Fairfax 2025

[Dinar]

10 hours ago, Xerxes said:

Based on the Q&A It is clear that Prem doesn’t waste too much time with Howard Marks’ memos

Howard is a great marketer, Bruce Karsh is the investor there.   To his credit, Marks did make several market calls at extremes and was correct. 

[Madpawn]

 

34 minutes ago, Dinar said:

Howard is a great marketer, Bruce Karsh is the investor there.   To his credit, Marks did make several market calls at extremes and was correct. 

I’ve missed the AGM, could anyone provide a summary of what was said about Howard? 

[glider3834]

repurchases Mar25

 

 

 

[giulio]

Transcript of AGM

FFH_agm24.pdf

[bluedevil]

49 minutes ago, giulio said:

Transcript of AGM

FFH_agm24.pdf 387.75 kB · 13 downloads

 

Thank you!!!

[bluedevil]

Wow, Seaspan is killing it!

 

"Our long-term charters with our -- with the major shipping companies. It was a little over $26 billion. And today, that long-term cash flow under contract is about $30.5 billion, and we burn about $2.3 billion a year."

 

They have 13 years of cash flow locked in.  That's incredible.

 

Only risk i see is financial instability in their customer base - which is more than a theoretical issue given tariffs.  But assuming no blow ups there, Seaspan seems very well positioned. 

 

[gfp]

1 minute ago, bluedevil said:

Wow, Seaspan is killing it!

 

"Our long-term charters with our -- with the major shipping companies. It was a little over $26 billion. And today, that long-term cash flow under contract is about $30.5 billion, and we burn about $2.3 billion a year."

 

They have 13 years of cash flow locked in.  That's incredible.

 

Only risk i see is financial instability in their customer base - which is more than a theoretical issue given tariffs.  But assuming no blow ups there, Seaspan seems very well positioned. 

 

 

I love how Sokol claimed they got out of APR with a "small profit" - yeah, you got a "small profit" because Fairfax sent you hundreds of millions of dollars to indemnify you for the losses LOL - that's a line for the Atlas annual meeting, not the Fairfax meeting!

Edited April 11, 2025 by gfp

[SafetyinNumbers]

29 minutes ago, gfp said:

 

I love how Sokol claimed they got out of APR with a "small profit" - yeah, you got a "small profit" because Fairfax sent you hundreds of millions of dollars to indemnify you for the losses LOL - that's a line for the Atlas annual meeting, not the Fairfax meeting!

Sokol said that he thought Seaspan was worth ~$9b and that Fairfax’s stake is worth ~$4b which is more than 2x where it is marked. 

[gfp]

Just now, SafetyinNumbers said:

Sokol said that he thought Seaspan was worth ~$9b and that Fairfax’s stake is worth ~$4b which is more than 2x where it is marked. 

 

Right - no problem with Atlas/Seaspan.  I was commenting on his APR Energy exit math.  Which was subsidized by Fairfax sending them money more than once.

[SafetyinNumbers]

5 minutes ago, gfp said:

 

Right - no problem with Atlas/Seaspan.  I was commenting on his APR Energy exit math.  Which was subsidized by Fairfax sending them money more than once.

I wasn’t disagreeing with you. Just adding something I learned during the week on Seaspan which I thought was important.

 

I know quite a few investors have been selling because the rate of change in operating earnings ($5b pre-tax, $150/sh after-tax) is slowing. I think ignoring that they have tons of embedded gains like Seaspan, Ki, BIAL etc… is a mistake. The three of those marked at fair value might increase book value over $200/sh and of course there are other FV over CV gains like Eurobank that are disclosed to consider.

 

 

[gfp]

I'm sure a bunch of people sold Berkshire shares the entire time they built what they built - it was always a mistake.  Such is life.  Fairfax is awfully well positioned and they have built one hell of an impressive company.

 

Everything is gonna be swell

[gfp]

The only thing that gives me pause on Fairfax stock in the very short term is the very bad looking bear flag pattern the share price has traced out.  That would suggest another couple day spike downwards - possibly with the broader market - next week or so.  That would be a wonderful time to buy more shares.  Otherwise, I will wait to buy more until it breaks higher and negates that bear flag pattern.  

 

Edited April 11, 2025 by gfp

[SafetyinNumbers]

44 minutes ago, gfp said:

I'm sure a bunch of people sold Berkshire shares the entire time they built what they built - it was always a mistake.  Such is life.  Fairfax is awfully well positioned and they have built one hell of an impressive company.

 

Everything is gonna be swell

Sure but Berkshire BV growth was less predictable then vs Fairfax now and the P/B multiple was also usually higher than Fairfax is now. It seems easier to avoid making a bad decision as it’s less of a bet on the jockey and more of a bet on the structure.
 

Still people are selling. I attribute that more to high return expectations given how inefficient and volatile the market is vs a view that absolute returns will < 10% CAGR over the next 5 years. 

 

[MMM20]

18 minutes ago, gfp said:

The only thing that gives me pause on Fairfax stock in the very short term is the very bad looking bear flag pattern the share price has traced out.  That would suggest another couple day spike downwards - possibly with the broader market - next week or so.  That would be a wonderful time to buy more shares.  Otherwise, I will wait to buy more until it breaks higher and negates that bear flag pattern.  

 

That’s obviously a quintuple lindy upward-facing dog constellation situation formation. Extremely bullish. 

[Jaygo]

34 minutes ago, gfp said:

The only thing that gives me pause on Fairfax stock in the very short term is the very bad looking bear flag pattern the share price has traced out.  That would suggest another couple day spike downwards - possibly with the broader market - next week or so.  That would be a wonderful time to buy more shares.  Otherwise, I will wait to buy more until it breaks higher and negates that bear flag pattern.  

 

I dont know what a bear flag is but I hope your right. After the last few days I'm dreaming of lower prices. 

[LC]

9 minutes ago, MMM20 said:

That’s obviously a quintuple lindy upward-facing dog constellation situation formation. Extremely bullish. 

Very wrong - you missed the head shoulders knees and toes pattern forming underneath the knee bone connecting to the leg bone. The price will clearly dip below its 200 light year moving average and ultimately settle within the long term exercise bands. 

[Hektor]

1 minute ago, LC said:

Very wrong - you missed the head shoulders knees and toes pattern forming underneath the knee bone connecting to the leg bone. The price will clearly dip below its 200 light year moving average and ultimately settle within the long term exercise bands. 

[villainx]

33 minutes ago, MMM20 said:

That’s obviously a quintuple lindy upward-facing dog constellation situation formation. Extremely bullish. 

Was there also a Back to School reference there?  
 

You getting no respect. 

[bluedevil]

2 hours ago, SafetyinNumbers said:

Sokol said that he thought Seaspan was worth ~$9b and that Fairfax’s stake is worth ~$4b which is more than 2x where it is marked. 

 

Thanks for sharing that nugget.  Makes me happy has a Fairfax shareholder; makes me kinda sad as a former Seaspan shareholder that did not want to sell

 

But pretty cool to see what they have accomplished despite big challenges during this period.  (Seaspan is heavily levered and had floating rate exposure during the big move in interest rates.)  

 

 

 

[Hoodlum]

ORLA rebounded nicely this week, closing at a new all-time high.  Those recent warrants are looking better every week. 
 

Edited April 11, 2025 by Hoodlum

[jfan]

Carney’s Checkmate: How Canada's Quiet Bond Play Forced Trump to Drop Tariffs

 

I'm not an expert in these matters. But will this not cause a mark-to-market drop in Fairfax's short treasury bond portfolio, reducing some of their financial flexibility?

[gfp]

26 minutes ago, jfan said:

Carney’s Checkmate: How Canada's Quiet Bond Play Forced Trump to Drop Tariffs

 

I'm not an expert in these matters. But will this not cause a mark-to-market drop in Fairfax's short treasury bond portfolio, reducing some of their financial flexibility?

 

That is written by someone who is "not an expert on these matters."

 

Fairfax's average duration is 3.5 years and they report in US Dollars.  They have liability discounting effects that offset quarter to quarter changes in market interest rates.  Fairfax isn't particularly exposed to losses on their bond portfolio unless they change how they are positioned (drastically extend maturities) or we have a huge default wave on their construction loans (which KW would then take over and manage to completion, mitigating that particular risk).

 

Fairfax will be OK.  Berkshire is even safer, obviously, with an average duration of less than 6 months last we heard.

[villainx]

I was thinking about the hedges that stalled Fairfax, was Prem right but just the wrong term?

 

If the hedges were on, would effect be dramatic?

 

 

[djokovic1]

2 hours ago, villainx said:

I was thinking about the hedges that stalled Fairfax, was Prem right but just the wrong term?

 

If the hedges were on, would effect be dramatic?

 

 

No hedging is a bad idea. Doesn’t work with long term investing. One of the reasons a lot of investors dismiss Fairfax today is not understanding that the lost decade was in a large part due to hedging which will not happen again.

[Cigarbutt]

10 hours ago, jfan said:

Carney’s Checkmate: How Canada's Quiet Bond Play Forced Trump to Drop Tariffs

 

I'm not an expert in these matters. But will this not cause a mark-to-market drop in Fairfax's short treasury bond portfolio, reducing some of their financial flexibility?

Just a tiny addition to what @gfp has mentioned:

In statutory accounting (regulatory capital, surplus etc) the US Treasury securities are (still) designated at levels which recognize the securities at (amortized) cost so the 'statutory' value does not fluctuate with market values, so no impact on "flexibility" from that point of view.

The idea is that insurers such as FFH tend to match their assets with their liabilities and it is assumed that these high quality fixed income securities will be held to maturity and that the issuer will not proceed to an unexpected restructuring.

Historically, FFH has recognized sometimes large unrealized losses in their bond portfolio under GAAP accounting but have also tended to report (sometimes large) realized gains.

Post 2008 and then for about a decade, they've positioned their float portfolio with a deflation-hedge skew but now it looks quite neutral but that could change any day.