Fairfax 2024

[Junior R]

2 minutes ago, Parsad said:

Stock is up $4.40 so far in Toronto.  Cheers!

no volume interesting again 

[Gregmal]

I love when they mouth off and short first and then ask questions later…ultimately ending up begging for better disclosure because they didn’t do the appropriate work in the first place and got it wrong. 

[StubbleJumper]

8 minutes ago, gfp said:

Disclosure regarding associates that have been on the balance sheet since Jan. 1 2020.  Cash in / cash out / profits booked / contingent liabilities question.

 

Will you be disclosing these transactions?

 

Jen Allen taking the question.

 

"disclosed under IFRS in our annual report"

 

Block, "Rather than going for the bare minimum that IFRS requires, why not go for enhanced disclosure.  Why leave it there?"

 

Next question please

 

Yep.  Go pound sand!

[MMM20]

8 minutes ago, juniorr said:

he seems worried on his short position 

wait, did I imagine him saying “goddammit” before they cut off his mic?

[Junior R]

1 minute ago, MMM20 said:

wait, did I imagine him saying “goddammit” before they cut off his mic?

Didn't hear that need to wait for replay lol

[Luke]

I was in the call at last, what a shitshow for MW, desperate question and especially ugly when he pushed for "further" details above what is required to insinuate any problems...sleezy guy...

[Luke]

I didnt hear any goddammit. 

 

I think they where right to stop giving him any space. He is a fool and the reaction from watsa was good. Get lost MW!

[gfp]

2 minutes ago, MMM20 said:

wait, did I imagine him saying “goddammit” before they cut off his mic?

 

I think that was Prem hollering something on a hot mic - not sure what he said but it might have just been a greeting to the next analyst.

[Smile]

This might be of some use!

 

FFH conf call notes.txt

Edited February 16 by Smile

[Thrifty3000]

In what universe are you given ONE make-or break-question on a company’s conference call - where everyone knows your intent is to take down said company - and your ONE question is WHY DON’T YOU DISCLOSE MORE INFORMATION??

 

Oh brother, that was really pathetic.

 

FFH is worth $1500 to $1800 USD per share. Kudos to Prem & Co. for a job very well done!

[jbwent63]

I thought Jen was a superstar on the call. I am an accountant so what she says isn't gobbledegook like it could be for non-accountants. I loved it when she stuck the knife in "IFRS is not USGAAP". That was an FU to Mr. Block. Then he asks for more disclosure of immaterial items. Sorry, that's not how it works. In my opinion Fairfax's disclosures are quite comprehensive, especially when compared to MRK or BH (Markel lumps all its non-insurance Ventures investments into one bucket with little further detail other than a breakdown into categories). It will be interesting to see if FFH increases any of its disclosures in the 2023 AR. I thought Prem sounded strong (pissed off maybe) and Mr. Clarke was nervous...although that may be par for the course with him (I don't recall thinking this on earlier calls). So now, what does everyone think about the AGM? Does Mr. Block show his face?

[gfp]

I assume Mr. Block will be long gone by the AGM.  I think Fairfax does have a more "accurate" or "up-to-date" book value than, say, Berkshire and should trade at a lower price to book ratio than Berkshire all else being equal (they are not equal, Fairfax has higher growth, more float leverage and generally lower quality earnings vs. BRK).  Berkshire's carrying values rarely get re-marked higher by transactions.  Marmon and Pilot are two recent examples of required Fairfax-style write-ups but we will probably never see BNSF or GEICO marked up on Berkshire's balance sheet.

[TwoCitiesCapital]

Going to be honest - the share price reaction to an a amazing earnings report is a bit disappointing

 

Makes me wonder if 1) the market had it "right" and the earnings rally was what we saw in January or 2) if we're back to the days of the getting the earnings look for free and the stock responds 2-3 days later

 

Either way - I am somewhat shocked we didn't get a pop of 5-10% from market participants who haven't been following this as closely as we have. 

[gfp]

1 minute ago, TwoCitiesCapital said:

Going to be honest - the share price reaction to an a amazing earnings report is a bit disappointing

 

Makes me wonder if 1) the market had it "right" and the earnings rally was what we saw in January or 2) if we're back to the days of the getting the earnings look for free and the stock responds 2-3 days later

 

Either way - I am somewhat shocked we didn't get a pop of 5-10% from market participants who haven't been following this as closely as we have. 

 

Were there any surprises in the Q4 earnings?  Seems like we knew all of that ahead of time:  TRS profit, Micron profit, October bond moves, interest rates move for the quarter, lack of big Cats, etc

[StubbleJumper]

4 minutes ago, TwoCitiesCapital said:

Going to be honest - the share price reaction to an a amazing earnings report is a bit disappointing

 

Makes me wonder if 1) the market had it "right" and the earnings rally was what we saw in January or 2) if we're back to the days of the getting the earnings look for free and the stock responds 2-3 days later

 

Either way - I am somewhat shocked we didn't get a pop of 5-10% from market participants who haven't been following this as closely as we have. 

 

There are probably some people who took the opportunity to add last week and are lightening up before the long weekend.  I increased my position by 30% about five minutes after I read that amateurish report.  I went from being unwisely concentrated in FFH to being bat-shit-crazy concentrated in FFH.  I really should have been trimming the position in 2024, but have instead increased it significantly.  At some point, reason will have to prevail and I'll put in a sell order for the shares that I bought last week.

 

High conviction is high conviction, but stupid is stupid.

 

 

SJ

[MMM20]

12 minutes ago, TwoCitiesCapital said:

Going to be honest - the share price reaction to an a amazing earnings report is a bit disappointing

 

I've felt this way every quarter for the past few years. And yet.

 

Give it a couple months. Or at least a couple days!

 

 

Edited February 16 by MMM20

[TwoCitiesCapital]

21 minutes ago, gfp said:

 

Were there any surprises in the Q4 earnings?  Seems like we knew all of that ahead of time:  TRS profit, Micron profit, October bond moves, interest rates move for the quarter, lack of big Cats, etc

 

Fairfax has demonstrated time and time again that its share price is NOT part of an efficient market. 

 

As mentioned in my post, there used to be stellar earnings reports that the stock wouldn't react to and then 2-days later the stock would pop 4-6% for seemingly no reason. I actually started a strategy of adding to my positions after great earnings and then selling into those pops that worked reasonably well for 12-18 months. 

 

So while there is nothing that surprised us, given things like the headlines characterizing these earnings as a "miss" or as lower than last-years (without adjusting for the $1.2B gain from a subsidiary sale), or the share price tanking after the MW report, it's clear that the market doesn't follow this anywhere near as closely as we do as is regularly missing the story here. Which is why I'm surprised the earnings report didn't spell it out for those folks with $1.7B in Q4. 

 

14 minutes ago, StubbleJumper said:

 

There are probably some people who took the opportunity to add last week and are lightening up before the long weekend.  I increased my position by 30% about five minutes after I read that amateurish report.  I went from being unwisely concentrated in FFH to being bat-shit-crazy concentrated in FFH.  I really should have been trimming the position in 2024, but have instead increased it significantly.  At some point, reason will have to prevail and I'll put in a sell order for the shares that I bought last week.

 

High conviction is high conviction, but stupid is stupid.

 

 

SJ

 

That could be. That was exactly my plan into a 5-10% earnings pop ABOVE the pre-MW report prices. 

 

Broke my own rule on position concentration to allow adds in the wake of the MW report. Gains since then have been satisfactory, but was definitely expecting more "oomph" from it. Now I have to decide how long I'm going to allow myself to break my rule for. 

 

10 minutes ago, MMM20 said:

 

I've felt this way every quarter for the past few years. And yet.

 

Give it a couple months. Or at least a couple days!

 

 

 

Yea - we'll see. Hoping it's the return of the 2-3 day lag in share response to earnings. 

[Crip1]

32 minutes ago, TwoCitiesCapital said:

Going to be honest - the share price reaction to an a amazing earnings report is a bit disappointing

 

Makes me wonder if 1) the market had it "right" and the earnings rally was what we saw in January or 2) if we're back to the days of the getting the earnings look for free and the stock responds 2-3 days later

 

Either way - I am somewhat shocked we didn't get a pop of 5-10% from market participants who haven't been following this as closely as we have. 

 

I think two things are muting the reaction today.

 

First, though I don't have data to support this, historically the reaction to positive earnings news has taken 2-3 trading days to materialize. No idea why this is, but it's happened on more than a few occasions.

 

Second, the earnings report came in reasonably close to expectations with positive surprises (4 year run rate) offset by negative surprises (slowing premium growth), so much of this was already baked into the price. 

 

All above in my humble opinion.

 

-Crip

[Thrifty3000]

The headline was negative. The bots are doing their thing.

[gfp]

Does anybody remember the date that the Annual Report / shareholders letter was released last year?  I couldn't find a press release.  I suppose I could check my 'downloads' folder..

[Hoodlum]

The Globe provided some of the detailed quotes from today's conference call.

 

https://www.theglobeandmail.com/business/article-fairfax-rebuts-short-seller-defends-investment-valuations/

[StubbleJumper]

19 minutes ago, gfp said:

Does anybody remember the date that the Annual Report / shareholders letter was released last year?  I couldn't find a press release.  I suppose I could check my 'downloads' folder..

 

I have the annual letter in my Downloads directory because I like to read it multiple times during a year.  When I open the .pdf file, the meta-data says it was created on 15 March 2023, so presumably it would have been released within a day or two of that.

 

 

SJ

[gfp]

Thanks, I couldn't find it in my own downloads.  Didn't think to download it again and check the pdf meta data. 

[Haryana]

14 hours ago, glider3834 said:

So Fairfax's book value per share (BVPS) CAGR growth (incl dividends) for 2017-2022 period was 11.7%

 

If we now update & look at 2017-2023 period, I get BVPS CAGR (incl dividends) as 15.5%

 

Calc below

 

=(1009.65*/367.4)^(1/7)-1 = 15.54%

 

*2023 YE BVPS 939.65 + 70 divs = 1009.65

You are adding dividends as if they were paid at the end.
They were paid annually at the beginning of each year.

 

When you account for that, the CAGR comes at ~16.5%.
Please see if you agree, time value of dividend.

 

Edited February 16 by Haryana
~

[SharperDingaan]

2 hours ago, Crip1 said:

 

I think two things are muting the reaction today.

 

First, though I don't have data to support this, historically the reaction to positive earnings news has taken 2-3 trading days to materialize. No idea why this is, but it's happened on more than a few occasions.

 

Second, the earnings report came in reasonably close to expectations with positive surprises (4 year run rate) offset by negative surprises (slowing premium growth), so much of this was already baked into the price. 

 

All above in my humble opinion.

 

-Crip

 

Keep in mind that no buying doesn't mean no money waiting on the side-lines to come in. If MW round 2 doesn't happen soon it's not going to, so give them some time  ; it's a small community, and the laughter is echoing. Their last success was a long time ago, and if this is the best that they can do now ...... well, the walls are closing. 

 

Somebody lend them a few shares, to buy back cheaper!

 

SD!

 

 

 

Edited February 16 by SharperDingaan