gfp

Yeah I don't usually pay much attention to global macro either, but I don't hold any cash and I am super bearish and fully invested at the same time. This exact moment is a new high in every account I manage, yet I am adding to shorts in RSP and actually buying TLT. But I'm not going to sell the 5 stocks I own in size just because I am super bearish.

I'm not of the belief that what the Fed does matters much but I do find it surprising that markets are pricing in an additional 25 basis point hike in Fed Funds in the next meeting or two. Even copper has come down a lot - and there are legitimate supply shortages there. Commodities are telling you demand is weak. Shipping prices are telling you demand is weak. Oil prices will probably hold up because of the cartel but even oil prices are pretty weak considering the fundamentals. Demand is weak everywhere. China reopening was a dud. I would anticipate the market pops higher on the debt ceiling resolution and then immediately gets sold.

Why is that unusual? The main thing that would make the TYX yield go down would be economic weakness and the main thing that would cause the yield to go up would be economic strength. Just think about it as reflation/bullish vs deflation/bearish.

KW / PACW transaction. Fairfax likely benefits https://www.cnbc.com/2023/05/22/pacwest-bancorp-to-sell-real-estate-loans-to-kennedy-wilson-subsidiary.html https://www.sec.gov/ix?doc=/Archives/edgar/data/0001102112/000110465923062856/tm2316420d1_8k.htm

Yes that has been my experience with Fidelity as well. I'm sure Ken Griffin gets his cut but we don't see "commissions." I also don't always get a fill on marketable orders.

Prem's first name is Vivian

attached FFH Q1 23 CC.pdf

They finally cleaned up the separate holdings at Gen Re New England Asset Management. They all show up on Berkshire's 13F now. No new AAPL shares have been acquired since the Allegheny purchase.

Well I'm not sure it is accurate to say "Atlas was sold 100%." (if anything it was an "add" since they exercised warrants for $78.7 million in cash during the quarter)

That's right. They also bought 58,185 shares at 10.85 on June 19th 2022, 1,532,864 shares on May 26th at $10.61. They let Fairfax India have first dibs on repurchasing shares because they can do it under an automatic plan (x% of average daily volume plus "take blocks"). As an insider with nonpublic information, Fairfax is not able to buy FIH shares any time it wishes. Plus there is a low public float as it is (OMERS owns a block - something like 20m shares). Lots of purchases by Ben Watsa, Brian Bradstreet and other reporting insiders. The biggest buyer is FIH itself under an automatic plan - including a $10.7 million block trade last week. And every time Fairfax buys FIH or FIH buys shares in itself they are giving up fees they would otherwise be earning on those shares.

Yeah. They consolidate it so there is a lot of minority interest. Think of it this way, the market value of all of Fairfax India currently is $1.76 Billion, and Fairfax India's market price is way below book value.

I don't understand what you are saying here. You think Fairfax India represents 15% of the NAV of Fairfax Financial or Fairfax Financial's total investment portfolio? *edit to point out that Fairfax's ownership in Fairfax India shares is something like $625 million inside a $57 Billion investment portfolio (1%) or a $16 Billion market cap company (3.9%).

Yes, this has been very explicit from the beginning - Fairfax India will not compete with Fairfax in the Insurance space. Pure insurance companies would go to Fairfax parent company. I own both securities but I will say the main reason to own Fairfax India and not just participate through Fairfax Financial is that FIH.U is tiny inside Fairfax's investment portfolio. You aren't really getting much exposure to Fairfax India by owning Fairfax parent. So if you like the assets and the prospects of the India operation, you can size it how you want by owning Fairfax India additionally. And when you own both the fee structure won't bother you the same - or at least it doesn't bother me (but I own Biglari Holdings so obviously I have made peace with this type of incentive payment when it is based primarily on performance).

I think Ajit said at worst they would "take a loss of $15 Billion" and if no major storm hits Florida they could make "several billion dollars." The $15 B number would be across all exposures, up to their limits, including GEICO, boats, etc..

Yeah, I hope you are OK no_free_lunch, but if it's open ended like you describe it can't really be in a two year note or something so I would put it in government securities money market or Berkshire or some combo of the two. Berkshire is tax efficient as well.

Great conference call. Prem pointed out that the $2.4 Billion adjustment from the new accounting rules that discount liabilities would have been offset by approx. $2.4 Billion and cancelled out if they had been running a matched book as far as their insurance liabilities (over 4 years) and their bond portfolio (1.6 years in 2022). So they recorded this big benefit because of how they were positioned. 803.49 bvps + 19 pretax for unmarked fair value + 24 pretax for announced deal gains that closed post quarter end.

So they mentioned that the forward purchase of 3yr treasuries they entered into is locking in the purchase of 3-yr treasuries at a 3.75% rate. So they didn't top tick the US 3-year rate during the quarter by any means. I still like the move.

It was the company that bought this block! Subsequent to March 31, 2023, the company purchased for cancellation 826,321 subordinate voting shares for a net cost of $10.7 million ($13.00 per subordinate voting share) under the terms of an automatic share purchase plan.

Thanks @Saluki that was a good answer

If you aren't able to trade CDS on US Sovereign credit (who is? Why would you ever trust a counter-party on CDS for USA??) you are sort of limited to picking up some extra interest on t-bills like Berkshire is. But that's for a month or two and that isn't big money. It's important to not get your signals crossed when looking at moves that are short-term debt-ceiling related and inferring what that would mean in normal times. But not a lot of opportunity for big trades related to the debt ceiling. You would think there will be a big "catch-up" issuance of treasury paper once they are allowed to again. The TGA will have been depleted and they are running large deficits. So presently there is a shortage of government paper which creates shortages of "good stuff" used as collateral.

Yeah this is an important point. There are two types of "Inflation" and two types of "Deflation." Type 1 Inflation, call it "temporary inflation," is the type caused by Covid-era supply shocks. In a free market system these work themselves out in due time. This type of inflation cannot be helped much by Fed action and raising rates may make it worse. Type 2 Inflation, call it "real monetary inflation," is caused primarily by increases in the amount of "money" circulating in the system, primarily because of fiscal policy deficit spending (but also for many years pre-2008 to the enormous and very fast growing eurodollar market for offshore dollar assets - they don't even try to calculate M3 anymore!). Fed changes to overnight rates are not the best way to handle this type of inflation and might not work at all. Moderating the size of fiscal deficits can work here but do not directly control the entire supply. Type 1 Deflation, call it "wonderful deflation," is a wonderful byproduct of economic efficiency. My microprocessor gets better and cheaper every year, offshore labor reduced prices on consumer goods at Walmart, etc. Nobody complains about this type of deflation most of the time. It's great. Type 2 Deflation, call it "deflationary monetary conditions," is the worst of the worst. This is what causes severe recessions and depressions. This is when money tightens up and if it isn't temporary (in order to rein in a too-hot economy or soak up some over-done monetary inflation of the recent past) it will cause a lot of problems in a modern monetary economy. 2008 was a good example. There are reasons to worry that we are going into a deflationary monetary conditions period now, despite 7% of GDP deficit spending in the US pouring stimulus on the US economy.

Well that didn't take long... Founder and CEO steps down as bankruptcy looms https://www.cnbc.com/2023/05/09/wheels-up-founder-abruptly-steps-down-as-losses-mount-bankruptcy-looms.html

Well the preferred shares in OXY isn't really offering "oil exposure" except in a bankruptcy. If Buffett sells more CVX than he buys in OXY common he will be lightening his exposure to oil. CVX is very large and liquid. The price of oil was already lower in Q1 and CVX had a few moments of price strength early in the quarter. We'll probably be able to tell when and at what price he sold CVX shares at once the NAIC filings are released for Q1.

Well the obvious two are Chevron ($6 Billion) and BYD. The rest will be disclosed in the 13F and insurance filings.

Ajit mentioned them in passing - that TransRe would be run independently the same way they have been successfully run for many years. Warren mentioned in passing that Allegheny's subsidiary was building the big chip plants in Arizona for Taiwan Semiconductor (as they did the Sphere and many other large building projects). There were a bunch of Squishmallows (jazzwares) on the convention floor. I had personally missed that Berkshire acquired Squishmallows in this deal.