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Posted

The Dow is down over 600 points today.

Blackberry is up nearly 40% today.

Blackberry has quadrupled since the first of the month.

 

Have I lost my mind or is this just a dream?

 

Will we soon be criticizing Prem if he sold BB a week ago for selling too soon?

 

Anyone else getting nervous?

 

Yes! Not sure what I’m nervous of though!

 

I feel exactly the same way.

 

Surely to heavens Prem is selling portions daily as this rally goes on.

 

I would feel much better about Prem having $2B in cash to take advantage of whatever opportunities might exist when this blows up versus hoping for another turn in Blackberry. I'm nervous that he DOESN'T sell - not that he sells too soon :/

 

I don't care if BB goes to $400 - I'm not going to be mad that he sold at $25.

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Posted

The Dow is down over 600 points today.

Blackberry is up nearly 40% today.

Blackberry has quadrupled since the first of the month.

 

Have I lost my mind or is this just a dream?

 

Will we soon be criticizing Prem if he sold BB a week ago for selling too soon?

 

Anyone else getting nervous?

 

Yes! Not sure what I’m nervous of though!

 

I feel exactly the same way.

 

Surely to heavens Prem is selling portions daily as this rally goes on.

 

At 18, I wasn't so sure.

 

At 25, yeah, I'd be offloading a good chunk.

Posted

Barring a restraint, I think there is virtually no chance FFH has not sold out much of its common stock over the last three days.  Just a gut feel from following this company for a long time.  They don't wait for the last dollar when something is "growing to the sky", as Prem likes to say.

 

But why no press release announcing the conversion of the note.  :-\

 

 

This is a bit of a crazy situation.  I wouldn't object if FFH dumped its 47m BB common shares and then held the debentures.  That strategy would be akin to trimming on the way up.  If they dump the 47m shares for US$1 billion and the share price subsequently falls back below the debenture conversion, at worst they'd get the $1 billion plus $330 million for the debs.  That would be roughly breaking even.

 

The worst would be riding the share price all the way to the top and then all the way back down without crystallizing any gains at all.

 

 

SJ

Posted

They had to have started selling today if they hadn't already.

 

The company may have been surprised on Monday to see BB's stock trading so high.  By today, they'd have to have discussed it and made a plan.  That plan must have included selling at some of the prices reached today.

 

That's how I see it at least.

Posted

The Dow is down over 600 points today.

Blackberry is up nearly 40% today.

Blackberry has quadrupled since the first of the month.

 

Have I lost my mind or is this just a dream?

 

Will we soon be criticizing Prem if he sold BB a week ago for selling too soon?

 

Anyone else getting nervous?

 

Yes! Not sure what I’m nervous of though!

 

I feel exactly the same way.

 

Surely to heavens Prem is selling portions daily as this rally goes on.

 

I would feel much better about Prem having $2B in cash to take advantage of whatever opportunities might exist when this blows up versus hoping for another turn in Blackberry. I'm nervous that he DOESN'T sell - not that he sells too soon :/

 

I don't care if BB goes to $400 - I'm not going to be mad that he sold at $25.

 

If Fairfax does not sell any BB while it is trading at these levels (US $25 today) and the shares return to $6-$7 i think you will see sentiment in Fairfax hit a new all time low. Especially when Prem tries to explain the logic of not selling...

Posted

Converting the note now would serve no purpose unless they're selling everything.

 

-- Right.  I am hoping they convert the note and sell everything!  Take the 1B of profit on the note and run before reality reasserts itself. 

Posted

No way to know how markets react tomorrow, but BB is down 25% after hours following WSB going invite-only.

 

GME down 23%

AMC down 37%

BBBY down 25%

 

Seems it's fairly widespread.

 

It’s back on. Odd flip flopping.

Posted

The Dow is down over 600 points today.

Blackberry is up nearly 40% today.

Blackberry has quadrupled since the first of the month.

 

Have I lost my mind or is this just a dream?

 

Will we soon be criticizing Prem if he sold BB a week ago for selling too soon?

 

Anyone else getting nervous?

 

Yes! Not sure what I’m nervous of though!

 

I feel exactly the same way.

 

Surely to heavens Prem is selling portions daily as this rally goes on.

 

I would feel much better about Prem having $2B in cash to take advantage of whatever opportunities might exist when this blows up versus hoping for another turn in Blackberry. I'm nervous that he DOESN'T sell - not that he sells too soon :/

 

I don't care if BB goes to $400 - I'm not going to be mad that he sold at $25.

 

If Fairfax does not sell any BB while it is trading at these levels (US $25 today) and the shares return to $6-$7 i think you will see sentiment in Fairfax hit a new all time low. Especially when Prem tries to explain the logic of not selling...

 

Is the required liquidity even available?

Not like they can sell without affecting the price.

Posted

Don't they have >100M shares? What are they allowed to sell at most? 5% of volume? Nowhere near instantanious.

 

 

No, they have 47m shares and a bunch of convertible debentures that they could convert into another 55m shares.  There's no excuse for not having sold the 47m shares when the volume has been so high this week.

 

 

 

SJ

Posted

Don't they have >100M shares? What are they allowed to sell at most? 5% of volume? Nowhere near instantanious.

 

There have been multiple days where trading volumes would've allowed them to sell. Selling is also just 1 way of reducing the long position. Could've sold calls. Could've bought puts. Could've entered a 6-month TRS contract. Any of these would've have reduced long exposure and not been constrained by the average volume of daily shares even though those volumes were sufficient.

Posted

So if we dont hear any news in the next few days than Prem did not sell shares, correct? Would we then expect to hear during the next quarterly call about any actions Fairfax did/did not take?

Posted

Assuming they have a reporting obligation, they have five days to report.  That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday.  We'll know by EOD Friday (or Saturday I suppose) whether they sold.

Posted

Assuming they have a reporting obligation, they have five days to report.  That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday.  We'll know by EOD Friday (or Saturday I suppose) whether they sold.

 

Where are you coming up with 5 days? I have never seen a 13D amendment issued later than one day after a change of 100 basis points or more change in position size. The SEC rule is that you must file promptly. Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply.

 

Per SEDI Wade Burton sold some shares today and Roger Lace sold some last week. It is going to be a very hard conversation if two senior members of Hamblin Watsa sold shares but Prem wouldn't let FFH sell any.

 

Holding out hope FFH used a total return swap to reduce their notional exposure and somehow convinced themselves via their attorney that they don't need to file an amendment as the TRS is cash settled and not a security. But I'm thinking that is a long shot at this point.

Posted

Assuming they have a reporting obligation, they have five days to report.  That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday.  We'll know by EOD Friday (or Saturday I suppose) whether they sold.

 

Where are you coming up with 5 days? I have never seen a 13D amendment issued later than one day after a change of 100 basis points or more change in position size. The SEC rule is that you must file promptly. Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply.

 

Per SEDI Wade Burton sold some shares today and Roger Lace sold some last week. It is going to be a very hard conversation if two senior members of Hamblin Watsa sold shares but Prem wouldn't let FFH sell any.

 

Holding out hope FFH used a total return swap to reduce their notional exposure and somehow convinced themselves via their attorney that they don't need to file an amendment as the TRS is cash settled and not a security. But I'm thinking that is a long shot at this point.

 

I'm pretty sure they did something.  They are value investors...opportunistic investing...this is not something they would not protect.  I doubt they sold shares, as that wouldn't look good in terms of their long-term expectations for BB.  Put options, total return swap, written calls, BB doing a private placement at a high price...they have choices other than outright selling.  And if Wade sold, you know the team is thinking about the best way to protect the gain and BB as well.  And this is Fairfax, they can execute on these things very quickly...it doesn't take weeks.  Cheers!

Posted

Assuming they have a reporting obligation, they have five days to report.  That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday.  We'll know by EOD Friday (or Saturday I suppose) whether they sold.

 

Where are you coming up with 5 days? I have never seen a 13D amendment issued later than one day after a change of 100 basis points or more change in position size. The SEC rule is that you must file promptly. Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply.

 

Per SEDI Wade Burton sold some shares today and Roger Lace sold some last week. It is going to be a very hard conversation if two senior members of Hamblin Watsa sold shares but Prem wouldn't let FFH sell any.

 

Holding out hope FFH used a total return swap to reduce their notional exposure and somehow convinced themselves via their attorney that they don't need to file an amendment as the TRS is cash settled and not a security. But I'm thinking that is a long shot at this point.

 

I'm pretty sure they did something.  They are value investors...opportunistic investing...this is not something they would not protect.  I doubt they sold shares, as that wouldn't look good in terms of their long-term expectations for BB.  Put options, total return swap, written calls, BB doing a private placement at a high price...they have choices other than outright selling.  And if Wade sold, you know the team is thinking about the best way to protect the gain and BB as well.  And this is Fairfax, they can execute on these things very quickly...it doesn't take weeks.  Cheers!

 

 

For most of those options, we should soon see a filing:  https://www.osc.gov.on.ca/documents/en/Securities-Category5/csa_20100611_55-312_equity-monetization.pdf

 

 

SJ

Posted

WRB reported two days ago... hard market is continuing with no end in sight. During each quarter of 2020 rate increases accelerated. They are confident rate increases are now running in excess of loss cost trends (which should improve margins over time).

 

I think they said later in 2021 workers comp pricing should also find a bottom.

 

The funny thing is WRB shares sold off very aggressively yesterday (5%) and are trading at the same level they were at back in July.

 

Markel under $1,000 looks interesting (same price it was trading at in June of last year). Surprising Markel has not moved more given Markel Ventures; i don’t think Markel’s equity exposure is as large as Fairfax’s but i think it is bigger than most insurers (please correct me if i am wrong).

 

Fairfax stock has done some serious catching (valuation wise) up the past 3 months compared to where it was trading in October versus its peers.

Posted

WRB reported two days ago... hard market is continuing with no end in sight. During each quarter of 2020 rate increases accelerated. They are confident rate increases are now running in excess of loss cost trends (which should improve margins over time).

I think they said later in 2021 workers comp pricing should also find a bottom.

Markel under $1,000 looks interesting (same price it was trading at in June of last year). Surprising Markel has not moved more given Markel Ventures; i don’t think Markel’s equity exposure is as large as Fairfax’s but i think it is bigger than most insurers (please correct me if i am wrong).

Fairfax stock has done some serious catching (valuation wise) up the past 3 months compared to where it was trading in October versus its peers.

There is a lot to learn from WRB.

https://s22.q4cdn.com/912518152/files/doc_presentations/2020/Investor-primer1-YE2019.pdf

Page 18 is an interesting look at the longer cycle (reserves) up to 2019. i'll wait for the 10-Q but it looks like 2020 will have an about 0.2% positive redundancy (for the year).

Page 11 helps to see the underwriting price cycle with the lag that you mention sometimes alluding to the lag between price increases and actual earned premiums reaching the bottom line.

WRBerkley is almost predictable in a way (as much as insurance can be..).

And MKL does have a significantly higher equity exposure in its investment portfolio (vs the typical (re)insurer out there).

---) Back to FFH 2021

 

Posted

Assuming they have a reporting obligation, they have five days to report.  That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday.  We'll know by EOD Friday (or Saturday I suppose) whether they sold.

 

Blackberry is U.S. listed and files a 10-K so can't imagine Canadian rules apply.

 

 

Blackberry is also Canadian listed and files in Canada. So Canadian rules also apply.

 

As with most situations, US law doesn't overrule the domestic law of other countries in those countries.

Posted

I would to understand what investors on this board are thinking in the event that we find out that Fairfax has not done anything to monetize the recent increase in value in Blackberry.

 

I have been very critical of Prem and the overall management of Fairfax for the last several years. My concerns have been expressed on here numerous times. I have been a long term shareholder of Fairfax having bought my initial position in Nov/1999. In the last several years I have gradually reduced my position and then significantly cut it at the outset of the pandemic. I continue to hold a small weight in the shares. Although I understand the excitement around the hard market and rebound in the values of their equity holdings I have resisted adding back the shares I sold because of concerns I still hold about the way that Fairfax is managed overall.

 

I view the recent run-up in the value of Blackberry as literally a gift from the investing Gods. A gift that I believe Prem and his team would be foolish not to capitalize on. So as a result if Fairfax has taken no action to realize the sudden (unwarranted) spike in Blackberry's stock price I have decided that I will sell off my remaining position in Fairfax and never re-enter the shares again as long as Prem is involved as such inaction will have confirmed my greatest concerns about Fairfax once and for all.

 

I would like to have a serious discussion here about what others are thinking on this point. Thanks

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