gfp
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Posts posted by gfp
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With age, Mr. Thebeau, you will gain some humility and realize that you are not all knowing in all things and that everybody else around you are not entirely clueless idiots. In most of your posts on this message board, you have an absolutist, I told you so attitude that suggests youth and inexperience. The combative, unpleasant tone of your posts does nothing to help the collegial atmosphere we have developed here over decades. Take it easy and enjoy the ride.
(and no, as you are about to suggest, I am not long a bunch of bonds at 4% and getting blown up. nor do I own paramount or xyz losing investment you so wisely called)
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2 minutes ago, MMM20 said:
wait, did I imagine him saying “goddammit” before they cut off his mic?I think that was Prem hollering something on a hot mic - not sure what he said but it might have just been a greeting to the next analyst.
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Call over
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Long history of reserve redundancies. Question was about reserve releases. Over time our reserve releases could well be significant.
4th quarter gets more "full" reviews for reserve releases / adjustments.
2016 and 2018 years at Allied and Crum & Forstner have had some unfavorable development similar to the industry experience at large. That effect is overwhelmed by positive adjustments elsewhere and for other years.
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Interest & Dividend income "locked" at approx. $2 Billion annually for approx. 4 years.
If soft landing, we can renew at these rates.
If hard landing, interest rates can go down, but the spread on corporate bonds can increase.
Atlas forecast - $300 million going to $600 million by 2025 and Fairfax still sees that forecast as appropriate.
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Disclosure regarding associates that have been on the balance sheet since Jan. 1 2020. Cash in / cash out / profits booked / contingent liabilities question.
Will you be disclosing these transactions?
Jen Allen taking the question.
"disclosed under IFRS in our annual report"
Block, "Rather than going for the bare minimum that IFRS requires, why not go for enhanced disclosure. Why leave it there?"
Next question please
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Carson Block question!
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Q&A now
Odyssey re quota share non-renewal question - $340m unearned premium returned to client - residential property quota share (was 2 year deal, didn't see the profits there). Odyssey non-renewed it and returned the unearned premium.
Brit pullback on D&O, Cyber and Cat risk question
where do you see best opportunities, where do you see other areas where you want to be cautious
Pricing on reinsurance, mostly still seeing double digit price increases on the property side.
Insurance - mid-single digit price increases. D&O and cyber price growth slowing and actually reducing
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Jen Allen is now going through the allegations in the report by grouping them into 4 categories. Started with Digit valuation and now going through valuations of associates like Recipe.
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The call is still in the prepared remarks, just wrapping them up now. Jen Allen speaking
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Just now, Gamecock-YT said:
the call dropped
It's back now
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2 minutes ago, Haryana said:
A 50% increase in cash and investments in the holding company from $1.2 billion at the end of Q3.
“We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 billion in cash and investments in the holding company, our debt to capital ratio at 23.1%,” said Prem Watsa, Chairman and Chief Executive Officer.
To be fair, hadn't they sold the new bonds in Q4 but had not yet fully repaid the old bonds they were essentially refinancing? They just announced the March 15 redemption yesterday. The 2024 notes weren't redeemed until January 29th 2024. But Fairfax had already raised $400m of the later-expanded 6% offering in December.
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Year end results press release:
surprising:
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During the fourth quarter of 2023 and the first quarter of 2024 the company entered into agreements to sell its equity interest in NSE for gross proceeds of approximately $189 million (15.7 billion Indian rupees). The original cost of the company's investment in NSE was $26.8 million. On January 29, 2024 the company completed one of the sales and received gross proceeds of $132.3 million (11.0 billion Indian rupees). The remaining sales are subject to customary closing conditions and are expected to be completed in the first quarter of 2024."
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"We have increased our annual interest and dividend income run-rate to approximately $2.0 billion and we anticipate it will remain at this level for approximately the next four years."
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At December 31, 2023 there were 23,003,248 common shares effectively outstanding"
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13 minutes ago, dipod said:
Really tempted to hedge some of my equity exposure with TSLA puts
That's not a great hedge unless your equity exposure is TSLA stock. Keep it simple, no need to get cute.
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It could be a weekend at bernie's situation for all I know, but it has been a positive for his investment performance.
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I'm pretty impressed with Guy Spier lately. He basically hasn't made a trade (that is reportable in a 13F at least) since Q2 2021.
https://www.dataroma.com/m/m_activity.php?m=aq&typ=a
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2 minutes ago, Sweet said:
Can’t remember the posters name, but there is a guy in the Citi thread who believes Buffett has been buying the stock.It is Dazel who thinks Warren Buffett is secretly adding to Citi despite Citi showing up in the 13F quarter after quarter.
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Yeah, that's nothing. These law firms do this for every stock decline that makes the news.
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Fairfax's year end 13-F was released -
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2 minutes ago, Hektor said:
If inflation is good for the borrower, and since US is a borrower, why would the Fed want to tame inflation? Why not keep it simmering and inflate away the debt?
It doesn't matter what the Fed "wants." They have a mandate for "price stability" and maximum employment and they have recently followed other global central banks into spelling out an arbitrary 2% target. They were not the first to put out a target rate of inflation - 2% is a common target. 2% is their buffer to avoid deflation when inflation fluctuates above and below the target. 2% inflation over long periods of time is as sound of money as we can hope for with our elastic money. As you said, a debt-based system needs some positive inflation to avoid risking the collateral death spiral of deflation.
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11 minutes ago, crs223 said:
If the Fed unwound its balance sheet back to 2007 levels, would that impact the stock market?
Im no economist, but I would guess that such an action would at minimum increase interest rates, which would cause stock prices to adjust to revise a competitive earnings yield.
They would have to be methodical about it. If they tried to unwind the balance sheet in an aggressive all-at-once move it would be messy. If they just plugged away and actually brought it down and kept it down it wouldn't necessarily result in higher rates. Long term interest rates are set by the market primarily on long term expectations for inflation and economic growth and demand for safety and liquidity over other assets. Supply isn't an important a factor as many people think. "supply" of new bonds is pre-funded by the deficit spending that preceded it / "caused" it.
Government bonds are money and the Fed swapping one government liability (bonds) for another (bank reserves) isn't a big deal for the economy. The bond is actually more useful out in the private sector than the bank reserve is. And in the old days it used to have a higher yield than the bank reserve.
I can pledge a government bond as collateral and multiply it, transform it into virtually anything. A bank reserve is trapped and somewhat sterile. Certainly can't invest a bank reserve into stocks.
Fairfax 2024
in Fairfax Financial
Posted
I assume Mr. Block will be long gone by the AGM. I think Fairfax does have a more "accurate" or "up-to-date" book value than, say, Berkshire and should trade at a lower price to book ratio than Berkshire all else being equal (they are not equal, Fairfax has higher growth, more float leverage and generally lower quality earnings vs. BRK). Berkshire's carrying values rarely get re-marked higher by transactions. Marmon and Pilot are two recent examples of required Fairfax-style write-ups but we will probably never see BNSF or GEICO marked up on Berkshire's balance sheet.