giofranchi

http://www.gurufocus.com/news/217564/nov--a-good-time-to-buy giofranchi

Hi tripleoptician, no, I didn’t. And my firm is invested in TPOU, not in TPOE. Though they declared they will go on paying a special dividend equivalent to 4-5% of NAV, I would rather see them interrupt this policy and buy back a lot more shares. I don’t see the point of paying large dividends, when they are clearly very much tax inefficient… Anyway, as long as Mr. Loeb goes on doing a great job, I will certainly not sell because of tax matters. :) giofranchi

You are very welcome! :) giofranchi

Hi luck, no, I am from Milan, Italy. And I invested in TPOU through my firm’s bank account (Intesa San Paolo SpA). I am not aware of any peculiar tax consideration for those outside England on capital appreciation. Though, I must say that at the end of 2012 TPOU distributed a very generous special dividend over which my firm was taxed 20%, instead of 15%, the norm in Italy for foreign dividends. Besides, tax considerations for a firm and for an individual might differ a lot. Sorry, I cannot be of much help… giofranchi

Full Year Results for the Twelve Months Ended 31 December 2012 giofranchi 2013-04-25-Full-Year-Results-for-Twelve-Months-Ended-31-December-2012.pdf

IceCap Asset Management April 2013. giofranchi IceCap-Asset-Management-Limited-Global-Markets-2013.4.pdf

txitxo, I think the image in attachment tells the whole story: with the Euro, for Italy to close the gap in competitiveness with Germany, prices should decline by as much as 28.5%. How could Eurobonds solve this enormous problem? giofranchi Pocket-Changes.bmp

Hey! I was thinking about exactly the same thing! You have just posted this question some minutes before I could do it! ;D It is very clear, from what he has written and from the presentation he has attached to one post of his, that Tommm50’s knowledge about the insurance and reinsurance industry is deep (by the way, thank you for answering to my question!) and even a match for twacowfca’s! It would be a real pleasure, and a true learning experience, to spark a conversation among them about Lancashire! ;) Cheers! giofranchi

txitxo, it is DIFFICULT. And men don’t manage difficult things very well. Things should be kept as easy to manage as possible. As soon as they get to be complicated, you can bet on some terrible mistake to be committed and some sort of crash to come. Tell me of a currency union that really lasted throughout history… not a single one. Because they are extremely difficult to manage, in an already highly complex system like human society is. If you tell me that the blue/red bonds proposal of von Weizsacker and Delpla is just a tool to keep us from the brink of disaster, while we work our way to a “White House” in Berlin, than I could agree. Vice versa, if anyone (Mr. Soros included) tells me that it might be the final and permanent solution to all our problems… well, then I have to disagree. Because I don't understand it. The Euro might be the first currency union to be really long lasting, without a political, banking, and fiscal union, but why? I cannot see any true reason. So, the only questions that matter, imo, are: do you really see a "White House" in Berlin? And, if so, how long will it take us to get there? Because in the meantime we must go on dealing with difficult things... :( giofranchi

ap1234, I understand your point very well. Unfortunately, I cannot answer to your question precisely. Because I really don’t know how much float Fairfax must keep in bonds and cash at any time, no matter what. I know it might be an apples to oranges comparison, but, if you look at Berkshire’s Consolidate Balance Sheet at 2012 yearend, you can see $42 billion in cash, $31 billion in fixed maturity securities, $86 billion in equity securities, and $191 billion in total shareholders’ equity. It shows other $5 billion in cash in Railroad, Utilities and Energy and in Finance and Financial Products, and has total assets of $427 billion. So, Berkshire at the end of 2012 had: - 25% of equity in cash - 11% of total assets in cash - 16% of equity in bonds - 7% of total assets in bonds - 41% of equity in bonds + cash - 18% of total assets in bonds + cash - 45% of equity in stocks - 20% of total assets in stocks - 184% of equity in stocks + investments other than cash and bonds - 82% of total assets in stocks + investments other than cash and bonds This is something I have checked out very quickly, so there might be some errors, but I guess it is clear that Berkshire returns in the future won’t depend very much on the bonds environment. I don’t know if Fairfax could replicate the way Mr. Buffett invested Berkshire growing capital through the years, buying an ever increasing number of whole businesses, instead of solely relying on the stock or bond markets, but I guess Mr. Watsa will carefully take it into consideration, if other opportunities for satisfactory investment returns won’t be available. giofranchi

Speaking about Mr. Soros, I must admit that most probably I am the one who doesn’t get it… ;D Still, I think Eurobonds could be the third way to solve our problems… which won’t work! Eurobonds mean that the Germans must accept to share all the liabilities, without retaining control over the assets… would you ever accept something like that? It would be like starting a business with a partner of yours: you put up all the capital, and he controls all operations?! Would you ever do that? Even if you trust him very much? I wouldn’t. Because it doesn’t make any economic sense. Again, either you we a “White House” in Berlin, or every nation will get back to its currency. Nothing else makes economic sense to me. But… I am no George Soros, so I must be surely missing something here! :( giofranchi

Thank you very much, Parsad! Very insightful and helpful answers, as always! :) giofranchi

I have heard this kind of objection to OAK future returns too. Yet the evidence is that OAK returned much more on the capital it raised during distressful times than during good times. Imo, both if a low interests world lasts a long time, and if interests start creeping up, capital will leave other insurance companies and flow into Fairfax. Because both those environments are extremely distressful for standard insurance companies, while Fairfax has shown to be a much more skillful and opportunistic allocator of capital. If Fairfax achieves a 7.5% annual return on its portfolio going forward, it will compound BVPS at 15% annual. A 7.5% annual return is 20% lower than its historic average. How is it going to achieve that? Well, if I knew exactly, I would be running my own Fairfax, right?! ;D Any way, I can try a guess: of course, not lots of treasuries… instead, distressed debt special situations, a much larger percentage of the portfolio allocated to equities (as soon as this market finally comes down!), and acquisitions of entire businesses a la Berkshire, or a la Markel Ventures. Acquisitions of entire businesses would be almost a completely new source of growth for Fairfax! Last, but not least, if you heed Mr. Barnard’s words, and you factor in the fact Fairfax is striving to achieve “underwriting excellence”, the annual return from investments needed to compound BVPS at 15% annual in the future could be even less than 7.5%. :) giofranchi

Yes! As I have said prices in Italy, and I guess also in Spain, and maybe even in Greece, are still way too high to be truly competitive! And the cause is simply that we do not have a currency that makes economic sense. :( giofranchi

txitxo, that’s exactly why they cannot afford the Euro. They would be much more competitive with a currency that truly makes economic sense for Spain. The same applies to Italy and others. Keynes was right, and again we won’t solve our problems until either we get to a United States of Europe, with a political, banking, and fiscal union, instead of only a monetary union, or Italy, Spain, and others get back to their currencies. I don’t see a third way to solve our problems. In Italy I keep hearing politicians talk about many things, yet no one speaks about the real problem: Italy has been losing in competitiveness on Germany and northern Europe in general for 12 years now, the gap is getting wider and wider, and prices in Italy are still way too high. And yet, no one even tries to tackle this most crucial issue! giofranchi

Tommm50, could you please elaborate a bit more on this one? I believe that insurance, reinsurance, and even investing require the same skill set. --Steven Markel, 2008 Thank you, giofranchi

Find in attachment the HDGE ETF Market Commentary for April 2013. giofranchi HDGE_PMCommentary_0420131.pdf

Thank you for posting this, racemize! :) giofranchi

The long history of long (10-years US treasuries) yields. giofranchi

Not easy to do! But, imo, a very good job! :) Thank you, giofranchi

Just GREAT!! Thank you WhoIsWarren! :) giofranchi

Thank you! Very interesting. Imo, especially point n.9 (the second one! ;D) is good news! :) giofranchi

It makes sense to me! Still, Mr. Barnard has just started overseeing all insurance operations, so I hope he will bring some pleasant surprises in the future and FFH will deliver even better results! :) giofranchi

Ah! Now I understand. Thank you! giofranchi

Why Has The Price Of Sirius XM Stagnated? http://seekingalpha.com/article/1360311-why-has-the-price-of-sirius-xm-stagnated?source=email_rt_article_title giofranchi