL covers today's market cap of $2.2B. Get the rest for free. Btw I just read some Marval fund letters and surely Ben Watsa shares his father optimism re: India and the investment opportunities there. Worth a read! Best, G

WTF did I just read? @berkshiremystery are you looking for the microstrategy thread?

Evo, psh, bat

Couldn't agree more! @LC at YE 23, my estimates of look-through earnings were around 135USD per share. This excludes investments gains (both derivates and sales). LOts of moving parts of course, especially this year. I think 10x is too low but I am comfortable using 13x given their Indian exposure, fixed income allocation, growing income from consolidated subs and associates, the possibility of repurchasing minorities stakes and ongoing buybacks. This is why I think it is still cheap. At USD1800 maybe I'll need to do more work Best, G

Is this adjusted for their NON mark to market investments? What about earnings multiple? I still think it's cheap, I have been adding recently. G