Fairfax stock positions

[modiva]

31 minutes ago, Gregmal said:

I just headed out fishing for the night so the response is simple, but here goes….

 

do you not believe something needs to change for FFH to get appreciated by the market? IE a corporate action or repositioning? Or do you believe that nothing needs to change and that they’re right and everyone else in the market is wrong?

 

Further off that;

would the following help?

 

-NYSE listing

-A real buyback

-Monetizing big pieces of the equity portfolio 

 

if so, why aren’t they doing this?

+1. Agree the above actions would be the exact catalysts that Fairfax would need.  If not, its a slow grind to the pre-pandemic valuation levels, which might take a few years. Lets hope that Fairfax takes the actions and attracts more investors...including institutional investors.  

[Spekulatius]

2 hours ago, Parsad said:

 

Actually it wasn't Prem's problem.  Balsillie and Lazaridis were on the board when Prem joined.  The board pushed for Heins and his vision...so Balsillie resigned.  Then the board pushed out Lazaridis, and Prem was left the lone voice in the wilderness pushing for John Chen and directing the company to focus on software.  It BECAME a Fairfax problem, since they had a substantial investment in the company.  Either Fairfax got involved, or BB would have disappeared a long-time ago. 

 

You can then argue...should they have cut bait and let it fail...or get involved, get Chen on board and perhaps save the company, its employees, its shareholders, the community built around BB and FFH's investment.  In hindsight, which is where we all sit, including you...I'd be happy if they sold.  But arbitrarily throwing around your opinions without any experience or being there...armchair quarterback at best!  Cheers!

The mistake wasn’t to make John Chen CEO, the mistake was to get involved with BB in the first place, since it was a tech company that was dying and it is common knowledge that tech turnaround are hard. Furthermore, FFH really doesn’t have domain expertise.

 

FFH has a tendency to chew off more than they can handle. I am not sure they learned much in this regard. Just recently, they invested 100CAD in a mining venture. Do they really have expertise here? Maybe they do, I have no idea. Other than stopping shorting, ( which is significant)  I am not convinced they have learned really anything.

 

What they really should do is that management defines  a circle of competence in a way that makes sense and can be easily communicated. This should come with a promise that future investment lie within this circle of competence and that current investment outside will be liquidated in time.

 

Somewhere upstream it was mentioned that FFH IR isn’t good. While this is correct, the underlying reason is that there isn‘t really a great strategy to being with.

 

If there is any, it would be 

1) We are an insurance holding

2) we buy pretty much anything as long as it looks cheap to us.

 

The problem with above is that it is not a great story, especially with thr mixed track record the last ten years. It seems about half the time, they don’t really know what they are buying and then it often doesn’t turn out to be cheap either.

 

They have got to make some changes at the top and with their strategy and this is not just an IR problem.

Edited October 8, 2021 by Spekulatius

[Gregmal]

Exactly. I feel like there’s no more victim of the typical value investor bs than FFH shareholders and even FFH itself. As a general rule of thumb, Mr Market is generally right. He can be wrong at times. But typically there’s reasons. With FFH they continually sit there are arrogantly claim everyone else is wrong and they’re right. Wake up, do a couple easy things, and see what happens. Not that hard. The question is whether Mr Watsa is just that arrogant, doesn’t care, or simply won’t do it for other reasons. My money has been on the later two. So far it’s been correct 

[glider3834]

 

1 hour ago, modiva said:

-NYSE listing

-A real buyback

-Monetizing big pieces of the equity portfolio 

I would add that most of the time, valuation just becomes its own catalyst

 

NYSE listing - is it really necessary? main reasons they gave were inconvenient, costly, US investors can buy on TSX anyway & doesn't impact their capital raising capability https://www.theglobeandmail.com/globe-investor/fairfax-financial-delisting-shares-from-nyse/article4215526/

 

Fairfax bought over 1.5% of their shares in last 12 mths but yes I would like to see hopefully more + bigger buybacks in future - the swaps are a synthetic buyback as well - fyi for those who are interested, here are my calc estimates if Fairfax returns to avg P/B in last 5 years,  Fairfax will make around $370 mil after tax (@16.5% estimated tax - could change??) on these swaps (this is on top of any MTM gains up to 30 Jun-21) . Here are my estimates on potential return on swaps based on market price trading at different P/B ratios - hope its not too confusing

 

 

 

Yes I am mindful they need to take advantage of monetising equity or wholly owned positions in an opportunitistic way this is something I am watching - RFP maybe they could have trimmed/ sold at $16 but I checked & apparently there is an analyst with an $18 price target on RFP & median price target of $16 - I haven't done a deep dive on this one but is it clear cut??. With BB the most they could have trimmed/sold at was around US$12.50 IMO - see my last post on reasons why. BB Is one I am more concerned about but in the context of everything else going on, at least BB is a smaller % of the overall pie now. On the flip side, there have been a lot of monetisations by Fairfax this year more so across their operating subs but still they are being opportunistic - Viking has done a good job covering these so no need to repeat.

 

 

Edited October 8, 2021 by glider3834

[Viking]

4 hours ago, StubbleJumper said:

@Viking and @glider3834

 

One of the reasons that FFH's share price is in the shit-hole might be that market participants have lost confidence in Prem's decision making, and frankly the shorting episode and the deflation derivatives make that a reasonable position to hold.  My view is that there are a great many good things going on with FFH, but frankly it can take a long time to re-establish confidence after episodes like that and you need a long string of clear and consistently rational decisions to convince people that you are back on the rails. 

 

The problem with BB and RFP is not the money (well, for me it's the money because I'm a cheapskate!), it's that the continued hold strikes people as irrational when there has been six months of good exit opportunities.  So, is the bizarre decision making over, or is it not?  Well, I don't blame anyone who is hesitant about Prem and who looks that BB and RFP with a jaundiced eye.

 

Now, let's move on from impressions and deal with the money, because there's a bit of a bifurcation there.  FFH has had *two* good opportunities to dump BB at US$14-ish and it is now trading at US$10-ish.  That's US$400 million that has at least temporarily evaporated.  Same deal with RFP, it trades at ~US12.25 and it could easily have been dumped at US$14.25, which is another US$60m.  It is what it is.  We have 27m shares outstanding and Prem has flushed *multiple* opportunities to exit legacy positions that would have provided US$460m more value to shareholders.  He has basically flushed US$17/share through those decisions (so far).  He might end up being right, in the end, and maybe it's not a permanent flush.  And US$17/sh isn't a death-blow by any means.  But the impression is not great.

 

So, let us move to the reason *why* the impression isn't great.  Prem flushed enormous amounts a shareholders capital on the shorts and to a lesser extent the deflation derivatives.  Was it US$175/sh, or thereabouts (seriously, I haven't done that depressing math, but someone on this board must have).  All that bullshit about ridiculously ill-conceived and stubbornly held decisions was supposed to be over, right?  Well, here we go again, another US$17 of bad decisions.  What's the annual quota of losses from shitty decisions, anyway?  Is it US$25, or is it higher?  Maybe flushing US$17 is a "good performance" in the context of the past.  That's a tough sell.

 

But, if you want to convince people that you've refocused your investment decisions and are better managing the downside, the failure to sell a couple of positions this year might have cost FFH a bit of market confidence.  And rightly so.

 

 

SJ

‘One of the reasons that FFH's share price is in the shit-hole might be that market participants have lost confidence in Prem's decision making’

 

I totally agree! i think i have consistently said this is a big watch-out for me with Fairfax. Some really bad past decisions. Bad communication. If the stock was overvalued this would be enough to keep me out. If the stock was fairly valued this might be enough of a reason to keep me out. But with the stock dirt cheap - and my read that they have been making better decisions for a couple of years now - i am happy to own the shares. 

Has the decision making the past few years really gotten better (my reading of the tea leaves today)? Time will tell. I will keep an open mind. And if Fairfax starts to fall back into their old ways i will respond accordingly (likely exit).

 

It just cracks me up that no one is giving them credit for the insurance businesses they have today. Or that we are in a hard market. Or Atlas. Or Stelco. Or India. All the fixes made to the many, many problems over the past 3-4 years. Does no one else see this?

 

Regarding RFP: if the US has a housing boom (very likely with interest rates so low) then lumber pricing is going to remain well above long term averages. If lumber prices stay high RFP will print money given the pivot they made to lumber the last couple of years. Bottom line, i understand why Fairfax still owns RFP. Look at the decisions management has made at RFP the past few years. They have done exceptionally well. Commodity super cycle? There are very good reasons to want to be patient with RFP right now. But to call management negligent because they did not sell at $18 just makes no sense to me. (And let’s not get started on how you exit a position and realize only top $ when you own better than 10%.)

 

We could have almost the exact discussion on Stelco. Man, why did they not sell out at CAN$50? Absolute dummies. 
 

And on Blackberry i have posted numerous times on why i though they should have unloaded Blackberry. When i read the Q1 release that was one of the big things i was looking for. But they still own it. Prem’s communication regarding Blackberry has been poor (i have read it all). So shareholders really are left to speculate. Not ideal. But i have reconciled myself to the fact they still own the company. And that they will monetize Blackberry at some future date. Hopefully we get some good news on Blackberry with the patent sale. In the meantime, what they do with Blackberry is not central to my thesis of why i think the company is cheap. So i do not let it become a distraction when i value Fairfax as a company. 
 

We are 11 months into the cyclical/value bull market (that group did not get going until Nov of 2020). With a large swath of companies peaking out in valuation in March/April. PERHAPS the bull market in these stocks has another leg higher. Maybe we actually get a multiyear run in cyclical/value? Fairfax’s equity holdings have performed pretty well the past 9 months… perhaps there is more upside to come  
 

Fairfax is getting roasted for bad buy decisions and now for not selling. 
 

The fact they have added $6 billion in value for shareholders in the last 9 months? Over $200/share? Doesn’t matter? Because they still own BB and RFP? 

Edited October 8, 2021 by Viking

[Viking]

2 hours ago, Spekulatius said:

The mistake wasn’t to make John Chen CEO, the mistake was to get involved with BB in the first place, since it was a tech company that was dying and it is common knowledge that tech turnaround are hard. Furthermore, FFH really doesn’t have domain expertise.

 

FFH has a tendency to chew off more than they can handle. I am not sure they learned much in this regard. Just recently, they invested 100CAD in a mining venture. Do they really have expertise here? Maybe they do, I have no idea. Other than stopping shorting, ( which is significant)  I am not convinced they have learned really anything.

 

What they really should do is that management defines  a circle of competence in a way that makes sense and can be easily communicated. This should come with a promise that future investment lie within this circle of competence and that current investment outside will be liquidated in time.

 

Somewhere upstream it was mentioned that FFH IR isn’t good. While this is correct, the underlying reason is that there isn‘t really a great strategy to being with.

 

If there is any, it would be 

1) We are an insurance holding

2) we buy pretty much anything as long as it looks cheap to us.

 

The problem with above is that it is not a great story, especially with thr mixed track record the last ten years. It seems about half the time, they don’t really know what they are buying and then it often doesn’t turn out to be cheap either.

 

They have got to make some changes at the top and with their strategy and this is not just an IR problem.

‘FFH has a tendency to chew off more than they can handle. I am not sure they learned much in this regard. Just recently, they invested 100CAD in a mining venture. Do they really have expertise here? Maybe they do, I have no idea. Other than stopping shorting, ( which is significant)  I am not convinced they have learned really anything.’

For sure this is a watch out. But because they sunk $100 million into a mining venture you are convinced they have not learned anything? 
 

But if you want to look at recent decisions would it not make more sense to start with Atlas? Recent purchase. And massive in size. This is now close to a $2 billion decision. Or what about Stelco? A $400 million decision? Or Carillion/Dexterra? Now a $200 million decision.  Or the APR fix (sell to Atlas for $200 million). There are many more decisions made the past couple of years that should be good for shareholders in the coming years. Are they not putting together a pretty good string of mostly good to great decisions over a few years now?
 

My read is if you look at Fairfax and break the company history into 4 year blocks. And list and analyze the top 15 management decisions each year. And compared the 4 year periods it would be VERY obvious that the 60 top decisions made the past 4 years are showing a clear break with the past. And they are working out much better for shareholders. Lots of shitty companies were purchased in the year 5-8 block. Most have been fixed over the past 4 years. And most of the new companies purchased the past 4 years are not shitty - like Atlas and Stelco - so they do not need to be fixed. Now Fairfax is not going to hit on every purchase. So i fully expect that some current holdings are going to underperform (hello Farmers Edge - but it was purchased in the year 5-8 block). 
 

But hey, i might be totally off base. So if we learn that Atlas is a big ponzi scheme. Or that the Stelco CEO is an idiot (like he decides to buy another steel company at peak valuations). Or that Eurobank is cooking the books (it is a black box bank after all). Or that the Indian investments are a sham (it is India after all…). Or that the insurance companies start reporting CR at 100 or more (it is Fairfax after all). Well if these sorts of things happen i will have to update my assessment of management at Fairfax.  

Edited October 8, 2021 by Viking

[glider3834]

Thomas Cook India & SOTC survey reveals Significant travel intent for last quarter 2021

https://www.equitybulls.com/admin/news2006/news_det.asp?id=299178

Also looks like shares up around 23% since 30 Jun-21 based on mid-day trade - not a huge position but a circa $45 mil or so bump

 

Even though we are in a bull run caution is setting in. Is it time to skew the portfolio towards deep value stocks? Are you sensing this change in mood?
Right now, we are seeing a return to normalcy in India. The economy is beginning to revive, unlocking is happening and therefore whether it is the hotel companies like Chalet, Indian Hotels or Thomas Cook, all these are certainly seeing a lot of bookings. When they report the next quarter, you would see really strong numbers. ..
 

Read more at:
https://economictimes.indiatimes.com/markets/expert-view/has-the-market-mood-shifted-in-favour-of-deep-value-stocks-chakri-lokapriya-answers/articleshow/86840374.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

 

 

 

 

[nwoodman]

2 hours ago, Spekulatius said:

FH has a tendency to chew off more than they can handle.

+1 totally agree.   A couple of quick points building on @Viking's and @glider3834comments above

 

1. While ATCO appears to be fully converted,  the way it was structured made it much lower risk by moving up the capital structure eg warrants, senior note, prefs etc.  Paid to wait - more Buffett.  

 

2. They are going to have winners and losers. Currently the market is awarding them the title of "biggest loser" that's fine as it presents quite an opportunity.  As their primary business is insurance I would be far more worried if the insurance companies were still writing at 100+ CRs. 

 

3. As a basket their investments offer more winners than losers.  At these prices they don't need to earn the title of  the "biggest winner" to make an investor decent money.

 

4. Going one step further perhaps their investment framework is more suited to countries like India and its point in the economic cycle rather than overpriced DMs.  So for me, FFH serves a dual purpose, deep discount on an OK insurance company and EM exposure.  Deal flow counts for a lot when you are trying to allocate decent amounts of capital.

 

 

[glider3834]

1 hour ago, glider3834 said:

Thomas Cook India & SOTC survey reveals Significant travel intent for last quarter 2021

https://www.equitybulls.com/admin/news2006/news_det.asp?id=299178

Also looks like shares up around 23% since 30 Jun-21 based on mid-day trade - not a huge position but a circa $45 mil or so bump

 

Even though we are in a bull run caution is setting in. Is it time to skew the portfolio towards deep value stocks? Are you sensing this change in mood?
Right now, we are seeing a return to normalcy in India. The economy is beginning to revive, unlocking is happening and therefore whether it is the hotel companies like Chalet, Indian Hotels or Thomas Cook, all these are certainly seeing a lot of bookings. When they report the next quarter, you would see really strong numbers. ..
 

Read more at:
https://economictimes.indiatimes.com/markets/expert-view/has-the-market-mood-shifted-in-favour-of-deep-value-stocks-chakri-lokapriya-answers/articleshow/86840374.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

 

 

 

 

this might be reason for jump today

https://timesofindia.indiatimes.com/india/india-to-issue-tourist-visas-from-october-15/articleshow/86854319.cms

 

 

 

 

Edited October 8, 2021 by glider3834

[Gregmal]

5 hours ago, Gregmal said:

do you not believe something needs to change for FFH to get appreciated by the market? IE a corporate action or repositioning? Or do you believe that nothing needs to change and that they’re right and everyone else in the market is wrong?

 

Further off that;

would the following help?

 

-NYSE listing

-A real buyback

-Monetizing big pieces of the equity portfolio 

 

if so, why aren’t they doing this?

Viking do you have an answer for this?

[Gregmal]

I guess at the end fo the day people get the returns that they deserve. Facetiously, but also summarizing all the shit Ive heard about FFH recently...

 

On NYSE or a real listing(after all, as Viking mentioned, they are a huge insurance company; start acting like it!)..

they dont need one, its a waste of money

 

On increased disclosure:

Its fine, I hope they disclose less going forward

 

On buybacks:

They cant because theyre an insurance company, besides they have total return swaps

 

On shitty performance and long term track record:

Its fine, the more it goes down the more I like and the more I buy

 

On the horrendous investments:

Theyre fine now, just look at what they've done lately!

 

On Prem's lack of interest in maximizing shareholder value:

How dare you question his motives/integrity

 

On selling losers:

Hopefully he will but he's waiting for the right time. 

 

On trading at a discount to book/NAV:

Its ok eventually the market will get it! Its impossible not to revert to a premium at some point

 

On being a dog post covid:

It did 30% TTM!

 

On terrible track record:

Its fine, I sold it before it went down, bought it back, sold it at a profit, bought it back again

 

On shorting:

He said he's done so we must take his word. If you ignore the shorting he's done OK

 

On repeatedly picking lousy businesses:

He's not a stock picker, he is a businessman!

 

 

I mean you cant even make this shit up. At least if one wants a cult stock buy BAM or TSLA or something that rewards its shareholders. I mean seriously, just buy Berkshire for God sakes and stop wasting time on this junk.

 

 

 

[Daphne]

Based on your clearly articulated analysis and recommended approach to poor investments, maybe it’s time to take your own advice Greg……and dump this dog right now!

[MMM20]

Hi all. I'm new to the forum and to deep diving on FFH. I've followed it on and off for 10+ years but took a hard look after the whole BB situation and Sequoia's investment in Digit.

 

By my math, FFH's underlying stock/business holdings are now +$4B vs. 12/31/2020. And giving them credit for the capitalized value of growth in insurance float, maybe the uplift is +$5B to the equity at this point. (Obviously much of this has not flowed through to the reports - I'll just note that pro forma BVPS growth over the trailing 3/5-ish years is actually quite good adjusting for the yet-unreported performance, for what it's worth to the algos among us.)

 

 

The Indian investments including Digit represent well over half of the current market value now. Even if 0.8-0.9x P/B is fair, that's a +50% from today on the marked-to-market book value. And do we have a potential Naspers/Tencent redux on our hands with Digit? I'm not sure how to handicap that, but it seems like a real possibility. From a starting point of an all-time low (post-9/11) valuation, the risk/reward seems skewed to the upside with that sort of optionality built in.

How do we think about the true share count? Would it be fair to include the TRS effectively as a buyback in our modeling? This would give us a current share count of ~24.4M, right? That gives me the following range of outcomes (bear with me on the last line):

 

 

It must have been tough to be a FFH shareholder post-GFC. I understand why plenty of shareholders are not happy. Here's hoping that the ability to bring fresh eyes to this situation is an asset.

 

Appreciate the helpful discussion. Thanks all.

 

Edited October 8, 2021 by MMM20
typo

[Xerxes]

55 minutes ago, MMM20 said:

The Indian investments including Digit represent well over half of the current market value now. Even if 0.8-0.9x P/B is fair, that's a +50% from today on the marked-to-market book value. And do we have a potential Naspers/Tencent redux on our hands with Digit? I'm not sure how to handicap that, but it seems like a real possibility. From a starting point of an all-time low (post-9/11) valuation, the risk/reward seems skewed to the upside with that sort of optionality built in.

 

Welcome MMM20

The highlight of your post

 

Joey Levin from IAC on different conference calls had described IAC as a portfolio of call options. Perhaps there is a bit of that here as well.

 

 

Edited October 8, 2021 by Xerxes

[Viking]

17 hours ago, Gregmal said:

I just headed out fishing for the night so the response is simple, but here goes….

 

do you not believe something needs to change for FFH to get appreciated by the market? IE a corporate action or repositioning? Or do you believe that nothing needs to change and that they’re right and everyone else in the market is wrong?

 

Further off that;

would the following help?

 

-NYSE listing

-A real buyback

-Monetizing big pieces of the equity portfolio 

 

if so, why aren’t they doing this?

Ok Greg, let’s see what we can learn about Fairfax today  

 

1.) Greg: ‘do you not believe something needs to change for FFH to get appreciated by the market?’

- Yes. And i want to see action from Fairfax (talk is cheap). So what has Fairfax been DOING that demonstrates that ‘change’ thing we all want to see is actually happening? Read on…

 

The most important change we need to see is the business results need to get better. The stock is in the toilet because the business results over the past 7-8 years has been terrible.
 

As i posted before growing $6 billion in shareholder value (+$200/share) over the past 9 months is a good start. Of course this needs to continue now for a couple of years. Not at that pace of course. But it would be nice to see them get close to that 15% growth in BV aspirational goal over the next couple of years.

2.) Greg: ‘corporate action?’

Yes. And this has happened and is happening. They have communicated two major strategic changes that address the two biggest factors dragging down shareholder returns in the past. The next generation of equity managers have been given significantly more $ to manage. Former President Paul Rivette is no longer with the company.

a.) investing: no more shorting. Prem confirmed this has been incorporated into their investing policy book. This cost them perhaps as much as $4 billion in losses over 6 or 7 years.
b.) no more new/large insurance acquisitions. In the past large acquisitions were funded largely by issuing new shares. My guess is poor performance from newly acquired insurance businesses has cost Fairfax north of $1 billion in the first couple of years after acquisition. 
c.) Fairfax has also announced that their younger investment managers (Wade Burton, Lawrence Chin) will also manage $3 billion of the equity portfolio (up from $1.5); a reward for their strong performance. 

d.) Paul Rivette leaving also might be significant (in terms of the types of investments Fairfax buys moving forward). It was Paul’s idea to start Fairfax Africa (he wanted to duplicate the success the Fairfax India team was having). And his job to manage it. I think his fingerprints were all over the many lives of RFP. Torstar is another. I wonder if his leaving was not tied to disagreements about strategy and future direction. He certainly did not leave Fairfax to retire and spend time with his family. This is just speculation on my part. 

i think Fairfax has also made other important changes over the past couple of years that i would classify as ‘corporate actions’. Fairfax has come to understand that they are not a turn around shop. The current equity holdings need to be profitable and fund their own growth. An enormous amount of work has been put into fixing past mistakes and they are now at a point where most of their equity holdings are good to very good holdings run by strong management teams. Are there laggards? Yes. But the number of fixes they have made the past 3 years is impressive. And if i am right, as we get to the other side of the pandemic, and businesses normalize we should see the benefits start to manifest in the financials via higher profitability. 
 

And the past couple of years Fairfax has largely stopped putting big money into deep value shitty company. And has pivoted to partnering with strong management teams. Atlas/Sokol. Stelco/Kestenbaum. Helios. Kennedy Wilson/mortgages. All very good moves.

 

So when i add all the above up it looks to me like Fairfax is pivoting nicely. 
 

3.) Greg: ‘would the following help’

 

a.) ‘NYSE listing’: i like this idea. Who don’t they? No idea. Good question for management on the quarterly call. 

 

b.) ‘A real buyback’: yes, i would love to see a large buyback!

 

Prem has actually been pretty consistent in his answer to this question. How does Fairfax prioritize use of free cash flow:

i.) take advantage of hard market: support growth of insurance subs

ii.) reduce debt

iii.) buy back stock

 

The good news is with earnings and the jump in value of equity holdings the insurance subs likely need little money from the parent. And with the recent closing of the sale of Riverstone and 15% of Brit Fairfax had the cash to pay off their credit facility and get debt levels to a more acceptable level. So with i.) and ii.) done i expect buy back stock to become the focus at Fairfax.

 

Now Q3 is the catastrophe quarter so it makes sense for Fairfax to be prudent. My guess is we will see the pace of buybacks pick up after they release Q3 results. And the pace of buybacks will depend on… (see next point)

 

c.) ‘Monetizing big pieces of the equity portfolio’. And, yes, i would love to see this as well. 
 

Now you do realize they just sold that shitty runoff business they owned for a cool $1.26 billion ($700 million last month and $560 last year). Analysts hate runoff business. Good insurers don’t have them. So Fairfax simplified their business. Sold an asset. And realized a price that no one would have imagined. A+ grade for Fairfax management in this deal.

 

Now what have they done with their equity holdings? They did sell APR to Atlas (for more Atlas shares at $11). Good sale? Hell yes! Get rid of a problem. Get more Atlas shares for cheap. A grade for Fairfax management. 
 

Have they made any big equity sales? No. Why not? No idea. Perhaps because they see more upside in the holdings? We are still in the middle of this pandemic. We are still early days in the recovery. It appears it is going to take another year or two to get to a more normalized economy. In the meantime we could see cyclical/value stock continue to chug higher (and perhaps much higher) with lots of volatility.
 

My guess is we WILL see some large asset sales in the next 12 months. Especially if we get another leg up in the reopening trade like we had last Nov to March. But regardless, the equity holdings that Fairfax owns will be worth more money (collectively) in another 12 months as the economy expands and they execute on their business plans. And this is a good thing for shareholders. 
 

Now i think you want equity sales so they can take out a bunch of stock on the cheap. Yes? 
 

You do remember they did purchase TRS on 1.95 million FFH shares? So not technically a buyback but… Even you have to admit this was a pretty opportunistic/savvy thing for Fairfax management to do at the time (in the teeth of a pandemic).

Edited October 8, 2021 by Viking

[Viking]

11 hours ago, Gregmal said:

I guess at the end fo the day people get the returns that they deserve. Facetiously, but also summarizing all the shit Ive heard about FFH recently...

 

On NYSE or a real listing(after all, as Viking mentioned, they are a huge insurance company; start acting like it!)..

they dont need one, its a waste of money

 

On increased disclosure:

Its fine, I hope they disclose less going forward

 

On buybacks:

They cant because theyre an insurance company, besides they have total return swaps

 

On shitty performance and long term track record:

Its fine, the more it goes down the more I like and the more I buy

 

On the horrendous investments:

Theyre fine now, just look at what they've done lately!

 

On Prem's lack of interest in maximizing shareholder value:

How dare you question his motives/integrity

 

On selling losers:

Hopefully he will but he's waiting for the right time. 

 

On trading at a discount to book/NAV:

Its ok eventually the market will get it! Its impossible not to revert to a premium at some point

 

On being a dog post covid:

It did 30% TTM!

 

On terrible track record:

Its fine, I sold it before it went down, bought it back, sold it at a profit, bought it back again

 

On shorting:

He said he's done so we must take his word. If you ignore the shorting he's done OK

 

On repeatedly picking lousy businesses:

He's not a stock picker, he is a businessman!

 

 

I mean you cant even make this shit up. At least if one wants a cult stock buy BAM or TSLA or something that rewards its shareholders. I mean seriously, just buy Berkshire for God sakes and stop wasting time on this junk.

 

 

 

Greg, is there a reason you do not debate what people actually say? When they say it? You ask questions. People give you thoughtful detailed answers. Often with facts. You chose not to debate the facts. 
 

Instead you paraphrase what ‘they’ say. And that of course makes it impossible to identify who you are talking about. Or what they actually said. And so of course it is impossible to actually intelligently engage in debate. 
 

i read you post above and i have no idea what you are talking about. 

[Spekulatius]

I am pretty sure FFH  doesn't list in US exchanges due to the onerous SEC requirements.

[TwoCitiesCapital]

Just now, Spekulatius said:

I am pretty sure FFH  doesn't list in US exchanges due to the onerous SEC requirements.

 

I thought it had to do more with the short attack from years back, but that was also before I followed the company so might be wrong. 

[Gregmal]

29 minutes ago, Viking said:

Greg, is there a reason you do not debate what people actually say? When they say it? You ask questions. People give you thoughtful detailed answers. Often with facts. You chose not to debate the facts. 

We're just talking about different things. You guys(most of you, some see it) continue to miss the obvious reasons for why this is a dumpster fire and ignore what needs to change(or pretend its already changed).

 

I mentioned it above. Its too onerous for Prem to list on the NYSE....why LOL? Too much disclosure? How is that bad? Too costly? What did his embarrassing BB fake buyout bid cost in just legal fees? Not too mention all the other waste? But now we're worried about a few mil in costs...when $300M Griffin Industrial can list on the NYSE but mega insurer FFH cant? Please. 

 

So yea, maybe we talk past each other but I mean when we talk about how the holdings dont really matter because until you show you're serious about ringing the register you're only going to get 50/60 cents on the dollar, and then you throw out a spread sheet breakdown of how much the holdings are worth and tell me the markets wrong....

 

Or how we mention the performance and how this has been terrible and your response is that it doesnt matter because you trade it....

 

I mean we're addressing different point and at some point it would be helpful to have an "I'm right" or "I'm wrong" moment for everyone...however if the bar is trading 20% market fluctuations up or down or say the market rallies 30% and this does 35% and folks wanna say they were right....I mean, as I alluded to above...it doesnt matter cuz you guys have all the answers. 

 

I think myself and a few others have highlighted what most likely needs too happen in order for this to rapidly rerate(irrespective of the broader market) and we're nowhere near that. You guys are saying different and pointing to things the market already knows. Maybe we'll see, or maybe we won't. 

[Daphne]

You’re right TwoCities, they pulled out of NY SE because SEC wasn’t onerous enough

[ourkid8]

19 minutes ago, Spekulatius said:

I am pretty sure FFH  doesn't list in US exchanges due to the onerous SEC requirements.

 

https://www.fairfax.ca/news/press-releases/press-release-details/2009/Fairfax-Voluntarily-Delisting-From-NYSE/default.aspx

 

“After our recent privatization of Odyssey Re, Fairfax now wholly owns all of its primary businesses and is the largest property and casualty insurance company based in Canada, with worldwide operations in over 50 countries,” said Prem Watsa, Chairman and CEO. “While our decentralized operations have global reach, after reviewing the factors relevant to our continued listing on the NYSE, we determined that our company and its shareholders will be better served by the simplified focus and lower cost resulting from the maintenance of only our original TSX listing. In recent years, as markets have become significantly more global and liquid, our constituents, including shareholders and employees, no longer require multiple listings. The voluntary delisting will have no impact on our ongoing strategic and operating philosophy nor on our very substantial presence in the United States and our presence in the other global markets in which we operate.”

[Gregmal]

LOL so yea, now Prem finds pinching pennies convenient. In other words, its a crock of shit. How much money has been directly or indirectly IE Torstar thrown away to related parties? Multiples upon multiples of what it costs to be public on the NYSE. If FFH listed I'd almost guarantee a 5-10% valuation improvement, at least. 

[Gregmal]

52 minutes ago, Viking said:

Greg, is there a reason you do not debate what people actually say? When they say it? You ask questions. People give you thoughtful detailed answers. Often with facts. You chose not to debate the facts. 
 

Instead you paraphrase what ‘they’ say. And that of course makes it impossible to identify who you are talking about. Or what they actually said. And so of course it is impossible to actually intelligently engage in debate. 
 

i read you post above and i have no idea what you are talking about. 

To be specific, you keep mentioning how you bought into FFH mid last year. But thats not really an honest statement. You've been touting FFH for years and listed it as a top pick going into 2020. Yes, you panicked and sold all your stocks during covid, and then bought it back, but I mean come on. Acting like its a new position and the thesis has played out and the IRR has been great isnt really reality. 

[ourkid8]

5 minutes ago, Gregmal said:

LOL so yea, now Prem finds pinching pennies convenient. In other words, its a crock of shit. How much money has been directly or indirectly IE Torstar thrown away to related parties? Multiples upon multiples of what it costs to be public on the NYSE. If FFH listed I'd almost guarantee a 5-10% valuation improvement, at least. 

 

I am pro management looking to save costs by avoiding a NYSE listing.  If it stays depressed by 5-10%, that is a BONUS and allows management to repurchase stock at a better price which is better for long term shareholders.  

Edited October 8, 2021 by ourkid8

[Gregmal]

3 minutes ago, ourkid8 said:

 

I am pro management looking to save costs by avoiding a NYSE listing.  If it stays depressed by 5-10%, that is a BONUS and allows management to repurchase stock at a better price which is better for long term shareholders.  

But then they need to actually repurchase stock. There's still excuses for that. Again, going back to the post above, below is Viking in 2019 talking about buybacks. Are they really just a constantly hanging carrot? You have things you can monetize, and frankly when you trade at 60c on the dollar everything should be fair game in terms of monetizing. And yet.... the story is always the same here.