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JEast

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Posts posted by JEast

    100% Chance of Global Recession

    in General Discussion

    Posted

    I would tend to agree with the clock analogy but would credit his comments a little more and move it up to four times a day :)  He was one of the earlier ones calling for a global housing bubble so I have always enjoyed Marc Fabers more global oriented comments similar to Jim Rogers.  Both love the commodity super cycle and China.  Recognize Faber is Swiss but lives in Thailand when he is home.  I believe the guy has more frequent flyer miles than a pilot as he probably travels the globe at least twice a year, maybe more.

     

    Cheers

    JEast

    Paulson files 13D on HIG

    in General Discussion

    Posted

    The warrants (HIG+) appear to be the most mis-priced large cap opportunity around at these prices.  They do not expire for 7 more years and they are in the money with the reduced strike feature like the BAC warrants.  The only downside would seem that it goes belly up.  Otherwise, heads you win, tails you do not lose much.

     

     

    Cheers

    JEast

     

    Disclosure: Long HIG+

    Watsa conundrum

    in General Discussion

    Posted

    If one believes the Euro will survive in some fashion it makes sense.  Why else is the Euro at $1.27 or there abouts and not 90¢?  The world thinks that the Euro will be around but with less members and subsequently stronger members.  Mostly Ireland has taken there hit, with maybe a little more to go.

     

    Cheers

    JEast

     

    Prime Broker/IB - Foreign Security Forex Basis/Gain-Loss Reporting Issues/Costs

    in General Discussion

    Posted

    As mentioned previously, a quick download of the historical data will solve the issue (mostly as usually you can only download open/close/midpoint prices).  A potential good place for the data to be downloaded is below, then the VLOOKUP function in Excel will correct your cost basis to whatever base currency you need.

     

    http://www.oanda.com/currency/historical-rates/

     

    Cheers

    JEast

    Prime Broker/IB - Foreign Security Forex Basis/Gain-Loss Reporting Issues/Costs

    in General Discussion

    Posted

    Two issues with IB:  1) They calculate your FX mark-to-market gain/loss in the cash report each month, no need to recalculate anything, and 2) if you hold foreign securities, once they are sold take the IB sales price minus the IB realized gain equals your cost basis (i.e. IB does the FX calculation for you).

     

    Side note: The IB brokerage statement is not the easiest to read and may be why your admin is having difficulty.

     

    Cheers

    JEast

    Japan Will Follow Europe With a Debt Crisis: Kyle Bass

    in General Discussion

    Posted

    I also love the quote "It's a question of when, not if."  That is the issue at hand -- when.  Next year, or 10 years from now.  Most investors are aware of the issues with Japan and it is not a secret to most anymore.  It is not what everyone knows that usually is the tipping point, it is something else.  Are we just following the what Talib calls the 'narrative fallacy?' 

     

    I would not compare Japan to Greece.  The Japanese actually work for their social services :)  As Charlie said recently in the interview posted and at the meeting last week, Japan still has a lot of virtue left that is built into the system.

     

    Cheers

    JEast

    Bonds Continue To Rally

    in Fairfax Financial

    Posted

    Just bumping this up to say thanks to the HW team for being more transparent on the bond holdings at both the annual meeting and on the recent conference call.  I emphasis 'team' as most of recognize the strength of the team.

     

    It would appear that the cash is surely building (long-term bonds nearly liquidated) with the somewhat recent rally and return back to safety in the bond market.  If a real scare comes, surely bonds will rally even more, but the rally should be captured, in part, with the CPI swaps and the cash now on hand can be spent aggressively in the equity markets.

     

    Cheers

    JEast

     

     

    Republicans are the problem!

    in General Discussion

    Posted

    I have the belief that when we are younger we truly have faith that there is a difference in the two party system, at least in the US.  As one gets a little older, one realizes that there is little difference at all.  Case in point with the recent Hedge Fund legislation in the US.  Potentially great for the Hedge Fund industry, and I like it, but being supported by the Democrats and pushed by Obama.  The political backbone of all parties have gone topsy-turvy!!  :)

     

    Cheers

    JEast

    FFH results out

    in Fairfax Financial

    Posted

    Devil is in the details.  Recognize that many items have been pulled out of C&F over the years as either discontinued operations or put in runoff.

     

    What do they say about EBITDA  --  'the stuff before all the bad stuff.'  The triangles you see now/then are after much of the bad stuff was taken out.  Your point is dead on though about expenses though.  I argued with a previous CEO about the number of employees he had  --  he didn't really know :(

     

    Many of us are still getting over the handover of a great two days of activities, but in the end I have to ask the tough questions to myself -- and not get too excited about underwriting at Fairfax.

     

     

    Cheers

    JEast

    FFH results out

    in Fairfax Financial

    Posted

    The impact of the tornados in the south and central U.S. this year was only 0.4% to CR.  This was less than cat losses in 1st quarter of 2011.  If one takes into account that the asbestos and environmental liabilities are 100% reinsured now, the numbers look even worse.  My memory does not go back very fair, but I believe C&F has not written below roughly 105% for the last 10 years!!

     

    On a positive note, they are trying to carve out the turds and add in profitable lines of business like First Mercury.  The biggest drag to Fairfax underwriting is C&F period.  Doug  --  either pull the pen away from some folks or tighten the T&Cs and let the business go, even in an upcoming harder market.  Get ready for some very tough questions at next year's meeting.

     

    Remember, I am a 'Super' strong supporter of Fairfax.

     

    Cheers

    JEast

     

    FFH results out

    in Fairfax Financial

    Posted

    Agreed on the "hedges", as I sense that the short position is more of an arbitrage of the RUT and S&P versus WFC, JNJ, and USB.  Sometimes the arbitrage goes against one as it appeared to in the 1st quarter.

     

    What concerns me more is the continued struggles at C&F.  The first quarter numbers are usually the most benign of the year.  Even so, C&F still could not write at 100%.  I support Doug Libby as he did a bang up job at Senaca.  But with rates improving and T&C tightening, if C&F can not write at 98% or lower then big changes are required!!

     

    Cheers

    JEast

    ICICI Lombard Growth Continues

    in Fairfax Financial

    Posted

    I continue to think that this is a hidden gem for the Fairfax family.

     

    The year ended March 31 2012 numbers have been reported with premiums pass the $1B mark.  After removing new regulation required liability recognition for pooled claims, maybe the tide is finally turning.  Basically a breakeven year which is an improvement.  See ICICI Bank report for ICICI Lombard.

    http://insurancenewsnet.com/article.aspx?id=340240

     

     

    Cheers

    JEast

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