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FFH as a % of your portfolio


ValueBuff
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FFH as a % to what?  "general holdings", "investable assets", "net worth", non-401(k) investments....

 

 

Depending on what you count, FFH is probably between 30% and 80% for me (and I am way too lazy to actually calculate); it will go higher if BRK does well before the summer as I sell it and reinvest at least part in FFH.  I basically view Fairfax and more risky short term but ulimately more profitable than my "same as cash" Berkshire.

 

 

PS:  No, I am not the ultimate nut in here, some do over 100% of investable assets through leverage :)

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My weightings have varied from 90% to 0%. When the stock fell to $220 18 months ago and it was positioned so well with its CDS and long US treasury positions I backed up the truck and moved to 90%. I went to a similar weighting a couple of years ago when it fell to just over $100. I also reduced my position to 0% each time after purchase the stock went up significantly (as fears proved false or investment results smoked).

 

I have never planned to go so heavy. And I got VERY lucky in that the bottoms were temporary and the stock made very significant moves upwards shortly thereafter. My net worth is now large enough that I do not want to take on the additional risk of concentrating on one company.

 

Currently I have about 12% in FFH (of my investable assets) with my avg purchase being about  CAN$285 (I was at 0% at the start of the year).

 

On a go forward basis I doubt that FFH will trade as cheaply as it has in the past. I will be happy to buy when it falls below 0.8 x BV but will limit my exposure (perhaps 25%). I will also continue to lighten up as the stock appreciates...

 

I like the company alot and feel it will perform quite well looking out 3 to 5 years. And the results will be lumpy. I will get more excited about FFH once the insurance market begins to harden...

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jeez Viking, you've been smoking good!  While I did a couple of round trips as well, I didn't do anywhere near as well as you seem to have (or uccmal/ericopoly/others have done with the leaps).  I should really go back to looking at the Joe/Jane 6pack investors who lose their shirt in the market to make myself feel better in comparison  ;D

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Uruhu, I should point out that FFH gains over the years have covered up a number of smaller losses (although my long return is about 18%). Also, with FFH, I never went from zero to 90% on one purchase. I always started buying when the stock looked cheap and as it kept going lower I always bought more. And when it got insanely cheap (i.e. $100 a couple of years ago) I went pretty much all in. If FFH went under at the same time the stock price was cratering I would have been pretty much cleaned out. Also, during the short periods when I was 'all in' it was very difficult for me to keep things together mentally. High risk... high reward. Gambling? Stupid? I do not have the answers.

 

Bottom line, I have learned that I do have a predisposition to do something that is quite dangerous (go overweight). I am trying to get better at getting a little more diversified but not too much (as I believe concentrated portfolios are the best way to go).

 

And despite having a pretty good long term track record I still am not sure if it is skill or luck! I just try and keep reading and learning and getting a little better every year...

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