SafetyinNumbers

My guess is that if estimates go up post quarter that eventually the stock will resume moving higher but thankfully I don’t have to bet on it.

2.5x+ BV starting to seem expensive or is something else going on?

Thanks!

Thanks for sharing. Do they have the FIH.U transcript as well?

Thanks for sharing. This moment at the AGM forced me to add even though it’s a full position. If I can paraphrase Prem here: We’re sitting with the bat on our shoulders waiting for fat pitches and virtually every one we have swung on lately has been knocked out of the park. We should have a rating system based on dollars. If a trade makes $1b it’s a home run like the TRS, duration decisions which allowed for the premium growth and saved billions, the SIB etc.. Right now, I think they are stating plainly that quality compounders on sale is their sweet spot. The beauty of the giant float is that just stacking cash gets them over a 15% ROE. I can see how buying a crash could increase returns and increase the multiple i.e. decrease negative Social Value. Lots of investors won’t buy Fairfax because they only buy quality and Fairfax does not own quality i.e. Fairfax owns stocks they would never buy. Part of Markel’s premium is because they are associated with quality as it’s certainly not because of recent returns. I had a PM friend say FFH’s reputation is as a junk collector but that could change quickly if price changes quickly. They also seem to have a lot of excess capital. Float is $33b but they have $45b of fixed income. If there is a market dislocation like the pandemic etc… Fairfax might be in the position to deploy 20% or more of its market cap in high quality stocks or the index at a fair price. VOO on the 13F maybe isn’t much of a head scratcher anymore but a capital allocation decision consistent with a new mentality. Of course, we’ll have to see what they actually do but each fat pitch they swing at could super charge ROE and BV if they get a hit and it seems to me like an environment rich in potential fat pitches including a market dislocation.

I use 10% as my hurdle rate since that’s an estimate of long term equity returns. I’m not sure what they use.

I think Fairfax is an absolute return investor and not a relative return investor. They aren’t trying to beat the S&P/500.

My guess is it should increase the deferred tax liability all else being equal by the increase in the inclusion rate. Anyone have a better idea? If my estimate is right it would increase the deferred tax liability by ~$412m or ~$18/share.

I asked the question about using a structure where FIH was the GP. I thought the answer suggested it was the likely possibility but others in the room didn’t have the same takeaway.

@hardcorevalue presented BAT so he can probably help.

There was no explicit mention of IDBI but it was alluded to that the decision would be post India election (early June). Generally I got the sense that activity will pick up across the board in India once the election is over. Also, I was the “someone else” who had the opportunity to sit on the panel with Viking at the dinner. I hope I made sense even if I wasn’t memorable!

Thanks! I’m still confused about what @John Hjorthis upset about.

You think they are lying in these two slides?

I think this is what he’s referring to. https://www.fairfax.ca/wp-content/uploads/2023-Fairfax-Financial-Holdings-Limited-ESG-Performance-Report.pdf

Those were the old estimates unless they are unchanged.