Phoenix01 Posted March 4, 2009 Share Posted March 4, 2009 I don't understand why they didn't buy back any ORH in Q4. They bought none, yet it traded down to $32. I think that they reached the 70% ownership mark and therefore are able to consolidate. In this market, it may be better to hold $$ than to buy back shares. It looks like there will be plenty of opportunities to put the cash to work. Link to comment Share on other sites More sharing options...
Partner24 Posted March 4, 2009 Share Posted March 4, 2009 I'm not expecting anything. I'll just look and comment at the numbers when I'll see them. Suffice to say that the opportunities are very large in this environment. What a difference a year or two make!!! Cheers! Link to comment Share on other sites More sharing options...
avluk Posted March 4, 2009 Share Posted March 4, 2009 is FFH allowed to buyback days before they file their 10k? Do they have to wait until next week? Link to comment Share on other sites More sharing options...
Smazz Posted March 4, 2009 Share Posted March 4, 2009 depends on their course issuer bid, what the date is and if it is used up. Link to comment Share on other sites More sharing options...
avluk Posted March 4, 2009 Share Posted March 4, 2009 smazz, i don't quite follow. Could you explain? Link to comment Share on other sites More sharing options...
T-bone1 Posted March 4, 2009 Share Posted March 4, 2009 I thought that they removed the 25% of daily volume limit for buybacks. Was this only for financials during the temorary no-shorting rule? Link to comment Share on other sites More sharing options...
Uccmal Posted March 5, 2009 Author Share Posted March 5, 2009 Hi T-Bone, I looked into this and as far as I can tell the US rule is that: 1) A company cannot buy back stock for the first 100 shares 2) A company can only buy back 25% of the average daily trading volume for the past 4 weeks (This may work in FFHs favour right now) 3) A company cannot buy back stock in the last half hour of trading. I dont know about Canada. A. Link to comment Share on other sites More sharing options...
StubbleJumper Posted March 5, 2009 Share Posted March 5, 2009 This is amazing! FFH is trading below US$220 this morning. If we believe that the $8 dividend is now the norm, the dividend yield is a shade higher than 3.6%. FFH now qualifies as a "dividend stock!!" Who would have imagined!? I had not imagined that we would once again get a chance to buy at such an attractive discount to book value. SJ Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted March 5, 2009 Share Posted March 5, 2009 Based on my calcs, they have lost $850 million on their equities since 12/31. That is $50/ share pre tax. This is kind of ridiculous though. Link to comment Share on other sites More sharing options...
SFValue Posted March 5, 2009 Share Posted March 5, 2009 i did not, otherwise would have sold at BV+ to buy back now (all in less than a month).. ;) it is acting as if a big hurricane is on the way.... Prem makes billions when everybody looses their shirts and the market says: great, but you can not do it again...you deserve to trade like all your others wounded colleagues. the equity port is suffering greatly, munis are doing well, corporates are suffering, CDS are doing well... has to be a fixation with CR (markets reaction)...specially while looking at ORH wichich is less leveraged to the equity market. No respect at all, I agree with Partner that we should comment when we see concrete numbers, but I certainly hope that they are incresing my piece of the pie by retiring some stock since I can not buy more now... Link to comment Share on other sites More sharing options...
Alekbaylee Posted March 5, 2009 Share Posted March 5, 2009 i did not, otherwise would have sold at BV+ to buy back now (all in less than a month).. ;) it is acting as if a big hurricane is on the way.... Prem makes billions when everybody looses their shirts and the market says: great, but you can not do it again...you deserve to trade like all your others wounded colleagues. the equity port is suffering greatly, munis are doing well, corporates are suffering, CDS are doing well... has to be a fixation with CR (markets reaction)...specially while looking at ORH wichich is less leveraged to the equity market. No respect at all, I agree with Partner that we should comment when we see concrete numbers, but I certainly hope that they are incresing my piece of the pie by retiring some stock since I can not buy more now... I'm with you SFValue. Can't buy anymore but hope Prem and Co is buying back hand over fist. Link to comment Share on other sites More sharing options...
Partner24 Posted March 5, 2009 Share Posted March 5, 2009 They can buy 0 share if they want to. No expectation at all from me regarding this. How would you behave with Tiger Woods? I would give him a golf bag, all the clubs that he need, and then let him play and chose the clubs that he want to hit the ball. Then, I would look at the scorecard in the end and comment on it. I'm saying this especially in these turbulent times because there is so much investments options available in this environment and they have proven to be great capital allocators. The more flexibility they have, the better. Link to comment Share on other sites More sharing options...
smw397 Posted March 5, 2009 Share Posted March 5, 2009 I know I'm well off in tinfoil hat territory here, but the more I look into this the more convinced I become that there's much more at work here than just Mr. Market and concerns about CR or declines in the equities portfolio. Hedge funds are hurting and have been since last fall. We're told to anticipate that Madoff and Stanford are just the tip of the iceberg as far as indictments to come for various forms of fraud. Massive equity declines coupled with massive redemptions mean hedgies have an extreme need to generate cash quickly. They're already heavily into shorting, and depending on who you believe, a lot of them likely naked shorting. And finally, there's the FFH lawsuit that threatens to expose just exactly that. But as far as the SEC is concerned, ineffectual temporary short term short selling bans and supposed efforts to step up enforcement against naked shorting aside, there has been not one single effective effort to reign it in that I'm aware of. Even worse, it's becoming clear that Reg SHO, contrary to its supposed intent, has not only not curbed naked shorting but has in fact given abusive naked short sellers yet more cover to mask what they're doing. Nothing's black and white and I can't say I understand all the machinations, but I do know what a rat does when it's cornered. If I put myself in the position of someone who's on the hook for a whole lot of money and I'm looking at going down hard if I don't do something drastic, well now I'm probably going to do something drastic. The path of least resistance for now would appear to be taking advantage of the relationship many hedgies enjoy with market makers and the DTCC to just sell sell sell all the while never bothering to deliver what they're selling. Get enough of these guys working together and they can continually roll over the so called 'security entitlements' that masquerade as shares from one party to another such that for purposes of gaming Reg SHO there is an appearance of delivery having occurred; or at least that failure to deliver has not. Millions of counterfeit shares can be generated without ever making it onto the list. Innocent buyers think they're buying legitimate stock certificates and have no idea that the float is being artificially inflated with each and every buy where these miscreants are party to the sale. Because the current construct of the system is based on collateralization vs. payment rather than delivery vs. payment, and the selling party only needs to maintain 102% collateral on a daily marked-to-market basis, if I keep hitting the bid (no uptick rule!!) and drive the price down each day, my maintenance requirement keeps dropping thus freeing up the cash I generated by selling that which I don't have, didn't borrow, and have no intention of delivering. Best of all, if I'm a very powerful hedgie named in a lawsuit by a certain company and threatened with exposure for these criminal but not easily enforceable infractions, I can at least temporarily solve my cash flow problem while at the same time doing considerable damage to the biggest threat against my existence. If I'm really good and drunk on power and this works for a few weeks at a stretch, I may even become delusional enough to believe I can drive the share price all the way into oblivion so that I never have to cover. Hell, I've done it to enough penny stocks, why not some Canadian whatever it is they do company? Who's going to even notice? You think Fortune or the WSJ are going to write about it? Well sure they are, but I own the writers so that's not really a problem is it? Sorry for the rant. I'm not one of those who is sitting on 50% cash and able to scoop up a bunch of shares at these prices. Thanks to FFH I survived most of the carnage the last six months, but this last few weeks has been devastating. I can see no rational reason for what's happening here in the absence of the kind of illegal gaming I describe above. I had so much hope for a new enforcement framework with the new administration but to see Shapiro replace Cox has shattered that hope. This guy Dr. Jim DeCosta who comments a lot at the Deep Capture blog has filed a paper with the SEC that explains the mechanics of it all much better than I ever could and I highly recommend reading it: http://www.sec.gov/comments/s7-30-08/s73008-78.pdf Link to comment Share on other sites More sharing options...
millsman Posted March 5, 2009 Share Posted March 5, 2009 I hope they bought some put to limit the losses. Its difficult to know exactly what's the results (damage) on the portfolio.But we already had 8 billions on CDS and a lot of cash. The stock seem not near to stop falling, and next quarter look far far away. But i have a bad feeling, on a mark to market view. We are loosing more than 1,1 billion on our equity portfolio in less than 70 days. http://www.secinfo.com/dRX7g.s4u.htm#1stPage http://www.nasdaq.com/asp/holdings.asp?symbol=GE&selected=GE&FormType=Institutional and WFC, GE are falling like rock. Wanted or not, welcome in the hard-steel-ball club. A huge portfolio drop would results in change in rating trend and limit the ability to grow in hard market. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted March 5, 2009 Share Posted March 5, 2009 Well, while the equities could be down about $1 billion, I'm hoping we've made at least $500 million in the Muni's by now, so this mitigates to some degree. Link to comment Share on other sites More sharing options...
Smazz Posted March 5, 2009 Share Posted March 5, 2009 lets not forget - as long as we are not buying (soon to be)insolvent securities and we are doing most of our buying now (and not 8 - 12 months ago like most happy feet) the downside is limited at this point and the upside could be explosive. If youve owned the likes of FFH for some time you will have practice in patience. Once again, it will be a matter of when not if. Link to comment Share on other sites More sharing options...
Viking Posted March 5, 2009 Share Posted March 5, 2009 I think it is also important to remember that volatility is the friend of FFH. They are active managers and have demonstrated they understand the current environment very well. It will be interesting to read the Annual Report this weekend to better understand the protection they have built it. Also remember their competitors are also in the very same environment. As investment portfolios continue to get trashed and capital is reduced at some point the hard market has to arrive. Last year I tried a strategy of piggy backing on the well publicized purchases made by FFH and Buffet. I did OK (roughly broke even). What I learned is their individual purchases were made with the total portfolio in mind and with hedges in place. This year, I am more than happy to be able to going back to buying FFH (and now BRK) directly and let Prem and Warren manage a large chunk of my money for me. Link to comment Share on other sites More sharing options...
Partner24 Posted March 5, 2009 Share Posted March 5, 2009 We live in crazy times. Really crazy. Unless something very significant happen again (weapons of mass destruction attack or something very damaging like that), I would be surprised to see a crazy market like that again in my life. I'm quite happy to have red about Benjamin Graham, Warren Buffett and the likes. Otherwise, I'm not sure I would behave like I do now. I'm looking forward with a lot of interest to read our FFH CEO's letter to shareholders. In times like these, it's good to read him. Cheers! Link to comment Share on other sites More sharing options...
Guest ericopoly Posted March 5, 2009 Share Posted March 5, 2009 The big source of confusion to me is how the other half of that bond portfolio is holding up. If only 4b is in muni bonds, I assume the other 4b is in corporates. I know corporates are getting hurt pretty bad, but they have 8b or 9b worth of CDS left to hedge those bonds. Given that the muni side is pulling more than it's own weight with some gains, if the CDS does it's job we might have a net gain from the CDS hedges after factoring in the losses on the corporate bonds. At this point, the size of the CDS notional coverage nearly mirrors their $8b bond portfolio -- finally it is truly a hedge. I was surprised nobody asked them at all about the corporate bonds on the conference call. They asked about the muni bonds, but not a peep as to whether the remainder ($8b) of the bond portfolio is in corporates. Link to comment Share on other sites More sharing options...
Zorrofan Posted March 6, 2009 Share Posted March 6, 2009 Not to blow my own horn (okay, maybe a little) I said that I thoguht Prem was too early in getting rid of the hedges. Hopefully the CDS will help offset some of the losses in equities. I also hope FFH is buying back stock right now. There are many bargins out there, but Prem might have heard of this little insurance company up in Canada that I think is a steal at this price..... cheers Zorro Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now