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This2ShallPass

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  1. Fully agree on these. That's why I have been holding / adding, even the last few weeks I started nibbling again ~460s.
  2. All I know is Francis hasn't bought Fairfax in his funds. If he trusts Prem so much, then why is 35% of his main fund in Berkshire and 0% in Fairfax (http://choufunds.com/pdf/Asso 2022 Q2 Holdings.pdf). I used him as an example as he has Fairfax connections, but why haven't many value investors bought Fairfax (only one is Southeastern)?? I brought up trust as that has been discussed a lot in this board (though a while back) with regards to Prem. Trust is built on doing what you say. My concern is only based on the Pet insurance proceeds and in Q2 he clearly said buyback would be the #1 priority. The markets haven't hardened that much in Q3 for that to change. And yes, I'll choose whom to trust with my money...right now that's starting to erode.
  3. I was thinking about a SIB Viking. I'm keeping it very simple, if you'll be earning $100/sh, your stock is at $500 and you're getting $1B..you do a buyback. Their financial position is solid. I bought Fairfax 10-12 years ago, have held it patiently through their mistakes and even added more. I'm the kind of long term shareholder they should reward at some point (in the really long term, we're all dead). Forget the market, even prominent value investors who would have scooped up this bargain are buying. Not even Francis Chou. That to me suggests there's a big trust issue. If they keep eroding that trust, even in people like me who have really believed in them, they will never have the kind of shareholder base that Berkshire or Markel has.
  4. Thanks Viking for the great update. Earning $100/sh, stock is unloved, but still unwilling to buyback shares Like someone posted maybe they're getting ready to bid for IDBI, looking to turnaround another company and wait another 5-10 years? Is there a chance Prem is in empire building mode and trying to cement his legacy vs. doing what he said. I'm coming around to the idea that this guy is not trustable. Here's his quote from Q2 Q: "What are your thoughts as to what to do with this $1.2 billion in cash from that Pet Insurance deal?" Prem: " And so we look at obviously, buying back our stock, that'll be the number one thing that we'd look at, but not at the expense of our financial position. "
  5. Agreed, but they also need to prioritize long term shareholders who have really trusted them and have got 0% return over 10 years during a historic bull market. And do what they say or risk losing even more trust, Prem just said in Q2 buybacks are the main priority from the sale and has been talking about Teledyne forever. I don't see a better setup to do what Singleton did then now..
  6. With the pet insurance sale closing Oct 31, I'm hoping they announce a SIB in their earnings announcement. They have taken advantage of the hard market and if their own stock is as undervalued as we all believe, there's no justification (in my mind) to not prioritize buybacks now. Fairfax is very much out of favor with the market due to their past mistakes and they need to be their own catalyst..
  7. I was just looking at it this weekend, it's supposed to close 2H. Since the deal was only announced June 20th, might be late Q4 or even early Q1. I also had a slight concern about the buyer pulling out due to the current market conditions and looked them up. The first thing that struck me was they had a decade (not annual!) shareholder letter. Skimming through that and their '22 mid-year report, I'm no longer worried. They seem like a high quality partner and long term oriented..
  8. Which other large insurance companies would be a close comparable to Fairfax? Trying to decide if I should take some cheap insurance () against Ian..
  9. @TwoCitiesCapital aren't first two the same, i.e. buybacks increase BV/share only if you buy at a discount? Overall, I agree with what you're saying. How much cash will the IIFL wealth sale generate? This combined with their cash on hand means a high likelihood of another dutch auction. @ICUMD I think Prosus showed the blue print for reducing holdco discount. After years of trying everything other than selling Tencent shares, they finally gave in and the discount closed fast. Same could be done hereafter Anchorage IPO. I would prefer them to keep BIAL shares but not with a persistent 30% discount..
  10. What should an appropriate holding company discount be to BV? At 30%, FFXDF should trade ~$12.5. They have $209M in cash, is another SIB coming? With Fairfax India trading at such a discount, I would like to see them buy back shares before buying more companies. I'm also not sure about some of the recent buys like Maxop / Jaynix, why buy such small companies...even if they do really well they won't move the needle much and is going to be a distraction for management.
  11. @nwoodman the last reliable update on Exco I saw was from Chou's annual report (http://choufunds.com/pdf/2021 AR English.pdf). He had some good things to say and his current PV-10 estimate is $1.2B! I'm also looking at Exco again. Bought originally around $1 (my lowest buy was $0.6 which was close to the 5-year low) after reading Chou's update a while back, but sold ~$5 as there were no public updates / financials and I had no good way of knowing the value. Looks like that was a mistake..
  12. I would be disappointed with this, for the 5-yr period from 2022 it would just be a double. Fairfax seems to be in a position with almost everything going right and all the positives that has been discussed in the board. With all of this, 15% 5-yr cagr feels too low. Just curious on what should be the expectation for % BV growth over the next 4 years? If Fairfax consistently delivers BV/share improvement for the next 4 years, then it's reasonable to expect a much higher multiple (1.2-1.3x BV?)..
  13. I have been lurking here for a long time. Thanks to all the posters and the great discussion, this is an amazing community. A shout out to Viking who regularly shares his analysis, mid-qtr equity updates etc. Fairfax is my largest holding (along with Fairfax India is ~30% of my pf). I have increased my position after the 2020 lows, but being a really long term holder Fairfax has definitely contributed to my underperformance (it's a position I was sitting tight on but maybe was not right). Currently, I share the optimism as many in the board and they seem to be doing all the right moves. Here are couple of things to add to the potential upside Digit IPO - the last post in Digit talked about 15% at Rs.5000 crore, which translates to ~$4.2B valuation. Fairfax with their 74% share would be worth $3B (24% of today's market cap!). IPO might be the catalyst for the $3B to be baked into Fairfax by most analysts / investors. Question: it has taken a long time for Fairfax ownership to get from 49% to 74%, is this just a formality or do we still have some regulatory risk here? Buying back shares - if they were serious about following Teledyne, then we should see significant buyback over the next few years. If prices remain ~$500-550, it feels like another SIB is coming post the pet insurance sale? -T2SP
  14. This decision has to based on the relative prices, I think we're in that 10% here:) 20-30% discount to BV seems common, but when the discount is at 50+% it's better to buy the underlying. To me personally, it's a vehicle to invest in India and given the growth trajectory there I feel comfortable paying the discount (knowing very well I will not be able to get the deals Fairfax gets or have the expertise to invest in the Indian market). We know they bought back shares at $15 and will do that again, so that could be a reasonable floor. Buying today gives a minimum 35% upside (current market conditions make that return even better). ps: I have been a lurker for many years and this is my first post. I have benefited greatly from the wisdom of many posters here and thanks to everyone for generously sharing your thoughts.
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