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http://www.fairfax.ca/news/press-releases/press-release-details/2015/Fairfax-Financial-Holdings-Limited-Financial-Results-for-the-Year-Ended-December-31-2014/default.aspx

 

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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http://www.fairfax.ca/news/press-releases/press-release-details/2015/Fairfax-Financial-Holdings-Limited-Financial-Results-for-the-Year-Ended-December-31-2014/default.aspx

 

Book value per basic 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!

 

The yearly results are looking decently good,... anyway,... the first 3 quarters were already known,...  Cheers! ;D

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Odd thoughts:

  • In reading through this, a little voice in my head said that this is starting to look like a “Machine”. Underwriting and investing fund acquisitions which beget more underwriting and investing which generate funds which beget more...
  • Fascinated that they did show a positive realized gain for the year in equity hedges in an up market…though they were dwarfed by the unrealized losses, it seems to indicate that they were timely in closing out some hedges.
  • Rough Q4 where both the Equity investments and equity hedges but get hit pretty good. Ouch...
  • Never thought I’d see the day where Fairfax’ combined for a full year would be lower than Markel’s.

-Crip

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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

…………..

Just to keep a perspective out remind you that it took five years in Japan before deflation set in for the next 18 years.

……………..

 

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.

……………..

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.

……………..

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.

……………..

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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Great to see underwriting results continuing to improve!

 

Definitely! Q4 underwriting results are even better than overall 2014 results, which are better than 2013 results, which were considered an outlier at the time!

 

If something goes wrong, even if only for a couple of years, Fairfax will have many ways to make money, beginning with their insurance operations that are becoming more and more reliable and profitable.

 

Cheers,

 

Gio

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Special thanks goes out to Andrew Barnard for the superb underwriting results! 

 

Tks,

S

 

Great to see underwriting results continuing to improve!

 

Definitely! Q4 underwriting results are even better than overall 2014 results, which are better than 2013 results, which were considered an outlier at the time!

 

If something goes wrong, even if only for a couple of years, Fairfax will have many ways to make money, beginning with their insurance operations that are becoming more and more reliable and profitable.

 

Cheers,

 

Gio

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Odd thoughts:

  • In reading through this, a little voice in my head said that this is starting to look like a “Machine”. Underwriting and investing fund acquisitions which beget more underwriting and investing which generate funds which beget more...
  • Fascinated that they did show a positive realized gain for the year in equity hedges in an up market…though they were dwarfed by the unrealized losses, it seems to indicate that they were timely in closing out some hedges.
  • Rough Q4 where both the Equity investments and equity hedges but get hit pretty good. Ouch...
  • Never thought I’d see the day where Fairfax’ combined for a full year would be lower than Markel’s.

-Crip

 

+1

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Earlier in this thread I mentioned how there frequently seems to be a delayed reaction whenever FFH posts good results and based on that I bought in at about $510 a few days after third quarter results were posted. I believe Ericopoly did as well. The price jumped immediately afterwards.

 

Some criticised that post, but now several days after the fourth quarter results were posted investors again seem to have a delayed reaction. FFH only eased up slightly but so far today it's jumped about $50 CDN.

 

 

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Earlier in this thread I mentioned how there frequently seems to be a delayed reaction whenever FFH posts good results and based on that I bought in at about $510 a few days after third quarter results were posted. I believe Ericopoly did as well. The price jumped immediately afterwards.

 

Some criticised that post, but now several days after the fourth quarter results were posted investors again seem to have a delayed reaction. FFH only eased up slightly but so far today it's jumped about $50 CDN.

 

Today's jump is likely due to Brit Plc. purchase and not due to delayed reaction to Q4 results.

 

That said, I decided to go "passive investor" at New Year's by selling most my positions and putting my money into Fairfax. I bought most of my planned allocation before today's jump.

 

It's better to be lucky than smart.  8)

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Earlier in this thread I mentioned how there frequently seems to be a delayed reaction whenever FFH posts good results and based on that I bought in at about $510 a few days after third quarter results were posted. I believe Ericopoly did as well. The price jumped immediately afterwards.

 

 

I have also noticed this delayed reaction and also that a relatively small position ($5M) can significantly move the stock price.  Perhaps the thin volume, high stock price and poor visibility (not traded on the American exchanges) all contribute to this phenomenon.  I wonder if FFH fits into some category that requires the trades to be vetted by an investment committee before the trades can be executed?

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I think its fair to say MR. Market left the office early to buy MRS. a valentine's card...

 

For the old timers here (MSN Message board), some might remember that it was usually because Sanjeev was out for lunch...

 

 

Like all urban legends, this one started on a day when FFH jumped while Sanj was at lunch. Upon returning to his computer, he posted that he had been at lunch and wondered what had happened while he was out. This may have happened on another occasion which caused the legend to grow from there. Other FFH shareholders asked him when he was going next, told him that he needed to take lunch more often, etc (There may have been a half-hearted recommendation that FFH holders take up a collection to send Sanj out to lunch every day). Soon after, every time Fairfax would spike up, someone would remark "Sanj must be at lunch" or, for when Fairfax opened up strongly "Sanj took a really early lunch today", etc.

 

 

Someday, this will be on Snopes.com

 

 

-Crip

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Yes, and I still remember not so long ago, the day that FFH crashed to about the $50-60 range. That's when the shorts were all over the company and the false reports were being published. Remember those days?

Prem and company sure "have come a long way baby" since then. Hats off to them and to those investors who continued to believe in FFH.

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Yes, and I still remember not so long ago, the day that FFH crashed to about the $50-60 range. That's when the shorts were all over the company and the false reports were being published. Remember those days?

 

Oh yes Hawks, I remember them very well! :-) So much things have changed with FFH since then. I'm happy that they still keep a more conservative balance sheet and have more sound underwriting business now than in those years.

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