Alekbaylee
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Tidbits from the Fairfax Financial Holdings Ltd (OTCMKTS:FRFHF) (TSE:FFH) Financial conference call this morning (from ValueWalk)
Prem Watsa
Core inflation continues to be at or below 1% in the United States and Europe. Levels that we have not seen since the 1950s.
In fact, it may be a surprise to many of you to know that in the second half of 2014 the US had deflation of 1.5% or an annualized rate of 3%. And Europe had deflation of .5% or an annualized rate of 1% point. That what this is saying is that prices went down in the second half of 2014 at an annualized rate of 3% in the United States and 1% in Europe. This is in spite of QE1, QE2, QD3, and now quantitative easing in Europe.
Prem Watsa: European bonds at record lows
Long-term government bond rates in Europe are making record lows quite often the lowest in 200 years.
In Germany, almost half of the German government bond market is yielding negative interest rates. Also six or seven countries in Europe are already experiencing deflation. Thirty-year German government bond rates are below 1%. The spread between 30 year US long-term rates and 30 year German government bond rates is at a record . German rates have fallen much faster than the United States.
prem watsa
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Just to keep a perspective out remind you that it took five years in Japan before deflation set in for the next 18 years.
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Prem Watsa concerned about the prospects for financial markets
We purchased Thomas Cook Group plc (LON:TCG) (OTCMKTS:TCKGY) and 50 to rupees per share in 2012 and it is now creating at about Rs.200 . We continue to be concerned about the prospects for financial markets and economies in North America and Western Europe accentuated as we have said many times before by the potential significant weakness in China we have said for some time that we believe it continues to be a disconnect between the financial market and the underlying economic fundamentals . As of December 31, 2014, we have $6.1 billion in cash and short-term investments in our portfolio which is 23% of our total investment portfolio.
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That price of oil coming down by the way we think is not only supply in the United States but it’s reflecting decreasing demand in from China. China’s and we took the better for some time — China is a big potential negative. And you never know when it will strike. But you have to be careful about it.
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We are maintaining our defensive equity hedges and deflation protection as we remain concerned about the financial markets and the economic outlook in this global deflationary environment.
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Long US government bond rates continued to drop and our common stocks did much better than the Russell index which increased 3.5% in the year. We have yet to significantly benefit from our hedges and are approximately $112 billion depreciation swaps. And of course our cash position gives us great optionality.
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At x1.3 BV it's not trading at crazy level considering they will make money no matter what direction the economy/market goes. They built an incredible ark that can sail virtually any sea...
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Book value per share increased to $394.83 at December 31, 2014 from $339.00 at December 31, 2013 (an increase of 19.5% adjusted for the $10 per common share dividend paid in the first quarter of 2014).
Best results in 29-year history!
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Good! Although... Dunno if Ukraine is the best spot to invest in insurance right now. ???
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Looks like they know what they're doing...
TORONTO — Fairfax Financial Holdings, which bet on the success of a Greek turnaround last year, on Monday reiterated confidence in the country’s prospects and those of one of its largest lenders Eurobank.
“I’m very confident that this current Greek government will successfully negotiate a deal with the troika,” said Watsa, a well known contrarian investor.
“We feel certain that by moving forward with the reform program and by remaining in the Eurozone, Greece will very soon achieve significant economic growth that will in turn drive new investment,” said Watsa, adding that Fairfax would be open to the idea of investing further in Greece once the reform program gets going and the conditions allow for it.
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Chairman, CEO of Greece’s Eurobank Ergasias Resign
Fokion Karavias, a general manager, will be named as the bank’s new CEO, after Christos Megalou ’s decision to accept a position at Fairfax Financial Holdings Ltd. The Toronto-based fund holds a 13.6% stake in the Greek bank.
All other board positions remained unchanged.
“Under this new leadership, Eurobank can continue to play a pivotal role in the Greek banking sector, providing value to the Greek economy, the bank’s customers and its shareholders,” Prem Watsa, chairman and CEO of Fairfax, said in a statement.
http://www.wsj.com/articles/chairman-ceo-of-greeces-eurobank-ergasias-resign-1422830785
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Thanks for the insight guys!
I'm gonna put this in the too hard pile as I realize that on top of my lack of knowledge in valuing this type of business, I'd need to understand -at least broadly- bioscience to assess its prospects.
The pipeline looked really great, but c'est la vie!
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http://www.bignewsnetwork.com/index.php/sid/229740269
Watsa said he is keen to invest in hardware, tourism, hospitality and power sector in the state.
Inviting Naidu to visit Canada, the Hyderabad-born investor said he will host an investors' summit in Canada and help Andhra Pradesh attract investments from the country.
That's cool. He does business/makes money and contributes to developing his native country as well.
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How does one go about valuing a small biopharma?
Prometic Life Sciences (PLI.TO) has come under my radar lately with its promising drug pipeline for metabolic syndrome and type 2 diabetes which is a major problem in N.A. and elsewhere but I have no idea how to approach this sort of business with no real recurrent or predictable revenues.
Anyone care to give some advice?
Thanks
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If you plan to travel abroad, I'd suggest Sears (yeah!) credit card that allows you to save the 2% conversion or transaction fee on purchases you make in foreign currency, plus you get to accumulate the same points as a standard Sears card.
Got one recently but have not used it yet so I can't speak about their customer service.
http://www.searsfinancial.ca/CreditCards/SaveonForeignCurrencyChanges.aspx
http://www.creditcards.ca/credit-card-news/How-to-save-on-foreign-exchange-fees-1268.php
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Part of the recent rise ($50 or so) is due to the weakening of the CND$... I think.
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Wonder if Fairfax will hike its dividend a bit next month..
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I've been meaning to ask the question for a while now but kept forgetting.
Did I miss something? Is he on honey moon? Did he take a sabbatical? Went traveling the world?
The board works well on automatic pilot but I miss his posts.
Cheers! :P
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1) anybody follow insurance well enough to know if we're seeing a slow hardening of rates or are the results just a lack of catastrophes?
Not in the business but my auto premiums didn't decrease this year (all other things being equal) and home insurance increased a bit. What's new though is that my insurance broker is now charging a 3% interest to people who choose the monthly installments option vs paying upfront (most people do I would think). Was free for the past 15 years. Not sure if this is an industry-wide trend, but clearly it's a way for insurance cos to make up for the poor interests rate available in the market right now.
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(this is neither here or there-- I had a dream last night that in Q3 filing, FFH announced a 100M unrealized profit on their deflations swaps, with guidance of billions to come)
LOL! And do you usually have precognitive dreams?
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Getting a first job is still difficult for the vast majority of immigrants in this country.
After that it gets easier.
Luckily governments have good policies in place to help.
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After my MBA, I began applying for jobs, but as an Indian immigrant competing with established Canadians, I had a difficult time. Finally, I got into a company called Confederation Life Insurance (where I then worked for almost ten years), and that too only because out of the four applicants, the other three, never showed up for the interview! My manager there, John Watson, taught me all that I know today about investing, trained me for the job and became my mentor. He was one of the best people I ever knew, and exposed me to the world of Value Investing.
Shows how important the impact (certain) people you cross paths with (can) have in your life.
As long as one has a strong ethic and willingness to work hard of course.
As far as my personal life is concerned, I got married at 23 and been married, for over 40 years now. That is probably the single best thing that has ever happened in my life. Also, develop a strong faith in God, and practice your faith whatever faith it may be. It will give you a guideline on how to live your life, and will help you make all the right choices for a wonderful future. Once you are successful you should always remember to pay it back and help others who are less fortunate. You will find that personally rewarding.
Thank you for that piece of wisdom. And may you share many more years of happiness with your wife.
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Suggestion: You probably should've created a poll where it's possible to anonymously vote. Most online communities treat women badly, or at least differently, so it's often much easier for women to not have feminized screen names and don't mention that they're women.
Speaking from experience, Liberty? ;)
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I am not sure calling it selfish is right. Severe depression can feel like your own brain is torturing itself. Most people have not experienced this on a regular basis. And to really understand this, you basicly have to experience it. No other way about it. I can tell you that hard drugs are amazing, but it is impossible to even have a slight clue unless you tried it. There is just no way to show this to someone else in picture or words.
I think it would be more comparable to being tortured, at a certain point you do anything to get out of it and mechanisms like rational thought and empathy are mostly shut down. That is also why mental illness often goes hand in hand with drug/alcohol abuse or other addictions. I think depression is basicly your defense mechanism (feeling bad about something) working a little bit too well.
most people are pretty much in the middle. If -10 would be feeling the worst possible and +10 would be doing pure heroin, then most people are between -4 and +6 through out their lifes. So it is pretty much impossible to really know what someone with bipolar disorder going from -10 to +10 on a regular basis really goes through untill you experience it yourself. The mistake people make is assuming that someone who kills himself does it when feeling like -4 instead of -10, and should have just slept it off or something. Especially if you have never seriously considered suicide, you should probably praise your lucky stars that you won the genetic lottery in that regard and not call these people selfish.
Allthough it is not bad to attach stigma to suicide as a society I think.
+1
Very well thought and expressed Yadayada.
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Sucks!!! What a great actor and probably a good soul, as far as one can see from afar.
My favorite was his performance in Good will hunting with Matt Damon.
RIP Robin. :'(
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"Only" $300 Millions.
Could that be to invest in Bank of Cyprus along with Wilbur Ross?
The guy recently said he'll take a pass on Banco Espirito (Portugal).
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FFH Announces $650 million Equity Bought Deal Financing
in Fairfax Financial
Posted
+1