gfp
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Posts posted by gfp
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436,777 shares on the open, similar to recent opening tick block trades
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7 minutes ago, tede02 said:
I have a 60HP excavator. I absolutely love operating that machine. It weighs about 15,000 pounds. It can do some serious damage, LOL. The hours feel like minutes when I'm running that thing.
Awesome. We have a bunch of excavators in my family (not me personally) - the newest is a "midi" Takeuchi which is a really nice one. The Takeuchi can dig 14 feet down! Is your 60hp considered a "mini" or a "midi?"
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Saw this Q4 letter covered Fairfax. Is this investor a member of this forum?
https://www.edgepointwealth.com/article/Q4-2022-EdgePoint-commentary/
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now look what you went and did to RFP
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I'm sure this is tiny but there is some hope that the higher price of money for private equity deals opens up the bolt-on acquisition deal flow a bit for Berkshire's many subsidiaries. Meryl Witmer mentioned something similar in a recent Barrons.
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On 1/13/2023 at 8:55 AM, gfp said:
Apologies, as this is getting repetitive, but there was again a huge trade (~210,000) shares on the open.
This morning the large opening tick trade was "only" 75,000 shares. I do generally agree with the speculation that this is related to the timing of the ex-dividend date and the various hedging counter-parties to the total return swaps. I would expect the unusual first-tick volume to disappear after the dividend.
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Yeah, GEICO has been getting steadily worse. State Farm's headline number for Q3 looks to have had about a billion dollars worth of net adverse development from prior periods to hit that $4.57B number. As a shareholder of Progressive it makes me nervous - but they are a very well run company and I do think they know what they are doing. At $50 Billion it was an easy decision for me but at $78 Billion it worries me. I think I will channel my inner dealraker and do nothing.
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Yeah, it's gonna stick out for a while on the Canadian price chart... Three of these things are not like the others.
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23 hours ago, gfp said:
This morning had an even larger first trade of over a quarter million FFH shares. Interesting!
Apologies, as this is getting repetitive, but there was again a huge trade (~210,000) shares on the open.
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11 minutes ago, Grenville said:
Its mind boggling to see the sudden change in rates and the widespread nature of it all....will be interesting to know if its just business as usual policy like others have mentioned or GEICO sees something others aren't seeing yet. The other wildcard is you have one of BRK investment managers running GEICO while at the same time you have to imagine Ajit Jain is aware of what's going on at GEICO and is ok with it?
I think Progressive sees this unique environment as an amazing opportunity to grow the company. It's interesting how much of a head start GEICO gave to PGR by not really feeling like they needed to invest in Telematics for so long (reminds me of Amazon and AWS a little bit I guess). GEICO was profitable, growing, and had a lot of experience pricing business off the factors that were working well for it. But PGR now has this huge advantage with decently high uptake, something like 30% of Auto customers agree to use the Snapshot, and now they have "continuous monitoring" which is huge amounts of real time data coming in that they can learn a ton from.
For instance, early telematics would tell them how many miles you were driving, how much time your car was parked in the garage not doing anything, emergency braking, etc. But now they can differentiate between the driver who is commuting to work vs the driver averaging the exact same number of miles but always on longer road trips to grandmas house. The commuter is on more congested roads and has a much higher crash frequency than the equal number of miles on a road trip to a place farther away. Current smartphone based telematics also know when you are looking at your phone while driving and other distracted driver statistics.
You also have the adverse selection issue of course, which is when the crazy drivers stay away from the Insurance company that pushes telematics, etc...
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One thing progressive factors in is the expected lifetime of you keeping your policy with them. They target a 96 combined ratio but they target that over the total lifetime of the customer. So they have names for each type of customer at PGR. The best are the Robinsons (like your family if you were bundling multiple types of coverage with them, owns home, owns the cars, etc), next sounds like you, the "Wrights" - because you didn't mention bundling other types of insurance with your auto but you have multiple cars and multiple drivers - and then they have "Dianes" which rent their home but have multiple insurance products and the worst (shortest life, most fickle to price changes, inconsistently insured) category are called "Sams."
So because a "Sam" will likely only be around a year or so, they need to price that customer to expect the 96 combined ratio right off the batt. But for a "Wright" like your family, they can price a lot more aggressively because they are targeting that 96 combined ratio over the entirety of your (longer) expected life as a customer.
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3 minutes ago, MCR said:
Speaking personally, we switched last month from Liberty Mutual to Progressive. We went from $8,700 annual premium for 3 cars (4 drivers) to just under $3,100. I couldn't wrap my brain around how this was possible, but maybe Progressive is looking at this difference as customer acquisition cost...
I am curious if you agreed to use PGR's "snapshot" telematics or did you opt not to?
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This chorus of GEICO cancellations has been everywhere lately. There is going to be a huge reset coming out of GEICO and I have to wonder how PGR's underwriting results are going to look on all this growth. Is PGR looking at this as a customer acquisition cost and hope to retain these customers down the line when it needs to take price or is GEICO really that out of line on price. PGR reports monthly so I guess we will see it play out almost in real time.
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Also saw this article this morning -
https://www.retailbankerinternational.com/news/emirates-nbd-fairfax-stake-idbi/
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23 hours ago, gfp said:
Are other people seeing a huge trade at the open on Fairfax's Toronto listed shares (FFH) ? Very unusual. Like $150+ million CAD?
This morning had an even larger first trade of over a quarter million FFH shares. Interesting!
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SBF's lawyers must love it every time he speaks publicly before the trial. Anyway, it is a good read.
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Thanks for the context Cigarbutt. I remember years ago Gen Re felt so highly of TransRe that they let them have the underwriting pen for a while and it surprised me at the time. But really it was a good show of respect for their underwriting culture and of course they are now part of Berkshire.
https://www.sec.gov/Archives/edgar/data/775368/000119312516641267/d222170dex991.htm
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Are other people seeing a huge trade at the open on Fairfax's Toronto listed shares (FFH) ? Very unusual. Like $150+ million CAD?
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1 minute ago, mattee2264 said:
The BULL case does seem to be that a combination of inflation falling and economic weakness will mean lower interest rates as if interest rates are the ONLY thing that matter.
The BEAR case is that earnings will increasingly start to matter and are heading lower and central banks are going to be cautious about pivoting too soon.
That there are such divergent opinions and no real consensus probably explains why we are stuck in a trading range between 3600 and 4000 and probably haven't bottomed yet.
I think the bull case is that inflation is falling and the economy is very strong.
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4 minutes ago, Spekulatius said:
The short term estimates are useful to understand the market earning expectations. If they are missed the stock is likely going down.
I understand and all but it has always been a pet peeve of mine that "reality" is always described as "a miss" and the guys paid to guess are not the "miss."
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So this business is an MGU "Managing General Underwriter" - sort of like an insurance broker with the authority to bind coverage directly (make the underwriting decision). My understanding is that Ambridge placed business not only with Brit but also with other global reinsurers. After this deal closes, they will still have a close partnership with Brit to place business with them. But Brit would no longer participate in the brokerage commission portion of that business.
No idea how this differs from an "MGA" (Managing general agent) but I think they are essentially the same.
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4 minutes ago, glider3834 said:
Looks like they bought original 50% stake for $28.6M - so $75.2M original cost
On December 9, 2015 Brit completed the acquisition of a 50% ownership interest in Ambridge Partners for $28.6.
$75.2m plus whatever the value of Brit's US operations that were contributed to the Ambridge business was. I believe they refer to this business as "BGSU" in the press release.
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Thanks Viking for the RBC summary.
Here is a video with the Guy Carpenter chairman David Priebe talking about the hectic 1/1 renewals
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Is Houbi owned by the guy who paid up for the lunch with Buffett?
Fairfax 2023
in Fairfax Financial
Posted
The way it lines up before and after the ex-dividend date I really do think these large crossed trades (without moving the price much) are just related to the behind the scenes positioning/hedging from the total return swaps.
They aren't just sells - they is obviously a purchaser taking the other side. Since the price was basically uneffected by each trade and they are privately negotiated and crossed at the opening, I don't think it is some big Fairfax investor selling out. That wouldn't be done in such a dramatic way and it would effect the price.
We might find out later, if Fairfax says they closed out the total return swaps or converted some of them into actual repurchase and retirement. Or someone might ask about it at the annual meeting and Prem might know some of the story.
But I do believe these trades are related to the TRS counterparties' hedging operations and not some big move by investors in the company. And I think in retrospect the blocks will stop and we will see that it was only right before and right after the ex-dividend date.