if it were not for this thing or that

[Warner]

There are plenty other insurance companies with better 20 year records than fairfax. Why play with the cigar butts when there are many quality insurers that can be bought in a hard market? 

 

 

 

 

[Parsad]

57 minutes ago, Warner said:

There are plenty other insurance companies with better 20 year records than fairfax. Why play with the cigar butts when there are many quality insurers that can be bought in a hard market? 

 

 

 

 

 

Again, you are viewing Fairfax in a vacuum.  How many insurer stocks dropped from $600 to $60?  Fairfax's did when it was under the short attack 17 years ago...thus the high volatility.  The question isn't what Fairfax did in the past, but what it will do in the future?  Cheers!

[Parsad]

3 hours ago, Gregmal said:

@Viking I dont disagree but a lot of that is externally influenced. Every insurance company(relatively speaking) is in a good place. Markets are at ATHs and even Robinhoods are printing big gains. Record earnings, record book value, big investment gains, it gets redundant, but thats fairly common place right now. So these things get priced in, for better or for worse. You follow Stelco and I follow CLF...do those valuations make sense? There is built in sentiment with most of this stuff and its preceded by sector or company specific expectation. And only until its proven otherwise, do those change. If the steel co's print another 2-4 Q of these numbers, the shares probably double. But again, within the sector, there are those that trade a premium valuations and those that dont. Out of everything you listed, numbers 9 and 10 to me have the potential if there's real follow through, to have a greater impact on improving the multiple. In a vacuum, when you have a great market for the insurance co's you want the company who's either best of breed, or undergoing a major turnaround(insurance just being an example). Anything in between is kind of a waste of time. FFH is not best of breed. And while some are saying theres a turnaround, I just dont see any internal effort. I just see results that are consistent with what everyone else is printing in those spaces and a valuation that is indicative of a deserved discount. Thats what I see as needing to change here. Or put another way, if the above results continue for another 12 months, are there not plenty of other companies who could boast those same type of results but get more credit for it? Or someone who is really undergoing a big time turnaround, IE levered to the tilt but paying it down/new management reinventing the company, etc?

 

I would actually argue that Fairfax's group of insurance companies and their underwriting are now as good as any of their peers.  Dare I even compare them to Berkshire's group of insurers excluding National Indemnity and Geico.  Cheers!

[Viking]

1 hour ago, Warner said:

There are plenty other insurance companies with better 20 year records than fairfax. Why play with the cigar butts when there are many quality insurers that can be bought in a hard market? 

 

 

 

 

Why do you call Fairfax, as it is comprised today, a ‘cigar butt’? 
 

Fairfax is trading today at about the same price in US$ it was trading at in 2014. So looking at past returns, yes, it has been a complete dog with fleas. And based solely on its performance the past 10 years an investor would have to be an idiot to put money into FFH shares. 
 

I am focussed on where the shares are trading today, how the company is positioned today, what its earnings will be moving forward and where the share price is likely to go in the future. As i have stated in many different ways i like the current risk/reward US $450/share set up for Fairfax.

 

Would it be better for investors to put their $ in other insurers? That is certainly an option investors need to carefully consider. If i had to buy one insurer and hold it for 20 years i probably would not buy Fairfax. Fortunately, i do not have to hold any of my investments for 20 years. There is no right decision for everyone. Rather, each of us does our homework, makes a decision, lays out some $ and hopefully does well / makes some money.
 

Best of luck to everyone   

Edited August 10, 2021 by Viking

[Parsad]

1 hour ago, glider3834 said:

Out of interest - was Prem's insider buy on open market of US$150 mil one of the largest ever - I have never seen an executive insider buy of this size before?

 

I think there have been a handful of CEO's who have bought back more in recent history (between the financial crisis and the Covid pandemic) with their own personal capital...pretty much all in the U.S.  I'm almost certain Prem's buyback with personal capital was the single largest in North America during the pandemic. 

 

I have heard of several CEO's who bought back $20-$50M (Jamie Dimon, the CEO of Prospect Capital, Gary Schiffman, Dustin Moskowitz (Asana), Robert Duggan, Whitney Wolfe Heard) in the last 18 months...but none were anywhere near $150M.  Cheers!

[Gregmal]

9 hours ago, Viking said:

The reason i like Fairfax right now is i like the risk / reward with the shares are trading at US $450. I think i understand the company. And i have owned it on and off for 20 years and done very well in the past when my analysis has identified a similar set up. We will see what the future holds  

I actually think this is your edge here. Same for a few other folks. Find your yo-yo/vehicle and turn it into a money tree. This is more an individual skill though. And I think many others who are just relying on aphorisms and cliches may have a rougher go of things. Or maybe they won't. As always, time will tell.