steph

Is there a place I can find Brian Bradstreet's or FFh's bond track record? They used to show it in the AGM presentation. Thx for the help.

Thank you so much Viking for all the amazing work you have done! Really appreciated that you share all this.

I would vote ‘Yes’ even though I realise it would be an amazing outcome. I totally agree with what is written here about book value around 1500 by the end of 2027. What surprises me is this ‘anchoring’ about valuation. I have been in this business now for over 30 years and the biggest or one of the biggest opportunities is when a certain valuation starts to seem like totally normal, but people forget that there have been periods with very different valuations. My believe is that if and that’s a big ‘if’, FFH continues executing as they have been doing lately AND investing in quality assets, they will get a rerating. For a company doing between 10 and 15% CAGR with quality assets and quality management I would think that the market could easily pay 1,5 times book. Even though insurance companies are historically not expensive today, you can find many with way higher P/B ratios. There will most certainly be a time when FFH will be priced at 1,5 to 2 times book and only then will people start to find that a very reasonable valuation. By then, 1 or 1,2 times book will be seen as extremely cheap and the opportunity of a lifetime.

India is a nice diversification and I believe they have good connections there, which is important. However, I prefer that the bulk of investments is in ‘hard currency’ countries such as the US, Canada and Europe. The Indian Rupee has halved over the last 15 years. It is often the case that growth is interesting but in the end the currency eats a lot of the performance. I hope they will invest most of their capital like Buffett does: in legislations that are kind to investors and stable and in solid currencies. Mostly just close to home.

The longer it lasts the more ridiculous he becomes.

....and 15 times earnings. FFh could double and still be cheaper than WRB.

What if you manage a fund?

I used to agree with this, but much less nowadays. Reason being that with BRK you also pay 1,4 times the value of Apple and other huge listed portfolio + huge cash pile. You don’t pay the real value of the unlisted companies, but you pay a big premium on cash and listed portfolio that has become a very big part of BRK.

Thx Haryana!

Somebody on the board knows if there are any other interesting meetings/presentations the day(s) before the annual meeting? Thx

@Vikingthe only thing that will certainly happen in the coming years, but we don't know when, is a high catastrophe year with very bad combined ratios. Business as usual, but it will impact your 25% compound.

Not so sure that FFH book value is more inflated than competitors. At Markel the difference between book and tangible book is also quite big. And with Berkshire you have a lot of hidden value, many companies that are worth much more than what book says, but on the other hand you have today, more than ever, 200 billion in Apple, 150 billion in cash plus all other equity holdings for which you pay 1.35 times book.

You don't only pay a higher P/B multiple because of high expeced return on book. You pay a higher multiple because of the notion of quality. Quality company, quality management,... . Fairfax got a low P/B because of distrust towards management and the idea that FFH was lower quality. With what they have just done I sincerely do believe that the market will reward them again with a P/B more in line with quality competitors. 1.3 to 1.5 times would be reasonable. So if after 2026 rates are lower and ROE will be somewhat lower I am convinced the P/B could be higher as long as they continue doing sensible things.

Very interesting discussion. Thx! Whatever the outcome in 5 or 10 years, Fairfax is today a quite unique risk/return investment. Investing is about probabilities. With Fairfax today you have a bond portfolio consisting of mostly AAA paper and some other quite secure income that will give you 10% for at least the next 3 to 4 years and probably longer. You can buy this at book and all the rest is optionality : good combined ratios/Eurobank/Digit/buying back minorities/ even higher interest rates/ good reinvestments of all this cash coming in/ rerating to a higher price to book….and many more possible surprises. In my eyes, for the next 5 years a certain 10%, a high probability 15% and why not even a good chance of even higher returns (if the market falls in love again with Prem ).