sdev
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Posts posted by sdev
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fun read :)
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Thanks for this long interview. I have watched about 5 interviews with this guy and am a big Fan. He is like a plan speaking better performing Bill Gross. I feel he is also much more nimble, I dont know how Gross can manage that much money.
All roads point to range bound markets and 7 lean years. I am going to update all my holdings and head off for the summer, watching the market these days is like watching paint dry. I wonder what will cause the next uptick.
Ditto, big fan of Gundlach.
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Also, I did not want to have to beg for someone to post their notes of the AGM, but it looks like we've gotten to that point: please please please. :)
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Thanks for the link, great talk.
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Am I the only one that noticed that the CFO is a fellow boardmember?
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Wow, familiar names involved in that ;). Confused how owners subscribed for shares in january just over $1 and shares are almost $4 now.
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Hesitated to post this, but think it's time well spent if you have an hour:
http://www.talkpoint.com/viewer/starthere.asp?Pres=134567
It is the Jeff Gundlach's latest webcast to investors including slides. He does a great job at quantifying where we stand, mostly from a credit perspective. A lot of us talk about things like..stocks aren't cheap/high yield is too high etc. His presentation looks at exactly what is going on in the credit markets versus now, versus what was being done in 06-07. Very eye opening.
In addition, I think his fixed income investment strategy is completely unique and not being replicated by others. Yields 8+%, holds half the portfolio in bonds that do well in deflationary scenarios and half the portfolio in bonds that would do well in an inflationary scenario (handpicked Prime and Alt-A MBS priced way way below par). He would always do a much better job than I do in explaining it, so watch the webcast!
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I hope for our sake (shareholders) that they aren't forming relationships from visitors on the web. Who cares if the website is boring and simple...if somebody is serious about learning about Fairfax, all the pertinent information is there. How come those that are complaining about it aren't howling about BRK's website, or Leucadia?
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He didn't appear to be very wise and seemed ignorant. Not protecting Buffett but Steinhardt just seemed like a waste of space.
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mean, that was so mean.....Had me for a sec there.
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:o Any lessons to learn from this?
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For many years prior to 2008, we had harped against asset backed bonds, particularly triple A tranches, because their
spreads had no correlation to their risks. In the last two years we purchased many triple A tranches of mortgage
backed bonds at about 40¢ on the dollar, since even if house prices dropped by 67%, we would get our money back.
Also, we bought some lower rated tranches at 8-9¢ on the dollar – where the interest payments alone on the tranches
would pay back our purchase price in less than 12 months. We invested a total of $388 million in these mortgage
backed bonds, received $262 million in interest and principal payments and sold the tranches for $441 million – a
15total gain of $315 million or 81% on our investment in less than 2
1
⁄2 years. This idea was brought to us by Jamie
Rosenwald from Dalton Investments, and Brian Bradstreet and our investment committee worked with Jamie
approving each purchase. Please thank Jamie when you next see him – perhaps at our AGM. By the way, we invested
$23 million with Jamie from 1996 to 2006 for Asian investments, he returned $20 million in March 2008, and the
remaining amount was worth $63 million at the end of 2010!
Has anybody heard about Jamie Rosenwald and his firm?
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I just read some of Francis Chou's old annual letters, and I'm sure that many of you already know this, but for those like me that did not before...it looks like Francis just missed the boat in his mutual fund on buying corporate CDS by a matter of months because of regulatory approval. Had he been legally able to act when he saw the opportunity (like Fairfax was able to), I bet a lot more people would be singing praises about him. Fun learning more about his history.
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Anybody follow Jeff Gundlach and his story/bond fund? I apologize if I'm naive about it but I think his total return fund strategy is interesting and unique. He is long Ginnie Maes and non-agency backed MBS to position himself in what he says as protected from inflation and deflation. Said that if inflation hits, the beat up MBS will rise in value as the value of the debt is easier to pay off and if deflation hits, the govt backed bonds will protect principal. His fund yields about 8% from the blended cash flows of the MBS and Ginnies. No idea if this is a good/bad strategy, but I haven't heard of others positioning themselves like this. Any thoughts? His story is a fun read:
"Firing the $70 Billion Dollar Man"
http://money.cnn.com/2010/03/10/news/companies/TCW_Gundlach.fortune/index.htm
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A few more days like this? HOPE NOT!
Although that may double the VIX which can be a good thing.
I really thought O&G will outperform the market while the market corrects. Especially those with domestic assets... Too soon to tell!
Still too early to admit that I am just dumb.
Let me guess, you're getting the chinese water torture treatment from atp oil and gas?
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Wow, those old posts are incredible to read. Somehow I landed randomly on the page where Sanjeev did a simple valuation of their public holdings and demonstrated the market valuing FFH at less than (-500m). Can't imagine what that time must have been like!
73.7% interest in Odyssey Re65.14 M shares outstanding = 48M shares owned by FFH
48M x $18.03/share = $865M US = $1298M CDN
Interest in Hub International
11.24M x $13.9/share = $156M US = $234M CDN
Interest in Lindsey Morden
9.52M x $7/share = $67M CDN
Interest in Zenith
7.81M x $19.74/share = $154M US = $231M CDN
Total market capitalization of FFH on today's close
14.33M shares x $87.1/share = $1248M CDN
Market values the rest of FFH at -$582M on Friday's close! And these valuations include a U.S. dollar which is nearly 3 cents lower since the last update! Businesses valued as worth -$582M are:
Commonwealth Insurance - 84.1% CR
Crum and Forster - 103.3% CR
Falcon Insurance - 99.8% CR
Federated Insurance - 94% CR
Lombard Insurance - 98.6% CR
Markel Insurance - 96.3% CR
Ranger Insurance -
TIG Specialty Insurance - *106% CR
Compagnie Transcontinentale de Reassurance
CRC (Bermuda) Reinsurance
ORC Re - 99.1% CR
Wentworth Insurance
The Resolution Group (TRG) - now completely owned
Riverstone Group
* 58.2% excluded
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Carrying cash ain't a bad hedge! It's cheap too! ;)
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Taxable bonds (annualized return) 12.6% (5yr) 11.9% (10yr) 10.0% (15yr)
:o :o :o
Pros.
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Nope, The best company... with a really crappy stock.
Sdev, I have owned FFH in various forms for nearly 14 years. I did extremely well with the options. If I had held the common stock all this time I would have shot myself. The p/b has shrunk from 3x to ~1 over that time getting lower each year. We always seem to be waiting for some great catalyst to move the stock. Now its the hard market we are waiting for. When that comes and the stock doesn't budge out of its moribund state what excuse will everyone use.
I have definitely not been around these guys for more than a fraction of the time that you have. However, I'm not that worried about it being "dead money" seeing as it's not trading for a multiple of book value right now. I might be optimistic about their continuous overseas expansion, but I dont think that it's a stretch that they continue to increase the book value at a reasonable rate over the long term. If the stock doesn't follow book value, eventually I'd assume they would start buying back stock. Does that logic seem flawed?
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Crappy if you define long term as 1 year. In that year they have made some great acquisitions and over the long term, it will continue to do well.
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I may suggest reading "Good Calories, Bad Calories" by Gary Taubes. A very insightful book.
BTW, I've lost 18lbs in the last two weeks
--Eric
You must be losing a lot of fluid? Are you bleeding?
Fat has about 3,500 (working from memory) calories per pound. In 14 days, you haven't lost 18 lbs of fat.
Wish more people would read about refined carbs.
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I'm way more excited about the long term growth they are setting their core business up for via all the quiet international and domestic expansion.
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Would love to own owner managers that did 15% till the end of time. I'd rather relax than work so hard churning and burning.
ICICI Bank breaking gender norms
in Fairfax Financial
Posted
http://www.bloomberg.com/news/2011-06-22/top-women-in-india-banking-proving-icici-s-factory-for-ceos-gender-neutral.html
Not directly related to Fairfax but I thought the article and video was interesting.