Dazel

They have $2.5b at the holdco level...I think. That will be used for buybacks...they are not able to get that many shares daily because the volumes are low and the are restricted on how much % Wise they can buy on a daily basis...they will not spend all the cash on Buybacks right away...tender offer at$650 for $250 million might make sense....to take advantage of this sell off...And continue to pick away is likely the course.... I would love for them to buy big at these levels however! ....I feel intrinsic value here is much higher than the share price...many are emotional here. Petec....slow down...most of the 85% investment of investment at the end of quarter one in accounts at the insurance level will go into bonds. Earnings power of Fairfax is being hidden by large cash balances. Buy Prem buy....

I expect at the end of quarter one Fairfax to have invested 85% of the $20 billion cash. Old wife Old dog And ready cash

Fall baby fall...buy Prem buy. Cheers all! We have been waiting for this for awhile......

Would have been very happy with those puts today!

I hope it tanks! :)

Yep and there is the spike in interest rates I was talking about....expect Sir Bradstreet to start buying long dated bonds soon....nice to have $20 billion lying around. Fairfax down again (LOL) and Travelers up!! TRV will have billions in bonds losses and the bond market trillions!!(see previous discussion)..... 1994 Fairfax can not possibly buy back enough stock here...Let’s go Prem

I think we all should have learned that book value is overrated...if you don’t think so study Munger. Buffett followed him...Prem will too (as I said I think he has moved this way but will have to prove it)...when he said Fairfax was cheap...he was not talking about book value...he specifically said the insurance companies are trading well below their intrinsic value and then he showed us by realizing the large gains in ICiCI Lombard and First Capital. In the process he gave up little intrinsic value in relation to earnings as they were very good deals and not really adding much in the way of operating earnings. More importantly for the short term....Fairfax share price is dropping daily...while all other financials are rising. A rare opportunity these days...can’t help but let all of you know...it feels like 2003. (Partner24 thanks for kind comments you have been an MVP to this board keep up the great work!) https://www.cnbc.com/2018/02/01/when-market-says-both-stocks-and-bonds-in-bubble-cash-is-king.html

Cardboard and Partner24, That is what I am looking for...you are both correct. Show me the money...anger, disappointment and disbelief that investment team outside of Brian Bradstreet has been soooo bad! Fairfax needs to deserve respect and the investment team has to prove themselves. I think we all get that! The insurance companies, the ability of Fairfax to build new insurance companies with Brian Bradstreet creating bond income over 35 years are undervalued. If Fairfax becomes simple like Markel....which I am obviously betting they are the the time to buy back is now. If you are talking Apples to Apples compare Markel insurance to Fairfax....Fairfax underwriting has been very good for sometime. Markel 2016 $316m and 2015$429m Fairfax 2016 $576m and 2015$704m Investment portfolio’s are two to one in size $40b Fairfax and $20b at Markel. Same market cap.....Markel has done well investing and insurance has been solid...the question is will Fairfax do the same? I am betting yes. The math is on their side as the same performance in combined ratio and investment return would be at least double the income for Fairfax over Markel at starting point from these market caps. Iam tired of standing up for Fairfax many of the negative press is deserved!!!!Sooo good luck all...will wait for Prem to walk the walk...no more talk. Dazel

And to show how much people give a crap about the valuations.....Lol. Who do you think is happier coming to the office on Monday morning? Mkl is up $23 USD Fairfax down $13 cdn

Net Net to be clear it’s not exactly half of Markel book value premium and I am not trying bash Markel I think they are an excellent operation! it is an obvious mismatch in pricing when you look the two side by side....Unless you think Markel is that great and Fairfax is that Bad!

Add First capital Sale Dec 28...and insurance profit depending fires....$15b annualized sales vs. Markel’s $5b

To get the lower price shares now...the multiple is stupid low compared to Markel and the rest of the market. Markel trades at almost twice the book value Fairfax does... Markel bought $84m shares back through 3 quarters Fairfax bought $129m back. What’s Markel’s upside? Fairfax has triple the revenues and more than twice the size of investments and Markel and Fairfax has approx the same market cap. Markel has approx the same size bond portfolio as Fairfax and half the total size investments. There is urgency when you are that mispriced as the buy back would almost twice as accretive to Fairfax on each share purchase because of the valuation mismatch. The fact is Prem needs to act vigorously and quickly because like many here no one is looking and nor do the care about the crazy mismatch in Markel vs Fairfax. Markel should try to buy Fairfax it would be the deal of the century for them even the paid a 40% premium to today! Fairfax is forgotten...Prem needs to take advantage of it...it may not matter to the investment community but the employees know.....its demorilizing to go to work and know that the rest of 8ndustry stock prices keep rising and are valued at almost twice as more as your are. Berkshire has thrived on always havin* a high valuation and employee satisfaction because they feel like they are the best. Markel would feeel that way too! Fairfax has lost its swagger...Prem needs to show them and his partners that he believes Fairfax should have the same valuation as Markel or better. They used to and now they are depressed that depresses the employees their clients as well....this is one of the most important aspects of a CEO’s job and to honest he is failing miserably right now. Look at this boards feelings towards him and Fairfax!!!!!! Dislike. That’s why now and big....it’s cheap let’s take advantage....tender offer time....Fairfax is loaded with cash....get everyone excited about the future and create some value in buying your own company!

Fairfax does not need the correction “I” am hoping for.... All financials have traded up on the rising yields in the last week...Fairfax has dropped...ex divvy was Jan 18...the risng yields were after this actually. Travelers (example I used with a $70b bond portfolio that is dropping in value!)is up today and pennies away from their 52 week high....while Markel is up another 1% and near a 52 week high of $1121 USD...FFH $$647 Cdn today. Prem time to up your game lets see the buy back in big way...Fairfax is hated for a reason...underperformance....show your partners you are aware that market has forgotten Fairfax and you believe in our future. I am tired of seeing you and Francis Chou and all the rest of the team get shit on! Announce the earnings early and buy back at these cheap levels....show us Fairfax has a heart beat...the employees and every one else who has trusted in you and got burned while Markel and the rest outperformed needs to see Fairfax show it’s teeth. It’s cheap we can see it take advantage of it! As Tom Brady says “Let’s go”! Dazel

Would be nice to see a 10 to 15% correction in the market...and the 10 year hit 3% plus.

If you are holding Fairfax and you know how they are positioned you are licking your lips...both from allocating the almost 50% cash or almost $20b from a yield of zero into stocks and bonds...while avoiding the large bond losses and equity losses that those holding bonds and over weight stocks “may” be facing. I think everyone is nuts...Fairfax is the only company that I own right now....and unfortunately I did not get to short crypto and pot stocks yet....and may be wrong of course. But to see Fairfax stock falling while other financials rise...well is funny. Enjoy the fall! Prem will get a better price on the buyback and smaller investors are capable of buying in...volumes are enemic ...quiet period before earnings....and those that were here for the dividend are selling into no volume. I don’t care. This what I and Fairfax have been waiting for...the lunacy to reset.

The Fairfax thesis continues to trend in the right direction....Bonds continued to get hit. 10 year is above 2.70% at 2.72 and the 30 year is almost at 3%. Once again are we headed for 1994? In a perfect world for Fairfax a quick and painful bond sell off taking the 10 year over 3% and the 30 year much higher would not only chase the Bond holders out of fixed income it would create the market correction that gives us a stock pickers market where value once again matters and Fairfax does its best work. A large cash position hurts returns until it doesn’t. A mans best friend “An old wife, An old dog and ready cash!” Benjamin Franklin

Another Fairfax point which has not been made and it may appear as if the India drum has been beat to death here...is that the $5b investment there is a value play but has been done with the expectation of the holdings being growth companies. As Prem stated “our Indian companies are growing by leaps and bounds”....this is a different approach for the Fairfax team...as pure value has dominated investment decisions over 35 years. Prem is bullish which is not the impression the market has. They expect growth and the investment portfolio is spring loaded for it....the bets are on Emerging markets not the U.S stock market so it’s not getting any attention. If global growth continues the emerging market bets will certainly appreciate many fold the developed market returns....Bradstreet will renter the bond market in bigger way, and Fairfax will realize returns on the old dogs, Greek investments,Resolute, Blackberry etc. It’s a nice set up for reaching Fairfax earnings potential as Insurance premiums will be solid...

They do not break it down their SEC filing. 3.3% yield on the bond portfolio....the 30 year U.S treasury bond is below 3%. While the corporates will yield higher it is obvious that they have significant longer duration bonds. They have $400m in hedges for interest rate risk which is not broken down. To be clear this has been a very smart move by them...and will continue to be if rates don’t rise...the 10 year has risen about 35 basis points recently. It’s up 65 basis points from the low in August... These are not huge moves....3% is likely pain threshold which may bring panic for those holding long duration bonds and a possible Fairfax opportunity entry point if we were to spike around that yield.

No I would like to buy a put i think I was clear...the price of that put matters. So the amount I am willing to speculate depends on the price and the duration obviously. There are not Puts available yet with any duration.

If bonds fall example Travelers Insurance has $70b in bonds with half of it in corporates.... $2b private equity $900m $3b equity This has been a genius move for the 30 years...can you imagine what their sensitivity to losses are if rates were to rise 100 or 200 basis points? Sure longer term they will role short maturities into higher rates...but there would be significant losses to mark to market equity. They had significant reserve reduncy for the hurricane season this year...this was likely the reason for all insurance companies rising yesterday...it looks like costs for the 2017 hurricanes will come down. This is likely one of the reasons we are not getting a hard market.

Cardboard, I sabotaged the thread...because of my outside annoyance of what is happening. My understanding of most private business is certainly in my circle of confidence as I have run many and dealt with the variables....I can assure you pot stocks are a bubble. I was approached to start a business in 2014...the economics are dreadful. I feel no regret or jealousy...in fact I am cheering on many people very close to me who have made and are making a fortune on it! In the words of Mr. Buffett crypto currencies are out of my circle of competance...I will speculate l8ke Mr. Buffett given the opportunity to buy a 5 year put option on bitcoin if it ever becomes available. I don’t think those that are so confident in it will privately write a put option for me to buy...but if an6 of you are I am willing to discuss it seriously. I will start another thread on instruments to short this stuff...when it becomes available. I will exit this one I apologize I took it off course. Dazel

True that Cardboard. I am understanding Buffett and Mungers persona more by the day.(don’t understand it...blah blah...i do understand it...mathematically it’s impossible!) I can’t save them even though I keep trying....I am exhausted so I am going to make a lot of money on this stupidity...when the time comes and the instruments to bet against this insanity become available. If I find something I will let you know...I would hope you will do the same.

Petec, I believe SD came on the Fairfax 2017 thread with the benefits Fairfax and all insurance companies would reap from Blockchain transactions...it was one of the Fairfax threads in the fall anyways. He is all over the Crypto currency threads...to get the Blockchain discussion.

SJ, Your concern about Fairfax buying longer term bonds will not be relevant for the third quarter as almost half the value of the bond portfolio is in corporate bonds. I would have to assume that a large part of the bond portfolio is the Blackberry convertible which of course is going up because the common shares are rising and the converts worth more. Fairfax has virtually nothing in government bonds in relation to the size of their invested assets in the terms of long term duration....so they will have sidestepped the current bond “whacking” as of the 3rd quarter.... But I can’t say that for the fourth quarter...so looking forward to the annual report...I bet Bradstreet is still waiting.

SD our resident expert on all things Crypto is correct with his points on what blockchain will do to the insurance industry....costs could fall dramatically in the next couple of decades. Fairfax presence in Silicon Valley India if they integrate and learn from growing “Go Digit” and their experience in Blackberry and the technologies and people that are available to improve efficiencies at their large operations could be very rewarding. Block chain is the future (as much I poke fun at the crypto currencies!)...any advantage in its implementation is a competitive advantage. Case in point technology has allowed the big banks in the U.S finally be able to integrate across their huge operations with scale. JPM had record margins last quarter and the their costs should continue to drop.