Xerxes

Great move there TCC That said, i think FIH is a bit of a different beast than FFH. It is hard to see FIH discount ever close meaningfully (unless something happens transactionally; best hope is that BV inches higher and pulls its MV kicking and screaming higher inch by inch even with its yawning gap), but it is not hard to see FFH discount to eventually collapse (especially in a higher rate environment)

$USD

Q3: $80 million Q2: $268 million (is that right !) Q1: $87 million 2020: $10 million 2019: $47 million 2018: $235 million 2017: $84 million (loss) 2016: $81 million (loss) Not exactly the smoothest earning history. Perhaps there has been one-time losses here and there pre-pandemic, don't know the year to year history. Is it just the operating leverage kicking in with the surge in the base commodity prices dropping into the bottom line faster than they can buyback shares in the 'good years'. I think if we take $150 million per annum as an estimate, that is good enough. We can ignore the share-buy back that is increasing FFH' stake overtime, and just take 40% of that $150 million as an approximation.

Hi sorry for forgetting to answer. I suppose one way to see it is that the bulls are right going forward, thus the mid-cycle point would be today's snapshot, which is the average of the previous bad 5 years and forward good 5 years. I think the concept of mid-cycle point is more relevant when the cycle is short-medium term. If this is a structural secular shift, than it is less relevant.

Fairfax India is getting Tapered-Tantrumed

I realize this may not be accurate but a quick Google search about his land ownership has his overall wealth estimate. So although a $1.8 billion invested into Liberty medias is a good chunk of his overall wealth, but those are balanced against large ownership of hard assets : ”Malone owns 2.2 million acres across several different states including Maine, New Hampshire, New Mexico, Texas, Wyoming, Maryland, and Colorado. He has a net worth of $9 billion.Aug 28, 2020”

here is a podcast on KW. I haven't listened to it, but thought folks here might find it interesting. Yet Another Value Podcast - Yet Another Value Blog

Any reason why Resolute is not shown in the your numbers. It has a higher dollar earning than Atlas this past quarter and seemed to be a significant contributor at least in the short term.

I think you are referring to the three-way transaction with Blackstone and LSE for Reuters' analytic division ?

And yet Tesla is up who knows how much, since he added a slide on it in his AGM in April 2021, shown below. And probably the dollar value market capitalization created by Tesla during the same period that you alluded was more than 30% combined lost on PTON,SHOP,ZM,PINS, and perhaps dare I say, many times over. Bottom line no one knows anything. I like this new Fairfax that only talks about how outrageously overvalued these companies are as oppose to go around and act like Valuation Policeman by shorting it.

Why is it that it is fashionable to complain how complex Fairfax Financial is BUT it is not fashionable to complain about the complexity the John Malone' constellation fiefdoms. (i.e. don't you get it, he is the most tax-efficient investor)(i.e. you are not sophisticated enough to understand the Malone' canvas) Why is it ok to complain about Fairfax Financial lack of performance in the past 5 years BUT it it not ok to complain about Liberty's fiefdoms performance in the past 5 years (which ones are we suppose to look at anyways to gauge performance, i am lost) Why is it ok to complain about Brookfield treatment of minority shareholders (the dreaded BAM), BUT it it not ok to complain about Liberty's fiefdoms treatment of minority shareholders. Just some high level observation, i am not a Liberty expert and hope not offending any hardcore fans here. EDIT: That said, I agree that the Malone fiefdoms needs its own sub-section (aka Church of Malone) in par with Berkshire and Fairfax, but not my call

The one hurdle to Atlas' appreciation is Fairfax and Washington Family outsized % ownership. Those shackles needs to be reduced so that the caged bird can fly again. But cannot be reduced at the moment because it is undervalued. That hurdle was also there for Stelco from the PE shop point of view that owned a big stake in it. But the tsunami of cash coming in allowed Stelco to cash out the PE shop. So we are good there,

We can add Masayoshi Son to the list of folks who sold Nvidia too early in 2018, during the crypto winter. In fact he did it brilliantly using derivative hedging that went into money when Nvidia' share price collapsed. And for whatever reason, he never invested into Tesla. That I cannot understand, neither as a strategic investor nor as a gamble (i.e. through SB Northstar) That being said he sold ARM to Nvidia for $40 billion in Sept 2020, mostly in stock. That stock portion has appreciated a whopping 150% since, effectively giving Softbank a windfall, if the deal goes through, Chipmaker Nvidia has agreed to buy Arm Holdings, a designer of chips for mobile phones, from SoftBank in a deal worth $40 billion, the companies announced Sunday. The deal will include $21.5 billion in Nvidia stock and $12 billion in cash, including $2 billion payable at signing. Nvidia to buy Arm Holdings from SoftBank for $40 billion (cnbc.com)

so then i guess i sold my shares to you in March 2020 ... LOL

@Viking @Gregmal The reason you guys keep talking past each other, is simply due to one being down in the weeds and the details and the other being at 50,000 feet. You probably both right from your point of view.

Since the other thread is running hot. I will post this here. I thought this statement from 2018 was worth the re-highlight, with the excess free cash flow being defined as the $2 billion of earning minus the $300 million, which comes to theoretically $1.7 billion . The issue is they haven't been hitting 15% for a while pre-Pandemic era, and between minority buyback and debt re-payment, the vision has not hold. We maintained our dividend in 2018 at $10 per share. As I have mentioned to you before, we are focused on using our free cash flow to buy back stock so it is unlikely our dividend will be increased soon. A 15% return on equity implies earnings of approximately $2 billion, so paying approximately $300 million in dividends would leave us with $1.7 billion for stock buybacks and tuck-in acquisitions. Since we began paying dividends, we have paid cumulative dividends of $113 per share ----------------------------------------------- On a different note here some data point since the share issuance to buy Allied World in 2016-17. Another way to think about the benefit of the buyback is to see them as payback what they took from the cookie-jar back in 2016. Importantly, the FFH common shares they issued in 2016-17, I am guessing 3 million shares, were issued at a much higher multiple to book value than today. So with this tender offer and the current buyback in place, they are buying back what they issued then at a much lower multiple to BV. Said differently, they would be effectively lowering their acquisition cost of Allied World, if they are able to continue to swallow up 3 million share, bigger than today' tender offer for sure, but the direction is clear. 2015 2016 2017 2018 2019 2020 cash flow for dividend common/preferred 265.4 271.8 282 328.3 323.8 319.7 cash flow from operations 1258.2 2734.2 -1924.3 1355.4 139.8 net earning -394.7 1614.9 817.9 1971.2 37.4 share count 22.2 23.1 27.8 27.2 26.8 26.2

I had NVIDIA at about $120-130 (pre-split) cost, what got my attention was an article on The Economist that explained tailwind on its graphic heavy product vs. the Intels of the world. Nowadays everyone knows that but just three years that was eye opening. I bought it and even held it through the crash, when they had too much inventory piling up due to the Crypto winter in '18-19, but unfortunately I let it go (along with Bank of America) in March 2020. Somehow I deluded myself that I needed to lock-in my NVIDIA's paper profit to raise cash, as oppose to selling some other thing to raise cash that was threading close to its cost. I work in aerospace, so my world was melting in front of my eyes so rapidly, that i felt to need to raise cash. Now thankfully bought it heavily into tons of thing starting April 2020 and again fall of 2020, but never NVIDIA and missed 4 bags since.

be quick guys, this is going to go behind the dreaded Fire/payWall very quick

looking back to this thread, i dont think anyone identified Nvidia, fast approaching $800 billion market cap While I realize being part of FANG and having a $1 trillion market cap are not the same, still ....

he is trying to catch the ex-dividend dates for a 5% on a round-trip

Same here. Thanks for the discussion. I am holding mine in RRSP so saved from all this tax talks but they are interesting. The negotiation with two pension funds must have taken over a year. There is a roadmap that got us where we are today, and the current market environment, TRS, actual monetization, paper-funny-money monetization, tender offer for FIH and now for FFH, all part of that road map. Why they decided to crystallize a portion of Odyssey Re NOW, and fund their buyback at cost of 8%? (minus 2% dividend saved), as oppose to do the buyback drip and drab via excess free cash flow over several years, just means they expect their P&L to runs hot in 2022, so want to torque that share count accordingly ... or so is my hope. Another way to think about it is the following: the TRS is the rocket, and everything in this compressed roadmap is jet fuel. It makes no sense for Fairfax to setup TRS with its quarterly cash requirement (whichever it goes) just for the fun of it. That things needs rocket fuel, so that they can close it profitably. I cannot believe that the man for 10 years held out on his deflation swaps is out there to juice the share price with this tender offer (as a short term thing without an overall roadmap), eventhough i think the last dollar value of the last trading day of the year does have an importance from a reporting point of view to him.

I am with you, but at the moment, to be fair, i see this as Fairfax's FIH buyback moment rather than Teledyne moment. The Teledyne moment needs to have a sustainable continuous source of excess FCF to fund the buyback (ala Berkshire today). A step in the right direction and at the right time before close of the 2021 year. Viking previously alluded to that end of year need to show price.

Thanks everyone for your response. I think you are more or less all hinged on BV as a proxy i still take issue with the scale of earnings coming from Resolute vs. the combined Atlas/Eurobank. No wonder the RPF, the dog, is being kept around, as it is contributing a lot to the paper profits. On the news this morning. wasn't Odyssey, the crown jewel ? But if they can get full value from it (without making interest payment to OMERS etc.) to fund their tender offer and while at it jack-up the BV, than that cannot be bad.

My friends & contacts when they were buying GE like 10 years ago, were saying "dude, this is GE" .... kind of the same way today I tell my new contacts and friends when i was buying lots of Berkshire in 2020-21, "dude this is Berkshire". Again not comparing, as they are world' apart, but just to say all that glitters is not gold and General Electric outshone the 1990s so much that it had 10 years of inertia past Jack Welch cooking-jarring days.

I am certainly not comparing Berkshire with the likes of General Electric, but I bet in the late 90s, owning General Electric was seen as "owning work of art", in beautiful canvas if you will, autographed by Jack Welch himself. As if it was a trophy. In the early 2007, i was going to an investment club (physically, pre Meetup days), and i recall some of the Elders in those meeting, took a lot of pride of their ownership of General Electric and their inheritance of those shares from their parents. And that was in 2007, already about a decade from the Jack Welch days and already one leg down on the long term stock chart. Yet the Faithful continued to believe the magic of General Electric even as the mighty conglomerate unraveled in an ever glacial pace, as it died by a thousand cuts over the long term.