giofranchi

If you believe FFH could increase equity from now on like MKL might do, or that FFH could increase both BVPS and dividends like TRV might do, FFH is clearly undervalued today. On the other hand, if you believe FFH will go on performing like a mediocre insurance company, FFH might still be overvalued. I am not adding more shares right now: it is not a judgement about their future prospects, but it is simply because I like a diversified portfolio and don't want to let any position become too large. Cheers, Gio

and A move to more of these "paid to wait" type deals is very welcome cheers nwoodman Good find! Thank you for sharing. Cheers, Gio

Thank you very much for all the different perspectives, When they were poor underwriters nobody thought they would improve someday and become profitable. Now they look like poor investment managers, and of course nobody seems to believe their investment results might improve in the future. Personally, I think it is easier to give them credit now on the investment side then it was to give them credit back then on the operating side. Because they have already proven they can choose investments wisely in the past. Though I wouldn’t talk about 15% annualized anymore, nor I have any idea which kind of return should we expect from now on, I believe if they manage putting together both good underwriting and good investments, the business model is quite sound and satisfactory results will follow. We will see. Cheers, Gio

Sold ACGL and used the proceeds to buy AMZN. ACGL was a small position AMZN is a small position. Cheers, Gio

Sanjeev, believe me that I have enjoyed very much the couple of dinners I had the chance to attend! It simply is not easy for me to come every year from Milan... If it were easier and less time consuming, I would surely attend every single year. If it is of any help, I can buy the ticket even if I won't be able to be with you this year. Please, let me know. Cheers, Gio

My main takeaways: https://twitter.com/giovfranchi/status/844222400447307779 https://twitter.com/giovfranchi/status/844475949714460672 Cheers, Gio

My downside protection is the meaningful fcf the businesses I privately own and manage generate at the end of each month. And I don't know of any other kind of downside protection that really works. Cheers, Gio

Thank you! Cheers, Gio

Thank you, Ross! I will look into it carefully. Ok. I like Apple, therefore I am not really worried about this new and very large investment. Of course I understand anyone has his/her own view about Apple! Mmm... I am still skeptical... If consumers want a treasure hunt, why cannot Amazon and/or Alibaba give them such an experience? Let's put it this way: 1) If TJX, IKEA, and Costco could go on giving their customers something they cannot find at Amazon and/or Alibaba, TJX, IKEA, and Costco will be fine. Also Amazon and Alibaba will be fine and will keep growing. 2) If TJX, IKEA, and Costco could NOT go on giving their customers something they cannot find at Amazon and/or Alibaba, TJX, IKEA, and Costco will start to shrink. Instead Amazon and Alibaba will be fine and will keep growing. Of course TJX's track record till now seems to prove that 1) is more likely than 2). But will it continue to be so in the future? I don't know the answer, and that's why I prefer to hold those cos which will be fine in both cases. Cheers, Gio

Thank you Ross, I would like to know your mind on four topics: 1) What do you see in AXP that prompted you to make it the largest holding in your portfolio? 2) I don't know LKQ: another large position of yours. Why? 3) BRK is a small position. What concerns you at this point? 4) Finally, TJX is a wonderful compounder: why do you think they have been so successful in a very tough environment for retailers? Cheers, Gio

Thank you for this. Just makes it all the more ridiculous. I was relatively understanding of the partial move post-election to reduce duration and hedges. I did the exact same thing until we got more clarity on tax reform which had the potential to be a BIG change in my thesis. As time has passed, it appears tax reform won't happen quickly and won't be anywhere near as big as most Republicans would like, so I've added mine back. Fairfax, on the other hand, went ahead and sold all of their bonds and killed their hedging program in the middle of a tightening cycle with valuations at their 3rd most expensive ever while corporate profits are significantly off their 2014 highs...all because of a change in president? How important is public policy? (JPM 2015 AL) Cheers, Gio

+1! Cheers, Gio

Yeah! That's basically the reason why I am still holding it. We'll see! Cheers, Gio

Agreed 100%! Last year again they lost money with their equity investments. It’s hard to believe… I still like the business model of course, and I still like management (they have done a great job on the operating side of the business in recent years). But insurance without good investment capabilities is clearly unsatisfactory: they should prove they can be good stock pickers again. Cheers, Gio

By "off of sugar" which percentage of carbohydrates in your diet are you referring to? Those days in which I stay below 40% are the ones when I eat no bread, no pasta, and no desserts... Cheers, Gio

Very glad to hear that! And I agree 100%. Cheers, Gio

I have opened a position in The Travelers Companies (TRV): Average annual operating return on equity over the last 10 years: 13.8% CARG in BVPS over the last 10 years: 9.7% BVPS in 2008: +5% CAGR in dividends over the last 10 years: 10.1% Total return to shareholders for the last 10 years: 250% Dividend Yield: 2.2% Payout Ratio: 25% Debt/Equity: 0.26 Price/BVPS: 1.4 P/E: 12 This is imo an outstanding company selling at an attractive price. The change in management that occured last year might constitute a source of uncertainty. Anyway, Mr. Schnitzer already was CEO of Business and International Insurance, and seems to know the company very well and to be perfectly alligned with its culture. Cheers, Gio

I agree with all you have said. And I have twitted many parts of this book because, besides the continuity of culture and the fact there is no replacement for Buffett, I have found it interesting and useful to know lots of businesses BRK has acquired through the years better. Cheers, Gio

+1 They have been harshly criticized for their investments in equities recently: well, it seems that at least some of them are turning out to be quite profitable! Cheers, Gio

+1 Cheers, Gio

Could you educate me? I missed this. Thanks! Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually. But it looks pretty obvious who would run Fairfax if Prem could no longer do so. If you don't really know, time to do some legwork and figure it out. :) Incidentally, no one has ever said anything to me. But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking. Cheers! Ha - OK! I also have a fair idea, although I am nowhere near as well informed as you. However I read your comment to mean that an announcement had been made, hence the question. Pete, It really is obvious! Sanjeev is going to merge FFH with PDH and he is the one who will be running the show!! Cheers, Gio

It is exactly what I asked Picasso for... And of course I don't think it would be a bad idea! I try to stick to "great businesses, with great management, at fair prices" because the time I devote to investing in the stock market is limited: I run a business which provides useful services and products and which has given me great satisfaction (until now at least!). And the endeavor to make it grow consumes the majority of my working time. But I recognize the fact that other investing strategies (micro-caps, restructurings and special situations) might uncover much more value and therefore yield much better results. Like the FELP thread has demonstrated or like the results posted by writser and Hielko demonstrate. I wouldn't mind investing with a manager who has a good track record in finding special situations that have been rewarding, who takes the time to explain in great detail what he is doing (like Picasso has done with FELP), and whose fees are reasonable. Cheers, Gio

I am reading the FELP thread. The timing was almost perfect and therefore some good luck might have been involved. Nonetheless, I am really impressed by the amount of very carefully executed work Picasso has put into this idea! Really amazing! I know I would never be able to dig so deeply and masterfully into any stock market idea. Picasso, next time you start a thread and notice I am not following, please send me a wake up call through DM!! Cheers, Gio

Picasso, Is there a thread about FELP? If so, I would like to read it and understand your reasonings about the company. If not, where could I find more information? Thank you! Gio

The equity of my company has increased 16% this year. 12% from operating results + 4% from investments. I have also paid out a 1.5% dividend. Since 2010 the BV of my company has increased at a CAGR of 17.3% (dividends excluded). 2017 operating results should be solid: in 2016 we have signed a contract for monitoring the structures of hundreds of residential buildings in Northern Italy and the seismic retrofitting of a few. Last year we have signed a contract with Salini-Impregilo for some seismic analysis of the structures of the new metro in Lima (Peru), a relationship that has worked well this year and will go on in 2017. In 2016 we have also signed contracts with Autodesk and Oracle University to provide specializing courses that are very much sought after by engineers and architects: they should add meaningfully to both our top and bottom line in 2017. On a sour note a good contract with Italcementi will come to its end next year... Overall, though, I expect operating results to be quite satisfactory in 2017. I invest the free cash of my company in the stock market (funds that I still have at my disposal after all the investments for growth in my company have been made): results in between 5% and 10% will be more than enough to achieve my goal of compounding BV at 15% annual for many years to come. Last year and this year have been disappointing. Cheers, Gio