Prem Buying - WoW!

[Viking]

I have once again started buying some FFH. I like the insurance businesses and we are definitely in an insurance hard market. That side of the business should do very well the next few years.

 

What is stopping me from backing up the truck? The investing side of the business. Based on the terrible results from the past 10 years. Having said that it does look to me like the worm is slowly turning. Atlas looks like the real deal and it is a massive position within Fairfax. Digit in India looks like another star and the runway is long; this investment alone could be another $1 billion home run for Fairfax over the next decade. I like Fairfax India and am ok with the volatility. Quess looks like a solid long term hold. I like some of the smaller equity positions.

 

Most importantly, the terrible performing holdings continue to shrink in size (Blackberry, Recipe, Resolute etc). They look more than discounted with Fairfax trading at less than 0.7 x BV.

 

It also looks to me like Fairfax has slowly been dealing with its Investing issues. The process started when all the short positions were removed after the Trump election win. Problem children are slowly being dealt with: Fairfax Africa, APR Energy being the most recent 2 examples.

 

I think Prem also mentioned on the most recent conference call that they are looking to continue to monetize some of their assets. (Blackberry would be ideal, especially in this environment.) Fairfax has been VERY creative over the years in this regard. First Capital and European Runoff are two large examples but there are also many smaller examples. I expect more to come in this regard.

 

So solid insurance franchise combined with improving investment results should get the stock back close to BV. Perhaps it will take a year or two. From current prices ($290US) investors might actually see a couple of 10-15% returns the next couple of years :-)

[Xerxes]

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

 

Parsad,

While this may seem like a great trade in the next 2-3 years. I think the narrowing the discount will only come on the back of a rising book value, so you would get a double-lift in absolute and relative terms. But then what ...

 

Do you see it as having a real "growth" engine once the discount narrows ... past these relatively speaking low hanging fruits.

 

Maybe we should make it a thread. Where do folks see FFH ten years from now !!!!

- size of the float

- outstanding shares (hopefully 40% bought back)

- the size and growth of FIH

- the size and growth of Atlas

- book value

- share price

- hopefully Resolute and Stelco long gone. I like BB converts.

 

Can Prem pull a Microsoft out of his hat

[investmd]

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

 

Xerxes, would love to see this thread of where FFH is in 2030 and have it updated yearly :)

 

Parsad,

While this may seem like a great trade in the next 2-3 years. I think the narrowing the discount will only come on the back of a rising book value, so you would get a double-lift in absolute and relative terms. But then what ...

 

Do you see it as having a real "growth" engine once the discount narrows ... past these relatively speaking low hanging fruits.

 

Maybe we should make it a thread. Where do folks see FFH ten years from now !!!!

- size of the float

- outstanding shares (hopefully 40% bought back)

- the size and growth of FIH

- the size and growth of Atlas

- book value

- share price

- hopefully Resolute and Stelco long gone. I like BB converts.

 

Can Prem pull a Microsoft out of his hat

[ValueMaven]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

 

 

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

 

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

 

...and one to ask: ''is 15% a realistic expectation?''.

 

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

 

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;)

 

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

 

What is the thesis on ATCO?

[Thrifty3000]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

 

 

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

 

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

 

...and one to ask: ''is 15% a realistic expectation?''.

 

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

 

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;)

 

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

 

What is the thesis on ATCO?

 

David Sokol

[Parsad]

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV?  price to normalized earnings?

 

 

It looks like he bought at an average cost of $308 USD roughly or about $420-425 CDN per share.  It says he bought in the last few days before the press release...I would imagine it was around the 9th, 10th, 11th and 12th, where the stock was around $425 CDN or less and volumes rose.  If he is buying there, then I would imagine he is expecting a return of better than 15% annualized or more over the next few years.  Cheers!

 

The question then becomes is Prem expecting a 15% return a good predictor of future 15% returns.

 

...and one to ask: ''is 15% a realistic expectation?''.

 

I am approaching a decade of holding FFH and I am seriously wondering if this is a realistic target as recent shareholders (10 years or less) are yet to benefit from such appreciation. It sure attracts new ( and naive) investors. I am tired of hearing the 30 years track record and while I focus on the last 10 years, I can only come to the realization that shareholders fell short of expectations.

 

yeah , yeah ... I am still around and will for quite some time, but I needed to vent and share ;)

 

Even during the depths of the hedge fund crisis, when Fairfax stock fell to $53 USD, I don't remember Prem buying shares in such a significant amount.  Frankly, I'm shocked that he put $150M of outside capital into Fairfax...that would be a decades worth of dividends for him.  And if he didn't borrow the money, I would imagine that's probably half his net worth outside of what is held in Sixty-Two Corporation. 

 

Then again, I've got half my net worth outside of Corner Market Capital in Fairfax and Atlas Corp right now, so maybe I shouldn't be surprised...and I'm very comfortable with both and think both have 50-100% upside over the next 2-3 years!  Cheers!

 

What is the thesis on ATCO?

 

David Sokol

 

I think that was the original thesis, but Bing Chen is an extraordinary manager himself too.  Very impressed by what he's been able to do, how he leads and his investment/finance acumen.  Sokol picked a winning CEO!  Cheers!

[Xerxes]

Here is a video that i watched over the Holidays from Chen. The video was filmed right before Atlas holding was formed.

For those interested to see how he is like, this should serve.

 

 

WARNING: this was filmed pre-Covid, therefore, it might cause you anxiety to see two people so close together. It caused me discomfort.