Hoodlum

I do wonder how much longer this will continue with the US debt rising at a faster pace than most other countries.

It would need to be a selective coding error, as the below section from the press release did not have the word “never” removed.

That is not a good look. I have a hard time understanding how that could have been a typo.

The report from National Bank yesterday detailed that the 3 largest investments that would show a gain in market value if marked to market, would offset most of the negative book value that MW found. As long as there is no material variance in overall book value then there is no need to constantly mark to market each individual investments until there is a material change in ownership. The regulatory bodies have agreed with this approach and that is why there have been no issues with how individual investments are reported by Fairfax or any other insurance business that has similar businesses that are not marked to market. Unfortunately, many investors don’t understand how the insurance company investment reporting works and MW took advantage of this to try and make a quick profit, although it looks like MW had poor timing and just broke even based on MW shorting on 1/16 and getting out on Thursday.

i agree. They knew this would be their last opportunity to get out at close to where they started their short.

I wonder if MW did this report so that their shorts could get back to their cost, allowing them to get out approx. breakeven or a small profit before the financial. This was likely a last gasp chance before FFH took off even further from where they initially shorted.

I wonder if the 30 day period of the initial short is typical. Based on the more recent short, they would cover the morning after the financials are released based on the same 30 day interval. it is also interesting that FFH is only $20 below where the most recent short was done. LOL

Bret Horn must be working on his latest update as we speak.

Fairfax response to this report. https://www.globenewswire.com/news-release/2024/02/08/2826151/0/en/Fairfax-Responds-to-Short-Seller-Report.html

It would be great to see approval for a Go Digit IPO now. A nice valuation would squash this pretty quickly.

I doubt this will be implemented this year, but it is an interesting development. https://www.business-standard.com/finance/insurance/irdai-proposes-changes-in-listing-requirements-of-insurance-companies-124020201707_1.html

National Bank mentioned a few of the driving factors for stock price increase this year. It looks like analyst are starting to catch on to what has already been mentioned here. https://www.theglobeandmail.com/investing/markets/inside-the-market/article-fridays-analyst-upgrades-and-downgrades-for-jan-26/

This may explain some of the rise this week in share price. I expect we will see increases in target price from others over the next month. https://www.marketbeat.com/instant-alerts/tse-ffh-analyst-earnings-estimates-2024-01-24/ Of course these are in Cdn dollars.

I think this last sentence is important because if we do see a sizable drop in interest rates, then that would suggest we are in a recession and allows them to move to longer corporate bonds with higher interest rates. This would allow them to extend the duration further for higher yields.

Likely done to cover the additional $5/share dividend.

In the official press release from today, Fairfax plans to buy the remaining 10% of GIG in Q1. https://www.fairfax.ca/press-releases/fairfax-successfully-completes-acquisition-of-additional-46-32-interest-in-gulf-insurance-group-from-kipco-2023-12-26/

The GIG sale has now closed. https://www.zawya.com/en/press-release/companies-news/kipco-completes-the-sale-of-its-46-stake-in-gig-to-fairfax-financial-holdings-yi3hmkx4?amp=1

Fairfax passed the 10% ownership threshold in Canada for reporting and had to issue a press release.

This was an interesting read on the impact of losses from Severe Convective Storms (SCS) on reinsurance losses. SCS losses have increased on average 7% annually over the past 30 years and have a record $60B loss ($50B of which was in the US) in 2023. While more focus is placed on the one time events of Hurricanes and Earthquakes, it was interesting to see how these these storms have been adding up to a more significant portion of Property losses and continue to grow a a high rate, helping to extent a hardening of the market. https://www.globalreinsurance.com/home/swiss-re-scs-losses-reach-record-60bn-in-2023/1447322.article

DBRS Morningstar just upgraded Fairfax Financial from BBB(high) to A(low). Unless i am mistaken, I believe this is the first rating agency to rate FFH at A(low). https://www.dbrsmorningstar.com/research/424865

Now that the US is involved and have linked their assassination attempt to Canada's assassination, it will be interesting see how this plays out. It looks like the US undercover officer who was acting as a hitman in the US received a video of the Canadian assassination the day after it took place. This was the proof the Canadian government had on India. The key will be connecting these people back to the Indian government. https://www.theglobeandmail.com/canada/article-us-investigation-into-alleged-plot-to-kill-sikh-activist-in-new-york/

Foran mining has raised $200 through a private placement at $4.10/share. I wonder if Fairfax is participating to increase their equity. https://www.theglobeandmail.com/business/article-canadian-critical-minerals-miner-foran-raising-200-million-a-rare/

This will be a big challenge. Like homeowners, the builders have been conditioned to ever increasing new home prices over the past 30 years in Canada. Any land purchased in the past 5 years would have been based on this continuing trend. New home builders are generally slow in reducing their prices or starting new developments, which is not going to work during this high demand period. I am not sure how to work around this as there are many challenges. Home builders have to pay more for borrowing and if they start building on their land for less than they anticipated, the banks may ask for more money down once the land value falls below the cost of the initial estimated value. So basically home builders will try to wait this out hoping for lower interest rates and the return to “norm” for home buying. We also have the added complexity of working from home which is helping to drive both the upgrading of homes along with empty towers. This added mismatch of markets makes a solution even more complex.

Brett is doubling down on his analysis. https://www.morningstar.com/stocks/fairfax-earnings-positive-momentum-continues

The first early estimate of insured losses fromHurricane Otis is $3-6B. This range will narrow over the next couple weeks as more data comes in. Does anyone know approx what Fairfax's share of this would be. https://www.reinsurancene.ws/verisk-estimates-3bn-6bn-of-industry-insured-losses-from-hurricane-otis/