elliott

Although their website mentions "stock research", most of their sales pitch is about statistical data and a screener. Have you read any of their "reports"? They have a sample page (Facebook) that shows only statistics, and links to news. "Uncle Stock provides a wealth of information. You can analyse and screen on 75.000 stocks, based on more than 350 fundamental and technical indicators, combined with many derived indicators, giving more than 3.500 indicators per stock. All this with historical depth between 10 up to 25 years."

I am looking for an equity research service that covers stocks world wide (HK, Singapore, France, Germany, US, Canada...) and is not too expensive for an individual investor. What I look for is to gain understanding of individual businesses and their industries. I dont care about target prices nor data summaries - neither is reliable in my opinion. Do you know of any good service? (I have been reading the morningstar thread). Thanks!

Third quarter interim report is now available in FAH website. I have recalculated the BVPS using updated market data (public stocks). Almost no change at all from the reported figure above. Shares closed yesterday at USD 5.90 There might be several reasons for the discount: the fees the dismal performance of the public stock investments the uncertainty related to the valuation of the private equity investments In the first 9 months of the year the company has bought back and cancelled close to 5% of total outstanding shares at the end of fiscal year 2018.

I have also read and enjoyed the book. For anyone interested, I would tag it: autobiography, investing, Wall Street, economy, politics, the US, business...

EAF 30% of the target position if numbers & story, not just pabrai, convince me

ALUMS (Euronext Paris) FFAH (Toronto) - a few days ago

Bought shares a couple of days ago. The discount to BV, with public investments updated, will make up for a few years of fees I think. I may also buy Atlas Mara shares, if the price drops to below the minimum of a few days ago. The company has been profitable even when it has not been operating at its best. If Wilkerson's push for cutting costs down has any real impact, and the new strategic direction (divestitures, new investments) pays off, then earnings will only rise.

One thing I am noting from the latest filing is Sanmar common equity went from 554 (million Indian rupees) to 208,854. There is a section that gives reasoning but it is a 376 fold increase in a quarter and holds up the shareholder equity and book value per share in the bottom line for the year and the quarter. How does such a dramatic increase work out? https://s1.q4cdn.com/293822657/files/doc_financials/quarterly_reports/2018/2018-Q3-Interim-Report-(FIH)-(Final).pdf "Sanmar Common Shares At September 30, 2018 the company estimated the fair value of its investment in Sanmar common shares using a discounted cash flow analysis based on multi-year free cash flow projections with assumed after-tax discount rates ranging from 13.4% to 16.6% and long term growth rates ranging from 3.0% to 4.0% (December 31, 2017 - 15.2% to 19.5% and 2.0% to 3.6%, respectively). Free cash flow projections were based on EBITDA estimates derived from financial information for Sanmar's four business units (with additional financial information and analysis completed for Chemplast's underlying business units involved in new capital projects) prepared in the third quarter of 2018 by Sanmar's management. Discount rates were based on the company's assessment of risk premiums to the appropriate risk-free rate of the economic environment in which Sanmar operates. In the third quarter of 2018 Fairfax India recorded unrealized gains of $225,013 on its investment in Sanmar common shares primarily as a result of: (i) positive operational developments at Sanmar Egypt (successful completion of its increased capacities in Egypt) and Chemplast (will benefit from the completion of new capital projects); (ii) continued strong demand for PVC and related products in India, Europe, the Middle East and North Africa; and (iii) the decrease in the after-tax discount rates (principally related to the decreased risk at Sanmar Egypt as a result of the completion of its capital expenditure project to increase capacity). At September 30, 2018 the company's internal valuation model indicated that the fair value of the company's investment in Sanmar common shares was $208,854 (December 31, 2017 - $556). The changes in fair value of the company's investment in Sanmar common shares for the third quarters and first nine months of 2018 and 2017 are presented in the tables disclosed earlier in note 5." Didn’t Sanmar repay a big loan to FFH? My recollection was the original equity investment was valued almost at 0 and most of the financing was the loan, so when the company repaid the loan the equity value will have risen dramatically. I am not sure that can be the reason. Fairfax India reports loans and stocks separately. Indeed, the report for that year included another, specific, line for the loan to Sanmar. Additionally, FIH explained the reason for the difference; more specifically, it provided three reasons. None of them related to the loan. But maybe I am not understanding you correctly, and what you mean is that part of the loan was repaid, and that repayment was in kind, actually, stocks. There is actually some comments that might point to that, but then why did the loan line "Sanmar bonds" not decrease accordingly? It actually increased... Jan 1, 2018 - Dec 31, 2018 Sanmar equity: 556 - 217,000 (increase classified as net change in unrealized gains on investments) Sanmar bonds: 333,000 - 392,000 (increase classified as net change in unrealized gains on investments 60,000, and net unrealized currency translation loss (30,000)) EDIT Well, apparently the bonds were a very good investment, and the amount Sanmar owed to FIH at their maturity was ca $600,000 From that we can easily see how "Sanmar equity" increased to $200,000 even when "Sanmar bonds" did also increase by ca $100,000 Chapeaux for FIH

I should continue researching Atlas Mara, although I am more interested in FAH at this moment (Atlas Mara is how I discovered Fairfax Africa, actually). I like very much how they play their thesis - they are much more sophisticated than me just purchasing some shares. There are several points I need to address regarding FAH, though. The African thesis Probably, the growth/demographics/political improvements argument could have been made several times during the last few decades, and I am not sure how the bet would have played out. Farnam Street has invested in FAH recently, and they argued that Africa could replicate the growth Asia has achieved in the last 50 years. Yeah, the problem is, why did Africa not achieve such growth already? Undoubtedly, some regions in Africa have achieved extraodinary accomplishments, but... I simply think Asia has improved much more, so I dont know why the next 50 years should be different (and I really hope they are). Comparables. Farnam Street did not mention having compared the company against similars, which is unfortunate as it would have given us some names. At least, I think I need to read about similar firms to help me better understand FAH. If I cannot find any, then I need to look for actively managed funds investing in Africa. Fairfax positive bias FAH is backed by Fairfax, but it is not Fairfax (or is it?). I am not sure how it is at the present moment, but at IPO time all of the companys executive directors, including the CEO, were based outside of Africa. They sure make some trips but... The only ones in the region were independents. HWIC is not in Africa either... So, regardless of their past experiences, this leaves only Pactorum permanently in the region. It makes me think that Pactorum is probably the biggest originatior of ideas, and the main researcher too (afgri and nova, both were investments that agrigroupe, the seed/precendent of Pactorum, had already made before FAH had even been born). So I wonder, if Pactorum had set up a fund, without the Fairfax brand attached, how would I see them? Conflicts of interest This expression may be misleading though. I am not talking about HWIC first telling about an invesment to FFH instead of FAH, or things like that. I am thinking of situations like the "initial investment", AFGRI. It was not just FFH that sold its stake to FAH. Wilkerson, Holzapfel, and other members of the team sold part of their AFGRI stakes to the company, when they had purchased AFGRI only 3 years earlier or so. It is not that I think there was something fishy there, it is just that it is hard for me to believe that they would have sold at a loss even if an objective valuation at the moment would have been lower than the price they initially paid for AFGRI. And I dont like that. I could be wrong here, though, as the whole transaction is rather convoluted (the company indicated there was a conflict of interest in the prospectus). Also, Chris Venter, CEO of AGH/Afgri holdings, is a director in one of FAHs internal companies. I wonder the CEO of an acquired compoany should be director somwhere in the "structure" of FAH. Surely he has a competent background, but...

Did you finally opened a broker account in Kenya? I also would like to invest in some stocks of the Nairobi Stock Exchange, and I am trying to see in some body was able to do it. I also read the links in the first posts. Thanks.

My mistake! I assume then that you are talking here about Atlas Mara market cap and that of its stakes? Atlas Mara, USD ~250M Stakes, USD ~495M composed of [*]UBN (49% interest), USD ~280M [*]BancABC Botswana (80% interest), USD ~110M [*]Equity Bank Group, USD ~105M (Atlas Mara is suppose to receive as many shares as can be purchased for ~105M) I wonder however if we can make this comparison. Atlas Mara took on some debt in order to fund some of those acquisitions. That is, there is debt in Atlas Mara balance sheet that is not part of the normal banking business. What I am thinking is that if we want to compare what we get if we buy Atlas Mara against something that something has to be the cost of acquiring Atlas Mara, and that includes Market cap and that portion of the debt, which amount I dont know. Btw, nice conversation about FAH here!

Thanks for the reply, it provides some useful background. I will try to read about the people in the team, specially Wilkerson, and also Pectorum. One note though regarding Atlas Mara. According to my numbers, its trading at less of a discount than what most financial websites report, ex morningstar. First, is that I prefer to use PTBV. Second, Atlas Mara has UBN recorded at USD 530M approximately, when the fair value of their interest is worth much less, USD 300M (a little below the actual equity owned through that ownership - UBN trades slightly below BV). So, morningstar reports a 0.45 PBV, my numbers are close to 0.8 PTBV. Its still a figure that would be typically considered cheap, though.

Is the FAH team investing in some businesses which maybe in too much of a distressed situation? Is this typical Fairfax (parent company) behaviour? (I dont know much of FFH, and started looking at FAH only a couple of weeks ago). Atlas Mara. I would not consider Atlas Mara to be in a distressed situation ar they have been and are generating positive earnings (even if somewhat inflated with "gains" on transactions), but it would seem that the company overreached and capital needs arised, thats why they had to call FAH. Share price has dropped 50% since Fairfax made their biggest purchase (the rights offering). CIG. This company is clearly going through some tough years, financially and operationally (like South Africa!). FAH has provided some much needed capital but still. Share price has dropped 75% since FAH made its biggest purchase (the rights offering). Undisclosed infrastructure stock, traded in the JSE. A USD 3M position initiated during 2018 than less than a year later has lost ca 90% of its value. It was either a case of fraud or a case of a company in distress. I do not pretend to be negative with management here. I actually think they are doing some serious work, and like what I read in the reports, but the short term performance of, at least, the publicly traded stocks is appalling.

Amazing work. The index is very useful! If I may, though, I would suggest adding "Letter" to both Fairfax India and Fairfax Africa document labels, as they are indeed the "Letter to shareholders" section of the annual reports. In any case, thanks for sharing!