JEast Posted August 18, 2011 Share Posted August 18, 2011 What a difference only few trading days make. Since the end of the reported June 30 numbers, the 10-year has moved 100-110bp. Huge move in a such a short period. Some have speculated what this implies, but here is a call for our friends in the front office to sell a good portion of those long-dated bonds -- with the proceeds, do what you do best. All this good news even prior to heading into the peak hurricane season. As events play out, it would seem that our company is hitting on most, if not all, cylinders. On any general market pullback, FFH my even get back to extremely undervalued that the market is missing or doesn't care about short-term. -- Prem & Team, buy back a few shares :) Cheers JEast Link to comment Share on other sites More sharing options...
Valuebo Posted August 18, 2011 Share Posted August 18, 2011 sub 2%. :D Link to comment Share on other sites More sharing options...
Santayana Posted August 18, 2011 Share Posted August 18, 2011 Prem has said he thinks US debt is good for the long term. Does anyone think he'll be taking profits at these levels? Link to comment Share on other sites More sharing options...
bluedevil Posted August 18, 2011 Share Posted August 18, 2011 I think HWIC will sell when the yield on the 30 yr treasury goes below 3%. That is when he sold in 2008 and factors in the low levels of inflation HWIC expects in medium-term future. Link to comment Share on other sites More sharing options...
JEast Posted September 23, 2011 Author Share Posted September 23, 2011 Given the move in the past few days and from the December 31 numbers, the 10-year has moved 75-85bp and the 30-year has moved nearly 120bp. Huge moves for the year but significant moves from the June 30 when we were in a mark-to-market loss. Another call for our friends in the front office to sell a good portion of those long-dated bonds -- and with the proceeds, do what you do best. Cheers JEast Link to comment Share on other sites More sharing options...
Uccmal Posted September 23, 2011 Share Posted September 23, 2011 James, I am not convinced they will sell anything. There is a degree of re-investment risk. This capital has to stay liquid so they would have to move the long bonds to the short end. Anyway, we shall see in a few weeks what they are doing. Al. Link to comment Share on other sites More sharing options...
JEast Posted December 16, 2011 Author Share Posted December 16, 2011 As we gather steam back to the bond September lows, let’s see if the FFH team finally sells some of those long dated bonds. From the 3rd quarter report it would appear that they had not. I am sure HW sees good equity values currently that we could surely exchange. Given the opportunity for another 25% gain on bonds (some would argue) versus 10%+ earnings yield (plus dividends) seems like an easy exchange. Some bond gains for more equity positions is requested. If the birds chirp more, let’s give them a little in the next few weeks :) Cheers JEast Link to comment Share on other sites More sharing options...
Viking Posted December 16, 2011 Share Posted December 16, 2011 There look to be lots of cross currents currently swirling around: 1.) year end window dressing by funds 2.) low volume due to Christmas holidays 3.) year end tax loss selling Bonds again are at multi-year lows and stocks continue sideways... I wonder if Europe is burning people out, given all the noise since Sept and lack of progress. Perhaps time for the patient to receive a little shock therapy (complements of our hedge fund friends)... :) Link to comment Share on other sites More sharing options...
sdev Posted December 16, 2011 Share Posted December 16, 2011 I think dumping treasuries for equities on a large scale is not an option. Insurance regulators and ratings agencies would freak out. However I bet that if there were seemingly undervalued bonds that had adequate guaranteessuch as munis in 08 or munis they tried to buy within the last year but received no fills, they would swap out their treasuries. Link to comment Share on other sites More sharing options...
petec Posted December 19, 2011 Share Posted December 19, 2011 I hope they sell some. I understand their deflation thesis but the derivatives give them great protection there. There's no need to hold the bonds and you'd have to be out of your mind to say they have a margin of safety (vs. the other reason for holding them, which is a macro bet on deflation). Go to cash and wait for opportunities. Link to comment Share on other sites More sharing options...
Valuebo Posted January 10, 2012 Share Posted January 10, 2012 Remarkable that the 10y still yields under 2% after the run-up un the stock market. I just watched this interview from Wealthtrack with Robert Kessler (extreme bull on treasuries): http://wealthtrack.com/previous_12-30-2011.php Kessler is aiming for 1% on the 10 year treasuries because of deleveraging and coming deflation. :o Helps to understand Prem's thesis better, also considering he has the insurance business to think of. Doubt he'll sell any soon! Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 11, 2012 Share Posted January 11, 2012 He mentions Warren Buffett not caring if he buys IBM at the highest price possible because he's got $10b in his back pocket. Link to comment Share on other sites More sharing options...
JEast Posted February 1, 2012 Author Share Posted February 1, 2012 It would appear after the FED's recent announcement to keep a zero percent environment a year longer than expected, 1% on the 10 year treasuries is more likely than 3% anytime soon. Irrespective, I still would like HW to sell some of their/our long-term bonds. Another 70bp would be a nice addition to BV, but assuming FFH is still roughly 90%, or more, hedged, buying some businesses or equities would appear to be more beneficial to long-term shareholders. My 2 or 3 cents. Cheers JEast Link to comment Share on other sites More sharing options...
JEast Posted May 9, 2012 Author Share Posted May 9, 2012 Just bumping this up to say thanks to the HW team for being more transparent on the bond holdings at both the annual meeting and on the recent conference call. I emphasis 'team' as most of recognize the strength of the team. It would appear that the cash is surely building (long-term bonds nearly liquidated) with the somewhat recent rally and return back to safety in the bond market. If a real scare comes, surely bonds will rally even more, but the rally should be captured, in part, with the CPI swaps and the cash now on hand can be spent aggressively in the equity markets. Cheers JEast Link to comment Share on other sites More sharing options...
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