Analyzing Brett Horn

[Hoodlum]

That is not a good look.  I have a hard time understanding how that could have been a typo. 

[SafetyinNumbers]

3 minutes ago, Hoodlum said:

That is not a good look.  I have a hard time understanding how that could have been a typo. 

I agree. I sent an email to the company. Hopefully, they follow up. I dismissed the Morningstar conspiracy theories but now I wonder. 

[glider3834]

3 minutes ago, SafetyinNumbers said:

I agree. I sent an email to the company. Hopefully, they follow up. I dismissed the Morningstar conspiracy theories but now I wonder. 

I just sent an email to morningstar as well

[Santayana]

Wow, it really would be something if the report was on the behalf of Brett Horn.   Claim Fairfax book is 20% overstated, hope for a drawdown of at least that much, and then Brett can point to his price target and say "See, I knew it was overvalued".

[Parsad]

1 hour ago, glider3834 said:

well picked up - I highlighted in yellow from original press release from Fairfax below

 

 

 

Here's the actual Globe Newswire press release, so you know they didn't make a mistake.  How does Morningstar get this wrong?  This is not cut and paste.  The whole press release comes as is...there is nothing to adjust, cut, copy, etc.  Cheers!

 

https://www.globenewswire.com/en/news-release/2024/02/12/2827434/0/en/Fairfax-Responds-Further-to-Short-Seller-Report.html

[glider3834]

51 minutes ago, Hoodlum said:

That is not a good look.  I have a hard time understanding how that could have been a typo. 

it could be coding error 

[Jaygo]

3 minutes ago, glider3834 said:

it could be coding error 

This seems nefarious and it is definitely strange. Is someone at Morningstar on the take?

[Hoodlum]

15 minutes ago, glider3834 said:

it could be coding error 

It would need to be a selective coding error, as the below section from the press release did not have the word “never” removed. 
 

Quote

We have always been focused on building for the long term and have never given any quarterly guidance.

 

Edited February 14, 2024 by Hoodlum

[SafetyinNumbers]

Just now, Hoodlum said:

It would need to be a selective coding error, as the below section from the press release did not have the word “never” removed. 
 

 

someone on Twitter pointed out that Morningstar system probably wasn’t able to read underlined words. I guess it’s rare to see them in press releases.

[Parsad]

11 minutes ago, Jaygo said:

This seems nefarious and it is definitely strange. Is someone at Morningstar on the take?

 

No one ever thought Morgan Keegan was involved in anything until it was proven they were and John Gwynn was fired.  We still don't know how John Gwynn died.  Cheers!

 

https://www.wsj.com/articles/SB122110590390722731

[TwoCitiesCapital]

50 minutes ago, Santayana said:

Wow, it really would be something if the report was on the behalf of Brett Horn.   Claim Fairfax book is 20% overstated, hope for a drawdown of at least that much, and then Brett can point to his price target and say "See, I knew it was overvalued".

 

Jokes on us. Brett Horn hired MW just to have a second voice agree with him

[glider3834]

Here is a press release for Watsco  on morningstar site & the underlined words are also missing as well - so it looks like this is a system wide issue

 

https://www.morningstar.com/news/globe-newswire/9036198/watsco-reports-strong-2023-performance-gaining-share-in-a-soft-market-boosts-annual-dividend-10-to-1080-per-share

 

 

from watsco site https://www.globenewswire.com/en/news-release/2024/02/13/2828098/0/en/Watsco-Reports-Strong-2023-Performance-Gaining-Share-in-a-Soft-Market-Boosts-Annual-Dividend-10-to-10-80-Per-Share.html

[SafetyinNumbers]

9 minutes ago, glider3834 said:

Here is a press release for Watsco  on morningstar site & the underlined words are also missing as well - so it looks like this is a system wide issue

 

https://www.morningstar.com/news/globe-newswire/9036198/watsco-reports-strong-2023-performance-gaining-share-in-a-soft-market-boosts-annual-dividend-10-to-1080-per-share

 

 

from watsco site https://www.globenewswire.com/en/news-release/2024/02/13/2828098/0/en/Watsco-Reports-Strong-2023-Performance-Gaining-Share-in-a-Soft-Market-Boosts-Annual-Dividend-10-to-10-80-Per-Share.html

The most likely explanation is correct. Just more incompetence at Morningstar. 

[Haryana]

I was also thinking that this was likely something technical during their processing.

 

Watsco report has a large number of underlined text and all of them are truncated

but there that doesn't overturn the meaning of the message like it does on Fairfax.

 

[Hektor]

1 hour ago, SafetyinNumbers said:

I agree. I sent an email to the company. Hopefully, they follow up.

 

1 hour ago, glider3834 said:

I just sent an email to morningstar as well

Look at all the alligators in FFH’s moat 

 

With shareholders like these, FFH need not be concerned about shorts, I guess.

[Haryana]

Who knew this forgotten thread will get so hot out of nowhere -

 

 

Morningstar is likely to keep us entertained over and over again.

 

[dartmonkey]

15 hours ago, glider3834 said:

Here is a press release for Watsco  on morningstar site & the underlined words are also missing as well - so it looks like this is a system wide issue

Wow, great pick-up! With hindsight, we should have noticed that the two missing words were the two words that were underlined. 

 

 

 

[Haryana]

Brett Horn Strikes Again

 

https://www.morningstar.com/company-reports/1208136-fairfax-earnings-strong-finish-to-the-year

 

"Fairfax finished the year on a strong note and continues to benefit from industry and macroeconomic tailwinds. Book value per share, adjusted for dividends, increased 25% for the full year, a metric that we believe highlights how favorable the environment has been for the no-moat company. We are maintaining our CAD 970 per share fair value estimate and see the shares as overvalued right now."

 

[Luke]

HAHA! Love his description of the company as "the no moat company". A disgrace to watsa and Co.

[Haryana]

30 minutes ago, Luca said:

HAHA! Love his description of the company as "the no moat company". A disgrace to watsa and Co.

 

Certainly, it sounds ridiculous.

 

However, that is part of their categorization. They categorize all companies in either of

1. Wide Moat

2. Narrow Moat

3. No Moat

 

What looks unbelievably ridiculous is that their newswires are still up there without the underlined texts.

I wonder when this bug got started in their system or for how long this issue has been out there.

 

[Luke]

38 minutes ago, Haryana said:

 

Certainly, it sounds ridiculous.

 

However, that is part of their categorization. They categorize all companies in either of

1. Wide Moat

2. Narrow Moat

3. No Moat

 

What looks unbelievably ridiculous is that their newswires are still up there without the underlined texts.

I wonder when this bug got started in their system or for how long this issue has been out there.

 

I find "no moat" also quite undifferentiated. Yes, opening a burger restaurant next door is a very small to no moat. But a globally scaled insurance company does have a moat, they have trust of consumers, they spend significant amounts on advertising to preserve the trust, with scale one can compete on the price front too. Its not a wide moat but its also not NO moat...

 

 

[Haryana]

21 hours ago, Luca said:

I find "no moat" also quite undifferentiated. Yes, opening a burger restaurant next door is a very small to no moat. But a globally scaled insurance company does have a moat, they have trust of consumers, they spend significant amounts on advertising to preserve the trust, with scale one can compete on the price front too. Its not a wide moat but its also not NO moat...

 

 

 

Bigger companies have bigger competitors and the industry itself is a price taker. No moat even for the insurance business of Berkshire, however, they get the moat due to operating businesses which have moats and and now they are more about those than the insurance.

 

Fairfax seem to get zero credit for management from Brett and he is using the same rhetoric from the beginning if you go to the articles when he started covering. When he calls them no moat, it sounds insulting because he calls them destroyers of value. 

 

Edited February 18, 2024 by Haryana

[Tommm50]

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?

[SafetyinNumbers]

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. 

[Haryana]

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.