Fairfax 2024

[Hoodlum]

3 hours ago, MMM20 said:

Thanks. I assume you are referring to the Ensign Energy TRS @Hoodlum. 

Yes. Are we still holding any Fairfax swaps that could go up or down depending on share price?

Edited June 19, 2024 by Hoodlum

[hardcorevalue]

yes ffh swaps still in place (which makes sense to me)

[petec]

On 6/19/2024 at 1:46 PM, StubbleJumper said:

but I didn't quite grasp the objective and timing of tacking on the extra $250m for use by the holdco.  They needed that extra $250m last year

 

Lots has changed in the last year. Inflation fears have subsided somewhat, and FFH has has ratings upgrades. I suspect issuing 30-year debt at 6% is primarily opportunistic - it is a great piece of financing and likely highly accretive to equity value, so when the opportunity arises you do it even if you don't have an immediate plan for the money. My hypothesis would be that this opportunity wasn't there last year.

 

Also FFH is bigger now, so all else being equal you'd expect debt to rise.

[Munger_Disciple]

Prem donates $5mm to IIT Madras for brain research:

 

https://acr.iitm.ac.in/iitm_in_news/mr-prem-watsa-donates-5-million-to-iit-madras-for-brain-research-advancement/

[Parsad]

15 hours ago, Munger_Disciple said:

Prem donates $5mm to IIT Madras for brain research:

 

https://acr.iitm.ac.in/iitm_in_news/mr-prem-watsa-donates-5-million-to-iit-madras-for-brain-research-advancement/

 

That's wonderful!  Pay it forward!  Cheers!

[StubbleJumper]

18 hours ago, Munger_Disciple said:

Prem donates $5mm to IIT Madras for brain research:

 

https://acr.iitm.ac.in/iitm_in_news/mr-prem-watsa-donates-5-million-to-iit-madras-for-brain-research-advancement/

 

 

It wasn't entirely clear to me when I read the story, did Prem donate $5m of the Watsa family's money, or did Prem donate $5m of Fairfax shareholders' money?

 

 

SJ

[gfp]

2 hours ago, StubbleJumper said:

 

 

It wasn't entirely clear to me when I read the story, did Prem donate $5m of the Watsa family's money, or did Prem donate $5m of Fairfax shareholders' money?

 

 

SJ

it is Prem’s own (personal) money, although it follows a recent sale of Fairfax shares back to the company.  

[StubbleJumper]

1 hour ago, gfp said:

it is Prem’s own (personal) money, although it follows a recent sale of Fairfax shares back to the company.  

 

Well, that's what the headline would suggest, but I was having trouble finding more detailed clarity in the article itself, and there's no press release on Fairfax's website.  In the article, I saw these two lines, one which would suggest it was Watsa family money and one which might suggest that it was Fairfax shareholder money:

 

First: 

 

Mr. Prem Watsa, founder and chairman of Fairfax Financial Holdings Ltd., has donated $5 million (approximately Rs 41 crore) to his alma mater, the Indian Institute of Technology Madras, to advance brain research.

 

And second:

 

Fairfax Financial Holdings, under Mr. Prem Watsa’s leadership, has pledged its support to this cutting-edge research and development initiative. In a press release on Tuesday, Mr. Prem Watsa stated, “We are pleased to support this work and wish them the very best to reach greater heights.”

 

 

SJ

[John Hjorth]

So, @StubbleJumpers question above about if this is about Watsa funds or FFH funds hereby appear clearly justified, right?

 

Now who's going to ask FFH IR about it?

[gfp]

I think that is the gist - this $5 million donation is from Mr. Prem Watsa.  Also, Fairfax has pledged to support this cutting edge research (likely through smaller gifts).

[Parsad]

16 hours ago, John Hjorth said:

So, @StubbleJumpers question above about if this is about Watsa funds or FFH funds hereby appear clearly justified, right?

 

 

No, not really.  Do you want me to ask him and tell him that after all these years, shareholders still doubt his intentions and decision making?

 

I'm pretty sure it was Prem directly and neither Fairfax, nor Sixty-Three Foundation.  This research was always important to the Watsa Family, but it's become more important since Vinodh's illness and recovery.

 

Cheers!

[MMM20]

20 hours ago, John Hjorth said:

So, @StubbleJumpers question above about if this is about Watsa funds or FFH funds hereby appear clearly justified, right?

 

Now who's going to ask FFH IR about it?

 

Even if it’s from FFH, that’s like half a day of earnings, right? Maybe I’m too cynical, but that seems cheap enough for good PR in a important country for them. 

 

Edited June 30, 2024 by MMM20

[StubbleJumper]

29 minutes ago, MMM20 said:

 

Even if it’s from FFH, that’s like half a day of earnings, right? Maybe I’m too cynical, but that seems cheap enough for good PR in a important country for them. 

 

 

Irrespective of the magnitude it's not really even an issue.  FFH has a program of charitable donations and espouses the "doing good while doing well" approach.  Donating to this sort of cause could easily fit into that program.

 

My question was just basic curiosity.  Is the Watsa family donating money outside of FFH's charitable initiative, or was this part of the charitable initiative?  Both are fine, but if was FFH's money, I'd tend to prefer that the "credit" be attributable to FFH rather than the Watsa family.  If it was Watsa family money, then Prem should definitely be applauded for having made the donation.

 

 

SJ

[Crip1]

17 hours ago, Parsad said:

 

No, not really.  Do you want me to ask him and tell him that after all these years, shareholders still doubt his intentions and decision making?

 

I'm pretty sure it was Prem directly and neither Fairfax, nor Sixty-Three Foundation.  This research was always important to the Watsa Family, but it's become more important since Vinodh's illness and recovery.

 

Cheers!

Personally, this is not a matter of a lack of trust. It's simply a matter of clear candid communication as the press release seems to be somewhat ambiguous. 

 

-Crip

 

[Parsad]

3 hours ago, Crip1 said:

Personally, this is not a matter of a lack of trust. It's simply a matter of clear candid communication as the press release seems to be somewhat ambiguous. 

 

-Crip

 

 

It wasn't a press release from Fairfax, but from IIT Madras...which should suggest that this was a personal contribution, not one from Fairfax.  Cheers!

[Parsad]

16 hours ago, StubbleJumper said:

 

Irrespective of the magnitude it's not really even an issue.  FFH has a program of charitable donations and espouses the "doing good while doing well" approach.  Donating to this sort of cause could easily fit into that program.

 

My question was just basic curiosity.  Is the Watsa family donating money outside of FFH's charitable initiative, or was this part of the charitable initiative?  Both are fine, but if was FFH's money, I'd tend to prefer that the "credit" be attributable to FFH rather than the Watsa family.  If it was Watsa family money, then Prem should definitely be applauded for having made the donation.

 

 

SJ

 

Hi Stubble,

 

I'm almost certain it was a personal contribution...not from Fairfax or Sixty-Three.  An alumnus giving back.  Cheers!

[Munger_Disciple]

13 hours ago, Parsad said:

I'm almost certain it was a personal contribution...not from Fairfax or Sixty-Three.  An alumnus giving back.  Cheers!

 

That's my understanding as well. 

[Haryana]

On 6/30/2024 at 11:03 PM, Sanjeev Parsad said:

 

Hi Stubble,

 

I'm almost certain it was a personal contribution...not from Fairfax or Sixty-Three.  An alumnus giving back.  Cheers!

 

Calling @StubbleJumper by First name sounds similar to calling "Vampire Slayer" in a similar way - 

 

[Viking]

My oldest daughter (24) is in Toronto visiting a couple of fiends. What is she doing?

 

My younger daughter's (21) response (at the bottom) cracked me up.

 

Fairfax is definitely a family affair in our house  

 

PS: my kids TFSA's are 100% in Fairfax (since they were opened a couple of years ago). They are very happy shareholders (they look at their account balances).

 

 

Edited July 8, 2024 by Viking

[modiva]

1 hour ago, Viking said:

My oldest daughter (24) is in Toronto visiting a couple of fiends. What is she doing?

 

My younger daughter's (21) response (at the bottom) cracked me up.

 

Fairfax is definitely a family affair in our house  

 

PS: my kids TFSA's are 100% in Fairfax (since they were opened a couple of years ago). They are very happy shareholders (they look at their account balances).

 

 

That’s great! Congrats to you and to your daughters for getting into the investment world at a young age guided by their dad!! It can’t get better than that. 

[Luke]

3 hours ago, Viking said:

My oldest daughter (24) is in Toronto visiting a couple of fiends. What is she doing?

 

My younger daughter's (21) response (at the bottom) cracked me up.

 

Fairfax is definitely a family affair in our house  

 

PS: my kids TFSA's are 100% in Fairfax (since they were opened a couple of years ago). They are very happy shareholders (they look at their account balances).

 

 

Haha! Well deserved! New ATH today! Cheers! 

[glider3834]

https://www.sedi.ca/sedi/SVTItdSelectIssuer?locale=en_CA

Edited July 9, 2024 by glider3834

[Viking]

37 minutes ago, glider3834 said:

https://www.sedi.ca/sedi/SVTItdSelectIssuer?locale=en_CA

@glider3834 I am looking forward to seeing what the June 30 share count is when Fairfax reports Q2 results. If they keep the current pace of buybacks up there is a good chance they will reduce effective shares outstanding by +1 million in 2024 to 22 million (or less). Fairfax historically only buys back stock when they think it is trading at a cheap valuation. And i think they can value the company pretty well. I continue to think the piece that investors are getting wrong is the quality of the insurance AND the quality of the investment portfolio (much improved and best in company’s history) - and the multiple that warrants. But Fairfax gets it - hence why they continue to buy back stock hand over fist in 2024. Buying back stock at current prices is like shooting fish in a barrel (from a capital allocation perspective). 

 

Edited July 9, 2024 by Viking

[Hoodlum]

An interesting overview of the existing hard market.  There have been different catalysts driving this hard market, instead of the usual catastrophic event.  There have also been no new reinsurance entrants.
 

AM Best expects this hard market to continue through at least 2025 and possibly longer.   We may need to readjust our expectations over the next couple of years

 

https://www.insurancebusinessmag.com/ca/news/reinsurance/hard-reinsurance-market-not-going-away--am-best-495863.aspx

 

 

 

Edited July 9, 2024 by Hoodlum

[UK]

5 hours ago, Viking said:

@glider3834 I am looking forward to seeing what the June 30 share count is when Fairfax reports Q2 results. If they keep the current pace of buybacks up there is a good chance they will reduce effective shares outstanding by +1 million in 2024 to 22 million (or less). Fairfax historically only buys back stock when they think it is trading at a cheap valuation. And i think they can value the company pretty well. I continue to think the piece that investors are getting wrong is the quality of the insurance AND the quality of the investment portfolio (much improved and best in company’s history) - and the multiple that warrants. But Fairfax gets it - hence why they continue to buy back stock hand over fist in 2024. Buying back stock at current prices is like shooting fish in a barrel (from a capital allocation perspective). 

 

 

And maybe what is also new and interesting this year, is that they are doing all those buybacks at well above 1 BV. I do not think / remember that was the case any time previously? So perhaps this would also support your idea of quality and points of cheap and fair valuation moving up. Maybe it is 1.2 and 1.6 now vs 1.0 and 1.3 previously in their view and personally I would not disagree:)

 

Edited July 9, 2024 by UK