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StubbleJumper last won the day on October 30 2023

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  1. No, if I use a VPN to connect to the board, it's by accident. It usually means that I'm somewhere with dubious network security and I've done some financial transactions and forgot to turn off the VPN before visiting COBF. That being said, I don't spend all that much time at my principal residence, so I log in from all kinds of places. I think I stay home enough to qualify for provincial Medicare coverage, but I haven't done the precise calculation of how many days I've been in the province... SJ
  2. I hated this investment when it was made. A heavily unionized company in a commodity industry that was targeted by then-president Trump as a strategic sector, and it had already gone bankrupt to boot. But, I guess there's a price for everything. Beyond that, I think I might have bitched about what FFH's exit-strategy would be, because there seemed to be no exit-strategy for existing crap-positions like Blackberry or Resolute. Well, this is a great exit with a fully acceptable ROI. Kudos to management for having gotten in, and then more importantly, having gotten OUT of stelco profitably. SJ
  3. Seems to be back to normal for me now. It was a weird 24 hours. SJ
  4. I've buggered around enough yesterday that my IP address is apparently banned. I power-cycled my modem in an attempt to get a new IP, but that didn't work. I can only log in using my mobile phone, which has a different IP. Is it possible to erase your IP blacklist? SJ
  5. Irrespective of the magnitude it's not really even an issue. FFH has a program of charitable donations and espouses the "doing good while doing well" approach. Donating to this sort of cause could easily fit into that program. My question was just basic curiosity. Is the Watsa family donating money outside of FFH's charitable initiative, or was this part of the charitable initiative? Both are fine, but if was FFH's money, I'd tend to prefer that the "credit" be attributable to FFH rather than the Watsa family. If it was Watsa family money, then Prem should definitely be applauded for having made the donation. SJ
  6. Well, that's what the headline would suggest, but I was having trouble finding more detailed clarity in the article itself, and there's no press release on Fairfax's website. In the article, I saw these two lines, one which would suggest it was Watsa family money and one which might suggest that it was Fairfax shareholder money: First: Mr. Prem Watsa, founder and chairman of Fairfax Financial Holdings Ltd., has donated $5 million (approximately Rs 41 crore) to his alma mater, the Indian Institute of Technology Madras, to advance brain research. And second: Fairfax Financial Holdings, under Mr. Prem Watsa’s leadership, has pledged its support to this cutting-edge research and development initiative. In a press release on Tuesday, Mr. Prem Watsa stated, “We are pleased to support this work and wish them the very best to reach greater heights.” SJ
  7. It wasn't entirely clear to me when I read the story, did Prem donate $5m of the Watsa family's money, or did Prem donate $5m of Fairfax shareholders' money? SJ
  8. The borrowing is occurring at the holdco level, while the bond investments are principally held in the insurance subs. The subs must keep those bonds as part of the insurance reserves to pay indemnities to policy holders. But, the question is a good question, and it's something that I mused about a bit yesterday. It appears as if the hard market might be peaking and that premium growth might be abating. That being the case, the insurance subs appear to have considerable excess capital that they could dividend up to the holdco. I fully understood the objective of refinancing the existing Allied debt (~$500m), but I didn't quite grasp the objective and timing of tacking on the extra $250m for use by the holdco. They needed that extra $250m last year when the subs were capital constrained, but it strikes me that the holdco's activities this year could be easily funded by dividends from the subs. In any case, the part that raised my eyebrows is only the $250mm so it's not really all that material. Better to borrow when you don't really need to than to wait until you are desperate! SJ
  9. Interesting. The holdco was tight on cash for most of 2023, but in theory the insurance subs should be swimming in cash during 2024 and could easily dividend considerable amounts to the holdco. In that context, it raises an eyebrow that they are raising net cash of US$250m at this stage. I would have liked to see that last June... SJ
  10. Of course I was cherry picking dates, and I blatantly announced the fact that I did so! But, the fact is that that there is nothing magical about a 10-year hold. I cherry-picked an 12-year hold that had a disappointing return. Frankly the mythical person who actually bought at the beginning of that period and sold at the end, would clearly belly-ache about a "lost decade." And the points that I cherry-picked were not the only points of 10-ish years with disappointing market returns. That is an indisputable fact that the chart makes abundantly clear! As I said, it's not all that hard to find a couple of points with disappointing returns over 10 years. But, more importantly, the market return and the growth in IV are not always in sync. The opportunity available in 2021/22 when you could buy FFH at 0.7x or 0.8x BV show that disconnect. At that point, the market was saying that FFH was worth more dead than alive! The market was saying that management was destroying value, and not just destroying a little bit of it, but a great deal of it. So, there was a considerable disconnect between market results and IV. Nonetheless, if market results are your only point of focus, you can certainly easily find a decade of disappointment. SJ
  11. In fairness, if the stock price is all you are looking at, it's not hard at all to find a "lost decade." The stock price in January 2010 was US$392 and then it dropped below that level during the covid market displacement and stayed below that level for most of the first wave of covid (heck even in Sept 2022 it was only US$457). The dividends were a mitigating factor that provided a modest, positive return over that time but it's not hard at all to cherry-pick a start-date and end-date that give you an unsatisfactory market return over a decade. The question of whether there was a lost decade from an operational or capital allocation perspective is entirely a different question. I would say that there have been occasional poor investment and risk management decisions by FFH over the entire course of its existence, rather than there being only one decade with poor decisions. You just hope that the shrewd decisions outweigh the poor in terms of frequency and magnitude! SJ
  12. Ouch. Is the market finally turning? We are three days into the 2024 hurricane season, which the experts say will have a larger number of named storms and perhaps stronger than usual storms. Not sure that I like the sound of all of this. SJ
  13. Time for Ben to earn his stripes. If you wonder why FFH trades at a discount to some of its comparables, this is an example of the company's ongoing governance issues. SJ
  14. How much does depreciation and amortization amount to for a holding company that is primarily an insurance outfit? Without looking at the numbers, I would have assumed that EBIT and EBITDA would be pretty much the same thing. SJ
  15. Without a doubt, but the math of it can be a bit nasty. If the insurance market turns and the CR bounces up to even 98 from the current 94, it would hurt a fair bit. On $23B of float net written, that would be nearly $1B hit income, pre-tax. You'd need to sell a lot of chicken dinners at St Hubert to offset that! And a situation where it's possible to simultaneously write a CR of 98 and buy sovereign debt at 5% would still be an unusually good financing differential... SJ
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