FrankArabia

awesome!! My fave investor actually.

great link. thanks for the information.

tell that to Prem Watsa...his insurance biz is not what I would call "great" though it is improving...but he has been putting out spectacular results for over 20 years without the help of a "great" insurance op

businesses will continue buying PCs and INTC and PC makers will see a lift in demand when businesses eventually do an IT refresh....imagine doing financial modelling on a tablet? that's like eating with your feet.

i know a few speculators in the toronto housing market.......i think i'll let them find this out on their own.....

You seemed quite upset at the whole ordeal.....

why did he call Prem a fraud? what was his basis?

what exactly do they see in this company? looks at best like a cigar butt....more like a ciggerette butt though

Spanish and Italian babes are still the hottest.....Russian babes too....

great stuff. thanks for posting.

Well, of course you are right… as far as history is concerned! But, paraphrasing Mr. Buffett, if history were all there is about investing, librarians would be the richest people on earth. Past results are very important, far from me saying the contrary! But, they are not everything. You must also judge the business model, the management, and the price. Only then you can make a bet on the future! And I like what I see in FFH: I believe the opportunities to markedly improve their underwriting performance are there and will be exploited. Frank, do you really think you would be able to buy one of the best capital allocator out there at book value, if it were also the best underwriter?! No way, right? Think of it this way: on the underwriting front they have much room to “surprise” the market. And I see all the necessary premises in place, to achieve that: a great underwriting philosophy, a disciplined management, and troubles inherited from the past (see, for instance, Crum & Forster) that are constantly, albeit slowly, fading away. giofranchi I think its important to look at history to see what is capable. Especially in businesses like insurance/banking, their historical record matters. unless its a situation like AIG (or other) where a turnaround is the main theme I will not pay market value for the business. LUK, L are also in similar boats and as Palantir points out is trading for even less. EVERY insurance company talks about how their underwriting performance is safe, less risky, etc. Until I see evidence of this, I'm not going to assume and pay full value for it. Correct me if I am wrong but isn't the whole FFH record predicated on outsized investment returns? I think at the end of the day, most people aren't buying FFH for its insurance. its the ability of Prem that is problably keeping this company from trading at 0.8 book. I agree however that improvements in the insurance is likely a free option, but I rather get AIG (0.6 TBV) for an insurance turnaround story.

BRK has great underlying businesses. GEICO, sees, furniture mart, dairy queen etc. List of great businesses goes on and on, but nobody/or most (generalizing) is screaming about FFH because of its underlying business. People like this stock because its Prem Watsa and his amazing historical returns on the investment portfolio. Take that away and you got an average insurance operation(s). FFH's underlying business (not investment portfolio) is mainly insurance from what I know. Given what I have seen, their insurance ops are not world class. I look at their combined ratios and they appear to be "average" though I did not go into all of the subs to see their peers. But I have seen combined ratios north of 100% more times than I would like. Let me ask you, if you got the investment team at another insurance operation (SLF, MFC, GWO) operating at the healm of FFH would you still be bullish on FFH? of course not.

FFH at book is no steal. its slightly below intrinsic value but given its current investment position, how can you justify a higher than book multiple? They do not have great underlying businesses so all you really have is the hope that Watsa's council pulls something out of the hat in terms of unexpected or above average returns. Interest rates are at a low so insurers aren't going to do as well plus other insurers that are better are selling at or just a few notches above book. FFH looks to be dead money for the near term.

any chance you can post the presentations?

i have the first and second. I'm going to buy the third. I didn't think it would be too different but given what I see here, perhaps I will shell out the big bucks for a copy.

thanks Gio. Always helpful. I'm going to keep my eyes open on this stock for sure.

Gio, I believe they're hedged on both the up and downside (no net exposure) on equities. Can you help clarify on your statement that they will benefit from their investing wisdom?

I have read a lot of the FFH annual letters (though not as well versed in them as others here) as well and their record speaks for itself. However, given their current positions, I'm not so inclined at the moment to put money behind FFH. What do you expect to happen now to think their investment gains would work out so well? everything is hedged and they got a few one off derivative. i'm anxious to see how they perform but can't see how they will make their 15% on book in the next few years.

a company like FFH is especially reliant on management as its key product (investment returns) is directly at the mercy of management. I am not sure how everybody views FFH, but this is a hedge fund with an insurance wrapper, not the other way around.

INTC, TEVA, ....

Gio, Its interesting you mentioned FFH is a "great business". No doubt Watsa is a legendary investor, but don't you think FFH is really a "great hedge fund" in that if Watsa (God forbid) something were to happen to him, FFH will problably (saying that with tongue in cheek) not repeat its historical performance? Certainly FFH is not like a BRK where the underlying businesses themselves are industry leading with great moats (perhaps I'm wrong). From what I see, their insurance operations appear "decent" but not really outstanding per se on the level of a Chubb Corp. I have met a few value guys here in Canada this year and a few of them actually have FFH as their biggest holding. You certainly can do much worst than FFH.

thank you Gio! clears everything up. You think he'll make money on those? I looked into buying FFH but given what I am seeing (deflation hedges, equity hedges) I sided that they problably won't be going anywhere (the stock) anytime soon. If you're a shareholder (assuming you're), why do you like it?

aren't the FFH deflation derivatives under water at the moment? how much deflation would it take for the contracts to be in the money?

you guys are good! YTD is not fair for me as lots of my positions rallied from January onwards...its inflated and not indicative of purchase price August Y/Y i got a bit above 10% (Cdn currency killed me as all my stocks are in US dollars).

i been looking into FFH for sometime. their insurance operations are decent but you're really buying Prem's investment power on FFH (unlike BRK where the operating assets are excellent). problem I have are these equity hedges which if i'm not mistaken, means you're going to gain largely on the insurance operations alone. I think the stock can trade down from here and if I were to buy an insurance company, I think I can find better (or maybe not).