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Fairfax Third Quarter Results


bluedevil
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This was better than I expected, very nice!

 

I'd like to see a few more years of insurance results (preferably with some cats) to see that insurance is fixed (my belief for a long time)... we'll see.

 

Good to see the results (insurance and investing) starting to work together.  it's just a quarter, but it makes me smile.

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At 1.1x's book with downside protection this is looking cheap again

 

I agree, and it is exactly what I was saying a few days ago in another thread about FFH.

 

Also Q4 looks good until now, with US government rates that have come down substantially since the end of Q3.

 

Gio

 

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Certainly great results

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?

 

2) interesting to see hedges down further to 79%. Wonder if they'll talk about a change in strategy here. I have mixed feelings about this. Glad to see equity exposure that begins to have meaningful impacts on earnings but....kind of frustrated that we're only 79% hedged now that they seem to be ripe for paying off.

 

I'm just waiting for deflation hedges to begin paying

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Zach, running a long / short portfolio is hard.

 

If you are 100% hedged, and then your longs outperform your shorts ... does that mean you short more to bring your hedging back inline?  Sell longs?  Some of both?

 

Fairfax had the opposite problem when their shorts outperformed their longs (do you close losing shorts?  Do you add to losing longs?)... it's the nature of the beast.

 

One of the reasons shorting really sucks / is hard!

 

For insurance pricing, AON Benefield and Marketscout have some commentary, and other insurer conf calls are helpful.  Pricing has been rising (in general) for insurance... not so much for RE, but nothing dramatic.  I think we are just seeing Fairfaxs true results without the legacy reserve additions from 10+ year old business.

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Totally understand the long short dilemma - just frustrated to put up with so many foregone gains to not fully capitalize in a drop that looks more likely from here than in previous years.

 

I've done long/short bets that lost me money on both legs - didn't add to either side, simply closed out the trade and haven't attempted it again. I'm too familiar with how difficult it is and how to manage the sizing of each side. 

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kind of frustrated that we're only 79% hedged now that they seem to be ripe for paying off.

 

I think the fact is there is still a very real possibility of a melt up in stock prices, before the bubble bursts. Think of a Shiller P/E for the S&P500 that goes from 26 to 30. This is how bubbles usually behave towards their end. And I guess this is the reason Fairfax is keeping its hedges, but not increasing them. Btw, I am doing the same! ;)

 

Gio

 

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I bought some more FFH today too: 1.12xBook isn't a bad entry point, at all.

 

I am now a long term FFH holder, too :). I am still thinking how to trick myself into not selling in the next 10-20 years.

 

Make it hard to trade. Different brokerage account and throw the login passwords away/erase them from memory. Contact your broker for a new password in 10-20 years. ;)

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You can hold physical certs and store at the bank in a safety deposit box!  :)

 

Tks,

S

 

I bought some more FFH today too: 1.12xBook isn't a bad entry point, at all.

 

I am now a long term FFH holder, too :). I am still thinking how to trick myself into not selling in the next 10-20 years.

 

Make it hard to trade. Different brokerage account and throw the login passwords away/erase them from memory. Contact your broker for a new password in 10-20 years. ;)

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Does anyone know what this is about?  It's the first I have heard of it.

 

Both Watsa and Fairfax president Paul Rivett are part of an ongoing investigation by the Quebec securities regulator over possible insider trading or tipping.

 

Maybe this sheds some light on the issue

http://business.financialpost.com/2014/08/01/fairfax-financial-and-ceo-prem-watsa-probed-for-insider-trading/

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You can hold physical certs and store at the bank in a safety deposit box!  :)

 

Tks,

S

 

I bought some more FFH today too: 1.12xBook isn't a bad entry point, at all.

 

I am now a long term FFH holder, too :). I am still thinking how to trick myself into not selling in the next 10-20 years.

 

Make it hard to trade. Different brokerage account and throw the login passwords away/erase them from memory. Contact your broker for a new password in 10-20 years. ;)

 

Not possible in Belgium anymore. Wouldn't be surprised if it was the same for Germany (for frommi).

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I don`t think its possible and there where at least two bank robberies in germany this year where a lot of deposit boxes where stolen, so i don`t trust that method.

Or is my name on the stock certificate? While we are at that topic, are my stocks safe when they are in an electronic brokerage and an EMP hits the whole world and kills all electronic devices? :)

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