UK Posted November 6 Share Posted November 6 7 hours ago, SafetyinNumbers said: I went on a podcast and spoke mostly about Fairfax. https://t.co/x7v5g2OvGf Thanks! This will be the first thing I will listen to asap:) Link to comment Share on other sites More sharing options...
MarioP Posted November 6 Share Posted November 6 23 hours ago, SafetyinNumbers said: I went on a podcast and spoke mostly about Fairfax. https://t.co/x7v5g2OvGf Terrefic podcast. And don’t skip it because you know Fairfax. There is lots of interesting things, specialy your view of how the market work now that it is dominated by quants and indexers. And I must confess something : I’m one of those value guy who never bought Fairfax India because I didn’t want to pay the fees . I will have a serious look at it now that I know that they are waived until at least 21. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 6 Author Share Posted November 6 14 minutes ago, MarioP said: Terrefic podcast. And don’t skip it because you know Fairfax. There is lots of interesting things, specialy your view of how the market work now that it is dominated by quants and indexers. And I must confess something : I’m one of those value guy who never bought Fairfax India because I didn’t want to pay the fees . I will have a serious look at it now that I know that they are waived until at least 21. Thanks for listening! On FIH, the fees aren’t waived until the most recent book value ~$21.5, just that they are already paid up to the end of 2023 and any additional since then to end of Q324 already accrued above the 5% hurdle rate. Link to comment Share on other sites More sharing options...
mananainvesting Posted November 7 Share Posted November 7 @SafetyinNumbers: Fantastic Podcast! Enjoyed the listen just like your previous podcast with Bill Brewster. Link to comment Share on other sites More sharing options...
Viking Posted November 7 Share Posted November 7 On 11/5/2024 at 3:32 PM, SafetyinNumbers said: I went on a podcast and spoke mostly about Fairfax. https://t.co/x7v5g2OvGf @SafetyinNumbers , i finally got the time to listen to your podcast (I am just finishing up my vacation). You did a fantastic job! It was very comprehensive. It was a great review for me on many topics. And i also learned a great deal. It also provided me with some ideas that might make interesting long post articles in the future. Thank you! Link to comment Share on other sites More sharing options...
Haryana Posted November 7 Share Posted November 7 (edited) 9 hours ago, mananainvesting said: @SafetyinNumbers: Fantastic Podcast! Enjoyed the listen just like your previous podcast with Bill Brewster. Here is that for easy reference https://podcasters.spotify.com/pod/show/william-brewster1/episodes/Charles-Frischer-and-Asheef-Lalani---Fairfax-Is-A-Fat-Pitch-e2757vs Edited November 7 by Haryana Link to comment Share on other sites More sharing options...
Haryana Posted November 7 Share Posted November 7 (edited) 11 hours ago, SafetyinNumbers said: Thanks for listening! On FIH, the fees aren’t waived until the most recent book value ~$21.5, just that they are already paid up to the end of 2023 and any additional since then to end of Q324 already accrued above the 5% hurdle rate. Would you agree with the following perspective - The fee is already paid up to the current book value ($21.5). So, if the book value grows only 5% (~$1) in a year from now and also the market price catches up from $15 to $22.5, then all of this 50% price gain will be without paying any fee. Edited November 7 by Haryana Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 7 Author Share Posted November 7 Thanks @mananainvesting and @Viking! Viking I’m looking forward to what you come up with. I find your analysis extremely helpful! @Haryana I think that makes sense on the performance fees but it’s hard to believe the discount closes entirely except if investors really want to own BIAL post IPO. Link to comment Share on other sites More sharing options...
Hoodlum Posted November 7 Share Posted November 7 @SafetyinNumbers will appreciate this. CIBC’s chief market technician Sid Mokhtari has listed Fairfax as one of his top 10 TSX momentum stocks. https://www.theglobeandmail.com/investing/markets/inside-the-market/article-cibcs-chief-market-technician-shares-his-latest-top-10-momentum-driven/ Quote We run stocks against one another and those that come up in our tables, they tend to be selected based on the relative performance. Onex, for instance, is in an emerging backdrop, Sun Life is in an emerging backdrop, Fairfax is in an emerging backdrop, as they are showing better relative strength acceleration. So, within financials, it’s not that banks are not doing too well, that is not at all the call, it’s just that these three companies are now collectively showing better potential for relative strength acceleration. And that means these stocks are probably going to produce better alpha relative to the banks that have done quite well over the past six months. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 7 Author Share Posted November 7 1 hour ago, Hoodlum said: @SafetyinNumbers will appreciate this. CIBC’s chief market technician Sid Mokhtari has listed Fairfax as one of his top 10 TSX momentum stocks. https://www.theglobeandmail.com/investing/markets/inside-the-market/article-cibcs-chief-market-technician-shares-his-latest-top-10-momentum-driven/ Thanks! I think that’s part of why it did well on Nov 1 Link to comment Share on other sites More sharing options...
mananainvesting Posted November 8 Share Posted November 8 Alphyn Capital Q3 letter discussing Fairfax. https://www.alphyncap.com/uploads/1/4/1/2/14123551/acml_2024-q3.pdf Link to comment Share on other sites More sharing options...
Haryana Posted November 8 Share Posted November 8 (edited) Found it interesting @SafetyinNumbers on the podcast, came up with $2700 as intrinsic value by adding equity and float while I had the exact same number calculated from a different perspective. Edited November 8 by Haryana Link to comment Share on other sites More sharing options...
gfp Posted November 8 Share Posted November 8 21 minutes ago, mananainvesting said: Alphyn Capital Q3 letter discussing Fairfax. https://www.alphyncap.com/uploads/1/4/1/2/14123551/acml_2024-q3.pdf This line was weird - " Fairfax also continued its share repurchase program, spending $678 million in the quarter" Pretty sure it was more like $189 million in the quarter. Do we know who this manager is? A board member here? Underperforming the S&P 500 by over 10% annually over a long period of time is a tough sell Link to comment Share on other sites More sharing options...
mananainvesting Posted November 8 Share Posted November 8 17 minutes ago, gfp said: This line was weird - " Fairfax also continued its share repurchase program, spending $678 million in the quarter" Pretty sure it was more like $189 million in the quarter. Do we know who this manager is? A board member here? Underperforming the S&P 500 by over 10% annually over a long period of time is a tough sell Good catch on the share repurchase. I don't know the manager, the letter has a name at the top. Link to comment Share on other sites More sharing options...
Haryana Posted November 8 Share Posted November 8 14 hours ago, SafetyinNumbers said: @Haryana I think that makes sense on the performance fees but it’s hard to believe the discount closes entirely except if investors really want to own BIAL post IPO. The discount may turn to premium in 1 year or 5 years but the points being: 1. The fee is already paid on the increase in book value 2. Whenever the share price catches up to book value, all that gain will be fee-free 3. Upto 5% of additional gain each year is also fee-free 4. Buyer has benefit that fee on the increased book is already paid-for by the seller Link to comment Share on other sites More sharing options...
dartmonkey Posted November 8 Share Posted November 8 8 hours ago, Haryana said: 3. Upto 5% of additional gain each year is also fee-free Not that it makes that much of a difference, but I believe that the 5% hurdle is non-compounded, meaning that at this point it is only about 2.5%. I’d have to dig up the documents that convinced me of that but I believe it’s true. Link to comment Share on other sites More sharing options...
Haryana Posted November 8 Share Posted November 8 I think you are correct on the fee hurdle rate being less as was discussed on forum here earlier. The main point is that people dislike the hedge fund like fee but that is why there is big discount to book value. So, therefore, this is opportunity to get a high quality hedge fund without actually paying the fee upto the catchup to bookvalue. The high fee is justified as the investments like Bial would be otherwise unavailable to the common public. Ben's fund, for example, requires you to be an accredited investor to buy. Only when the price goes up that people will think the fee is justified and everything must be alright. The price of Fairfax had to cross $1000 for opinion to Uturn, for Fairfax India that price might be $20 or $25. Link to comment Share on other sites More sharing options...
wondering Posted November 9 Share Posted November 9 I know its still a bit early (2 months away) but I thought I would start the seemingly annual debate on the Fairfax dividend. If you would have asked me 18 months will Fairfax increase the dividend from $10/share US - my answer would have been - No way! Surprise, surprise - Fairfax increased the dividend to $15/share US last year. Now if you asked me the same question this year, I am not so sure. I think there is a good possibility (50%?) that they raise the dividend to 17-20/share. I know Fairfax will never be known as a huge dividend-payer, but since the stock price has rose so much in one year, I thought the probability that they raise the dividend again so that the dividend yield is 1.3 - 1.6%. (currently hovering around 1%). Thoughts... Related to this is that I listened to @SafetyinNumbers podcasts recently. Part of his argument of why the Fairfax price remains low is that the stock doesn't screen well with the quants. Based on this argument I was wondering if a few years of dividends increases would be looked on a favourable with the quants? Link to comment Share on other sites More sharing options...
Hoodlum Posted November 10 Share Posted November 10 (edited) 2 hours ago, wondering said: I know its still a bit early (2 months away) but I thought I would start the seemingly annual debate on the Fairfax dividend. If you would have asked me 18 months will Fairfax increase the dividend from $10/share US - my answer would have been - No way! Surprise, surprise - Fairfax increased the dividend to $15/share US last year. Now if you asked me the same question this year, I am not so sure. I think there is a good possibility (50%?) that they raise the dividend to 17-20/share. I know Fairfax will never be known as a huge dividend-payer, but since the stock price has rose so much in one year, I thought the probability that they raise the dividend again so that the dividend yield is 1.3 - 1.6%. (currently hovering around 1%). Thoughts... Related to this is that I listened to @SafetyinNumbers podcasts recently. Part of his argument of why the Fairfax price remains low is that the stock doesn't screen well with the quants. Based on this argument I was wondering if a few years of dividends increases would be looked on a favourable with the quants? I don’t believe we will see yearly dividend increases. I think the next increase won’t be for another year and that will be at $20. This would be in line with their 15% ROE per year. Fairfax is better off investing their earnings rather than distributing more of it to shareholders. Edited November 10 by Hoodlum Link to comment Share on other sites More sharing options...
sholland Posted November 10 Share Posted November 10 I believe that I once read that the only reason Fairfax established a dividend is because Prem personally wanted more money, but didn’t think it was fair to shareholders to increase his compensation. The dividend is a way for Prem to get more money while shareholders get the same too. Link to comment Share on other sites More sharing options...
yqsun Posted November 10 Share Posted November 10 (edited) On 11/7/2024 at 12:14 AM, Haryana said: Here is that for easy reference https://podcasters.spotify.com/pod/show/william-brewster1/episodes/Charles-Frischer-and-Asheef-Lalani---Fairfax-Is-A-Fat-Pitch-e2757vs If you don’t have three hours to watch the full two videos, here’s a 16-minute condensed audio version, summarized using Google’s powerful AI tool, "NotebookML": https://notebooklm.google.com/notebook/1931e09c-c74b-4d26-a25c-e03245e79347/audio ** Please refer to my 2022 post, where I shared tips on bypassing most online news paywalls. Edited November 10 by yqsun Add info on bypassing paywalls Link to comment Share on other sites More sharing options...
gfp Posted November 10 Share Posted November 10 1 hour ago, sholland said: I believe that I once read that the only reason Fairfax established a dividend is because Prem personally wanted more money, but didn’t think it was fair to shareholders to increase his compensation. The dividend is a way for Prem to get more money while shareholders get the same too. Well since the company just bought $304 million USD worth of shares from him for cash I suppose he won't be pushing for another dividend increase. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 10 Author Share Posted November 10 1 hour ago, gfp said: Well since the company just bought $304 million USD worth of shares from him for cash I suppose he won't be pushing for another dividend increase. My guess is that he bought the shares on margin probably using his original stake as collateral. But he did sell enough to pay off the loan and have a nice pile of cash and stock left over. Link to comment Share on other sites More sharing options...
Junior R Posted November 10 Share Posted November 10 Prem sold as the Liberals in Canada proposed higher Capital Gains tax rate..but it hasn't passed yet...We all can hope it doesnt lol Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 10 Author Share Posted November 10 38 minutes ago, Junior R said: Prem sold as the Liberals in Canada proposed higher Capital Gains tax rate..but it hasn't passed yet...We all can hope it doesnt lol Agreed. Also, I think to get the company more stock before the 60 add. Link to comment Share on other sites More sharing options...
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