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longlake95

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    Fairfax 2023

    in Fairfax Financial

    Posted

    1 hour ago, Luca said:

    Yep, friends of mine who also invest say they don't and cant understand insurance (fair enough, its a blackbox) and the history doesn't look appealing to them which stops them from digging deeper. I shared a lot of things from the board, but skepticism is strong against future underwriting (climate change), they still think rates will come down hard soon and that the interest income leg will fall away for fairfax (they know they locked in rates but are still skeptical)+their equity portfolio is not something where one immediately sees value. 

     

    Hence the opportunity.

    I have noticed a pattern over many years - people react slowly to good news and quickly to bad news. Combine that with the heard mentality and you get the Morningstar’s of the world. 

    18. Intrinsic Value – Discounted Cash Flow

    in General Discussion

    Posted

    I used to focus too much on the “numbers”, while they are very important, and the price you pay is VERY important, I learned from WEB & Co, it’s EVEN MORE important to get the business right. That is Waaaay more crucial than your discount rate. 
     

    SPEK, yes, looking backwards to see what growth rate is required to justify the current price, might be a better way to look at a DCF If you aren’t susceptible to creeping growth rates. Which I think most market participants waaay over estimate growth over the long pull. 

    18. Intrinsic Value – Discounted Cash Flow

    in General Discussion

    Posted

    Agreed, for me a DCF is just one arrow in the quiver. The world is far less linear than a DCF would suggest…lol…

     

    I do think it’s a great exercise for newer investors to do, to help wrap their head around absolute value of a business - to disconnect from the typical “ Lowe’s is 15x and the Depot is 20x, so Lowes must be cheap” mentality. 
     

    try a DCF on HTL - it doesn’t work…lol…

    18. Intrinsic Value – Discounted Cash Flow

    in General Discussion

    Posted

    It’s more about being right on the cash flow, less so on picking the perfect discount rate. Try using 10%, it’s your opportunity cost %. You have BRK available ( or the S&P 500, you can argue…) to buy which will give you 10% - it’s your hurdle. Whether you use 8.1, 8.9, 10.1, it doesn’t really matter, the value will scream at you. That’s my un-academic view. Others will chime in on risk premium,  WACC, long bond rates….it’s all over kill.

    Fairfax India new issue

    in Fairfax Financial

    Posted · Edited by longlake95

    14 minutes ago, Xerxes said:

    I am going to get shot for saying this in an FIH related thread. But I would be careful of these orders you see coming out of Paris Air Show. 
     

    Just like when the automakers were falling over themselves to place POs for chips few years ago, you have the same phenomena happing in the aerospace industry. Lots of airlines FOMO buying production slots in the out years of 2030s.  
     

    Take it for what it is, the directionality of India trajectory. But that is about it. 

    Yes Xer, you’re right they are buying “options” on airframes in many cases. I do know (from industry contacts) between growth and a bulge of airframes reaching end of useful life globally, there’s a good chance they take delivery of these airframes or sell to someone else who takes delivery. Not withstanding COVID, airlines have sweat the hell out of these airplanes, there is now a trend to moving to “larger” narrow body airframes. So net net it looks favourable. 

    variant perception - how do you get yours?

    in General Discussion

    Posted

    1 hour ago, james22 said:

    Inverting:

     

    Why you believe making your research process better will improve your returns?

     

    Unknown unknowns always existing, better research will likely only make you overconfident.

     

    Reading:

     

    How many here are really familiar with the arguments for indexing? Compare their returns to the S&P500 every year?

    Same….most of my ideas revolve around what a business won’t do as opposed to what it will do. Many ideas have the same narrative: this biz doesn’t have to do much other than get back to “normal” (whatever that is) and we do ok. Any “growth” on top of that basic idea is gravy. Combined with a heavy does of common sense and basic probability. 

    Historic Milestone

    in Fairfax Financial

    Posted

    10 minutes ago, cwericb said:

    But Berkshire does have A and B shares.

    yes, without dissecting this 10 ways to Sunday 😄, WEB would have likely preferred not to have the B's, but was forced to jump onboard having 2 share classes - when some people were trying to flog a security/fund/LP etc, made up of just BRK sliced into smaller pieces. Then he split the B's to accommodate the small BNSF shareholders.  I'd maintain $1000 is a small "price" to pay for entry into a diversified well run....we expect going forward, business. That's just one iPhone that lots of people carry around.

     

    but i'm probably wrong. 😉

    Historic Milestone

    in Fairfax Financial

    Posted

    Viking - you're right that investors don't have the same relationship with Prem/FFH, due to some of the blighted history. This will take time to heal/prove. I'm just not sure that a split, why improving liquidity, changes much in how the stock tracks intrinsic value over time. It may add more volatility - as the renters busily buy and sell FFH - with every new twitter post. 

     

    BTW, agreed on the Prem's answer on debt...i'd like to see lower leverage. FFH can/will do fine if they take a page out Omaha.

    Technical based trading

    in General Discussion

    Posted

    5 hours ago, vaibhav said:

    We all know that technical are important and can provide a good opportunities for investment and trading.

    Lets use this space to discuss the chart of stocks which are making any technical pattern and should be looked into.


    Really?

    • Haha 1
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