Xerxes
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Posts posted by Xerxes
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Gregmal,
For a moment forget about Prem, out of curiosity, what are your thoughts about Sokol's new outfit: Atlas.
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You are not redundant, but people have different ways to manage their portfolio.
Some of us (i.e. myself), did not meaningfully owned FFH prior to Covid, so we don't carry any bias. I think north of 65% of my FFH share-count has been bought post-Covid and at a good discount, yet it doesnt make it to the top 3 position. Buying FFH and discussing it doesn't mean that we do not have anything else or do anything else. I was happy to buy Microstrategy @ $380 ish in Dec 2020 and dump it for $1050 some weeks later. I was happy to sell BB @ $25 CAD in Jan (cost being in mid-single digit). I was happy to dump Uber at north of $55 in Q1 and with it good third of LSPD.
FFH creates discussion (and controversy) so people tend to post a lot, but (except for a few) i think the quantity of FFH posts are NOT correlated to the % size of it in their portfolio. Perhaps this could be a good survey, to see how many people actually have a large outsize position in FFH. I think that has more merit than the content of FFH bull's numerous posts, which is well discussed.
As point of reference on a different name, I bought BEP.UN and BIP.UN exactly at about the sametime: during the market swoon of mid/late Dec 2018.
BEP.UN has been an homerun of a sort, while BIP.UN has not done much, and i am sure we can write a PhD thesis on Brookfield's arrogance and their dealing with minority interest and its complexity, yet that does't make that entity a bad hold.
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16 hours ago, Gregmal said:
However I also think the recession worries are overblown. There were mountains of folks screaming "recession is imminent!" in January 2020, and February, and then "knew it" in March and April 2020...and Buffett didnt even navigate COVID all that well IMO, including being the ultimate contrarian indicator at the AGM and with his bank sales.....and yet, who's laughing now?
resilience of the BRK machine even with all this !!
On 8/7/2021 at 3:31 PM, wabuffo said:but I think BRK may be coming out of its ho-hum phase that has lasted way too long while Buffett got sidetracked by PCP, KraftHeinz, IBM, the airlines, etc when he should've been using all that wasted capital in repurchasing BRK.
wabuffo
To be fair that basket of so-so investments in the last decade were more than offset by the Apple homerun in the same period. So net +ve.
That said, i somewhat believe the post-Covid canvas-pivot theory.
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On the comments about share repurchase at these high absolute dollar levels comments, perhaps what the Omaha team has in mind, is not so much cost dollar value in any given month or quarter, but rather the aggregate average dollar cost of all the repurchases in the past say 20 months or so.
So, yes they are buying at $270 ish, but what is the average cost of all the buys since the start of 2020 (maybe that is at $240 per share), I do not think you will see that moving average creeps up to $270, which means slowing share re-purchases going forward to not let the moving average cost creep up.
Said differently, in my view, he is more concerned about the volume of stock that he is retiring with a given average cost as a target, than just shoving money quarter after quarter as 100% payout ratio.
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1 hour ago, StevieV said:
"Who wanted to own Blackstone in 2014 or 2016." - Me.
I haven't followed or owned BX through it's whole history, but in the mid to late 2010s, the company was delivering pretty good results. The earnings can be lumpy, especially as they were more incentive fee driven at the time. However, AUM growth was consistent and quick.
The stock price was stuck-in-the mud despite the growth of the business and Steve S complained about it regularly. The same was true of their alt asset manager competitors - KKR, ARES, APO, CG.
Perception has certainly changed for BX and its competitors. Who knows exactly why, but the two most likely culprits are the change to corporations from partnerships and the focus on FRE (fee related earnings). Also, the incentive fees were cyclical and many of the alts were cashing in big on investments they made during the GFC in the 2013-2015 timeframe. They over-earned for a period leading to some headline softness, depending on who you are talking about.
Regardless, I am not aware of BX making any particularly major errors or hiccups anytime in the 2010. Just grinding away really effectively from a business standpoint, even if the market didn't care. BX didn't need to convince investors it had corrected any mistakes from the past. What mistake were the correcting?
Fairfax has a heavier burden as they clearly made significant mistakes.
There is a possible future out there where the outcome of the Hilton purchase and Sam Zell's REIT would have had a completely different outcome. It did not. Both were spectacular successes and now seared into the Blackstone folklore and investing legend. Investing comes with mistakes and I am sure BX did its share even with its watch-the-downside DNA, it just didn't have a needle moving mistake before reaching critical mass. They are now achieved escaped velocity and can throw their weight around.
My point, in my original post, however was not that BX made a mistake and therefore its stock was in doldrum for 10 years. My point was that its business was not recognized or given credit and therefore its stock was in doldrum for 10 years. Rubenstein from Carlyle talked about this as well on a recent podcast, how PEs had to balance public shareholders and fund investors. The former wants recurring earnings, the latter wants the carry to incentives the PE.
Faithful, like yourself, that stuck with it did really well, when the market give credit for the recurring earning.
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3 hours ago, Gregmal said:
Sometimes it's about realizing that the narrative needs changing rather than being a prick and just not caring or insisting you'll do it your way anyway. Bill Ackman didnt need to sell BHC/VRX for $12 per share. On a valuation basis you could even say he wasted money getting out for what was obviously optics reasons rather than let it rebound. But sometimes it's just best to cut bait and move on so that everyone else can too. However when you are an egomaniac(which was surprising because Ackman is) its often hard to take a loss because that crystallizes the fact that you were wrong. In my book, regardless of where BB or RFP are sold, they were losses. Wake up and start changing the narrative.
Greg
I give full credit to Ackman for his pivot post-Valeant. Not just cutting a getting-smaller position that was consuming 80% of his time, but also for not doing that again. He became the 'activist' on himself.
I am all about dumping BB/RFP (am #1 poster here complaining about it), but at the end i can only complain. The two positions that are getting smaller and smaller.
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Folks, have a look at Blackstone or Microstrategy.
Who wanted to own Microstrategy in 2016 ? i am not saying it is gold now, but like it or not its CEO did something revolutionary and outside the box that brought it a whole host of new investors.
Who wanted to own Blackstone in 2014 or 2016. Now that has done the hockystick, everyone cannot stop raving about the genius of Steve Schwartzman and Jon Grey. There was a time, where the conventional wisdom was, you do not want to own the private equity business as a public shareholder, but where you wanted to be is to be invested into their funds.
The only caveat is, you cannot time it, and the founder/CEO/operator is not going to do it on your timetable. He/she is not there to serve the traders, looking to do a flip. Because they are not there to do a flip in 6 months on their life achievements.
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On 8/3/2021 at 10:43 AM, petec said:
Fairfax has traded around fair value plenty of times in the past, as do other highly complex entities. Also, this board generally obsesses far too much about Blackberry and Resolute in my view. There are many other things that move the needle and as they grow Blackberry and Resolute get less and less relevant.
Agree,
In fact Resolute and BB are more about optics: The legacy of the Lost Decade.
As a reference point, in 2012, the investment portfolio was $25.163 billion
And it was $42.108 billion in 2020.
I don't know the exact position sizes then and now, but say both combined were less than $1.5-2 billion and has gone flat for 9-10 years. Their % contribution dropped as the overall pie just got much bigger, and as the two names moved sideways.
We collectively maybe attributing too much to those two names, because of what they represent. But that is to our detriment as the canvas has evolved to something else, and we might be missing the bigger picture.
I bet Prem Watsa is going to have the last laugh .... but we can laugh with him too.
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No worries, i was just poking
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Come on guys, Canada is not just made of Ontario and BC etc and the in-betweens.
Monday was not a holiday in Quebec where I reside.
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For now only accounting change.
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Not totally clear to me. My read is that the regulators in India have to push the limit to 75% for foreigners (which may or may not include FFH - it is not clear).
If it does include FFH, than there would have to be cash outlay by FFH at a higher valuation, pushing up their cost basis. If it doesn't include FFH, than they get diluted.
I just hope the whole 75% increase ownership hurdle, is not a repeat of Pershing/SEC/Universal/Ackman fiasco, causing FFH to go backward on something that stated to be "done deal" on the conference call.
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On Blackberry
i knew it !!! at least someone on the call push for it and asked the right question.
The quarter had enough goodies in it, to offset lack of positive news on BB. Even the "Rude Gentleman" from Q1 2021, did not show up.
He was probably happy,
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It is possible that he closed his Yahoo shorts by buying some of the shares from Mark Cuban as the latter was exited his long.
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re: ERIC
I wouldn't know.
But I will say this: Berkshire considers its equity portfolio composition as a propriety information. I have heard Buffett on one his AGM (perhaps 2018) where he said that as an answer to a question that inquired about his Asian holdings. He added (IIRC) that if it was up to him, you wont see much U.S.-based holdings either, but that 13F filing force him to make U.S. holdings public. These days he is showing BYD because it is a large holding.
Nothing to do with FFH, but I don't think we will ever get to see the composition of those shorts and what drove them.
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Ericopoly
I am with you 100% on how i feel about Shaming of the Big Tech on his annual letter. I usually skip that page anyways because it irritates me (it actually does). But, i believe what he writes (as an opinion) and what he does, are often not the same thing.Except for the mystery short last year (people say it was Tesla), I don't believe we have any proof that he went out there and shorted FANGS. We make that connection, but there is no hard evidence.
Said, differently, even if FANGs were to get cut in half today, you will not see him investing in them in a huge way, even knowing what he knows. He wants to own businesses from the ground up, and not ride someone else' glory.
This is my perception
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30 minutes ago, Daphne said:
29 minutes ago, Daphne said:We’ll and thoughtfully stated X
Thank you Daphne.
Well that's it for me folks, I am going to leave on a high note !
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Folks,
Not to repeat myself from a month ago or so:
On comments on why he didnt buy AAPL/MSFT but bought this. etc. why Quess as high p/e. etc.
Prem (i believe) is first and foremost a businessman and then an investor. Therefore, his investing style is always with an eye to build something from the ground-up and help nurture an entity as a financier (if outside his domain of expertise). He is not there to take a swing at Microsoft or Comcast as a game-changing bet. This is not about value vs. growth but rather owning businesses vs. owning stocks mindset.
His equity portfolio has two major components: i call them Beta and Alpha baskets. The Beta basket is managed by his underlings, that broadly matches the S&P500. The Alpha basket is his own bet, with an eye to not own as a stock but as a business or a platform. That is the basket that ought outperform with a caveat of having lumpy returns.
I believe you all are commenting as investors first, looking at valuation metrics solely, and less as someone interested to have a piece of this business-building machine for better or worse.
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Can this be the birth of a futures market, where people make bet on the quarterly results before their release.
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40 minutes ago, ERICOPOLY said:
Wasn't future innovation the entire thesis?
I had a look at few article from 2013, (i.e. in 2 years it will be decade), the language and the tone was always about saving the "beleaguered Canadian entity".
CPPIB has the right view, I think. A strategic investor was needed more so than financial one.
It's a tough sell. Speaking at a conference Monday, André Bourbonnais, senior vice-president of the Canada Pension Plan Investment Board's private-equity unit, said his pension fund would as a matter of course examine any possible bid. But he said he that for any deal to succeed, it needed to include a "strategic" player, such as another technology firm, to help turn BlackBerry around. "My view is it needs the right kind of investor," he said.
Fairfax hands BlackBerry $4.7-billion lifeline - The Globe and Mail
All these are water under the bridge now.
The question is at the moment, what incremental value does holding 10% of BB has (as oppose to use those resources to buyback your own share - a company you know well for instance). Could there be a bid/play from a large FANG name and is that what FFH holding it for. These things take time, but if there are discussion that the public is unaware of, that could be a reason why FFH didn't dispose of it during the Reddit Madness.
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1 minute ago, ERICOPOLY said:
And he buys BlackBerry why?
Distress investment
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In my humble opinion, FFH investors and prospective investors need to differentiate between how FFH invest and what Prem W. write in his letters. I got no issue with how he invest for this equity position (yes there are bad apples) but have an issue with his Annual Shaming Parade of FANGs etc.
It is entirely possible that the latter is doing him more harm than good from a PR and optics point of view.
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On a different note, is it possible that i am the only who is excited to hear what they did with BB and if not why not. I always believed that little bit about not being able to transact for 6 months back in January was more of a good excuse, on a name that they did not want to monetize to begin with. Just my read and perception.
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Xerxes is going to give you folks some real news that is interesting but wont be moving the needle.
Former President Barack Obama minority owner in NBA's Africa business (cnbc.com)
"Nigeria-based industrial group Yinka Folawiyo Group and Helios Fairfax Partners Corporation, an investment holding company that trades on the Toronto Stock Exchange under the ticker symbol “HFPC,” are investors in NBA Africa, alongside former NBA players Luol Deng and Joakim Noah are also investors. In addition, NBA commissioner Adam Silver and NBA Chief Operating Officer Mark Tatum have board seats."
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Dragging myself happily through Expanse Season 2.
What a novel story ! like to know how was the return on Church of Mormon long-term investment portfolio in the century that show is set, since they talk about Mormons. Did they beat inflation
The Mormon Church Amassed $100 Billion. It Was the Best-Kept Secret in the Investment World. - WSJ
On a different note - new Dune trailer.
I must have read the original book 5 times, that is two times more than JRR Tolkein's Lord of the Rings books, which I set as my discount rate.
Once upon a time, in galaxy far far away, when Dell Computer was running a hedge fund business.
in General Discussion
Posted
One could say that Michael Dell was a value investor first, then maybe a SOB ....