Jump to content

Hamblin Watsa investment style over the decades


Shane
 Share

Recommended Posts

Outside of the hedge and CPI-linked derivatives, has the investment style changed much over time at Hamblin Watsa?

 

There have been a lot of changes with the top 10 positions over the past 6-7 years, but i am not overly familiar with the early days.  Can anyone who has followed the company for a long time comment?

Link to comment
Share on other sites

Yes it has - although they will say it hasnt...Of course as Mr. Market changes, one needs to adapt, so I have no issues there.  You're best bet is to read Prem's early investor letters - I would say from the late 80s to mid 90s he was deep almost distressed value.  They made big $$ in natural resources related companies, miners, gold, and banks early on.  Then in late 90s/early 2000s they started to switch to the 'better business' and even wrote that the three stocks he would 'own for ever' would be Wells, J&J and Heinz.  They have since sold these names for huge gains, and are now back in distressed equity since 2009 I would say.  Would love to get other shareholders view

 

ValueMaven

Link to comment
Share on other sites

The style has most certainly changed over the years.  Remember, for a very long-time, Hamblin-Watsa was composed of Prem and about 5 managers who had worked for/with him for 30+ years...they were Ben Graham, distressed investment disciples working together from Confederation Life to Gardiner Watson and then Hamblin-Watsa & Fairfax.  But as the company has grown and grown, the tentacles within Hamblin-Watsa have become quite encompassing. 

 

At their heart, they are still those same Ben Graham disciples, but like Berkshire and the shift to acquiring whole businesses, they have become more private-equity like with the addition of various new vehicles and managers...FairVentures, Thomas Cook, India Fund, Africa Fund, etc.

 

The one part that will not change is how they analyze and buy fixed income instruments, including all sorts of debt securities.  That has been the domain of Brian Bradstreet for so many years, and he has been so successful, that it may only change once he is gone.  As a Fairfax shareholder, the one area that I would be interested in getting to know better at the AGM, etc is who is the next generation of Hamblin-Watsa investment managers that have learned from Prem, Brian, Roger, Sam et al.

 

We know who would run Fairfax and that's the perfect choice in my opinion.  But who are some of the other managers at Hamblin-Watsa...I'm probably one of the few shareholders who knows a few of them, but it would be great for them to become more prominent over time.  I also think as Fairfax/Hamblin-Watsa get bigger, they will rely on outside managers to manage some capital...not unlike what White Mountains/Markel do already and Hamblin-Watsa does to a lesser degree.  Alot of talented people at HW!  Cheers! 

Link to comment
Share on other sites

I'm also unaware at who the successor will be.

 

Thanks for all the input.  The question comes about as I kind of randomly chose letters to read that spanned the full time from 1985 to now and noticed that the portfolio seems to be inconsistent in the style of holdings.  As ValueMaven pointed out, they have at least twice gone towards a concentrated portfolio weighted towards quality names (Wells, JNJ, Heinz, Kraft, USB) and then reverted back to distressed names.  This is unlike Markel/Buffett who are more consistent in the types of investments they buy.  Once WEB moved on to quality names, he stuck with it.  Similarly, Gayner seems to consistently build portfolios with high(er) ROC names and jockey stocks.  HWIC goes all over the place.

 

Can anyone shed some light on how the investment process is structured?  How many people are responsible for final investment decisions?  Do analysts pitch ideas to an investment council?  Do they track individual analyst performance?  Any details would be great.

Link to comment
Share on other sites

We know who would run Fairfax and that's the perfect choice in my opinion. 

 

Could you educate me?  I missed this.  Thanks!

 

Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually.  But it looks pretty obvious who would run Fairfax if Prem could no longer do so.  If you don't really know, time to do some legwork and figure it out.  :)

 

Incidentally, no one has ever said anything to me.  But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking.  Cheers!

Link to comment
Share on other sites

We know who would run Fairfax and that's the perfect choice in my opinion. 

 

Could you educate me?  I missed this.  Thanks!

 

Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually.  But it looks pretty obvious who would run Fairfax if Prem could no longer do so.  If you don't really know, time to do some legwork and figure it out.  :)

 

Incidentally, no one has ever said anything to me.  But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking.  Cheers!

 

Ha - OK!  I also have a fair idea, although I am nowhere near as well informed as you.  However I read your comment to mean that an announcement had been made, hence the question.

Link to comment
Share on other sites

We know who would run Fairfax and that's the perfect choice in my opinion. 

 

Could you educate me?  I missed this.  Thanks!

 

Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually.  But it looks pretty obvious who would run Fairfax if Prem could no longer do so.  If you don't really know, time to do some legwork and figure it out.  :)

 

Incidentally, no one has ever said anything to me.  But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking.  Cheers!

 

Ha - OK!  I also have a fair idea, although I am nowhere near as well informed as you.  However I read your comment to mean that an announcement had been made, hence the question.

 

Pete,

It really is obvious!

Sanjeev is going to merge FFH with PDH and he is the one who will be running the show!!😉

 

Cheers,

 

Gio

Link to comment
Share on other sites

We know who would run Fairfax and that's the perfect choice in my opinion. 

 

Could you educate me?  I missed this.  Thanks!

 

Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually.  But it looks pretty obvious who would run Fairfax if Prem could no longer do so.  If you don't really know, time to do some legwork and figure it out.  :)

 

Incidentally, no one has ever said anything to me.  But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking.  Cheers!

 

Ha - OK!  I also have a fair idea, although I am nowhere near as well informed as you.  However I read your comment to mean that an announcement had been made, hence the question.

 

Pete,

It really is obvious!

Sanjeev is going to merge FFH with PDH and he is the one who will be running the show!!😉

 

Cheers,

 

Gio

 

You got it!  I'll do a reverse merger...$10M corp buys out $10B corp.  Cheers!

Link to comment
Share on other sites

I guess Ben Watsa and family will own controlling stock. They will also be on the board.

Company will be run by professional managers

 

I think the Hambin Watsa investment council will continue as they hire a lot of young people to manage their money.

 

We know who would run Fairfax and that's the perfect choice in my opinion. 

 

Could you educate me?  I missed this.  Thanks!

 

Well Prem runs Fairfax and will until he no longer can...be it physically or spiritually.  But it looks pretty obvious who would run Fairfax if Prem could no longer do so.  If you don't really know, time to do some legwork and figure it out.  :)

 

Incidentally, no one has ever said anything to me.  But after watching it for all these years, I kind of have a pretty good idea of changes at Fairfax that may not seem like much, but are monumental shifts in planning or thinking.  Cheers!

 

Ha - OK!  I also have a fair idea, although I am nowhere near as well informed as you.  However I read your comment to mean that an announcement had been made, hence the question.

 

Pete,

It really is obvious!

Sanjeev is going to merge FFH with PDH and he is the one who will be running the show!!😉

 

Cheers,

 

Gio

 

You got it!  I'll do a reverse merger...$10M corp buys out $10B corp.  Cheers!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...