Fairfax Stock - New All Time High

[Parsad]

1 hour ago, nwoodman said:

It may have nothing to do with FFH, a market wide margin call would have this baby throw out with the bath water in a heart beat, just the same with Berkshire.  The point is to not get called yourself called or have the stomach to sit through it even with no margin.  Hence the stress testing.
 

In a 50% off market sale, is Fairfax going to be your number 1 pick? 

 

Costco!  Cheers!

[Parsad]

3 hours ago, giulio said:

It looks to me as people are assuming that ffh could drop 50%+ in one single session. What could trigger such event? Fraud accusations? Insufficient/overstated reserves? What's the probability of that happening?

Why would a thoughtful, concentrated investor, having followed the company for many years, not being able to exit at a smaller loss? 

 

Btw, Thank you @SafetyinNumbers and @Parsad for sharing your thoughts.

And congratulations on the terrific results!!

 

G

 

I bought BRK at 0.55 times book value in late 1999/early 2000.  

 

I bought FFH twice...once at 0.35 times book value in 2003 and again at 0.6 times book value in 2020.

 

It's not that it is going to happen...but it could very well happen for various reasons. 

 

In BRK's case it was because tech stocks were hot and quality non-tech companies were completely unloved.

 

In FFH's case it was reinsurance losses combined with hedge fund attacks in 2003 and actually nothing significant in 2020 other than the pandemic.

 

Buying BRK in 2000 was riskless...it was just unloved.

 

Buying FFH in 2020 was riskless...also unloved.

 

Buying FFH in 2003 was full of risk as their balance sheet wasn't that strong after reinsurance losses...but I was young and had the balls to buy because I trusted Prem.

 

If I had to do it again today, as I approach retirement now and am not as young as I was in 2000 and 2003, I would buy BRK in 2000 and I would buy FFH in 2020...but I would not have bought FFH in 2003.

 

I want to buy money-making stocks, with good balance sheets, at deep discounts with little risk these days...unloved!  Cheers!

[Junior R]

8 hours ago, Parsad said:

 

$10M+.  Returns outside of PDH have been phenomenal.  I've averaged about 20% annualized for 20 years on my personal investments. You take out PDH and we've done about 18% annualized in MPIC Fund I, LP since 2006...too bad I can't do that!    

 

Cheers!

Lol would that be in USD or CAD

[73 Reds]

56 minutes ago, Parsad said:

 

I bought BRK at 0.55 times book value in late 1999/early 2000.  

 

I bought FFH twice...once at 0.35 times book value in 2003 and again at 0.6 times book value in 2020.

 

It's not that it is going to happen...but it could very well happen for various reasons. 

 

In BRK's case it was because tech stocks were hot and quality non-tech companies were completely unloved.

 

In FFH's case it was reinsurance losses combined with hedge fund attacks in 2003 and actually nothing significant in 2020 other than the pandemic.

 

Buying BRK in 2000 was riskless...it was just unloved.

 

Buying FFH in 2020 was riskless...also unloved.

 

Buying FFH in 2003 was full of risk as their balance sheet wasn't that strong after reinsurance losses...but I was young and had the balls to buy because I trusted Prem.

 

If I had to do it again today, as I approach retirement now and am not as young as I was in 2000 and 2003, I would buy BRK in 2000 and I would buy FFH in 2020...but I would not have bought FFH in 2003.

 

I want to buy money-making stocks, with good balance sheets, at deep discounts with little risk these days...unloved!  Cheers!

Yep, don't buy stocks that can "go to 0" without having an exit plan.  Strong balance sheets prevent a stock from going to 0.  Money making companies don't go to 0 while making money.  The whole discussion about "going to 0" really makes no sense because if somehow a high quality company were to become worthless overnight, that would likely be the least of our worries.

[Junior R]

3 minutes ago, 73 Reds said:

Yep, don't buy stocks that can "go to 0" without having an exit plan.  Strong balance sheets prevent a stock from going to 0.  Money making companies don't go to 0 while making money.  The whole discussion about "going to 0" really makes no sense because if somehow a high quality company were to become worthless overnight, that would likely be the least of our worries.

Also its hard to go to 0 when each of the companies are separate companies vs the holding company...Its more about risk reward if you buy FFH at 1.4 there is possibility it corrects...The real big risk to FFH is what happens when Prem leaves and his son/daughter take over

[SafetyinNumbers]

30 minutes ago, Junior R said:

Also its hard to go to 0 when each of the companies are separate companies vs the holding company...Its more about risk reward if you buy FFH at 1.4 there is possibility it corrects...The real big risk to FFH is what happens when Prem leaves and his son/daughter take over

I agree that it’s really hard for it to go to zero especially in the current set up given how much excess capital they are creating. The stock is still well below 1.2x adjusted forward BV and with buybacks in place, I think any decline in the multiple would reverse pretty quickly. I don’t think there is a real big risk when Ben takes over as Chairman although the company will probably look very different by the time that happens. 

[Parsad]

7 hours ago, Junior R said:

Lol would that be in USD or CAD

 

In Canadian.  But I wouldn't be surprised if that number isn't the same in the US in most major cities with high housing costs.

 

Cheers!