Tommm50 Posted February 18 Share Posted February 18 To me "no moat" basically means nothing special, it can be easily replicated. How would Brett suppose to replicate the global reach, the market position in emerging economies, the diversity of industries, the expertise in bond investing, and longevity and loyalty of staff enjoyed by Fairfax? Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted February 18 Share Posted February 18 1 hour ago, Tommm50 said: To me "no moat" basically means nothing special, it can be easily replicated. How would Brett suppose to replicate the global reach, the market position in emerging economies, the diversity of industries, the expertise in bond investing, and longevity and loyalty of staff enjoyed by Fairfax? The no moat stuff is nonsense but it’s the improbable earnings estimates that I really have trouble reconciling. Link to comment Share on other sites More sharing options...
Haryana Posted April 12 Author Share Posted April 12 On 1/24/2024 at 9:04 PM, Haryana said: The way the estimate value numbers have changed over last year seem like being done manually. As if someone is making the numbers up strategically from their La-Z-Boy recliner to camouflage. First, the number changed from 730 to 790, that is the maximum to go in 700s with just one digit. Then, the number changed from 790 to 970, that is the maximum below 1000 exchanging a digit. Now the number has changed from 970 to 1180 which again make it look like something around a 1000. For this purpose, he had to make sure that the new number is under 1200 even if the math is senseless. So he has moved the fair value from 730 to 1180 in steps where each step made to look like nothing big. Because all the while he analyzed that the company was overvalued and management value destructive. Link to comment Share on other sites More sharing options...
Mystery Guest Posted April 13 Share Posted April 13 1 minute ago, Mystery Guest said: The Moat is Hamblin Watsa. Long time Lurker Link to comment Share on other sites More sharing options...
Haryana Posted Saturday at 01:23 AM Author Share Posted Saturday at 01:23 AM Brett Horn blares again https://www.morningstar.com/company-reports/1221484-fairfax-earnings-tailwinds-remain-in-place " We think Fairfax’s first-quarter results were solid. Underwriting margins held at an attractive level, and tailwinds continue on the investing side. Book value per share, adjusted for dividends, increased 2% from year-end. We will maintain our CAD 1,180 fair value estimate and no-moat rating. We continue to see shares as overvalued. While Fairfax is performing well right now, its historical record is mixed, and we think the market is overly focused on the favorable near-term outlook. " Link to comment Share on other sites More sharing options...
steph Posted Saturday at 09:30 AM Share Posted Saturday at 09:30 AM The longer it lasts the more ridiculous he becomes. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted Sunday at 03:05 PM Share Posted Sunday at 03:05 PM On 5/4/2024 at 4:30 AM, steph said: The longer it lasts the more ridiculous he becomes. Quants gonna quant Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted Sunday at 04:45 PM Share Posted Sunday at 04:45 PM On 5/3/2024 at 8:23 PM, Haryana said: Brett Horn blares again https://www.morningstar.com/company-reports/1221484-fairfax-earnings-tailwinds-remain-in-place " We think Fairfax’s first-quarter results were solid. Underwriting margins held at an attractive level, and tailwinds continue on the investing side. Book value per share, adjusted for dividends, increased 2% from year-end. We will maintain our CAD 1,180 fair value estimate and no-moat rating. We continue to see shares as overvalued. While Fairfax is performing well right now, its historical record is mixed, and we think the market is overly focused on the favorable near-term outlook. " I think he's paying too much attention to the no-moat piece and maybe that's what is holding him back? Let's ignore the moat. Let's assume insurance, and every insurance company out there, is offering a commodity product. Fairfax is still exceptionally well positioned with low duration, little-to-no capital impact from rising rates, and investments/associates that are banging on all cylinders. The earnings power is almost as perfectly predictable as you could hope barring a catastrophe and it's extraordinarily high for the next 2-3 years. Even if we assume no differentiation or skill of management, we know Fairfax will earn ~600 CAD/share over the next 3-4 years. Assuming no reinvestment and just adding to BV as retained earnings, you'd expect the stock price to go up $ for $ and that alone represents an 11-15% annualized return over the next 3-4 years without assuming compound returns OR a rerating of the stock. So why does he assume an equity risk premium of 6-10% for Fairfax with such visibility into its earnings? Link to comment Share on other sites More sharing options...
Crip1 Posted Sunday at 05:28 PM Share Posted Sunday at 05:28 PM Guessing it's a combination of Inconsistency-Avoidance Tendency (#5 of Charlie Munger's Psychology of Human Misjudgment) and the fact that any indication akin to "I was wrong", no matter how refreshing it is in real life, is a resume-killer in the profession of Equity Analysis. -Crip Link to comment Share on other sites More sharing options...
Parsad Posted Sunday at 05:53 PM Share Posted Sunday at 05:53 PM 24 minutes ago, Crip1 said: Guessing it's a combination of Inconsistency-Avoidance Tendency (#5 of Charlie Munger's Psychology of Human Misjudgment) and the fact that any indication akin to "I was wrong", no matter how refreshing it is in real life, is a resume-killer in the profession of Equity Analysis. -Crip +1! Cheers! Link to comment Share on other sites More sharing options...
Viking Posted Monday at 05:58 AM Share Posted Monday at 05:58 AM On 4/12/2024 at 6:36 PM, Mystery Guest said: The moat is Hamblin Watsa. @Mystery Guest , I think you might be on to something. Fairfax compounded book value at 18.4% for 38 straight years. That is a phenomenal track record. To call the company ‘no-moat’ is, of course, idiotic. Obviously, there is a moat hiding in there somewhere. Link to comment Share on other sites More sharing options...
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