Crip1
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Posts posted by Crip1
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26 minutes ago, FairFacts said:
My largest position (again) ....don't get me wrong....but BB??....why not sell a little just to loosen up their thinking....share price is at a 5 year low excluding the pandemic....I don't know what it will take to catalyze the stock price back to life (above 1x of bv).
"“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
As long as they keep continuing to execute, shares will trade closer to or at a premium of an ascending Book Value. Always happier to see the business doing better than the share price as opposed to the opposite.
-Crip
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9 hours ago, petec said:
Agreed. They could definitely take advantage of spikes more.However (responding to another post above) they can’t sell RFP to buy back shares. The portfolio investments are held at the insurance subs and represent insurance sub capital. To be used as a buyback they’d need to be dividended to the holdco, depleting insurance sub capital and therefore underwriting capacity.
Duly noted. Thanks for the knowledge.
-Crip
P. S. I'd still love to jettison RFP now, and would have loved to do so more in Q1
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41 minutes ago, Gregmal said:
Sometimes it's about realizing that the narrative needs changing rather than being a prick and just not caring or insisting you'll do it your way anyway. Bill Ackman didnt need to sell BHC/VRX for $12 per share. On a valuation basis you could even say he wasted money getting out for what was obviously optics reasons rather than let it rebound. But sometimes it's just best to cut bait and move on so that everyone else can too. However when you are an egomaniac(which was surprising because Ackman is) its often hard to take a loss because that crystallizes the fact that you were wrong. In my book, regardless of where BB or RFP are sold, they were losses. Wake up and start changing the narrative.
To be clear, I don’t think owning either of these is the best use of capital:
· BB – It will never turn out to be a good investment, but it is possible that this turns into a decent to good return from this point forward. Lots of folks wanted to sell this at US$7, but holding on from that point to now has worked out OK…not great, but OK. I honestly don’t know what it’s worth, but one can see how this could still work out OK from here. Maybe US$25 (a figure that’s part devil’s advocate, part pulling it out of my arse) in a few years? Not bad from the $10 point now.
· RFP – The market gave a golden opportunity, unless there’s something I missed, to cash out of this during Q1-2021. The chances of this trading where it did in Q1-2021 are pretty damned slim. Even now, selling RFP and buying back FFH shares would be a far better use of capital.
-Crip
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36 minutes ago, ERICOPOLY said:
Why does my cost basis in USD come out to $420? Is that a sign the party is on again?
Maybe a sign from above to sell your Fairfax and look into cannibus stocks?
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16 minutes ago, TwoCitiesCapital said:
Now watch - it'll trade flat tomorrow and be up 5% on Monday/Tuesday.
That's happened numerous times before, no doubt.
For the love of GOD I hope they bought back more shares in July.
-Crip -
"I find writing also helps greatly to focus ones thoughts... you have to understand it to write it so that others can understand it." - Viking
Concur 100%. It's tedious to be sure and time-consuming, but it really does help one to not only focus their thoughts but to actually think more. And this goes well beyond posting to this board or investing in general...it applies to most any kind of communication.
-Crip
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18 hours ago, SharperDingaan said:
Nothing prevents FFH from using derivatives to lend out/repo the beneficial interest from time to time - it is really no different to writing a covered call. However, in the garbage collection business, there is a lot to be said for ALSO owning enough of sh!te co to warrant a voice at the table.
SD
SD,
Is there sufficient market out there for FFH to do this with a meaningful portion of their BB holdings? Just wondering whether there's a collection of counterparties ready, willing and able to do so.
-Crip
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The common thought is that the speculators running up the price for BB are unsophisticated and naive. But think about it, if one does want to run up the price, it does make sense to do so when the largest shareholder can't sell.
-Crip
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13 hours ago, StubbleJumper said:
Yes, I would say that we've been talking about Resolute a fair bit, and the discussion of the lumber market dynamics has been unprecedented on this site. The conversation seems to have boiled down to two competing views. One view is that this is just a temporary lumber price spike and FFH should divest RFP at the top-ish of the lumber cycle (ie, find a sucker to buy the whole company while the stock is high), while the other view is that this will be a longer-term price increase and FFH should hold its shares to milk the cash cow. I guess we could spill a bit more ink about which of those views is correct, but I'm not sure that would be helpful.
Sanj, for FFH shareholders, it's worth celebrating that the RFP and BB positions have risen from the dead, but it's really not cause for patting Prem on the back when you consider the time-value-of-money. Some enterprising board member might wish to do some forensic research to construct a little spreadsheet that tracks RFP and BB share/note purchases, dividends and current market value which would enable the calculation of an IRR. But, I don't think we even need that sort of spreadsheet to tell us that we have not gotten a 8% or 10% return on either of those stocks for the period that FFH has been holding.
Seaspan, on the other hand, is one where you might want to praise FFH management because I am guessing that the IRR calculation would be favourable.
SJ
Concur in full. The share price of RFP is obviously good news. Couple that with an economist I read who thinks that this is a longer term (2 years or so, if not more) play on lumber pricing since additional capacity is not terribly easy to bring in line, and there looks to still be more upside than down side in the short term.
That said, even if Fairfax can sell out of BB and RFP at prices more elevated than what we’re seeing now, the net impact on Fairfax will still be noticeably worse than if they would have purchased a basket of stocks whose returns were in line with the S&P.
-Crip
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I have always loved listening to Charlie talk. His style is less politically correct and more forthright and blunt. Normally I do not care for those with “a black belt in chutzpah” because, often times, that chutzpah is associated with arrogance. The difference is Charlie’s humility.
Choosing between him and Warren is the ice cream analogy: It’s all ice cream, so it’s all good…it just a matter of which flavor you like.
-Crip
P. S. The CEO of Robinhood countered Charlie’s statement about Robinhood referring to Charlie as “elitist”. I disagree with his assessment and, further, find it annoying when someone uses a “term of the day” to save face.
-Crip
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I agree. Was thinking some 5y and maybe pockets of opportunity in corporate.
FFH has historically shown to be pretty adept at positioning themselves within the bond market. Accordingly, the volatility we're seeing now plays into their hands, IMHO, far moreso than it does the aggregate of the industry. This month the yield on the 5 year is up 39 bps compared to 45 bps on the 10 year, not enough to risk capital loss on a significant portion of their investment portfolio.
-Crip
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Perhaps this is simply consistent with pessimistic nature of a value investor, but I really don't think that FFH/Prem did anything with BB. It seems that they consider this a Long Term holding and really don't fancy themselves as traders, and moving out and potentially back into this is more consistent with trading mentality. Yes, a big component of value investing is selling when price exceeds value, and at $20+, that was arguably the case, but I simply do not think they did anything.
Hope I am wrong.
-Crip
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Cigarbutt,
“Even if felt to be obsolete, i have difficulty understanding why one should long for immediate market recognition when one of the principal lever of value creation would be share repurchases.”
That was kind of what I was thinking. There may be multiple reasons for the lack of transparency to which Cardboard referred. One of those being that “selling” this transaction would potentially hinder their ability to buy back shares at a good price. That said, for long-term holders who have had dead money invested here for years, it’s only natural to want to see a nice bump in price, especially if one is looking for an exit strategy.
-Crip
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2) How are losses from short equity exposures continuing to overwhelm gains from the long? What shitty selection of securities drove that result? It's hard to believe how poorly the equity portfolio has performed.
Umm...seriously, that jumped off the page at me. Saw it earlier this year but figured (or hoped) that with the overall market returning to levels reasonably close to what they were at the start of the year that we'd see better equity results. The days of "With their investing prowess, if they can just get their insurance business in line, this will be magnificent investment" are long gone. Good insurance quarter considering the environment, but we're several years into probelmatic equity investing and it's absolutely killed the value of the company.
-Crip
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Was just about to post this. Although not huge, this is another example of realizing some value in their assets that was not previously reflected in BV. Wondering if this is a concerted effort or just being opportunistic. Thoughts from others who are better educated would be welcome.
-Crip
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Full disclosure, this is well outside of my circle of competence.
For the past several years I’ve read about BB’s strength being the security of their platform. Actually have friends who work at banks where they are required to use BB phones because of that. They all carry two phones (work and personal) accordingly. Where I’m skeptical is that none of the big boys in the software/mobile phone industries have, as far as I know, tried to purchase the company, or even something close to a controlling stake. One has to think that if the platform was valuable, then those who are familiar with the business would have long ago bought out BB. Granted it’s cheaper now than it’s been in forever, but nothing suggests that there is enough value there to warrant a buyout.
-Crip
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Any way to listen to the conference call without actually calling the number for a playback ?
Not only it is very expensive to overseas investors but it is very inconvenient to sit for an hour on the phone.
am I missing something or is fairfax basically the only company that doesn't provide a transcript / playback on their website ?
Seeking Alpha normally has a transcript of the Conference Call a couple of days later. The problem is that the transcribers are not terribly well aware of insurance terms so you'll need to interpret here and there.
-Crip
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FFH is a core pillar in my portfolio strategy. Have taking a buy and hold approach over past dozen years with ongoing purchases on dips. Full confidence in the ability to run an insurance business well and effectively deploy float and ability to take advantage of opportunities.
Today, I noticed that price on Jan 1, 2015 is essentially identical to price on Jan 1, 2019. Completely flat over 4 years of a "bull market". Yes, I'm picking the dates, as if we go over 5 years, it's up a total of some 30%. So over 5 years, annual return of 7%'ish is not terrible. However, 4 years is a significant time period. To be flat (with 2% dividend yield) for past 4 years is raising some questions for me about management going forwards and questioning my long term core nature of this investment. Watsa is always so positive, energetic and bullish. Recent thoughts on this Board included that FFH was undervalued, was well positioned for regime of increased interest rates and would/should be buying back shares.
Is there full confidence that this company can AVERAGE 7%/yr over any 10 year investment period? Means some flat 4 year periods and some 30%+ years. I'm fine with lumpy returns, but over time they need to at least meet market return with potential for alpha.
As a long-term shareholder, I feel your pain, completely. I do feel that the flat share performance over the past 4 years needs to be tempered to a certain extent by the understanding that share price does not necessarily follow intrinsic value. Taking a page from Buffet, intrinsic value does follow book value, more or less. From Y/E 2014 through the end of Q3 2018 (the last period for which we have measured Book Value) BV has increased just under 3.34%/year ($395/share to 451/share). Add the $10 divvy and you’re up to a little over 5.5%. Certainly not a compounding machine, and well behind the S&P 500, but certainly better than flat money.
-Crip
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To me, Fairfax hasen't looked better than it does now for years.
Me too.
Whenever a question like this is asked, or at least whenever I've asked that question, it's been more of "Everything looks good to me but the price is dropping...am I missing something?"
-Crip
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As much as one can save time by reading rather than listening, the typos and misunderstandings on the transcript are enough to drive one batty.
-Crip
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Thanks for posting this. Two totally separate reactions:
- In terms of investing, it’s easy to see how people can make serious money (or be easily duped) by “pump and dump”. Members of this board will likely not be impacted by this directly as we tend to be pragmatic in our approaches, but members of the general public would not be so insulated. “A fool and his money are soon parted” comes to mind. So…thinking selfishly, no harm, no foul, and if a holding of mine is pumped or dumped, then I can likely take advantage. All good.
- In terms of greater social impact, this is nothing short of frightening. I’ve had both Conservative and Liberal friends refer to Snopes as wholly inaccurate…an agent for the other side. Clearly, that’s not possible. A significant portion of the population is driven by ideologies as opposed to facts or human character. We are repulsed by bad behavior but ONLY repulsed when the bad behavior is perpetrated by those with whom we disagree. Fake news panders to this in no uncertain terms, and it scares the hell out of me. There’s a science to this and the “scientists” are getting better and better. I fear for how this all ends.
-Crip
- In terms of investing, it’s easy to see how people can make serious money (or be easily duped) by “pump and dump”. Members of this board will likely not be impacted by this directly as we tend to be pragmatic in our approaches, but members of the general public would not be so insulated. “A fool and his money are soon parted” comes to mind. So…thinking selfishly, no harm, no foul, and if a holding of mine is pumped or dumped, then I can likely take advantage. All good.
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No idea what's driving this move. Interesting, though, is that FFH's price is moving inversely to MKL(2018.5.17 - 2018.6.17 MKL was down 2.8% and FFH was up 6%. Since then FFH is down 9% and MKL is up 3%). Something similar happened during Q1 of this year as well.
If FFH moves below US$500 I'll most likely add, else, I'll wait on earnings. We've had a few instances of good earnings and the price moving sharply higher within the week. If earnings come back solid and there's not an immediate move, I may add then as well.
-Crip
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Want to clarify a few things will be away for awhile...I am a terrible writer so I will do it in point form! – Please do…it drives me crazy when someone wants to make multiple points in paragraph form. Points make it easier on the reader.
-when Fairfax says offence they are talking about the economies of the world not the stock markets...ie if India continues to grow at 7% a year Fairfax will make a killing. The Dow doesn’t matter. – Compels one to ponder whether Fairfax or Faifax India is the better investment.
-your either trust Prem and Fairfax management or you don’t pretty easy...if you don’t you should NOT buy shares – I would add something to the effect of “if you don’t feel Prem is a good steward for your money, then you should NOT buy shares.
-I see large consistent buybacks up until $700 on FFH....after that they will slow substantially. I think that once the news comes out that FFH is buying back shares that the price will spike making the buybacks less beneficial. Stated differently, I hope they’re buying a boatload now.
Value investors have been killed for years...Prem and Fairfax have not escaped this fate and many are right to doubt their recent stock picking performance. That is rear view mirror stuff but Fairfax has to prove themselves AGAIN for sure. Thomas Cook India is a good start. After years of under-performance, I would hope that value-type investments over-perform in the coming years. The flipside of this is that over-performing against relatively benign overall market returns suggests absolute returns will not be great.
-Crip
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And, the stock price is essentially flat at this morning's bell. Interesting.
SJ
We've seen multiple instances of earnings coming out for FFH where price movement is relatively stable for 1-3 days only to see a significant move up (3-5%). Since I've got a pretty hefty position in Fairfax and am not one to trade on short-term movements, I'm not buying in to this, but history does show this to have occurred multiple times in the past.
-Crip
Fairfax India new issue
in Fairfax Financial
Posted
Yup, more or less.