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Zorrofan

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    Credit Default Swaps

    in Fairfax Financial

    Posted

    I can't remember who it was that posted the CDS spreads before - on the old board - but if someone had access and was willing it would be appreciated!!

     

    In the big picture, the swaps and hedges did their job with 2007 & 2008 results at record levels - did Prem close them out too early? Maybe. But FFH has loaded up on some ultra-safe, high yield munis backed by BRK, some global blue chips and 5 years from now Mr. Market will be looking at todays move into equities by FFH the same way they looked at the move into CDS - wishing that they had been that smart.  (unless of course it really is the end of the world!!)

     

    cheers

    Zorro  ;D

    Capitulation

    in General Discussion

    Posted

    Things may get a lot cheaper yet. The trailing 12-months earnings on the S & P are under $30 or expected to be under $30 IIRC, multiply that $30 by 15 and you get 450 for the S & P. Even if you are optomistic and feel $40 is fair for 2009, 15 x $40 = 600. And I am being generous with the p/e. Interesting to note that WEB & Prem are buying bonds (high yield) with warrents for future equity purchases. We will have hit bottom when BusinessWeek puts out a cover that equities are dead or WEB is wrong.....

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