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Fairfax 2024


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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

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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

 

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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!

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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!

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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 - 

 

a.jpg

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Posted (edited)

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).

 

image.thumb.png.2cc6357a1883b0abdba8a1d706650b13.png

image.thumb.png.7782106c96b3d353956775f7ecb828d1.png

 

Edited by Viking
  • Haha 1
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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).

 

image.thumb.png.2cc6357a1883b0abdba8a1d706650b13.png

image.thumb.png.7782106c96b3d353956775f7ecb828d1.png

 

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. 

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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).

 

image.thumb.png.2cc6357a1883b0abdba8a1d706650b13.png

image.thumb.png.7782106c96b3d353956775f7ecb828d1.png

 

Haha! Well deserved! New ATH today! Cheers! 

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Posted (edited)
37 minutes ago, glider3834 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). 

 

Edited by Viking
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Posted (edited)

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 by Hoodlum
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Posted (edited)
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 by UK
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8 hours ago, UK said:

 

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:)

 


Probably still 1x FTM BV so not too demanding a valuation for buybacks. Personally, I think they want to buy shares back ahead of the eventual 60 add as that may drive the multiple much higher.

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2 hours ago, SafetyinNumbers said:

I think they want to buy shares back ahead of the eventual 60 add as that may drive the multiple much higher.

remind us of the process/timing/probability of this. (apologies i know you've discussed it before)

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Posted (edited)

Wondering what the board makes of this...

 

Prop Cat Is Significantly Underpriced This Year https://iansbnr.com/prop-cat-is-significantly-underpriced-this-year/

 

"One of the great mistakes of the financial crisis was mortgage underwriters and investors thinking they would be OK because their models told them what a bad outcome looked like and that they would be OK under that outcome. The problem, of course, was the models accounted for 'normal' stress and not an extreme stress. I fear the same thing is happening this year in the prop cat market. Underwriters are ignoring the elevated risk of a historically active season and continuing to price off the cat models. You would price the odds of who wins the Presidential election differently before the debate vs. afterwards in response to new information. Well, we have lots of information that suggests it won’t be a normal hurricane season, so why are reinsurers pricing cat treaties like it is a normal year?"

 

Edited by MMM20
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23 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).

 

image.thumb.png.2cc6357a1883b0abdba8a1d706650b13.png

image.thumb.png.7782106c96b3d353956775f7ecb828d1.png

 


Amazing !!

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24 minutes ago, ourkid8 said:

Is anyone aware of any timelines when the rebalance of the index happens?    

Rebalances happen every 3 months, next one in September. 

 

One of the rules is that no company should constitute less than 0.2% of the index (obviously, the average is 100%/60=1.67%). Right now, the smallest constituent is Algonquin Power and Utilities (AQN), which, at $5.621b market cap, constitues 0.202% of the index, so they are flirting with ejection. They are in a sector (Energy) which is already heavily represented, at 17.9%; unfortunately for the prospects of Fairfax inclusion, so are Financials, at 34.4%. They could turf Canadian Apartment Properties Real Estate Investment Trust (CAR.UN) which is at 0.28% and put Fairfax in, given that Fairfax is #31 by market cap of Canadian companies, so would seem to belong to the TSX60 which is in principal "designed to represent leading companies in leading industries. Its 60 stocks make it ideal for coverage of companies with large market capitalizations and a cost-efficient way to achieve Canadian equity exposure."

 

I'm guessing it won't happen yet, but it would be a nice surprise, if you like that sort of thing.

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3 minutes ago, 73 Reds said:

Is there an argument to be made that Fairfax won't get an invite due to the Watsa family control of the company?  Similar to why Berkshire is not in the Dow 30?


Berkshire ‘ case might be due to its very high class A shares given Dow’ unique methodology. 
 

 

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Yeah, high share price was always the reason or excuse given but today one can easily buy fractional shares.  The other issue is two classes of stock but some of us remember when there was only one class and they weren't so expensive.  Not that Buffett would give a sh-t one way or another; in fact he probably prefers to be excluded for the same reason why Groucho Marx would never be a member of a club that would have him.

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On 7/8/2024 at 11:13 AM, 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).

 

image.thumb.png.2cc6357a1883b0abdba8a1d706650b13.png

image.thumb.png.7782106c96b3d353956775f7ecb828d1.png

 

 

As usual, elder sibling better at exploring and discovering while the younger more social and practical.

Prem could logically reply to the job proposal -
"Since you know Fairfax so well, you would know that we are very small at the holding company and will always be like that."
(You may have a better chance at one of the subsidiaries.)

 

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