SafetyinNumbers

They don't disclose it because they have a policy. If they didn't have a policy they would have to decide on each portfolio transaction if they should disclose it or not. It just sounds like you don't like the corporate culture or the long term orientation. Not every stock is for everybody, that's what makes a market.

Maybe they did an inverse total return swap on BB. Would be really easy for them to do since they can lend their own stock to the counterparty. We probably just need to see the Q1 report in less than two months and you might have your answer. How big a number in investment gains in Q1 will make you happy even if you don't know BB gains are part of it? Do you have an estimate with BB marked to market? Some of the big names have moved up a lot so far in 2021. I am just speculating of course. FFH did a long total return swap on its own stock and didn't have to file anything on SEDI. It would follow, it's the same if they entered into an inverse total return swap on BB. Why would he ever say anything if that's the case? Better to be the supportive long term shareholder for BB's sake which is of course in our best interest too.

Buffett would never report anything like that... I used to like him but he has become a tool... There is an alternative theory. I want to point out he has a BEng and not a BMath

Added more ATTO. The stock should be up today but markets are weak and ATTO is in no one's benchmark.

Added some more ELF.TO Earnings should be out this week (tomorrow?). Reported NAV will likely be 2x+ share price, NCIB renewal and a special dividend potentially also on tap.

Rising rates is a tailwind for Fairfax (all things considered). They hold a disproportionate amount of their very large bond portfolio in short duration bonds or cash. As rates rise they will take a mark to market loss on existing holdings which will lower BV. However, if they are able to redeploy some of the cash/short term securities into higher yielding bonds then this will increase interest income. Presumably they would also be able to discount estimated future insurance claims at a higher rate which should help increase book value. The reserves are established and reported undiscounted. There was a time when they established and reported reserves for certain workers' comp lines of business (Zenith sub mostly) on a discounted basis but this was a small part of claims overall and, starting in 2012, they no longer described this discounted reserves sub-component. Thanks. Can you tell I'm a new shareholder?

Rising rates is a tailwind for Fairfax (all things considered). They hold a disproportionate amount of their very large bond portfolio in short duration bonds or cash. As rates rise they will take a mark to market loss on existing holdings which will lower BV. However, if they are able to redeploy some of the cash/short term securities into higher yielding bonds then this will increase interest income. Presumably they would also be able to discount estimated future insurance claims at a higher rate which should help increase book value.

Added a touch more ATTO. A full position for me but I trade around the edges. I can't see a specific reason for the sell off but it is up a lot this year and some fund might be looking to take profits. They report next Wednesday night with the conference call on Thursday morning (Mar 4) at 10 am. At the very least we should have analyst estimates increased post report as all of the analysts have been restricted because of a debt refinancing since they pre-reported better than expected revenues and EBITDA. Consensus 2021 EBITDA is $186.5m and they reported an EBITDA range of $50-55m for Q4. That should lift consensus above $200m. At 5% cc revenue growth and 14% margins, 2021E EBITDA would be $217m. They pre-reported margins of 14-14.5% for Q420 so it doesn't seem like a big stretch to assume that for the full year. Each point of margin adds ~$15m to EBITDA. At $22.50, the company is trading at 4.6x EV/EBITDA on current consensus 2021E EBITDA. If consensus jumps to $217, at 4.6x, the stock would trade at $30.50. The beauty of leverage and only 16.3m shares outstanding on a fully diluted basis. I am a valueHODLer here until the strategic sale of the company in 2022 or 2023. Peers trade 8-15x EBITDA. If a sale could be based on 2023E estimates, assuming the same sales growth and a lift of EBITDA margins to 14.5% or the half way point of guidance. We could have a selling price of $90+ based on the low end of the comp range at 8x. Still a long way to go from here of course but I think it's important to understand the roadmap.

I assume if FFH could do enter into the long side of total return swap on its own stock then it could enter into an inverse total return swap on BB. It’s pretty easy to execute since, FFH can lend its own shares to the counterparty making the borrow cost and risk free. Based on no SEDI filings necessary for the FFH total return swap, I don’t see why they would need to disclose for BB.

Maybe he's just a bad guy to me. That's ok.

I don't think it's Chamath's fault if someone invests their life savings over a tweet. He also went on air and mentioned he sold out - stock still went up. I guess it's his fault too? How's this different from Prem announcing a stake in Blackberry? Not to be vindictive - truly not, but I want to challenge your point. People who followed them into those investment loss quite a bit too. People should be responsible for their own capital, as we're in a capitalist economy. It's not his fault but he should know the consequences, so why do it?

I thought the GME Call buying tweet was irresponsible. A lot of people were hurt around that frenzy. It didn't need anymore fuel.

He's very smart and very charming but he either doesn't know the damage he is causing or he's a bad guy.

From what I could understand, FFH basically wrote a put on the public equity portfolio in order to derisk the Riverstone purchase for the buyer. Presumably if they sell positions before then, it reduces the size of the put.

Anyone find the wide range odd? $10-17 is the widest I have ever seen, I think. The deck also says, if the $100m offering is successful at the midpoint of the range, public shareholders would own 16% and Fairfax would be at 65%. Ticker FDGE (keeps the jokes to yourselves)

Farmers Edge files for IPO. Pricing Feb 22, close Mar 1. Lots of info filed on SEDAR for anyone that wants to learn more. https://www.newswire.ca/news-releases/farmers-edge-inc-files-preliminary-prospectus-for-initial-public-offering-of-common-shares-868468104.html

Do you mind explaining, Cigarbutt? I'm more of a macrotourist than anything else. Thanks!

ATTO is up 55% so far this year so far but I think the risk reward has improved and there is considerably more upside. The stock is up because Goldman finally updated their stale estimates (although they are stale again), the company pre-announced better than expected Q4 EBITDA range ($50-55m, vs consensus $45m) and they were able to refinance the 2022 debt for 5 years. The company also plans to hedge their debt against the BRL according to Fitch. I assume they are taking advantage of the newly steep yield curve in Brazil to do so. I don’t think the hedge is well known and I believe it will make the company more attractive to fundamental investors. The debt deal will close on Feb 10 so we might get more information then. Next week, the analysts who are all restricted on the bond deal will likely come off restriction and we should see an upgrade to estimates and potentially target prices/ratings. Given the free float is so tiny, an upgrade from Goldman or Morgan might result in an outsized move. Despite the performance this year, the stock is still trading at only 4x EV/EBITDA (based on annualized Q4 EBITDA midpoint). We haven’t seen any multiple expansion yet. I think we can get to 8x within a few years which is $72 based on the same Q420 annualized EBITDA estimate of $210m.

I guess that question was already answered. This deal seems like it’s all about aligning incentives. New management did not want to underwrite legacy investments and Fairfax gets more leverage to the upside on the whole portfolio. Better for Helios shareholders but good for both. I think that’s right although new management’s scepticism about these investments didn’t stop them closing the deal. That's true but mitigating any losses on the "Reference Investments" now should theoretically materially reduce Helios's cost of capital resulting in an increase in the share price which benefits everyone.

I guess that question was already answered. This deal seems like it’s all about aligning incentives. New management did not want to underwrite legacy investments and Fairfax gets more leverage to the upside on the whole portfolio. Better for Helios shareholders but good for both.

Are the “Reference Investments” legacy FAH investments or Helios?

I haven’t looked at Fairfax in over a decade but I’m getting intrigued. Is there a good place to start for a newbie?

I can’t answer the question but I do think the strong dollar is the cause of a lot of imbalances around the world. I think it’s artificially keeping commodity prices low which might result in supply shortages. It’s making US manufacturing less competitive which is increasing income inequality. It’s forcing interest rates negative in other “safe haven” currencies.

I’m doubling down on Atento (ATTO) for 21. I think Covid obscured the operational improvements in 2020. Net debt has declined materially in 2020 ($595m to $515m) to make the stock relatively cheaper and safer in my opinion. I held on (and added early unfortunately) through the volatility and feel better about the business than a year ago. Management did a great job managing through Covid and the decline in the BRL but the hit to headline EBITDA was hard in Q1 and Q2 especially. EBITDA margins bounced back to 12.7% in Q3 and I’m expecting improvement in 2021 to 14%. USDBRL has been stable for three quarters @5.4 and is currently below that average (which is good!). If oil rallies as many expect, ATTO could be an indirect beneficiary through its emerging market currency exposure. At current exchange rates, ATTO could put up north of $200m in EBITDA in 2021, at 8x EBITDA which is a low end multiple, my intrinsic value estimate is $67 using $500m in net debt which accounts for dilution of options and RSUs. Lots of risk in that estimate of course but too much in the price of ATTO, in my opinion. Street estimates for 2021, are very deceptive. The “street” is expecting $160m in EBITDA (11.4% EBITDA margin) but that’s made up of three estimates: Barrington $174m Goldman $114m Morgan Stanley $192m To the extent there are active managers left, I have been in the room when a PM asks an analyst what came up on the quant screen. In this case, Atento screens at 4.6x consensus EV/EBITDA. The PM will ask the analyst who covers it, he’ll ask what the multiple is on Goldman’s estimates and the analyst will correctly answer 7.8x. You see Goldman’s net debt ($686m vs $515m) is way higher because it’s EBITDA estimate is way lower. The PM will then look the analyst directly in the eye and say “Can we short it or buy puts?” and the analyst will say “No, it has no listed options and it’s illiquid.” That’s the end of the discussion. What the PM doesn’t know is that Goldman has not updated their estimates since before ATTO reported $45m in EBITDA in Q3. In fact, their 2020 EBITDA estimate is $94.9m while ATTO has already reported $107.8m 9MTD. Goldman will eventually drop coverage or change their estimate if ATTO decides to pursue refinancing the 2022 debt in January forcing them to update the street on Q4 preliminary estimates which will likely improve on Q3. If consensus moves to Morgan’s $192m in EBITDA, even at the current EV/EBITDA multiple of 4.6x that would result in an ATTO price of $25. If the active funds don’t come, maybe the quant funds will. If there is a lot of variation in estimates, it makes sense for low volatility quant strategies (most of them!) to avoid those stocks. ATTO’s estimates will become significantly less variable if Goldman updates or removes it’s estimates although the former is better as more estimates are helpful. Recently spun out peer Concentrix (CNXC) trades at around 9x EV/EBITDA.and has very strong free cash flow. Their business strategy (growth by acquisition) and market position (big in Asia and smaller in LATAM) makes them seem like the perfect dance partner for Atento in 2022 when ATTO has achieved 15% EBITDA margins and has grown sales for a couple of years (assuming stable exchange rates). At 8x 2023E EBITDA of $270m (assumes 16% EBITDA margin expectations with 5% CC revenue growth) which CNXC would pay in the summer of 2022, ATTO would fetch ~$100/share give or take. ATTO would still be accretive to CNXC even if paying a fair multiple because of synergies and CNXC has a much lower cost of capital and would save on refinancing the bonds. It’s possible, CNXC wants to buy ATTO now but the three controlling shareholders of ATTO, GIC, HPS and Farallon (~70% ownership) will want a fair price and I think they recognize it’s a lot higher than here. I don’t know what’s going to happen but with the stock less than $14 and a recently incentivized management team and BOD (1.7m options with an 8 handle in August), I like the odds. Next week should see some stock for sale as RSUs vest today and there is some forced selling to pay taxes next week by the RSU trustee. I'm estimating about 150k shares for sale.

Adding more ATTO on a retest of the breakout at $12ish. I'm not very technically inclined but that seems like an important level. More importantly to me, the move from $10ish to $12ish, took the EV/EBITDA multiple from 3.7x to 3.9x so there seems like a lot more room to run if multiples can expand or if investors can gain more confidence in the numbers after they report Q4 or if Goldman finally updates their estimates. ATTO bonds are trading in the high 90s (due in 2022) so a bit of a disconnect between equity and debt persists. The equity is significantly less liquid than the bonds which might help explain the disconnect. https://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=FATNL4525153&startdata-ipsquote-timestamp=12%2F15%2F2019&enddata-ipsquote-timestamp=12%2F15%2F2020