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Prem Buying Japanese Real Estate!


Parsad
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Interesting.

 

Does anyone forsee Fairfax buying up entire companies outside insurance, ala BRK? 

 

This company has a lot of potential to grow.  What an amazing story so far.

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Prem told me a long time ago that it is something they may consider some day, but there has never been any specifics about when, where, or who they may or may not acquire. 

 

Their circle of competence is insurance, so they like to stay in that field...what are they going to do if they acquire a non-insurance business and need to change management?  Throw Mark Ram or another insurance executive in there? 

 

There is no David Sokol yet at Fairfax, so it will take some time for them to get comfortable with the idea of buying non-insurance businesses and having a deep enough team of managers that could step into such positions.  Berkshire has always bought non-insurance businesses...they have the experience and depth in management to throw in a pinch-hitter.  Cheers!   

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I don't think Markel has anyone of the caliber of David Sokol as a fixer, yet they have started up Markel Ventures and have acquired a number of companies.

 

Why wouldn't Fairfax follow the same model of buying well-run companies with mgmt in place.

 

Well, I think Markel would run into the same problem.  If a CEO quits, then you have to find a replacement...and it almost certainly won't be someone in-house, inundated with the Fairfax/Markel culture, nor necessarily the same ideas about shareholder value or business ethics.  Prem may just not want the hassle.  Cheers!

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Interesting.

 

Does anyone forsee Fairfax buying up entire companies outside insurance, ala BRK?  

 

This company has a lot of potential to grow.  What an amazing story so far.

 

At the AGM in 2009, Prem was asked this and, while not outright saying "no", he did state that he much favored businesses which generated investable float. Couple that with, as Sanj said, the insurance circle of competance, I do not see them buying anything outright for a while.

 

When one has a managable ego, one can buy fractional portions of companies and not feel the need to get involved with the day-to-day. In listening to Prem, his ego is obviously managable, so this would look to be the direction in which they are headed.

 

-Crip

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One approach could be the Buffett way - hey, I'll buy your company and you stay as long as you want.  But I'll give you a crap load of cash between now and when you retire (to buy your company).

 

Interesting about the comment of other companies with float.  Any ideas if this meant anything outside of insurance?  My guess would be no, but I am speculating.

 

I guess time will tell.  Tough to argue with the moves they have made over the past 4 years or so, although everyone makes some mistakes.

 

 

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Japan looks incredibly interesting at the moment, not just from a real estate angle. The Yen is making record highs, Japanese businesses are basically getting roasted alive. Look at the sheer volume of government debt that's financed at pathetic rates, if people think U.S. Treasurys are cheap they ain't seen nothing. Then you've got the stock market, which has been a dog for 20 years now, but yet has some of the cheapest companies in the world. It's strange though, it's still the (real) second largest economy in the world, yet it's treated as some sort of outlier, a sort of white elephant to be ignored.

 

Real estate aside, has anyone got any ideas for investments in Japan, particularly with inflation in mind for Japan? I'm thinking low-capital intensive businesses like Nintendo, although I would rather find lesser known companies.

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Japan looks incredibly interesting at the moment, not just from a real estate angle. The Yen is making record highs, Japanese businesses are basically getting roasted alive. Look at the sheer volume of government debt that's financed at pathetic rates, if people think U.S. Treasurys are cheap they ain't seen nothing. Then you've got the stock market, which has been a dog for 20 years now, but yet has some of the cheapest companies in the world. It's strange though, it's still the (real) second largest economy in the world, yet it's treated as some sort of outlier, a sort of white elephant to be ignored.

 

Real estate aside, has anyone got any ideas for investments in Japan, particularly with inflation in mind for Japan? I'm thinking low-capital intensive businesses like Nintendo, although I would rather find lesser known companies.

 

A personal find:  Iwatsuka Confectionery Company Limited

-It looks expensive on a P/E basis, however they own 5% of china based Want Want Holdings (worth much more than their own market cap...)  Since they don't appear to be in any hurry to sell, you need to figure out Want Want as well.

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I think it is unlikely you will see FFF buying businesses outright that are not insurance related.  It is a very different structure from Berky.  No offence to Prem but he is not Warren Buffett.  People sell to Warren and keep working for Warren.  If you sell to FFH you are selling to an insurance conglomerate run by committee with Prem at the top.  You are not selling to Watsa.

 

These recent moves have been very interesting and totally fascinating.  Hamblin-Watsa is staying within their circle of competence with both the medical insurance and the real estate.  

 

Bronco,  FFH has had at least one real ugly loser recently - Canwest;  they also have some dubious ones still hanging such as Torstar, LVLT, ABH, MB.  

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