Granitepost Posted January 26, 2011 Posted January 26, 2011 FFH Dividends are in my TDWaterhouse accounts now. Cheers.
Uccmal Posted January 26, 2011 Author Posted January 26, 2011 Got it now... Hasn't made up for anywhere near the drop in the stock, mind you. This is turning into a really crappy stock to own. I remember the good old days when the company was a sinking ship and traded at >1.5 book, or two years ago when it traded at 1.25 book, or 12 years ago when it traded at 3x book.
sdev Posted January 26, 2011 Posted January 26, 2011 Crappy if you define long term as 1 year. In that year they have made some great acquisitions and over the long term, it will continue to do well.
Uccmal Posted January 26, 2011 Author Posted January 26, 2011 Nope, The best company... with a really crappy stock. Sdev, I have owned FFH in various forms for nearly 14 years. I did extremely well with the options. If I had held the common stock all this time I would have shot myself. The p/b has shrunk from 3x to ~1 over that time getting lower each year. We always seem to be waiting for some great catalyst to move the stock. Now its the hard market we are waiting for. When that comes and the stock doesn't budge out of its moribund state what excuse will everyone use.
Myth465 Posted January 26, 2011 Posted January 26, 2011 Nope, The best company... with a really crappy stock. Sdev, I have owned FFH in various forms for nearly 14 years. I did extremely well with the options. If I had held the common stock all this time I would have shot myself. The p/b has shrunk from 3x to ~1 over that time getting lower each year. We always seem to be waiting for some great catalyst to move the stock. Now its the hard market we are waiting for. When that comes and the stock doesn't budge out of its moribund state what excuse will everyone use. I hope im smart enough like you are, and continue to simply trade value. I will always be a FFH shareholder, but will only pony up when I see value + a catalyst. I think if one is intellectually honest, its hard to see FFH getting revalued based on underwriting. That leaves investment gains and a hard market. I dont see significant gains in the portfolio, and believe I will have an op to buy at a lower price once we get a hard market (likely caused by a cat or fall in the markets which sends the stock and BV down). As a young poor fellow I cant justify holding most of my portfolio in FFH.
DynamicPerception Posted January 26, 2011 Posted January 26, 2011 Monday 2011Jan17 was ex-dividend date.
sdev Posted January 27, 2011 Posted January 27, 2011 Nope, The best company... with a really crappy stock. Sdev, I have owned FFH in various forms for nearly 14 years. I did extremely well with the options. If I had held the common stock all this time I would have shot myself. The p/b has shrunk from 3x to ~1 over that time getting lower each year. We always seem to be waiting for some great catalyst to move the stock. Now its the hard market we are waiting for. When that comes and the stock doesn't budge out of its moribund state what excuse will everyone use. I have definitely not been around these guys for more than a fraction of the time that you have. However, I'm not that worried about it being "dead money" seeing as it's not trading for a multiple of book value right now. I might be optimistic about their continuous overseas expansion, but I dont think that it's a stretch that they continue to increase the book value at a reasonable rate over the long term. If the stock doesn't follow book value, eventually I'd assume they would start buying back stock. Does that logic seem flawed?
Parsad Posted January 27, 2011 Posted January 27, 2011 Hopefully Prem is retiring some shares at these prices. I think they could nibble and retire a few of them here and there. Cheers!
treasurehunt Posted January 27, 2011 Posted January 27, 2011 I have definitely not been around these guys for more than a fraction of the time that you have. However, I'm not that worried about it being "dead money" seeing as it's not trading for a multiple of book value right now. I might be optimistic about their continuous overseas expansion, but I dont think that it's a stretch that they continue to increase the book value at a reasonable rate over the long term. If the stock doesn't follow book value, eventually I'd assume they would start buying back stock. Does that logic seem flawed? I agree with sdev. Why does FFH need a "catalyst" as long as Watsa is able to increase IV at a good rate and is willing and able to buy back stock? FFH certainly has enough capital to buy back stock if undervaluation persists, and hopefully IV will continue to increase. I must admit that I am bummed about the massive S&P 500 and Russell 2000 swaps that FFH put on when these two indices were much lower. By my calculation, FFH is in the hole by about $1.1 billion pre-tax on these swaps since inception. But I guess they make for decent disaster insurance. The swaps could constrain IV growth going forward though.
Uccmal Posted January 27, 2011 Author Posted January 27, 2011 Yeah, I hope they are buying in shares right now. They certainly have the cash flow to do it, disregarding the destruction of book value this year. I am mostly trying to right (shrink) size my holdings after exercising the last of my options. As per Myth's comments I think there is a downside to the stock price right now that may be reached by whatever catalyst takes us to a hard market. Dropping tide reduces all boats kind of effect.
biaggio Posted January 27, 2011 Posted January 27, 2011 what do you think is an appropriate allocation for a concentrated portfolio of 10 stocks?
StubbleJumper Posted January 27, 2011 Posted January 27, 2011 Yeah, I hope they are buying in shares right now. They certainly have the cash flow to do it, disregarding the destruction of book value this year. I am mostly trying to right (shrink) size my holdings after exercising the last of my options. As per Myth's comments I think there is a downside to the stock price right now that may be reached by whatever catalyst takes us to a hard market. Dropping tide reduces all boats kind of effect. Al, Sanj, I'd be surprised if there were any meaningful buybacks (ie, >5% of outstanding shares). FFH is on an acquisition binge, and it shows no signs of subsiding. At some point, they'll have to stop to digest, but my sense is that they're not done yet. SJ
valuesource Posted January 27, 2011 Posted January 27, 2011 You should see it today. The F/X rate on our CAD a/c was 0.9962. I just waited until the dividend hit CDS (approx 12:00 noon) and changed the money.
Myth465 Posted January 27, 2011 Posted January 27, 2011 I dont see buybacks in significant fashion. I also think FFH may be right at book with the losses and dividends. Buying at .95 book value is no real bargain considering they could keep acquiring other insurers at BV. Also we have had too many issues to be buying back so soon. I think capital will continue to build and acquisitions / expansions will continue.
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