obtuse_investor

I've been thinking of buying for years. I FINALLY BOUGHT SOME TODAY. THAT'S THE REAL REASON THE STOCK PRICE HAS FALLEN!!! Haha! I hope you buy plenty more-- I have waited years, as well.

I suspect the selling pressure could be one of more of the following: - Tax loss selling (FFH has been down over the year) - Window dressing (getting rid of the losers to make the portfolio look pretty for the muppets) - Closet indexers (Removal of FFH from MSCI Canada) - Low earnings, as FFH forgoes participating in this equity rally - 100% hedged position - Mild rise in CPI over the year, further eroding the value of the CPI linked derivatives book - Unknown damage from Sandy to the insurance business Anyone else have more reasons?

Thanks for the video. A curious fellow-- a value investor who believes in technical analysis ideas; and does short term trading.

Just picked up a few more units under 345... Part of me wishes they cut the dividend due to sandy and unrealized losses, so I can load up a lot more units.

It is unfortunate indeed. I am hoping the great many of closet indexers out there will slowly sell over next couple weeks and bring price back down to where I can nibble on it.

Fairfax largely would have an exposure via their reinsurance operations.

My sentiments exactly. Mr Watsa and his team are in the deflationary camp, and I am leaning that way too. I am no macroeconomist, but I have read enough financial history to identify when it is about to repeat itself. If and when the effects of deflation hit, stocks would perform very poorly. There is real risk of permanent loss of capital for folks buying into stock market today. There are definitely deep value names out there, but the number keeps on getting smaller and smaller. FFH's CPI linked instruments should do very well in that environment. If FFH falls 10% [or more] below book, it would be worthy investment for the long haul with a healthy margin of safety. Disclosure: I have a small position in FFH; waiting for opportunity to increase it significantly

Since the FFH books are in USD, but the stock is traded in CAD; according to my calculations price of the stock never quite touched book value. Am I seeing this right? Although, it can be argued that CAD is currently overvalued, so the FFH stock today (~380) is well below book.

Actually, from a payout perspective, inflation is great for insurance companies because policy payouts aren't inflation adjusted. If FFH continues to increase book value well above inflation (whether it is high or low), it wins.