jfan Posted March 24, 2019 Share Posted March 24, 2019 It seems that alot of what hinges on FFH economic fate is quite dependent on their investment returns from their cash, bonds, equities and investment in associates. It also seems their preferred style is concentrated bets in companies with more tangible assets that are market ugly. They approach it with hopes of mean reversion and some degree of activism at the corporate level. This style has left them with some difficult to turnaround equities eg Blackberry and Resolute Forest in a environment that has not been mean reverting. (As an aside, this is an interesting paper from GMO LLC about the market's mean reversion tendency.) https://www.gmo.com/north-america/research-library/is-the-u.s.-stock-market-bubble-bursting/ It also has left them with large short macro positions for too long a period of time. From my understanding, Hamblin Watsa carries out the majority of investment decisions. Prem eludes to a group that works together to help make these decisions. Does anybody have a sense of the process that they use to make these decisions and to learn from them subsequently? It is, for example, a group consensus decision or does everyone has a individual portfolio to run and the group is used for devil's advocacy? Do they routinely use pre-mortems, post-mortems, standardized checklisting, decision journal etc? I guess I'm just trying to dissect whether it is their investment process that has been sub-optimal explaining their recent returns or whether the outcomes were bad due to the inherent uncertainty in the investment outcomes. Thanks Jerome Link to comment Share on other sites More sharing options...
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