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mals

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Everything posted by mals

  1. Thanks for sharing your solution. Some day I need to do that.
  2. Sounds like Interactive Brokers solves the problem... That is great. In order to use the XIRR function in Excel, every buy and sell and dividends would need to be entered into Excel, isn't it? I am not hung up about measuring portfolio return daily, but a monthly check with the least amount of additional admin work is what I am hoping to be able to do. And the Excel solution appears to need a lot of manual work...
  3. How do you account for contributions or withdrawals from the investment corpus during the year?
  4. Bumping up this dormant thread - appears that people have a good solution because this question is not being asked as much... It would be great if you could share what works for you - in terms of a software that can compile more than one account at more than one brokerage, and to assess returns of various holdings, ideally including dividends etc. I have tried using Fund Manager Software, and while it appears very capable - it is on Windows (requires VM on a Mac). Am open to learning some more if that is the best solution. Thank you!
  5. @JEast - Thanks for sharing the update from the horse's mouth. Based on their annual report, it appears that P/B is about 6 and P/E ratio is about 25. So I suppose a lot of growth has been factored into the price. At 16% growth in book value, what they achieved last year, book value would double in 5 years. https://www.icicilombard.com/Content/ilom-en/annualreport/Annual_Report_2014_2015.pdf
  6. I am also quite disappointed in their equity picks. It does seem like they want to do all or nothing investments. Thankfully insurance businesses are doing well and generally doing better than in the past, so they are getting it right in a rather difficult business - one where there is little brand power. As for future outlook - would it be wrong to say that Prem Watsa and other leaders in Fairfax have followed a process that has worked for them - in equities, bonds, insurance and company culture are smart enough to want to learn from their own and others' mistakes are ethical in their dealings - path to sustained greatness and respect from others (he does not need more money in a hurry based on lack of ostentatious lifestyle) If the above statements are not wrong, then perhaps reasonable to expect them to learn and adapt? They sure have a great platform - appear rather liquid and financially sound, protected against stock market declines and deflationary forces, are structurally able to play the long term game and at this point the market has low expectations from them.
  7. +1 on the macro comment above (although I can see the rationale their considering their levered structure) and also that they seem to be swinging for the fences - to strike the big wins. But I wonder if that swing for the fences style is a new one or is that what has led to their BV growth over the past two decades?
  8. Thanks for sharing the buyback related information. Also, it would indeed be interesting to see an informed comparison of Markel and Fairfax.
  9. Ha ha, I wasn't very clear. I first invested in June 2008 (dumb luck) and have been building my stake ever since. What I meant by 'only an observer for 10 years' was that I wasn't an observer in the 1990s, so I can't comment on whether their process/mentality/confidence has changed since then. Oh well. Then you are not quite the 50 year patient observer turned investor. Anyhow, dumb luck favored you. I heard that luck is when preparation meets opportunity. ;)
  10. First - wow. Active observer for 10 years and did not invest. That is discipline - I assume that you had alternate investment options which were more attractive. Second, thanks for sharing the granular assessment of Fairfax's investment process and company culture oriented observations. Glad that you think things have not changed, except that some things have changed for the better. Even their investments in India have been quality companies that can grow for long periods of time. I agree also with your observation that they need to hedge because of their leverage - people always compare them with BRK. I hope there comes a day when they do not have to hedge because their revenue sources are very diversified and they are less leveraged, but as of now that leverage is part of the strategy. And I do agree that if they were not concerned now, then that would be inconsistent with their past process. Wonder what others think about the Fairfax investment process.
  11. While I hope it's true, has wasn't buying back when we were delisted and sank 20% below the current price. Maybe he had better opportunities back then, but I'd truly be surprised if he bought back here. Like TwoCitiesCapital, I also tend to think that he would not have purchased his own stock - given that he believes that the market will offer even better opportunities. In fact, perhaps it is a topic for another thread to ask long time observers as to what they think about Prem's investment process - sound as in the past or negatively affected by past successes. Many here have started believing that Prem has got carried away.
  12. f) money in circulation so money gets into circulation when somebody spends it. and people and corporations have not increased spending as much as in past such cycles. perhaps scared of debt, corporations cautious, or that demand elasticity is low in developed world (outside of luxury and entertainment). g) other factors stock market shock can indeed cause people to spend less - not so for Main Street though. Anyhow, since there are many who believe deflation likelihood is low, would be great to hear their rationale as it might translate to this "Change in price = a + b + ... + g" framework.
  13. Here is my view on why deflation is possible. I am no expert - just trying to see if I can wrap my arms around what is going on - directionally (not trying to predict timing). I think that Change in Prices to consumers are a function of change in a) RM cost + b) apportioned capital cost + c) labor component ( of mining/growing, manufacturing and transportation and retail) + d) return on capital (profit) + e) temporary / rapid currency fluctuations + f) money in circulation + g) unexplained factors ;) If I think about it in this manner, here is what I conclude (based on facts as I know them) a) is severely downwards - i understand that the input value in the overall consumer basket might be a smaller portion as basic RM goes through many value addition steps. b) if massively surplus capacity - then this should also trend downwards (production to cover variable cost?) c) labor component - US labor mildly upwards perhaps, the rest of the world not quite. d) if surplus capacity, then this should also trend downwards e) negative effect on all import prices - at least for the US and perhaps Europe also f) my understanding is that the increase in circulation is not quite happening - low velocity of money (as i understand) g) ?? So my question - is the above equation too simplistic or wrong? Are there a big factors i.e. g), that I have missed out altogether, and are they such that they negate the other factors for long enough? And please note, this is without assuming major recessions or anything - just basing it on factors observed so far this year.
  14. Great article. Love the emphasis on the repeatability :), and thanks for sharing the underlying numbers. At the end of the article, you state that Berkshire is trading at a discount to intrinsic value. I wonder as to how much of your assertion is based on the relative valuation compared to the S&P500?
  15. If we assume for a moment, that Fairfax hedges are not entirely because of desire to make macro bets. Then here are thoughts that are worth considering. 1. Fairfax's equity hedges - Let us analyze for a moment as to why Fairfax needs / wants these hedges vs why Berkshire / Markel do not. Berkshire is cash rick and huge. Market dislocations are unlikely to affect their liquidity in any meaningful way. Berkshire is also more US oriented - which maybe a more stable market than some that Fairfax is in - with respect to insurance and investments both. Markel - is about the same size and therefore should also be concerned. As far as I can tell they are - lots of cash and bond tenure has been falling. Maybe Markel is simply more conservative in their ambition for returns and are content with sufficient liquidity at this point. Markel's insurance business is more specialized and has had historically good combined ratios - and so may be has to worry less about its insurance business stability. Businesses Markel owns are also more local and as far as I can tell more stable and not leveraged. Would love to hear what others think on why the differences between their strategies? 2. Fairfax deflation hedges - why these? I would say, part business protection and part macro bet. My understanding - deflation is a double whammy for an insurance company. Float returns diminish - as the yields go down. And more importantly, deflation happens only if the economies are depressed and so business is tepid. So as an insurance leader, if you are worried about deflation, you try to protect yourself. Add to that the fact that deflation protection was / is probably very cheap, and if you are an opportunistic investor, you go ahead and do more than just protect yourself. So here it does appear to me that Prem Watsa is playing macro bets. But the bet is perhaps asymmetric - losses are finite if it does not work out, and possible gains are a multiple of the losses. And gains accrue at a time when the firm will likely reallyneed the gains. Thoughts?
  16. Hi - I also subscribed and have since seen very few issues. I assume you are referring to the author here, and so should we expect more issues when there is sufficient publishing worthy material?
  17. I concur. I see investing in Fairfax Fin as a belief in 1) Prem Watsa and team's investing prowess aided by the leverage, and 2) their alignment of interest which causes them to seek out the most prudent capital deployment. Such massive macro bets worry me also - but the way I see it is that FFH still needs to protect itself from 100 year events differently than, say, Berkshire. BRK is large and can withstand much lowered investment values whereas FFH's insurance business can suffer from temporary impairments. As to whether they can create a good insurance business that generates nearly free float - I do not know nearly as much as people on this board. But with time to build expertise in insurance and with the ability to walk away from business when it is not attractive, I hope that they will get close to less than 100% combined ratio. Although insurance does appear to be a business with little pricing power - so either one has to have lower costs - through underwriting or business model (Geico it seems has both) or less compeition (BRK's reinsurance business and Markel niche businesses may fall in that category). Would love to hear what others think about what one has to believe in to invest in FFH, as to how to reconcile with macro bets that are running into Fed's powerful machine and insurance business profitability.
  18. @rtgross - thanks for sharing the insights on IB. will evaluate again.
  19. It is for this reason that I evaluated Interactive Brokers as recently as last week. However their highly trader oriented interface put me off. And I was under the impression that their monthly fee is $30 if your trading volume is light - which mine will be. $10 changes the picture. Sticking to TDAmeritrade for now. I will try to negotiate international trades with them - can you share how much it costs to do international trades at IB? Thanks!
  20. @racemize - I will ask TDAmeritrade. Will update here as to what I hear.
  21. FRFHF and OTC risk --- I read a comment in this thread on how FRFHF can be redeemed for a share by a full service broker in the event there is a problem. I purchased FRFHF because it is simpler, I can do it online and because TD Ameritrade makes international trades much more expensive. Have others also considered the risk? And if there is even some risk, what may be a good broker that offers easy international trading and competitive per trade prices.
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