What are the chances that FFH trades over US$750 some time in the next 5 years?

[MMM20]

7 minutes ago, Xerxes said:

The argument about moving to NYSE to get a “rich valuation” assumes that management is willing to trade its high quality long term shareholders (who might flip if trades at a very rich P/B) with lower quality shareholders (con) and ability to issue stock (pro) at premium one one time shot. (If ever it shoots up). 

 

I am not sure that is a good trade off for FFH management. As they will already get plenty of capital back to the holding company as opportunity to re-invest in premium growth tapers down.  
 

So why trade its shareholder base … for more SEC scrutiny, more exposure to over excited hedge funds all for maybe there is an opportunity to issue stock at 3x book 

 

I think it depends how much they actually care about their stock trading at something remotely close to fair value... so many puts and takes go into that. 

 

But it sounds like NYSE will never happen again after the prior experience. 

 

Edited August 25, 2023 by MMM20

[Xerxes]

2 minutes ago, MMM20 said:

 

I think it depends how much they actually care about their stock trading at something remotely close to fair value... so many puts and takes go into that. 

 

But it sounds like NYSE will never happen again after the prior experience. 

 

If Jack Welch was in charge of FFH at this point in time he would do it. As he was just an employee-CEO looking for a quick buck and fame as oppose to being owner-CEO 

[Haryana]

 

Just wondering if Fairfax manages growing at 10-20% over the next few decades, will TSX be able to tolerate a market cap of hundreds of billions reaching upto a trillion.

While there is acceptance for RBC and TD as being the forever big ones, everyone sees their branches all around and people are happy to get big mortgages from them, Canadians might demand taxing down insurance companies if Fairfax grows as big as their insurance bills and the governments would be happy to tax the excess profts.

 

Raising equity is important for Fairfax, they mentioned that in a recent call. They will have to make bigger investments to grow at high rate while being bigger in own size.

 

[Xerxes]

I think there is no chance of FFH reaching these lofty market capitalization …. in my life time anyways. 
 

Also, as a side note, a company that becomes a serial buyer of its shares will see its market capitalization grow at a slow rate (or even flat out) than its value per share (I.e share price) as the share count drops off. 
 

[Haryana]

1 hour ago, Xerxes said:

I think there is no chance of FFH reaching these lofty market capitalization …

 

20B @15% = 1T in 28 years.