StubbleJumper Posted January 24, 2018 Share Posted January 24, 2018 If bonds fall example Travelers Insurance has $70b in bonds with half of it in corporates.... $2b private equity $900m $3b equity This has been a genius move for the 30 years...can you imagine what their sensitivity to losses are if rates were to rise 100 or 200 basis points? Sure longer term they will role short maturities into higher rates...but there would be significant losses to mark to market equity. They had significant reserve reduncy for the hurricane season this year...this was likely the reason for all insurance companies rising yesterday...it looks like costs for the 2017 hurricanes will come down. This is likely one of the reasons we are not getting a hard market. It could be even worse for Travellers if they truly have half in corporates. Any long bond gets whacked when there is a generalized interest rate increase. On top of that, risk premia for corporates are pretty thin these days, so if you should also see a re-pricing of risk, the long corporates would get doubly whacked. I like what FFH has done with the bond port, and I hope that they've taken steps to get the Allied port cleaned up... SJ Link to comment Share on other sites More sharing options...
ValueMaven Posted January 25, 2018 Share Posted January 25, 2018 Cant wait to get our dividend tmrw! I am reinvesting right back into FFH Sincerely, VM Link to comment Share on other sites More sharing options...
petec Posted January 25, 2018 Share Posted January 25, 2018 Another Fairfax point which has not been made and it may appear as if the India drum has been beat to death here...is that the $5b investment there is a value play but has been done with the expectation of the holdings being growth companies. Agreed. It seems to me there's been a shift towards helping build companies - Cara, TCIL & subs, India/Africa & subs, maybe Grivalia - rather than just picking up cigar butts. Probably a combination of scale, and their experience in building Lombard and First. Link to comment Share on other sites More sharing options...
wondering Posted January 25, 2018 Author Share Posted January 25, 2018 I hold my FFH shares in a RBC Canadian dollar account. The FX rate I got my dividends was 1.2267. How does that compare with other brokers? Link to comment Share on other sites More sharing options...
DynamicPerception Posted January 25, 2018 Share Posted January 25, 2018 In TD I received $12.1800 In RBC I received $12.2670 I simply divided the dividend by the numbers of shares. Both $CDN accounts. Also TD shows a Settlement date of 2018Jan25 and RBC shows a Settlement date of 2018Jan26. Link to comment Share on other sites More sharing options...
FFHWatcher Posted January 25, 2018 Share Posted January 25, 2018 In TD I received $12.1800 In RBC I received $12.2670 I simply divided the dividend by the numbers of shares. Both $CDN accounts. Also TD shows a Settlement date of 2018Jan25 and RBC shows a Settlement date of 2018Jan26. $12.325 (1.2325) - Scotiaitrade strike that. That is my projected income. No divi yet. I was wondering why I actually had a good Forex rate. Scotia usually sucks. We'll see Link to comment Share on other sites More sharing options...
cwericb Posted January 25, 2018 Share Posted January 25, 2018 RBC 1.2267 Jan 25/18 Link to comment Share on other sites More sharing options...
StubbleJumper Posted January 25, 2018 Share Posted January 25, 2018 I hold my FFH shares in a RBC Canadian dollar account. The FX rate I got my dividends was 1.2267. How does that compare with other brokers? You are generally better to journal your shares over to the US side of your account and then you get the divvy in US dollars. You can always convert it later if you want cdn. Link to comment Share on other sites More sharing options...
tripleoptician Posted January 25, 2018 Share Posted January 25, 2018 I hold my FFH shares in a RBC Canadian dollar account. The FX rate I got my dividends was 1.2267. How does that compare with other brokers? You are generally better to journal your shares over to the US side of your account and then you get the divvy in US dollars. You can always convert it later if you want cdn. Wouldnt that convert the dividend into a US (foreigb) dividend which would have worse taxatiin than a Canadian dividend? I guess this question assumes it is held in a non- registered tax account Link to comment Share on other sites More sharing options...
StubbleJumper Posted January 26, 2018 Share Posted January 26, 2018 Nope, the tax status of a divvy is not about the currency. It's about whether the Corp is an eligible cdn corp. I claim the divvy tax credit every year, just need to convert to cdn dollars. Link to comment Share on other sites More sharing options...
Daphne Posted January 26, 2018 Share Posted January 26, 2018 HSBC gave me a rate of 1.2280 Link to comment Share on other sites More sharing options...
ourkid8 Posted January 26, 2018 Share Posted January 26, 2018 TD Waterhouse 1.21800... Link to comment Share on other sites More sharing options...
dartmonkey Posted January 26, 2018 Share Posted January 26, 2018 Nope, the tax status of a divvy is not about the currency. It's about whether the Corp is an eligible cdn corp. I claim the divvy tax credit every year, just need to convert to cdn dollars. This is clearly true in tax law, but while checking this, I noticed that there has been a problem in the past with some brokers, notably Interactive Brokers (my broker) incorrectly withholding US tax on USD dividends. I presume this has now been cleared up, since I see no such withholding tax in my account statements in the past couple of years. Can anyone confirm? Automatic conversion at disadvantageous rates (the worst being my other broker, TDW, it seems) is really a big deal for a lot of people. Losing 1.5% on a few thousand dollars of dividends is bad enough, and can be avoided by journalling over the shares into a US account. But then, you still have to be careful not to forget about this issue, because if you sell your shares, now denominated in dollars, without first journalling those shares back to the Canadian side. You don't want to save $50 on the dividends every year for a few years and then get robbed by your broker for $1000. Of course, the simple thing to do would be for brokers to just provide a decent rate on the forex trade (as Interactive Brokers does for instance), but don't hold your breath. Link to comment Share on other sites More sharing options...
StubbleJumper Posted January 27, 2018 Share Posted January 27, 2018 Most of my port is in US securities or cdn interlisted securities. So, if you sell ffh from the US side of your account and you want to invest the proceeds in the Royal Bank, it's no biggie, just buy it on the nyse. In the worst case that you want to buy something cdn that is not interlisted, it's at least worthwhile to find low cost alternatives for exchange, notably a Norbert's Gambit, when you are dealing with $50k rather than consistently getting screwed on $1k divvies. Link to comment Share on other sites More sharing options...
Dazel Posted January 29, 2018 Share Posted January 29, 2018 The Fairfax thesis continues to trend in the right direction....Bonds continued to get hit. 10 year is above 2.70% at 2.72 and the 30 year is almost at 3%. Once again are we headed for 1994? In a perfect world for Fairfax a quick and painful bond sell off taking the 10 year over 3% and the 30 year much higher would not only chase the Bond holders out of fixed income it would create the market correction that gives us a stock pickers market where value once again matters and Fairfax does its best work. A large cash position hurts returns until it doesn’t. A mans best friend “An old wife, An old dog and ready cash!” Benjamin Franklin Link to comment Share on other sites More sharing options...
Dazel Posted January 30, 2018 Share Posted January 30, 2018 If you are holding Fairfax and you know how they are positioned you are licking your lips...both from allocating the almost 50% cash or almost $20b from a yield of zero into stocks and bonds...while avoiding the large bond losses and equity losses that those holding bonds and over weight stocks “may” be facing. I think everyone is nuts...Fairfax is the only company that I own right now....and unfortunately I did not get to short crypto and pot stocks yet....and may be wrong of course. But to see Fairfax stock falling while other financials rise...well is funny. Enjoy the fall! Prem will get a better price on the buyback and smaller investors are capable of buying in...volumes are enemic ...quiet period before earnings....and those that were here for the dividend are selling into no volume. I don’t care. This what I and Fairfax have been waiting for...the lunacy to reset. Link to comment Share on other sites More sharing options...
Dazel Posted January 30, 2018 Share Posted January 30, 2018 Would be nice to see a 10 to 15% correction in the market...and the 10 year hit 3% plus. Link to comment Share on other sites More sharing options...
Dazel Posted January 30, 2018 Share Posted January 30, 2018 Fairfax does not need the correction “I” am hoping for.... All financials have traded up on the rising yields in the last week...Fairfax has dropped...ex divvy was Jan 18...the risng yields were after this actually. Travelers (example I used with a $70b bond portfolio that is dropping in value!)is up today and pennies away from their 52 week high....while Markel is up another 1% and near a 52 week high of $1121 USD...FFH $$647 Cdn today. Prem time to up your game lets see the buy back in big way...Fairfax is hated for a reason...underperformance....show your partners you are aware that market has forgotten Fairfax and you believe in our future. I am tired of seeing you and Francis Chou and all the rest of the team get shit on! Announce the earnings early and buy back at these cheap levels....show us Fairfax has a heart beat...the employees and every one else who has trusted in you and got burned while Markel and the rest outperformed needs to see Fairfax show it’s teeth. It’s cheap we can see it take advantage of it! As Tom Brady says “Let’s go”! Dazel Link to comment Share on other sites More sharing options...
ourkid8 Posted January 30, 2018 Share Posted January 30, 2018 Why would he announce earnings early when he can aggressively repurchase the maximum daily shares quietly? Announce the earnings early and buy back at these cheap levels....show us Fairfax has a heart beat... Link to comment Share on other sites More sharing options...
Dazel Posted January 30, 2018 Share Posted January 30, 2018 To get the lower price shares now...the multiple is stupid low compared to Markel and the rest of the market. Markel trades at almost twice the book value Fairfax does... Markel bought $84m shares back through 3 quarters Fairfax bought $129m back. What’s Markel’s upside? Fairfax has triple the revenues and more than twice the size of investments and Markel and Fairfax has approx the same market cap. Markel has approx the same size bond portfolio as Fairfax and half the total size investments. There is urgency when you are that mispriced as the buy back would almost twice as accretive to Fairfax on each share purchase because of the valuation mismatch. The fact is Prem needs to act vigorously and quickly because like many here no one is looking and nor do the care about the crazy mismatch in Markel vs Fairfax. Markel should try to buy Fairfax it would be the deal of the century for them even the paid a 40% premium to today! Fairfax is forgotten...Prem needs to take advantage of it...it may not matter to the investment community but the employees know.....its demorilizing to go to work and know that the rest of 8ndustry stock prices keep rising and are valued at almost twice as more as your are. Berkshire has thrived on always havin* a high valuation and employee satisfaction because they feel like they are the best. Markel would feeel that way too! Fairfax has lost its swagger...Prem needs to show them and his partners that he believes Fairfax should have the same valuation as Markel or better. They used to and now they are depressed that depresses the employees their clients as well....this is one of the most important aspects of a CEO’s job and to honest he is failing miserably right now. Look at this boards feelings towards him and Fairfax!!!!!! Dislike. That’s why now and big....it’s cheap let’s take advantage....tender offer time....Fairfax is loaded with cash....get everyone excited about the future and create some value in buying your own company! Link to comment Share on other sites More sharing options...
Daphne Posted January 30, 2018 Share Posted January 30, 2018 It’s in pre results quiet period and therefore not allowed to buy back until after results Link to comment Share on other sites More sharing options...
Viking Posted January 30, 2018 Share Posted January 30, 2018 Dazel, I think we are still in the early days of the Fairfax turnaround. Long bond yields have just started their next leg higher and yields could continue to move higher for the next couple of years. Yes, FFH has positioned its bond portfolio very well and the company is sitting on a bunch of cash. However, my guess is FFH will not be rewarded by Mr. Market simply for playing good defence. FFH has dramatically underperformed for the last 7 years; it is going to take time (my guess is a couple of years) to rebuild investor trust. Investors are going to want to see how the cash is deployed and this will likely happen slowly over the next couple of years. Investors will reward FFH for driving earnings and growing book value, just like any other company. This will be hard to do in the short term when 1/2 of their portfolio is sitting in cash and short term investments ($17 billion of $35 billion). I agree that FFH is positioned very well. The shares are cheap (and I am a buyer once again for the first time in many years). If the long bond continues higher and FFH shares continue to go lower I will be happy to buy more shares. I am looking forward to FFH releasing Q4 results. Lots to learn: 1.) How is bond portfolio positioned compared to Q3? 2.) How much cash is at holding company level? 3.) What will they be doing with $1 billion after tax proceeds from First Capital sale? If used for share repurchases then, yes, we could see a jump in the share price. 4.) What is the plan with $17 billion cash and short term investments? 5.) Updates on loss estimates from this past year; any new news? How does reserving a Allied look? 6.) How is insurance pricing for 2018 looking? What kind of price increases are they able to get? Link to comment Share on other sites More sharing options...
netnet Posted January 30, 2018 Share Posted January 30, 2018 What book value are you using to say that it is as cheap as ever? A too quick and dirty off of the third quarter results is north if 1.5. Obviously there are adjustments for the sales etc., but half of Markel? Link to comment Share on other sites More sharing options...
Dazel Posted January 30, 2018 Share Posted January 30, 2018 Add First capital Sale Dec 28...and insurance profit depending fires....$15b annualized sales vs. Markel’s $5b Link to comment Share on other sites More sharing options...
ourkid8 Posted January 30, 2018 Share Posted January 30, 2018 https://globenewswire.com/news-release/2017/09/29/1134849/0/en/Fairfax-Enters-Into-Automatic-Share-Purchase-Plan.html I believe this would be an approved exemption to allow them to repurchase stock during the quiet period. It’s in pre results quiet period and therefore not allowed to buy back until after results Link to comment Share on other sites More sharing options...
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