Santayana

I just renewed a policy for my small business, and Chubb was able to quote me a rate about 35% less than The Hartford was asking. The Hartford quote was a 10% increase on what they charged last year.

You'll never win being overly defensive, but I have no problem hedging a bit with puts. The primary reason being that it protects me from myself hitting the panic button when some volatility inevitably shows up.

ORH calls in 2009. It seemed like everyone knew the purchase of the remaining shares was imminent, but $35 calls were only a few bucks and it happened at $60.

Between the over representation of the mega-caps, and the advent of index ETFs, I'm not sure much historical data about the major indexes is really relevant anymore.

At lower-mid ELOs the winner is the person that makes the second to last blunder.

It's a gift to those that are still accumulating a position to have it trading where it is now. My belief regarding all of the relative inattention from the analysts and markets is simply that Fairfax isn't trading on a major US exchange. It's some some random P&C insurer in Canada, who cares?

I'm not sure which statistic is my favorite. The fact that BV is up ~38% over the last 7 quarters, or that 2023 Q3 earnings were a bit higher than the first 3 quarters of 2022 combined.

Aug 24 Joe Calls

This is the line that cracks me up. "Fairfax will continue to post poor results and could destroy significant value if Watsa's investment thesis doesn't pan out."

What did you buy? I just noticed there's some longer dated stuff than the last time I had looked.

I wouldn't bother trying to understand short term moves in Fairfax stock. But maybe just some profit taking after hitting ATHs on Friday?

If you don't hold it, you can't sell it

It's easy to point at the shorts and deflation swaps, and say wow Fairfax really was screwing up back then. But if you could go back in time and have them not do those things, but also not make all the acquisitions they made during those years, would you prefer that vs. where they are now?

There have been quant managers active in Canada for over 20 years.

Fairfax and JOE even though I'm overweight in both.

I agree with much of what you're saying, but regardless of whether or not it's been caused by government, inflation has been real for most people for quite some time, much more so than what the CPI says. What does Natty Light have to do with the price of beer?

Right, but doubling in 10 years is far in excess of both the target, and what the CPI tells us the "actual" inflation is. Then we have the so called hedonic adjustments which try to wave away price increases as being a result of improved quality. Do you know anyone who actually thinks the quality of most of the goods we buy has actually been increasing for the past few decades?

100%

10 years ago I could buy a beer after work for $5, tax and tip included. Now I can't do it for $10.

https://fred.stlouisfed.org/series/CUUR0000SEHA https://fred.stlouisfed.org/series/CSUSHPINSA It may have accelerated post-Covid, and of course there is a lot of regional variation. But both rents and home prices were increasing faster than 3% over that time. I'll withdraw my comment about *extreme* inflation, although where I live the numbers are much higher than the average, but it's still 50% higher that their target inflation rate. Inflation has been real for much longer than the CPI tells us.

The problem with that argument is that it ignores the extreme housing inflation we've had for the past 10 years while rates have been extremely low almost that entire time.

I think he meant he was 100% Fairfax vs. also holding some Fairfax India.

To me, what's really highlighted here is how much order of returns matter. Equities basically went sideways for 20 years from the 1973 highs while bonds were giving substantial returns. If the interest rate moves had been reversed, very low rates at the beginning and double digit rates more recently, the numbers would be very different.

You are assuming that the bond investor took that interest payment every 6 months and just buried it in their backyard rather than reinvesting.

I don't think there is an onus on anyone on this board to prove their assertions to anyone else. If you're convinced an argument is wrong and want to disregard it, that is on you. I think the point he was trying to make is that a savvy bond investor would have outperformed equities over that time especially given the huge advantages the bond investor had in the first half of that time period. Will we ever see a time like that again? I don't think so, but that's what makes a market.