Eurobank

[bluedevil]

Two articles of interest to FFH.  I assume the "shareholders from Eurobank" includes FFH.

 

Unfortunately, FFH is looking at a $270 million loss on its Eurobank investment, but hopefully it is a temporary trading loss.

 

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http://www.reuters.com/article/2015/01/28/greece-politics-banks-idUSL6N0V752X20150128

 

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http://www.theglobeandmail.com/report-on-business/international-business/eurobanks-greek-problem-felt-all-the-way-to-toronto/article22655484/

 

[Guest glavacem]

Is it just me, or does it seem like everything Fairfax invests in lately seems to be a miss.

 

Am I looking into recent declines to much?  Is this a far criticism?

 

I am long Fairfax and have never sold a share. I don't plan on selling any shares. Just wondering what the group thinks.

 

 

[Txvestor]

What I've noticed is that Prem does a lot of balancing in his portfolio. If X goes bad then Y will pay off in spades, negating it kind of thing. So take Eurobank. You could make the case that if Greece stays in the Euro and renegotiations with the troika come to a successful resolution, Eurobank will do very well. If on the other hand there is. Grexit, then the possibility of the Eurozone coming apart and significant Euroland deflation is more, and the U.S. treasuries and munis they hold will appreciate significantly, rendering losses on Greece minor.

Over the last few years, I've seen some quarters where I believed things would be bad and the BV will go down but it seems like they pull a rabbit out of the hat when results come out. I agree that between his Greek holdings, Sandridge, Exco, IBM, this looks like a lousy quarter, but I'm sure the US treasury holdings, munis, deflation hedges etc are up somewhat to mitigate.

Also the insurance operations have been firing on all cylinders lately with impressive combined ratios and reserve releases. So I think all taken together, he will come out fine. The irony is that he predicted the collapse of commodities including oil, and a collapse in China, and I wonder why he maintained his positions in Sandridge and even increased in Exco.

Anyway prem is the one with the Buffetesque returns, so I'm sure he has a good answer.

[dartmonkey]

Is it just me, or does it seem like everything Fairfax invests in lately seems to be a miss.

 

Am I looking into recent declines to much?  Is this a far criticism?

 

I am long Fairfax and have never sold a share. I don't plan on selling any shares. Just wondering what the group thinks.

 

It's not just you. That's the way it is. If you want clean stuff, with no craziness, things like Wells Fargo,and Walmart , Procter and Gamble and Coke, then try Berkshire - it's fully priced, but it will likely give you a steady return with no palpitations.

 

If you don't mind scruffy Irish and Greek banks, failed smartphone and pulp and paper companies, retailers that are borderline (The Brick) or outright kooky (Overstock), along with outrageous macro bets on market valuation and inflation, then we might have something for you here, along with lots of Sturm und Drang.

[Guest glavacem]

Hey dartmonkey,

 

What is Sturm and drang?  I have never heard this term.

 

One of the reasons I like Fairfax is they buy all of this interesting stuff that I never would. I am curious when the new presentation comes out,  to see what their 5year investment results look like. It just feels like it's been a tough ride lately.

[infinitee00]

There is a separate Eurobank thread. Dont know if these two can be merged.

 

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/eurobank-egfey/

[Alekbaylee]

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

[Shane]

Really kind of perplexed by this.  Does anyone have insight?

[Alekbaylee]

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.

 

http://business.financialpost.com/2015/02/02/fairfax-financial-holdings-ltds-prem-watsa-very-confident-about-greece-eurobank-prospects/

[giofranchi]

Nobel Winner Shiller Joins Pimco in Saying Buy Greek Assets

 

http://www.bloomberg.com/news/articles/2015-01-27/nobel-prize-winning-economist-says-it-s-time-to-buy-greek-stocks

 

 

Gio

[constructive]

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.

 

http://business.financialpost.com/2015/02/02/fairfax-financial-holdings-ltds-prem-watsa-very-confident-about-greece-eurobank-prospects/

 

Why do you say that? You like his confidence, or you think what he's saying makes sense? Because I don't think it does. Greece is refusing to negotiate with the troika.

 

http://www.reuters.com/article/2015/01/31/us-greece-politics-idUSKBN0L31TB20150131

 

Varoufakis said Greece had no intention of cooperating with a mission from the lending "troika" of the European Union, European Central Bank and International Monetary Fund, which had been due to return to Athens. He said Greece would not seek an extension to a Feb. 28 deadline with euro zone lenders.

 

There is not much time. If they don't find a lender by this summer, they will default.

[Packer16]

This is the S. European game of chicken.  S. Marchionne has done this to a tee at Fiat and the Greeks are doing it to the troika. 

 

Packer

[constructive]

This is the S. European game of chicken.  S. Marchionne has done this to a tee at Fiat and the Greeks are doing it to the troika. 

 

Packer

 

If Watsa's thesis depends on hard-left Greek politicians being extremely adept at financial negotiations like Marchionne, I am afraid that seems hopeless.

[Jurgis]

I agree with Constructive: Watsa better have plan B up his sleeve, since Greece is likely to default and leave euro. I'd say the chance of default is above 30% right now. The chance of leaving euro is a bit lower, since they could theoretically - though unlikely - default and stay.

 

Disclosure: I do have a large position in Fairfax.

[Guest glavacem]

I'm afraid on this one we are at the mercy of whatever the folks in Greece decide to do.

 

Based on what some folks at Pimco told me about Greece 5-6 years ago i would never invest in Greece. That being said I understand and have compassion for the Greek people, 25% poverty is a lot to bear. I hope they can get the issues figured out and give the people a better future.

[twacowfca]

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.

 

http://business.financialpost.com/2015/02/02/fairfax-financial-holdings-ltds-prem-watsa-very-confident-about-greece-eurobank-prospects/

 

Why do you say that? You like his confidence, or you think what he's saying makes sense? Because I don't think it does. Greece is refusing to negotiate with the troika.

 

http://www.reuters.com/article/2015/01/31/us-greece-politics-idUSKBN0L31TB20150131

 

Varoufakis said Greece had no intention of cooperating with a mission from the lending "troika" of the European Union, European Central Bank and International Monetary Fund, which had been due to return to Athens. He said Greece would not seek an extension to a Feb. 28 deadline with euro zone lenders.

 

There is not much time. If they don't find a lender by this summer, they will default.

 

Varoufakis is an expert in game theory.  :)

[barsax]

Varoufakis may be an expert in game theory, but he is pretty good at dishing out inflammatory rhetoric too.  This is from an article in today's Globe & Mail (Toronto, Canada):

 

“Clever people in Brussels, in Frankfurt and in Berlin knew back in May 2010 that Greece would never pay back its debts. But they acted as if Greece wasn’t bankrupt, as if it just didn’t have enough liquid funds,” Varoufakis told the documentary.

 

“In this position, to give the most bankrupt of any state the biggest credit in history, like third class corrupt bankers, was a crime against humanity,” said Varoufakis, according to a German translation of his comments.

 

It was unclear when the programme was recorded.

 

Although strident criticism of the way Greece has been treated is typical for Varoufakis, a Marxist economist, the remarks caused a stir in Germany where voters and politicians are increasingly reluctant to lend Greece money."