gfp
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Posts posted by gfp
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1 minute ago, MMM20 said:
The question is if/when this ever becomes the consensus view. Maybe a fool's errand to even think about.
I wouldn't hold your breath. Berkshire is still being valued based on price-to-book value all these years later.
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46 minutes ago, glider3834 said:
Looking at MW chart table below for years 2017-22 - how does that reconcile with Fairfax's number from their 2022 Annual report for 2017-22 period? Or am I missing something?
The Muddy Waters graph of book values appear to be each year's CAGR in Book value since some arbitrary day they are calling "the GFC." So it isn't the book value growth for those years, but those end-dates.
The actual BV growth for those years (which is probably what most casual observers understood it as) was this:
2017: +24.7%
2018: -1.5%
2019: +14.8%
2020: +0.6%
2021: +34.2%
2022: +6%
(and 2023 comes out this week and should look pretty good)
* one thing about posting Fairfax's actual annual results as above is that the bumpiness goes against the narrative that this is a GE-style smoothed manipulator.
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It's funny because my hometown team was not involved in that game but Nola has such a deep rivalry and hatred for the Atlanta Falcons that it is not uncommon to see murals of the 3rd quarter score, flags memorializing the score, etc, all over town. There was even someone that rented billboards memorializing the choke/comeback.
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We use a lot of hot sauce in my household and Huy Fong Sriracha is still not available in stores down here. We have been buying the products directly from Underwood Ranches, the grower that Huy Fong tried to replace. The Sriracha is slightly spicier but works just fine for us. We also use a Sriracha out of Thailand under the Polar brand name that is very good but sweeter than the Underwood Ranches. We still have Huy Fong Sambal Olek in our fridge but the Underwood Sambal is also very good. One of my friends loves the yellow Trader Joe's "sriracha." We don't have any of that so far. Just say NO to Tabasco. I don't think anybody actually wants Tabasco I think it is just ubiquitous and well distributed. I even know some McIlhenny family members and still won't touch the stuff. Maybe the green or chipotle but never the original. Definitely not their "sriracha" product - blech.
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Kind of funny that they are going to phase the margin increase in "over multiple days" and then say those days are from after the close on Friday to trade date Monday. That's one day, not phased in.
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1 hour ago, ValueMaven said:
FFH is a VERY dangerous stock to short unless you think its a $0
There is a controlling chairman who controls about half of the 25M shares o/s. There are 2.2B shares outstanding of BRKB btw
You have a long-term holding base, figure thats several million shares ... The true float of FFH is very low!!! This could actually blow-up on MW.
Why do you say Prem controls half of the shares? There are not 25m, there are 23.1 million shares. (brk.b has 2.166 billion b-share equivalents outstanding)
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38 minutes ago, SharperDingaan said:
Sadly, I'm nowhere near as eloquent as James Joyce!
Just to throw some random numbers out ...
Start at 1400 pre-announcement. Short 1,000 shares, long 10 out-of-the-money puts at 1300, publish report, media tour
Drive the price < 1300 by expiry date. Have the 1,000 shares assigned, off exchange. Long 20 calls between 1300 and 1400.
AR is announced, squeeze the shorty! Price moves to 1500, sell the 20 calls at 1500, return the 1,000 shares to the lender.
Buy today at 1260. Sell at 1500 post AR (240 profit), buy back at 1260 on MW round-2 (240 profit). MW eventually walks away, shares sold for 1500 (240 profit). Total gain of 720 on a 1260 investment is 57%. If you only capture 2/3 of this ... about a 38% return.
Just one of many possibilities .....
SD
Hopefully, a good $300+/share on the turn before any option/margin leverage!
We would also be very surprised if MW didn't intend to exercise on existing options, as the mechanism by which to raise the shares to repay the short loans; plus accumulate some additional - offered for a buyback. We also expect them to have used the drop to lay in a stack of out-of-the-money calls; FFH buys in the stock at a price well < 1401, MW walks away, the price quickly returns > 1401 & all those calls go deep in the money.
What options?
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3 hours ago, SharperDingaan said:
Hopefully, a good $300+/share on the turn before any option/margin leverage!
We would also be very surprised if MW didn't intend to exercise on existing options, as the mechanism by which to raise the shares to repay the short loans; plus accumulate some additional - offered for a buyback. We also expect them to have used the drop to lay in a stack of out-of-the-money calls; FFH buys in the stock at a price well < 1401, MW walks away, the price quickly returns > 1401 & all those calls go deep in the money.
.... Now of course, if an enterprising lad had learnt from ericopoly, and also knew how to work this trick!
Interesting times
SD
Honestly I can never make any sense of your posts.
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10 minutes ago, LC said:
Thank you, I must have missed your post - so I'm guessing mostly the off-the-run treasuries, so no big deal at all.
Some accounting reading for anyone interested: https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/fair_value_measureme/fair_value_measureme__9_US/chapter_4_concepts_u_US/45_inputs_to_fair_va_US.html#pwc-topic.dita_1533084709184712
Carson Block in shambles.
Yeah, from your link:
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22 minutes ago, LC said:
The only outstanding question I have is on the Level 2 classification for FFH's bond portfolio. My guess is there are covenants/options linked to these bonds which cause the L2 classification. Even with that question mark outstanding, the interest income generated from these bonds is observable so it is really more of a curiosity vs. a concern.
I already posted about this, but all off-the-run treasury securities are classified as Level 2. Also any bond that requires a dealer quote to mark to market is also a Level 2 security. So that leaves basically on-the-run treasuries, bills, cash equivalents, as the only level 1 bonds.
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18 minutes ago, Gmthebeau said:
Bitter little man cuz your stock crashed. Ok, the analysis was 2 times accused of creative accounting just because you don't understand the analysis doesn't make it less useful.
We will see if it "crashes." So far we are re-living the morning of January 17th, 2024 (at least in USD terms). I did most of my purchasing yesterday so I won't have much capital to buy a crash if it comes.
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1 minute ago, Intelligent_Investor said:
Wouldn't that be insider trading if Muddy Waters shorted due to knowing insider info that a large shareholder was selling? That sounds pretty illegal to me
That's not what "insider information" is. Material non-public information is about the company itself, not the behavior of other shareholders.
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I think they are talking about the US over the counter ticker FRFHF.
Interestingly, it seems like Interactive Brokers changed margin requirements for FRFHF mid-day today to 100% initial and 100% maintenance. FFH shares remain at 30% initial and 30% maintenance.
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Block tries to imply that Fairfax holding much of their government bond portfolio as Level 2 assets is somehow strange and untoward and ripe for manipulation.
Off-the-run treasury securities or really any bond that requires a dealer quote to get a valuation is Level 2. That is how off-the-run securities are supposed to be classified.
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That zeroes - tv interview is better than the CNBC interview, that's for sure. He still does a lot of assigning motive as being accounting write-ups without mentioning what they wanted/needed the money they borrow from OMERS for.
He seems to think that APR Energy has something to do with WTI oil prices because it has "energy" in the name.
He is right, of course, that the 10% of a subsidiary deals with the full intention to repurchase the interest is fixed rate preferred equity financing. I don't think that has been hidden. It's not structured as debt, it has a fixed, known cost, the partner fully expects to have the equity interest repurchased by Fairfax. Fairfax fully expects to repurchase the equity interest. It IS financing. I don't think that's a bombshell. But I guess it looks bad if you assume the motive was the accounting write up.
https://www.zer0es.tv/big-announcements/fairfax-financial-the-oracle-of-nothing/
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Might be lost in the news of the morning, but Prem resigned from the Blackberry board of directors today (as of 2/15)
"in connection with the Company's repayment at maturity of its $150 million principal amount convertible debentures held by Fairfax"
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What good are record earnings when Farmers Edge is bleeding millions!!!?
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Well he would be smart to exit before the annual report comes out, that's for sure. I suspect his best exit opportunity in the shares was to exit on this morning's open but I assume he expressed this "short" in the credit default swap market so who knows how those spreads look (not me).
Fairfax has no options and trades in in Canada and OTC - this isn't a very good "short and distort" candidate to get others on the bandwagon.
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Well that was fun!
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The IFRS discussion completely ignores the mismatch between the company's short duration bond portfolio and the liabilities at the time the new rules were adopted. This was the reason FFH had an outsized impact vs. other Canadian insurers at the time. This was required and audited - its not like they are pulling shit out of thin air.
The Digit stuff pretty weak. FFH only wrote up the preferred shares on the Sequoia deal. The 49% equity is equity-accounted (only P & L) and held on the books for $130m. I don't have a clue if an eventual IPO will be a "down round" less than $3.5 Billion. Digit combined ratios and profitability/losses are fully disclosed in FFH's filings. There is a mismatch between FFH's calendar year reports and Digit's fiscal year reports apparently.
The muddy waters report seems to conflate "fair value" and carrying value on Digit in a few places. Fairfax sometimes mentions "fair value," $2.278 Billion at 12/31/2022 - but that isn't what Digit is on FFH's books for.
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18 minutes ago, glider3834 said:
in the interview Jamie L mentions a book he gave to Prem W on Teledyne - A Distant Force - ~$521 at Amazon - too expensive for me but I would like to read it
https://www.amazon.com.au/Distant-Force-Teledyne-Corporation-Created/dp/097913630X
Oh wow, I had no idea that book had gone all "margin of safety" - maybe I should list my copy. It used to be quite easy to buy. I'm sure a bunch of libraries still have it.
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8 minutes ago, dealraker said:
Interesting...my always underperforming Willis stock is going up. Gotta find out why!
That would be earnings Charlie!
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26 minutes ago, cubsfan said:
when your cities, schools, hospitals, parks are overrun, overburdened and crime filled - the country has turned it's back on her Citizens.
It must be very different in American cities other than the one I live in. I don't see parks full of immigrants or immigrants committing crimes at rates even close to the rates of poor native-born Americans. I see homeless people that are almost 100% native born Americans, a mix of older military vetrans and mentally ill and young people that made bad choices or had awful luck or both. The folks living on the park bench and in tent cities where I am are not recent immigrants, they are native born Americans. The immigrants are at work making $200 per day, remitting $100 of it back to family and showing up at 7am the next morning to do it again.
Armed robberies, auto theft, shootings, homicides - all committed by native born poor people in my city.
It's like parallel realities. I see immigrants afraid they will be robbed by poor violent locals and you guys are acting like these are cartel members coming across with their children by the thousands. Cartel members can come into the united states whenever they want. Closing the border will not restrict the movement of cartel members. Crossing borders is literally their specialty.
Fairfax 2024
in Fairfax Financial
Posted
You should not use the 17.8% BVPS growth figure to compare to the 18.9%. You should use the 18.5% figure that includes dividends.