giulio

2022 AR Fairfax Financial is entitled to a performance fee calculated at the end of each three-year period, of 20% of any increase in Fairfax India’s BVPS (including distributions) above a non-compounded 5% increase each year from the BVPS at inception in 2015 2021 AR The performance fee is calculated at the end of each three-year period since inception, and the amount payable as at the end of any three-year period is the total amount calculated minus the aggregate of the performance fees paid in respect of all prior three-year periods. The performance fee has been calculated on this basis for the first two three-year periods

"a compound rate of 50-100% per annum has proven the sustainable growth trend...we get a 5x-10x in 12-18 months..." Cathie, are you in this room with us?

here is another interesting article @Dinar https://www.wsj.com/business/insurance-home-auto-rate-increases-climate-change-03b806f3?mod=itp_wsj,djemITP_h

@Xerxes it could be worse, like me being double taxed in Canada and Italy Let's hope they increase the buyback as well!

I havo no position, no idea how it unfolds. My post was to highlight the FFH team hot hand. Best of luck to those playing the merg arb!

https://www.cnbctv18.com/market/iifl-finance-share-price-block-deal-fairfax-among-sellers-exclusive-18627871.htm With bial deal and performance fee payment approaching I guess they HAD to sell something

FFH investment team has been playing merger arbs pretty well this year: X, ATVI, DICE, ARCE, PRVB, FSTX, VIVO. CPRI was a recent buy. Small positions but I am impressed. G

https://www.theglobeandmail.com/business/article-westbridge-renewable-closes-deal-to-sell-first-of-five-solar-power/

You are correct, it should not change the ownership % but FFH still has to pay cash for those shares. From Q3 2023: At September 30, 2023 the fair value of the AVLNs was a derivative obligation of $21.5 (December 31, 2022 – derivative asset of $30.7), with a remaining guaranteed value of $352.3

So is this related to the sale of Riverstone? the run off subsidiary? Ffh had to sell or purchase shares at a fixed amount by year end 2023 iirc. By shares I mean stocks held as part of Riverstone investments portfolio.

@gfp THANK YOU! Great posts as always. This whole Haslam's machination is complete nonsense. Pure greed, I guess they will have the reputation they deserve. Can't wait for it to be over and for brk to liquidate this "poor" guy.

makes a lot of sense, thank you @StubbleJumper! I am very curious about how this cycle evolves and how FFH adapts, many levers to pull. We will see!

@Parsad given the recent growth in premiums and their stated objective of limiting cat losses to 1 year of normalized earnings (i.e. 15% pre-tax ROE), do you think that FFH will hold more cash at holdco going forward? Should we expect $3B as a new average level of cash? TIA

Today is a sad day

I wondered the same when Logistec was up for sale... I don't see that happening in the near future unfortunately, unless it's an insurance business. Other than the restaurant business do we have other examples of something they bought, with a >80% stake and kept holding? Contrary to Buffett I think Prem would sell anything that gets closer to fair value or overpriced. G

Sure... In Italy we say "if my grandma had wheels she would have been a bike"... This non-sense crypto world is so funny. Looking back at the forbes covers...great memories Not taking shots at your post BTW. The "belivers" market is huge...just ask Chamath for proof!

I think it goes against human nature not to take credit for something like btc. You inveted digital gold and don't want to explain it on cnbc? I have never seen a "leader" of a currency (or gold). Lots of leaders in cults though. Keep the faith!

Who exactly are you quoting? Seriously, who's the "father" of this wonder?

Added to PRM I don't understand why is tanking today. A bit concerned about the absence of insiders buying and the fact that they have not announced an earnings release date.

The accounting changed but the economic substance did not. I think it is not worth it to focus on the impact of discounting/interest rates. it will move up and down, like mark-to-market investment gains (which should be excluded from earnings and not projected forward). I try to measure look-through earnings instead. I try to understand if they are writing profitable business and what CR will be over a cycle. I think Mr. Watsa said on CC that IFRS 17 will not have any impact on the way FFH conducts business, so let the equity research analysts deal with this mess in their models! focus on the business, don't let the accounting obfuscate economic reality.

@MMM20, @StubbleJumper thanks for the feedback! The relative attractiveness of the subordinate shares over the preferreds is what makes me think the probability of redemption is low. I looked at them but decided to pass since I would be double-taxed both in Canada and Italy. On to the next idea!

FFH floating rate preferred shares are trading at >10% yield, possible redemption in dec 24/dec 25. Canadian 3 month t-bill rate + spread (2.5-3%), resetting quarterly. Bradstreet bought these in dec 2022. The probability that they get called is low IMO, still looks like a good deal. What am I missing?

@glider3834 thanks for the analysis! I think fih will own 64% of bial after the last tranche closes. 50.6% directly and 13.4% through Anchorage

Love the napkin math, fantastic! Thanks for sharing @gfp

Fairfax now owns more than 25% of Ovostar Union pcl, an egg producer in Ukraine. https://www.money.pl/gielda/komunikaty/6943676719220865.html Looks like they are increasing exposure to the agri/food sector. https://ovostar.ua/en/pro-kompaniyu/pro-nas/