Phoenix01

I think that focusing on the rate of growth is the most important thing here. Production will grow, stabilize and then drop. We are still in the growth stage, but it slowing. The slowing growth is the basis for the "PEAK SHALE" call. Just keep in mind that we have yet to reach peak coal....

In 1999, FFH was trading over $550, and it had dropped under $200 in 2000. That caught my attention and started my journey with FFH as I was buying up shares around $170. One year later, I felt like genius as the price rose up to $289 in 2001. Then the short attacks started and that was when I switched from being more of a technical trader to a value investor. Thanks to @Parsad and the amazing folks on this board (@Crip1 @Dazel @cwericb @Viking @SharperDingaan), I was able to learn about the insurance business and FFH in particular. When I showed up to the AGM and met the FFH management in person, I was blown away by their openness and integrity. They were clearly smarter than I will ever be, and I thought it would be a good idea to have them manage my money. My conviction grew stronger as the short attacks intensified and I kept buying all the way down. My lowest entry was at $75 and I scraping together every dollar I could to buy at what I was convinced was the bottom. The rapid rise to $225 ballooned my net worth in a few months, and that scared me into selling half my position. I vowed to never sell the remaining position and have kept that position ever since. Not the smartest move, but I have learned a lot from the painful journey (as well articulated by @Buffett_Groupie). I am grateful to have had a front row seat to see the pre-AGM activities and this forum grow over the 25 years.

They may not be able to write more business if their balance sheets are impaired by rising longer term rates. I am trying to figure out which of FFH competitors are exposed.

Beside Brian potentially making huge gains with the rise in the long term rates, what will the impact be on the the underwriting? How many P&C insurance companies are going to be capital constraint based on these rising rates? Will this be the basis for the hard market to continue? Have any board members dug into this?

If the stock price goes up, they make money. If the price goes down they buy back more shares. Not seeing the down side as long as the business continues to deliver lots of cashflow.

My perspective is that Nvidia has cornered the market on Compute and all the major AI players are scrambling to get as much as possible to scale their models and gain first mover advantage on this massive opportunity. This will peak like it did for Cisco and Nortel, but I do not know the timeline and have no insight. The major tech players have no choice but to accelerate the development of their AI models, but the eventual monetization path is not clear. It will be interesting to see how this plays out, but again I have no insight. Data is the foundation for training these models. Shutterstock is the leader in providing licensed data for training the AI models. That is the part of the puzzle that has yet to solved. I have posted more on the SSTK thread.

We all owe Andy Benard a massive amount of gratitude for his leadership in turning around the FFH insurance subs.

Prem kept the insurance companies independent of each other prior to 2011. When they were placed under a single leadership umbrella, they shared best practices and there was a huge improvement. Each company remains independent, but accountable to the single leadership team.

He is an analyst for RBC that covers Fairfax. He has been fairly conservative with his valuations in the past.

Looks like Mark Dwell has seen it

Part #2

Here is a good review of the MW report. https://youtube.com/watch?v=nsxGizwLTd8&si=KJEEabBKv7v5b70z

That is a great way to keep the substantial upside of FFH and protect against the temporary market fluctuations. Are there any insurance companies that are better candidates to go short?

Share Message - Sam Altman: Ousted OpenAI boss to return days after being sacked https://www.bbc.co.uk/news/business-67494165

It can also be risk mitigation. A major disaster could cost FFH double since its price would likely drop as well and they would get hit with the TRS payment during the major event.

There are 3 keys factors to developing AI: Talent, Compute and Data. There has been lots of discussion about the talent that OpenAI has thrown away, and lots of discussion about the chips that are required to allow the progress to continue. However, there is very little discussion about the Datasets required to train the AI. There are big opportunities in this space and this is a bottleneck to commercialize the AI models. You might want to take a look at Shutterstock (SSTK) who has an interesting business model to leverage their huge high quality picture, video, audio, 3D collection for AI training. The OpenAI team has a long term relationship with SSTK to supply access to there collection to train and maintain their models. Google, Amazon, Meta, Nvidia,... have also signed up for access to the SSTK collection.

Looks like OPEC+ will cut supply if the Iran deal gets ratified. The price of crude is reacting to the announcement and is up over $3 today.

Viking- Thanks for sharing. It looks like the Iran deal will allow OPEC+ to increase their output quickly. Should find out more later this week. The release of the US’s strategic petroleum reserves at about 1 million bpd ends in mid-October; Iran’s 100 million barrels of stored crude and condensate could effectively replace that for three months. By next year, 1-1.2 million bpd of Iranian supply would return to the market.

Thanks SD for generously sharing your wisdom. Protecting the downside by taking $ off the table in times of doubt or once personal objectives are meet is very sound advice. Make me think of Buffet's rules: 1) Don't lose money. 2) Don't forget rule #1. These are the dangers of trying to capture all the Alpha. Pigs get fat and hogs get slaughtered. Similar to Prem's warnings about reaching for yield.

With all the volatility in the energy sector, how would you recommend hedging against sudden market sell offs? Does buying short duration puts options on long positions make sense? Are there better strategies?

Nine point energy income fund

Fairfax might have bought more TRS and the counter party might be covering their exposure. We will find out in a couple of weeks...

If FFH disposed of shares on the Thursday price spike, by when would they normally have to declare it publicly?

Thanks for that info. Much appreciated