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Questions about FFH equity hedges


Partner24

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http://www.fairfax.ca/files/doc_financials/AR2008.pdf

 

 

A read of 2008 annual report will give you a good idea..pg 41 outlines the short sale proceeds...$744 million of the 2008 short proceeds were from synthetic short total return contracts on individual equities. They also shorted the teck bubble in 2000 by shorting a basket of tech stocks...and they shorted the Japan implosion in late 1980's.

 

Dazel

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Anyone that wants a history lesson and where Fairfax is positioned today read the above (2008 annual report and I would read 2007 as well).

 

2008 was a record year for Fairfax...maybe 2015 will be as well!

 

Dazel

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Do we have any info on the size of current individual shorts as opposed to the Russell hedges?

 

I assume they have not been heavily short individual commodity names or we would have seen the results already.

 

This is more what I'm interested in. I haven't read the 2008 report cover to cover, but it doesn't seem to have much in the way of the thesis on the individual short positions or which companies are being shorted. I did like how the broke out in the table the notional amounts by equity index, equity index trs, and outright shorts. We don't even have that today (unless if there exposure is actually just limited to the Russel).

 

I'm just curious how they think about shorting, what they shorted, and how that might be impacting what they're doing today. I've known they were short the Russel for a long time but I'm curious as to what individual names are, or could be, included in their basket.

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