Daphne Posted September 15, 2015 Posted September 15, 2015 With the share price down more than 20% in the past seven months is anyone wondering why?? Prem told us that the winter run-up was due to the Canadian dollar descent but the dollar is further down yet every day the share price is eroding.
obtuse_investor Posted September 15, 2015 Posted September 15, 2015 I suspect all those folks that bought shares from the bought deal got spooked and are selling. As a shareholder, this is good news. Fairfax sold shares at high p/b ratio and now is our chance to purchase those units at low multiples, thereby negating the dilution from the bought deal earlier this year.
petec Posted September 15, 2015 Posted September 15, 2015 I suspect all those folks that bought shares from the bought deal got spooked and are selling. As a shareholder, this is good news. Fairfax sold shares at high p/b ratio and now is our chance to purchase those units at low multiples, thereby negating the dilution from the bought deal earlier this year. +1 I also suspect that people who bought in the deflation scare in 1H are now realising that we are about to annualise the commodity bust and inflation might not remain low. I know that China and recent market drops might have driven another bout of deflation fear but I don't really think they have. I think the stock had a mini-bubble on this basis in 1H which is deflating now.
ourkid8 Posted September 15, 2015 Posted September 15, 2015 Who is buying/adding to their position? I have tons of cash and it's hard sitting tight waiting... :)
obtuse_investor Posted September 15, 2015 Posted September 15, 2015 Who is buying/adding to their position? I have tons of cash and it's hard sitting tight waiting... :) I increased my position by 20% today.
accutronman Posted September 15, 2015 Posted September 15, 2015 Got back in today after having liquidated position months ago. The decline in p/b makes the stock too attractive to pass up.
TwoCitiesCapital Posted September 15, 2015 Posted September 15, 2015 I've been a buyer. Once mid-October comes around I'll have more money as my cash secured puts will expire. Hoping it stays low through December/January when I'll have even more money to allocated to it.
Guest glavacem Posted September 15, 2015 Posted September 15, 2015 I have a large position and have never sold. All the hedges etc don't bother me at all. I do have some concerns going forward about the stock picking....and I could be over reacting here. I will still be patient, but may lighten up a bit sometime in the future. My gut is saying lighten up, so I know now probably isn't the best time to do this. Thanks to everyone on this board for their wonderful insights as this has helped me understand a lot more about Fairfax.
ERICOPOLY Posted September 15, 2015 Posted September 15, 2015 Looking at the old prices when the last big fear event happened... I see $327.66 (CAD) for FFH on January 1st, 2008 and $233 on August 1st, 2008. Their hedges were doing great. Price happens. There's a T-Shirt idea for you Forrest Gump fans -- a big yellow smiling face on a T-Shirt where the mouth is a stock chart. Price Happens!
NewbieD Posted September 15, 2015 Posted September 15, 2015 Bought my first shares today, 5% position:) Main reason for choosing Fairfax was they should be less correlated than other insurers to a general market drawdown.
Tommm50 Posted September 16, 2015 Posted September 16, 2015 Yup, been adding to my position the last several days and keeping more in reserve if a market meltdown forces FFH down further.
Guest Dazel Posted September 16, 2015 Posted September 16, 2015 :) as we know the market is not efficient. http://finance.yahoo.com/news/u-consumer-prices-post-first-123518143.html http://www.theguardian.com/business/live/2015/sep/15/chinese-stocks-fall-again-uk-inflation-markets-live http://www.theglobeandmail.com/report-on-business/international-business/european-business/euro-zone-inflation-slows-raises-expectations-of-more-qe/article26376905/
Luckyone77 Posted September 24, 2015 Posted September 24, 2015 I haven't sold nor have I added but I've certainly taken a shellacking. I'm not near as convinced about this company as I use to be but the stock price is probably just too low to start selling. It's by far my largest holding but I'm very disillusioned with their stock picking. Some are simply inexplicable. As far as the Macro bets go, it is what it is. I agreed with their logic but let's face it, so far, it hasn't worked out. Time will tell. Hopefully, they'll prove to be visionaries. Insurance is clearly doing much better and I like the India play. They just seem to take too many BIG gambles on companies with bad fundamentals or dying prospects. What happened to Rule#1: Don't lose money! SD, among a few others, is beyond my scope of comprehension. IMO, they need to become better capital allocators and more protective of the "ball" before I invest more cash. Sure wish I would have just bought an SP 500 index fund and went fishing back in 09. I'll get em next time.
KinAlberta Posted November 2, 2015 Posted November 2, 2015 I haven't sold nor have I added but I've certainly taken a shellacking. I'm not near as convinced about this company as I use to be but the stock price is probably just too low to start selling. It's by far my largest holding but I'm very disillusioned with their stock picking. Some are simply inexplicable. As far as the Macro bets go, it is what it is. I agreed with their logic but let's face it, so far, it hasn't worked out. Time will tell. Hopefully, they'll prove to be visionaries. Insurance is clearly doing much better and I like the India play. They just seem to take too many BIG gambles on companies with bad fundamentals or dying prospects. What happened to Rule#1: Don't lose money! SD, among a few others, is beyond my scope of comprehension. IMO, they need to become better capital allocators and more protective of the "ball" before I invest more cash. Sure wish I would have just bought an SP 500 index fund and went fishing back in 09. I'll get em next time. I don't think they've changed their style very much over the years so you shouldn't be surprised at not seeing value where they see value. Moreover, not being happy with a company that has a falling share price is a very, very common condition - unless you are a value investor. So like you say, indexing may be the way to go in your case.
DCG Posted November 3, 2015 Posted November 3, 2015 Their investment decisions have been straight up dismal for years. Prem and HW seem to have no idea what they're doing from an investment perspective.
petec Posted November 3, 2015 Posted November 3, 2015 Their investment decisions have been straight up dismal for years. Prem and HW seem to have no idea what they're doing from an investment perspective. *listed equity and derivative! You can't fault their bond and control equity decisions ihmo.
LowIQinvestor Posted December 3, 2015 Posted December 3, 2015 So much for Fairfax serving as an equity market hedge... and a bet on low inflation :'(
TwoCitiesCapital Posted December 3, 2015 Posted December 3, 2015 So much for Fairfax serving as an equity market hedge... and a bet on low inflation :'( The bet on low inflation has been the saving grace of the past few quarters, along with good underwriting. I will also get real nitpicky here and say that the bet is actually on negative inflation and that the "lowflation" piece has been small and was added only recently. We only saw negative headline inflation briefly and in small increments. Remember, this is an in environment where doubted deflation could ever even happen and that the Fed would do all it could to stop it. Wait and see if it becomes more persistent and larger in magnitude over the next year or two. The low equity beta would have probably have played out well had investments in Eurobank and SD not sucked so badly over the past two quarters. Those are basically non-impactful at this point so wait and see. Too soon to throw in the towel.
LowIQinvestor Posted December 4, 2015 Posted December 4, 2015 Anyone have a valid reason why shares fell 4.5% yesterday! ?
naboo Posted December 4, 2015 Posted December 4, 2015 Anyone have a valid reason why shares fell 4.5% yesterday! ? My thought was the interest rate hike will hurt FFH bond portfolio. FED implies there will be a "GO" this time.
TwoCitiesCapital Posted December 4, 2015 Posted December 4, 2015 Anyone have a valid reason why shares fell 4.5% yesterday! ? My thought was the interest rate hike will hurt FFH bond portfolio. FED implies there will be a "GO" this time. Meh. A 25 bps rise at the front end will have very little effect on longer duration bonds - also, rate hiking cycles typically compress credits spreads. Widening muni-spreads have largely been what has hurt Fairfax's bond portfolio over the past year so it could actually be beneficial for them. I don't think this is why the market took 4% of the equity value of the company.
gary17 Posted December 4, 2015 Posted December 4, 2015 I think Mr Market now sees lower deflation risk in light of good economic data & ECB's less than expected stimulus , which signals the officials see a good chance of normalized inflation... my 2 c! http://www.cnbc.com/2015/12/04/ecb-pres-draghi-risk-of-deflation-firmly-off-the-table-thanks-to-policies.html
LowIQinvestor Posted December 4, 2015 Posted December 4, 2015 Thanks for the comments- I'm calling BS on the market and buying FRFHF today.
KinAlberta Posted February 18, 2016 Posted February 18, 2016 Run for the hills everyone, it may "Crash even more" !!! :-) Could Fairfax Financial Holdings Ltd Crash Even More? The Stock Had Another Big Decline Today FEBRUARY 17, 2016 BY ROBIN REYES IN STOCKINESS "...The stock of Fairfax Financial Holdings Ltd (TSE:FFH) is a huge mover today! The stock is down 0.22% or $1.68 after the news, hitting $777.15 per share. ... The move comes after 9 months negative chart setup for the $17.58 billion company. ..." http://sonoranweeklyreview.com/could-fairfax-financial-holdings-ltd-crash-even-more-the-stock-had-another-big-decline-today/
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