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Thrifty3000

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Everything posted by Thrifty3000

  1. I want the shares to triple overnight so I can exit and fly private the rest of my life.
  2. Amazing analysis as always. Many thanks! Another datapoint investors should probably keep in mind is the fully diluted EPS. Looks like the fully diluted version of your estimates would land around: $146 per share for 2024 $149 per share for 2025 Fairfax’s share-based plans have a longer vesting period than most companies. So it’s less of a near-term concern, but something to be aware of.
  3. Or, was Prem saying that he wouldn't be initiating tech investments, while the rest of the team is free to pursue tech opportunities as they see fit? That's how I interpreted it since they still have other tech investments in the portfolio.
  4. Step 1) Read this: "We had by far the best year in our history. A record underwriting profit of $1.5bn and net earnings of $4.4bn. BVPS increased 25% to US$940. In the last 3 years, our BVPS has doubled. Our operating income of $3.9bn may continue at these levels for the next 4 years.” - Prem Step 2) Study the last column, paying particular attention to the bottom right corner of this page in the annual report: Step 3) Combine knowledge gleaned from steps 1 & 2 and imagine how the chart will look four years from now. Step 4) Enjoy watching the share price climb to $2,000+ USD.
  5. When FFH reports mind-blowing results and the stock price drops...
  6. The headline was negative. The bots are doing their thing.
  7. In what universe are you given ONE make-or break-question on a company’s conference call - where everyone knows your intent is to take down said company - and your ONE question is WHY DON’T YOU DISCLOSE MORE INFORMATION?? Oh brother, that was really pathetic. FFH is worth $1500 to $1800 USD per share. Kudos to Prem & Co. for a job very well done!
  8. Raised the earnings guidance floor from $100 per share to $125 per share, excluding investment gains, for the next few years. (Prem said “of course there are no guarantees.”)
  9. This is. Four years is an eternity in Mr. Market years. This stock is going to be worth SO MUCH more 4 years from now.
  10. I’m assuming it only impacts balance sheet (and book value).
  11. Quick question: Do reserve releases flow through the income statement?
  12. If you want to see what legit short cases look like I recommend getting on the Hindenburg email list. Here is their short du jour (for a company called Temenos): https://hindenburgresearch.com/temenos/ And here’s the 25%+ beat down on the Temenos market cap. Notice after extensive research - including dozens of insider interviews - Hindenburg lists over 20 specific questions for management that it is confident management can’t answer favorably. These guys do a lot of quality work. I’ve never taken a short position, but I find the Hindenburg reports interesting. Key takeaway: MW’s work on Fairfax is amateur-hour in comparison to Hindenburg.
  13. I don't think there's a risk of getting burned by the TRS. According to the annual report there's over $2 billion of subsidiary dividend capacity. Also, there's more than enough undrawn capacity on the credit line.
  14. If you want to know if a short has teeth take a look at the bonds and preferreds. Example, look what happens to bonds after a Hindenburg hit.
  15. +1. It’s unusual how little command of the facts Block has when asked to comment on things falling outside the scope of the written report. Imagine if you’re the counterparty sitting on $150 million of losses on your FFH TRS position and you’re worried about FFH reporting a blowout quarter. What’s it cost to get a guy like Block to pump a short thesis so you can reverse the $150 million loss and exit? $10 million? The ROI is pretty irresistible. Follow that money. (Who are the counterparties now?)
  16. Curious if MW will be making anymore media rounds today.
  17. I bought more today too. Reinvested the dividend.
  18. In 2011, when Jefferies was under attack, I remember the CEO, Richard Handler, started posting daily updates of their financial statements on the Jefferies website to show customers and investors the short thesis was wrong. I'm curious if Prem could expedite the earnings release to today, open up the books for regulators and welcome them in with open arms, and then announce a million share buyback. Gotta pull out that elephant gun.
  19. Busch league. It barely qualifies as a short thesis. Even if MW's claims are valid, what's the downside? A $20 million regulatory slap on the wrist, where FFH neither admits nor denies wrongdoing? One of the best investments I ever made was in Jefferies during their 2011 short attack. At least the Jefferies attack was existential. The MW attack on FFH is just toothless noise. A comparison to Jack Welch's GE (and GE Capital) is just silly. #buyingOpportunity
  20. Pre-COVID I had about a third of my portfolio in an all-world (ex US) ETF. The only other ETF I’ve ever owned has been S&P 500. Currently, I don’t own a meaningful amount of ETFs or mutual funds. Right now I prefer individual equities and cash over broad indexes. I basically look at the S&P 500 index as risk free over the long term. I assume it will compound at 6 or 7%. So, since I consider it risk free I usually won’t invest in an individual company unless I’m confident the investment will outperform the S&P 500 by at LEAST double. In other words if I don’t think I can earn at least 14% on an individual company I’d prefer to own an index. (However, if cash is yielding 5% I’ll take the cash.) These days if I sell stock I’m parking proceeds in cash, which is about 10% of my portfolio.
  21. That will be up to the board of directors, and will probably be based on overall performance against the S&P 500 over rolling five year periods. Greg has been reporting to Buffett and the board on company results and his initiatives for several years now. So the board should have a good level of confidence by now on his grasp of the overall machine. I have a hunch Todd is being groomed to succeed Greg. By the time he takes the reins I think he’ll be about as good of a fit as investors could hope for - sans the personality.
  22. So, for this simple look through earnings spreadsheet the most important fields I track are: Ticker # of Shares I Own Per Share Cost Basis Normalized Earnings Estimate Per Share Normalized Dividend Per Share Total Cost Basis (Cost Basis Per Share X # of Shares Owned) Total Normalized Earnings (Normalized EPS X # of Shares Owned Total Normalized Dividend Current Share Price Current Value of Investment (Current Share Price X # Shares Owned) Normalized Earnings Yield Normalized Dividend Yield Price to Normalized Earnings Multiple 10 Yr Estimated Growth Rate Year 10 Normalized Earnings Forecast (Based on current normalized earnings and my estimated growth rate) % of Portfolio Allocation Unrealized Gains % Unrealized Gains Normalized earnings is the field I focus most on getting right. I don't have a one size fits all approach for this one, though. I'm mostly focused on understanding what free cash flow will look like through a full economic cycle. I also try to understand and adjust for key risks - like super cats. For some investments I have to adjust for things like big, temporary, expenses - like major litigation costs/settlements that will take a few years to burn through (think post-GFC Bank of America). With some investments that have highly reputable managements I've learned that management forecasts are plenty reliable. So, if I'm really comfortable with a manager, I'll start with their forecast, try to poke holes in it, and adjust accordingly if I come up with anything. As far as making adjustments, I review my estimates annually at a minimum. However, anytime I learn about a material change, or think of a material risk, whether from company updates, CoBF, or otherwise, I immediately update my estimate. I probably make a handful of small adjustments to the model every quarter. I rarely have to make major adjustments at this point. I may make 1 or 2 major adjustments to the model each year. Usually, I get to just bump up the earnings estimate for the next year, which is fun. Since I started maintaining this spreadsheet in 2019 I've been able to increase my total normalized look through earnings by six figures every year just by replacing lower yielding investments with higher yielding ones whenever clear opportunities arise.
  23. Yes, earnings quality and growth are essential. (Ideally, you have a high quality present value estimate.)
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