Partner24
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Posts posted by Partner24
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I think its fair to say MR. Market left the office early to buy MRS. a valentine's card...
For the old timers here (MSN Message board), some might remember that it was usually because Sanjeev was out for lunch...
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Sanjeev, do you went to lunch? ;)
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Odd thoughts:
- In reading through this, a little voice in my head said that this is starting to look like a “Machine”. Underwriting and investing fund acquisitions which beget more underwriting and investing which generate funds which beget more...
- Fascinated that they did show a positive realized gain for the year in equity hedges in an up market…though they were dwarfed by the unrealized losses, it seems to indicate that they were timely in closing out some hedges.
- Rough Q4 where both the Equity investments and equity hedges but get hit pretty good. Ouch...
- Never thought I’d see the day where Fairfax’ combined for a full year would be lower than Markel’s.
-Crip
+1
- In reading through this, a little voice in my head said that this is starting to look like a “Machine”. Underwriting and investing fund acquisitions which beget more underwriting and investing which generate funds which beget more...
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Used (3-6 years old) car with the following attributes:
reliable (low repairs) and cheap to own (insurance+gas)
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Oh well, then I guess that I'm really lucky to live in a Canadian democraty. May he find his "God" and face the values he did put into pratice in his late life.
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Suffice it to say that I'm not sad about it.
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FFH
MKL
BRK.B
BDVSY
Maybe I'll add PDH one day ;-)
Fund manager: Giverny Capital
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Well, I've discovered about Buffett when I was about 21 years old. The first stock I every bought was FFH in 2003. I guess what I regret was to focus too much on things like FFH, MKL, BRK and the likes. I should have took a closer look at very small businesses...cheap, growing, under the radar like PDRX. But that being said, things could have been far worse than owning FFH, MKL and the likes!! It's far from being a big regret.
Also, I don't regret about saving a lot when I was in my 20's and had less expenses than now (kids, house, etc.).
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Every single stock that I have is for sale...at a given price. Mr Market has to be turned to our advantage. If you don't find other good opportunities, you can always sell something, keep the cash and wait to buy it again later when it will come back to a good price.
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Ok Crip, let's take the 15% ROE assumption. At 1.3 times book, it means that on a normalized basis, you would pay nearly 9 times the earnings that the business can generate. It is a fair price to you?
What is a fair multiple regarding FFH? To me, the 1.7 figure is fair. There is certainly no absolute and I might be wrong, but that's my number. Time is a friend to me. When I get a business that can likely add intrinsic value at a satisfactory clip over a long period of time, I think twice before starting selling, but I'm very open to do it.
I'm wondering if I'll finally get the chance to have this dilemma after all these years of patience!
Cheers!
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"Fairfax: the multiple expansion is probably over."Well, nobody know for sure, but if the price to book reach 1.7 or so, I'll probably sell some shares that I kept since the last 12 years.
P24,
Well, that's an interesting point to ponder. I want to say that it was roughly 2007 that Markel was selling for 2X book and, at that time, I contemplated selling a good-sized chunk of my holdings. I think they also got pretty close to 2x BV in 1999 as well. Ultimately I never did and it cost me dearly as I could have, a couple of years later, purchased some MKL for dramatically less. I promised myself that, even though I think MKL is a great company to own (and I know you do as well), that I'd sell half or so of my holdings if it was selling at 2x BV. I think that it is a reasonable conclusion that 2X book for MKL is a result of price getting ahead of value. As we are currently sitting at about 1.3x BV, we've got a ways to go.
The same concept would seemingly apply to FFH but the specifics are not as clear to me. I cannot argue with your assertion that 1.7x BV being a selling point, but I cannot endorse it either. Do you have any specific calculation that says 1/7x BV is overvalued? Not trying to challenge you on this, just looking to understand.
-Crip
Crip,
Regarding FFH, when I take a look at it's normal capacity to generate earnings with the investment portfolio (less the expenses) and a normalized return on it's equity calculation, using both methods, I get that 1.7 times book is a fair price. These are the two main methods that I use in evaluating an insurance business. Even at 1.7 times book, I would still keep some shares. Over two times book, I think that the buyer would be cheerful and would make me feel uncomfortable to keep it, unless something unusual that would boost book value in a short period of time would very likely happen with FFH.
And I'm curious to know. In your mind Crip, what would be a fair price?
Cheers!
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"Fairfax: the multiple expansion is probably over."
Well, nobody know for sure, but if the price to book reach 1.7 or so, I'll probably sell some shares that I kept since the last 12 years.
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Obviously, it's far too soon to say that they were right.
Even if time tells us that they were right, it is certain that they were too early.
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Very good interview. Thanks!
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Well, I'll speak from experience. In my yound adulthood, I was a phone suicidal prevention care provider for a year. It was too tough to me.
I will not get into details, but suffice it to say that when someone was talking openly about suicide in a short to mid term period frame, the ultimate psychological saving rope that was teached to us was to help the person realize how bad it would be for people who cared about them. Sympathy and some kind of sane guilt was a powerful tool that helped to save lives. This was not meant to be a permanent solution, but a saving rope that was useful. Maybe things have changed over the last 15 years or so, but it did help.
So I don't know if rkbabang cultural social acceptation hypothesis is true, but it might be.
Feel true empathy about someone pain doesn't mean that you have to agree with what he does with it.
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Very sad indeed. That funny, talentuous, successful, positive etc. guy who commit suicide. Nobody is immune to sadness and depression. I feel sorry for him and all who loved him.
I feel a little bit disapointed about what he did too. What kind of message does his suicide send to other people?
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My god, only few posts about the FFH earnings release. Remember the 2003 era? ;-)
At first sight, a good quarter. Underwriting seems to be in very good control now, but will take a look at combined ratios with the adjustments over time.
Cheers!
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Dear Crip, have you lost your marbles? ;)
I'll always remember that quote: "The only time I made money with a crystall ball is when I sold it in a garage sale". ;D
But I know what you ask is just for fun! Still, I don't know what to say...I would guess it depends somewhat on what will happen with the general stock market. If it goes down, you'll likely see FFH do better on a relative basis than MKL. If it's the contrary, MKL should do better.
But that being said, I don't know what the general stock market will do over the next five years. But if I would be forced to do so, I would take the conservative side of the bet.
Oh thanks Lord I'm far from being forced to go that way with my real money!
Cheers!
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approx. 40%
Now it should be the time to sell some FFH. 1.3 times book.
Correct me if I’m wrong, but with the $15 increase, Fairfax is selling at 37% above BV, a valuation not seen since before the turn of the century. Granted that Fairfax’ bond portfolio is seeing some significant gains since 31 March but, still, this is pretty “frothy” for Fairfax, which brings about a dilemma. Being that the Fairfax shares are in a retirement account and there will be no tax impact on selling these shares, I’m tempted to sell 25-50% of my FFH (Fairfax is my top holding, comprising close to 25% of my total) in order to replenish some dry powder for future opportunities, which may, in fact, be Fairfax should the price drop enough.
So, is anyone else looking at this run-up as a selling opportunity?
-Crip
Hi Crip, that's a good question. I'm not tempted that much, but your question make sense. I would not sell in the hope of buying it at a cheaper price. Nobody can predict if FFH will see at 300's, 400's, 500's or significantly higher over the next few years. If you find a business that fit your criteria and is more appealing to you than FFH, your decision would intrinsicaly make sense, but no crystall ball can tell you if FFH will be cheaper down the road.
Cheers!
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I want to throw in a few that nobody has mentioned yet ;D - coming as a public company near you...
Gio holdings
Parsad Financial
That's what I tought too. I'll certainly take a look at them when they will get public.
Cheers!
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Thank you for you comments, especially those who are candid enough to admit they got cought. It's just fun. Having some is very cheap...most of the time, it doesn't cost us a dime ;D
Cheers!
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NSA where are you? You guys spy everthing on the Internet, phone, etc. even the 100% innocent and well intentioned people, but you can't do the basics?
What a shame. You should be fired.
Results out
in Fairfax Financial
Posted
Yes, back then was when some people predicted a cash crunch at Fairfax and we had several days when FFH daily price jumped 5-10%. It was frequent enough that this lunch joke became a running gag on the MSN BRK message board.