Fairfax 2024

[villainx]

1 hour ago, Thrifty3000 said:

I wouldn’t be surprised if FFH breaks into the top 25 within 6 months, and the top 20 within 18 months.

 

Okay to buy here?  

[Thrifty3000]

6 hours ago, villainx said:

 

Okay to buy here?  

 

Well, any veteran investor worth his salt would say if you have to ask then it's not okay. But, I'm pretty sure I'm not worth my salt, so I'm going to say you SHOULD invest - however, that recommendation comes with a caveat...

 

I recommend taking a "starter position" of, say, 1% of your portfolio, or whatever amount gives you enough skin in the game to incentivize you to do the requisite research to ascertain not only a conviction buy price, but also a conviction exit price.

 

At the very least I recommend reading Viking's thesis and maybe the last decade or so of Prem's annual letters.
 

After you do that, then if you still CAN’T succinctly defend your conviction buy and sell prices I recommend exiting your starter position. However, if you CAN defend them then I say set your trade triggers accordingly and welcome to the FFH party.

 

Hope this helps.

Edited October 8 by Thrifty3000

[villainx]

Thank you!

 

I had a starter position.  Then I made what I thought was a full position.  Now I'm thinking to get more concentrated.  I know, if it happens, I'm okay seeing it rise.  I'm just looking for new entry, just a matter of patience.

[Thrifty3000]

11 hours ago, villainx said:

Thank you!

 

I had a starter position.  Then I made what I thought was a full position.  Now I'm thinking to get more concentrated.  I know, if it happens, I'm okay seeing it rise.  I'm just looking for new entry, just a matter of patience.

Okay, well, if you have to ask then you shouldn’t buy. Haha

[Junior R]

On 10/7/2024 at 2:14 PM, villainx said:

 

Okay to buy here?  

you might get your day under $1600 CAD lol

[Munger_Disciple]

https://www.reuters.com/business/finance/hurricane-milton-could-cost-insurers-60-bln-raise-reinsurance-rates-rbc-says-2024-10-09/

 

No one knows what the actual damage from Milton would be but this analyst thinks insured loss in the range of $60-100B for the industry. Does this imply roughly 1.25%, or up to $1.25B hit to Fairfax (pre-tax)?

Edited October 10 by Munger_Disciple

[SafetyinNumbers]

Buybacks continued in September 

 

 

[nwoodman]

47 minutes ago, SafetyinNumbers said:

Buybacks continued in September 

 

 

Good, all things being equal they should be chipping away this month too.  Stupid on my part, but it’s like some arcade game, can they get the share count to 20m at low multiples before they make the TSX60. This period reminds me of buying Berkshire at book in 2011 when you had a high probability IV was growing by at least 1% per month, that return was locked you just didn’t know if your return was going to be higher.

[nwoodman]

On 10/7/2024 at 10:59 PM, Junior R said:

2 year and 10 year both above 4% ...Should be good for fairfax if they want to extend any

A couple of thoughts: (1) Brian Bradstreet you absolute legend.  (2) Did any of their competitors reach for yield?  

This may be the underpinning of a continuation of the hard market regardless of the cats. Taken together it must be a very high probability, even for the worst possible reasons.  

 

[KFRCanuk]

8 hours ago, SafetyinNumbers said:

Buybacks continued in September 

 

 

Best time of year to do it in some respects. They have a pretty good idea of how they will end FY2024.

Maybe it pushed it up?

[dartmonkey]

8 hours ago, SafetyinNumbers said:

Buybacks continued in September 

 

 

 

 

Wow, those are some great prices, as low as $1613. I bought another 5% or so yesterday, but only got $1263.

 

In fact, looking at historical prices yesterday, Yahoo Finance says the low price was $1656 yesterday, so I don't feel so bad. But how could Fairfax purchase these shares so cheaply?

 

That was a nice day's work for whoever is in charge of buying back shares, a $138m investment already up 6%...

[jbwent63]

2 minutes ago, dartmonkey said:

 

Wow, those are some great prices, as low as $1613. I bought another 5% or so yesterday, but only got $1263.

 

In fact, looking at historical prices yesterday, Yahoo Finance says the low price was $1656 yesterday, so I don't feel so bad. But how could Fairfax purchase these shares so cheaply?

 

That was a nice day's work for whoever is in charge of buying back shares, a $138m investment already up 6%...

All those purchases were in September, reported yesterday.

[dartmonkey]

4 minutes ago, jbwent63 said:

All those purchases were in September, reported yesterday.

oh yeah, thanks. Just goes to show, the way the stock has been rising, September prices seem like a great deal, limited time only! 

[Jaygo]

Do any Canadians hold FFH in USD. Sounds silly but I have lots of Canadian ideas right now but few US so i have a lot more USD cash laying around.

[Daphne]

Nuclear power company Westinghouse Electric and Seaspan ULC said on Thursday they have signed a memorandum of understanding to help expand nuclear projects in Canada and around the world.

With nuclear power garnering renewed interest as a cleaner energy source, countries such as Italy, United Kingdom, China and the United States are looking into nuclear technology firms such as Westinghouse to meet their carbon emission goals.

Westinghouse said Seaspan, which provides services such as shipbuilding and maintenance, has the potential to manufacture key components, including pipe spools and steel structures, used in its nuclear reactors.

[dartmonkey]

51 minutes ago, Jaygo said:

Do any Canadians hold FFH in USD. Sounds silly but I have lots of Canadian ideas right now but few US so i have a lot more USD cash laying around.

I own it all in USD (FRFHF) principally because I like getting the USD dividend in a US$-denominated account. In my TD accounts where I have my Fairfax shares, when I got a dividend in a Canadian account, TD thieved off 2% in converting the US$ dividend into CAD. Wouldn't be a problem if I owned it in my Interactive Brokers account, but my Fairfax holdings go back to a time before I had an IBKR account (>15 years ago).

 

Trading volume is about the same for the TSX (FFH) shares and for the US$ OTC shares anyways, so it makes sense for me to hold it on the US side.

[Jaygo]

2 minutes ago, dartmonkey said:

I own it all in USD (FRFHF) principally because I like getting the USD dividend in a US$-denominated account. In my TD accounts where I have my Fairfax shares, when I got a dividend in a Canadian account, TD thieved off 2% in converting the US$ dividend into CAD. Wouldn't be a problem if I owned it in my Interactive Brokers account, but my Fairfax holdings go back to a time before I had an IBKR account (>15 years ago).

 

Trading volume is about the same for the TSX (FFH) shares and for the US$ OTC shares anyways, so it makes sense for me to hold it on the US side.

Thanks. FRFHF doesn't seem to trade much at least on my garbage RBC brokerage account. It will show the same price all day then adjusts the following day.

 

 

[glider3834]

21 minutes ago, Daphne said:

Nuclear power company Westinghouse Electric and Seaspan ULC said on Thursday they have signed a memorandum of understanding to help expand nuclear projects in Canada and around the world.

With nuclear power garnering renewed interest as a cleaner energy source, countries such as Italy, United Kingdom, China and the United States are looking into nuclear technology firms such as Westinghouse to meet their carbon emission goals.

Westinghouse said Seaspan, which provides services such as shipbuilding and maintenance, has the potential to manufacture key components, including pipe spools and steel structures, used in its nuclear reactors.

I think this is Seaspan ULC rather than Seaspan Corp 

[RichardGibbons]

29 minutes ago, dartmonkey said:

I own it all in USD (FRFHF) principally because I like getting the USD dividend in a US$-denominated account. In my TD accounts where I have my Fairfax shares, when I got a dividend in a Canadian account, TD thieved off 2% in converting the US$ dividend into CAD. Wouldn't be a problem if I owned it in my Interactive Brokers account, but my Fairfax holdings go back to a time before I had an IBKR account (>15 years ago).

 

Trading volume is about the same for the TSX (FFH) shares and for the US$ OTC shares anyways, so it makes sense for me to hold it on the US side.

 

Funny, I do the same for the exact same reason.

[dartmonkey]

1 hour ago, Jaygo said:

FRFHF doesn't seem to trade much at least on my garbage RBC brokerage account. It will show the same price all day then adjusts the following day.

Yes, I probably get ripped off by TD with a bad spread when I buy or sell FRFHF there. I should probably just move everything over to Interactive Brokers where they treat you properly; the only reason I keep the TD account is (i) inertia and (ii) it's such a pain to trade there, for a variety of reasons, including the US$10 brokerage fee per trade, that I almost never make a trade (with a few exceptions; Muddy Waters, now Milton.) Making it difficult to trade has probably indirectly saved me a ton of money by making me just leave my now ~50% Fairfax position alone. If I could be sure I would respect my vow not to sell FFH at less than 2x book, I would just transfer all my funds over to IB.

 

Ideally, IB would set up a validation machine that would force me to insert my thumb to be painfully crushed for 60 seconds in order to go ahead with a sale of FFH shares. In the meantime, I let TD provide equivalent pain with no interest on cash balances, high transaction fees, usurious forex rates, and a crummy interface, but I get great returns...

[dartmonkey]

1 hour ago, glider3834 said:

I think this is Seaspan ULC rather than Seaspan Corp 

Yes. The companies are related - they have a common history and they even have the same logo!

 

Seaspan Corp (mostly ocean transport) was spun off from the Washington family owned Seaspan ULC (tugboats, ferries, shipyards); the Washington family still owns part of each of them, but Fairfax only owns the Seaspan Corp side (the parent company of which was called Atlas but is now called Poseidon.)

[Xerxes]

This is more of a Brookfield story as the 51% owner of Westinghouse, with Cameco owning the balance 49%

[Junior R]

1 hour ago, dartmonkey said:

Yes, I probably get ripped off by TD with a bad spread when I buy or sell FRFHF there. I should probably just move everything over to Interactive Brokers where they treat you properly; the only reason I keep the TD account is (i) inertia and (ii) it's such a pain to trade there, for a variety of reasons, including the US$10 brokerage fee per trade, that I almost never make a trade (with a few exceptions; Muddy Waters, now Milton.) Making it difficult to trade has probably indirectly saved me a ton of money by making me just leave my now ~50% Fairfax position alone. If I could be sure I would respect my vow not to sell FFH at less than 2x book, I would just transfer all my funds over to IB.

 

Ideally, IB would set up a validation machine that would force me to insert my thumb to be painfully crushed for 60 seconds in order to go ahead with a sale of FFH shares. In the meantime, I let TD provide equivalent pain with no interest on cash balances, high transaction fees, usurious forex rates, and a crummy interface, but I get great returns...

You can just FFH in CAD account using CAD then journal it over to USD side and not face this issue

[sleepydragon]

On 10/7/2024 at 11:05 AM, MMM20 said:

I missed this last week. CIBC's "index specialist" now thinks FFH is #1 in the queue for inclusion in the TSX 60, which would bring "close to 1mm shares of demand into the stock, representing ~15x its 30-day average daily volume." I'm guessing this is music to @SafetyinNumbers's ears and explains the recent strength. Here's hoping we eventually get to sell at a big premium to intrinsic value to know-nothing index investors. Sorry, grandma!

 

 

I used to do a lot of studies on these before. I remembered the highest prediction power variable that predicts the “pop” return is the dollar amount, not the days of $adv. also, TSX 60 is a small index. For SP500, such add is about 10% pop. For SP400, maybe 4%. You can look at historical what the “pop” is for past index adds to TSX. I suspect it’s not much.

 

 

[SafetyinNumbers]

3 hours ago, sleepydragon said:

I used to do a lot of studies on these before. I remembered the highest prediction power variable that predicts the “pop” return is the dollar amount, not the days of $adv. also, TSX 60 is a small index. For SP500, such add is about 10% pop. For SP400, maybe 4%. You can look at historical what the “pop” is for past index adds to TSX. I suspect it’s not much.

 

 

It all depends on the extant shareholders and where the marginal sellers are whether they are basing their decisions on price or value.