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A_Hamilton

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Everything posted by A_Hamilton

  1. I guess I disagree re: FFH's book loss. One has to include the deficiency in fair value from non-insurance associates. It is part of the investment book and real. FFH would be down ~12% with this included. Nonetheless, I don't think it matters all that much given the growth rates here and strong combined ratios...
  2. I'd like to see them just keep it on hand to fund premium growth and or begin reducing equity investments to tangible capital. I don't know why they always insist on living on the edge as it relates to liquidity and investment portfolio. Thankfully Bradstreet has kept them so short in duration this time around.
  3. The idea of matching the duration of your policy tail is that all else equal the yield on offer at a point in time should equal the risk premium inclusive of inflation expectations, so your risk isn't all that great. Problem is at very low rates and narrow spreads you better be using some form of modified duration because you are taking so much rates risk. It has been pretty incredible to watch Brian Bradstreet change his mind over time. 7 year duration post-GFC to Trump era and then down to basically nothing post Trump election. With 5 year treasury over 3.5%, I imagine you start seeing FFH move duration out another 6-12 months, perhaps buy some intermediate term high grade corporates. It is interesting, FFH mistakes on fixed side have been limited to the inflation floors being just too large of a bet and then the atrocious Greek Government Bond trade that they just never mention. On just pure rates trading, absolutely astoundingly good. If we could get just 1/2 as good on the equity side we'd be rolling.
  4. Always good to have BB report on first day of a new quarter.
  5. FYI. Good overview of where ORH is writing premium and where it is avoiding. Sounds like a rough Q3 for the industry (and ORH to a lesser extent) and that there is still more to be learned on COVID losses in EMEA and South Africa. https://www.theinsurer.com/reinsurance-month/
  6. Sandridge Exco Long GGB's prior to Greek default Eurobank (1st tranche) Blackberry RFP Sale of JNJ, USB, WFC to fund some of these.
  7. Xeres, they literally could not sell their position in Blackberry when it spiked last time because all of the proceeds would have had to have been remitted to Blackberry. Short swing profits rule.
  8. Positive. Prem is on the board, so he is an insider, subject to blackout. Also, FFH owns ~20% of shares out via the converts. In the U.S. you are "deemed" an insider when you own over 10% of a company...so regardless of whether Prem is on the board or not FFH would be considered an insider. From my perspective, best we can do is hope that BB halts its own stock news pending and preleases results today/after market close/over the weekend and then FFH can trade in two days...
  9. More I think about this FFH is definitely blacked out. Going to need an earnings pre-release and wait for two days of trading to take advantage.
  10. Quarter just ended for BB so they could be blacked out from trading.
  11. Roger Lace was like $13 Canadian, Wade Burton waited a bit longer and got $24 canadian. So can drive a truck through the difference in price. Regardless seems likely some monetization to take place here / may have already this morning.
  12. The annual says on page 95 that they have repurchased for cancellation 137,923 shares and then 42,197 shares for treasury thru 3/4.
  13. Petec, just so you know I think you are comparing some apples and oranges figures (this is due to the way FFH presents things). The $662 million FFH refers to is the market value of the common equities at 12/31 being less than the fair value by $662 million as laid out by Prem on page 10 of the annual report (due mainly to Eurobank and Quess). The $712 million figure that was mentioned by Jen Allen on the call corresponds to the Investment in Associates fair value over carrying value at 12/31/20 as laid out on page 72 of the annual. The biggest driver between these tables is the private insurance holdings (Eurolife, Thai Re, Go Digit) and then FFH India. FFH's comment on the call and then in the annual letter was that the fair value of the common as laid out by Prem on page 10 of the annual is now above that of their carrying value. These are very different statements so just want to be clear there. A good portion of Q1's gains (to the extent market stays up) then will simply go to having the carrying value and market value of the common equities be much closer.
  14. I don't think it would be the wrong response to exit if Prem didn't sell unless there were some kind of blackout period having prevented FFH from trading. I agree too with Petec's point that a lot of this is about the fact that the company could use some higher capital levels to take advantage of the hard market. They are somewhat fortunate so far that the hard market is stronger outside of catastrophe reinsurance because their just isn't the balance sheet to write that substantially right now and end up with 140% combineds for a few quarters if you get a bad hurricane season.
  15. Where are you coming up with 5 days? I have never seen a 13D amendment issued later than one day after a change of 100 basis points or more change in position size. The SEC rule is that you must file promptly. Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply. Per SEDI Wade Burton sold some shares today and Roger Lace sold some last week. It is going to be a very hard conversation if two senior members of Hamblin Watsa sold shares but Prem wouldn't let FFH sell any. Holding out hope FFH used a total return swap to reduce their notional exposure and somehow convinced themselves via their attorney that they don't need to file an amendment as the TRS is cash settled and not a security. But I'm thinking that is a long shot at this point.
  16. Just look at the 13D. https://www.sec.gov/Archives/edgar/data/915191/000110465920101936/a20-30061_1sc13da.htm FFH owns $330 million of converts at $6 for 55 million shares. Then they own 46.583 million common.
  17. Especially when you rewrote your convert. This.... 7$/share wouldn't have been anything previously with Fairfax's ability to convert to 50 million shares @ $10. But now Fairfax gets to convert into 55 million shares @ $6 - meaning they're ~$100 million in the money for bonds that wouldn't have been worth more than par back in September. Have you (or has any board participant) calculated FFH's break-even on its full investment in BB? It's mostly irrelevant because you cannot change your entry price, you can only choose whether to exit, but I am a bit curious. My mental guess would be about $10/sh, but that's just the result of faint memories of past discussions and accounting for the new conversion privilege for 55m shares. The prospect of exiting the BB position on a break-even basis (or gasp! a profitable basis) is encouraging. It's been a long ten years. <EDIT> Answering my own question, here's a bit of work that Valuehalla did a few years ago: https://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/fairfax-2017-15646/msg320753/#msg320753 SJ It's much higher than this. You'd have to look at old NAIC filings, but FFH didn't only own common equity it bought in the high $40's and low $50's, but also owned total return swaps long in RIMM / Blackberry. Glad there is the potential for a positive result form here.
  18. Anyone else notice subordinate voting share count is actually up YoY? 27,242,281 at 9/16/2020, 26,067,450 at 9/16/2019. I hadn't noticed that, but after you flagged it, I pulled up the Q2 financials: https://s1.q4cdn.com/579586326/files/doc_financials/2020/q2/FFH-2020-Q2-Interim-Report-(Final-Milestone-July-30-0451-pm).pdf On Page 21 of the Q2, it says the June 30th subordinated share count was 26.3m shares in 2020 vs 26.9m shares in 2019. It's not exactly Teledyne, but at least it looks like the share-count is going down slowly... SJ My point is just that it looks like FFH has been issuing treasury shares in Q3.
  19. Annual news. They must file one every year on the off-chance that they wish to repurchase shares. It's just a formality. SJ Thanks for cooling my excitement ;) So, when and how would they report actual share repurchases? FFH usually makes mention of the repurchases in its quarterly financials. Alternatively, if you don't want to wait until the financials are published, you can look for filings on SEDAR or this site is a good option: https://www.canadianinsider.com/company-insider-filings?ticker=FFH SJ Anyone else notice subordinate voting share count is actually up YoY? 27,242,281 at 9/16/2020, 26,067,450 at 9/16/2019.
  20. From what I understand, Ryan Reynolds is a minority shareholder and he is staying on as a shareholder of American Aviation. The rest of business (Davos) is mostly owned by Fairfax and the Sokol Family. Not sure how much is owned by who, but it looks like Fairfax and the Sokol Family are selling. Cheers! Thank you. I looked at Odyssey's NAIC filing and at 12/31 it had a $15 million investment in Davos that had generated losses bringing it to ~$9.5 million. I haven't dug through the other subs'/not knowing how much ownership ORH got for $15 million makes it tough to know, but would be nice to see a couple of dollars bump to BV in Q3 from this.
  21. I think you need to tax effect the loss that you are embedding, but this is how I think about it as well.
  22. Does anybody know how big FFH's stake is in Davos and then how big Davos' stake in Aviation Gin is? Aviation just sold for $335 million plus an earn out that could value it at $610 million. https://www.yahoo.com/entertainment/ryan-reynolds-aviation-gin-line-132816393.html
  23. If Berkshire had sold out of WFC, surely they would have had to file a 13D to indicate that their stake is below 5%? I think he probably sold quite a bit of WFC, but I wouldn't be surprised if he blew out JPM entirely. Out of all Berkshire's financials, JPM are probably the most exposed to unsecured consumer lending, which is probably not a place where you want to be in this environment. You are missing the fact that a company can go over 5% and be a 13G filer. This is a passive investor who owns over 5%. A 13G only needs to be filed once per year within 45 days of year end. There is no incremental filing needed until you get to a position over 10% or intend to become activist (then you'd need a 13D for activist and also become a deemed insider and Form 4 filer if over 10%).
  24. No no...$769.2 is available to all shareholders of Fairfax. Preferred shareholders received $11.2 million, so available to common is $758/26.98= 28 million. Or page 19 of the interim report in Note 12.
  25. It all comes from the Federal Reserve's Survey of Consumer Finance. These guys extrapolate the data to get to percentiles. It's pretty crude.
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