Fairfax's equity allocation

[ERICOPOLY]

Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.

 

Have they ever taken this percentage meaningfully higher?  Or have they ever indicated at what level they consider to be "maxed out"?

 

[giofranchi]

Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.

 

Have they ever taken this percentage meaningfully higher?  Or have they ever indicated at what level they consider to be "maxed out"?

 

Well, I don’t know, yet the last time I checked, MKL had a common stock portfolio worth 62% of shareholder’s equity, without any hedges in place. So, I guess FFH has much room to get more aggressive in common stocks. :)

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence. One’s knowledge and experience is definitely limited and there are seldom more than two or three enterprises at any given time which I personally feel myself entitled to put full confidence.” - John Maynard Keynes

 

[berkshiremystery]

Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.

 

Have they ever taken this percentage meaningfully higher?  Or have they ever indicated at what level they consider to be "maxed out"?

 

Well, I don’t know, yet the last time I checked, MKL had a common stock portfolio worth 62% of shareholder’s equity, without any hedges in place. So, I guess FFH has much room to get more aggressive in common stocks. :)

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence. One’s knowledge and experience is definitely limited and there are seldom more than two or three enterprises at any given time which I personally feel myself entitled to put full confidence.” - John Maynard Keynes

 

The more important thing about the quarterly changes of the weightings of it's equities portfolio relative to shareholders equity should be put on the aspect how this change is archived: A) through appreciation of share values, or B) new purchases. In the case of A, I wouldn't be worried at all. Cheers!

 

[vinod1]

Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.

 

Have they ever taken this percentage meaningfully higher?  Or have they ever indicated at what level they consider to be "maxed out"?

 

Yes. I was trying to model their returns so I had noted down this % way back in 2011 and here it goes:

 

Equities/Shareholders Equity  Year

40%                                          2002

47%                                          2003

59%                                          2004

76%                                          2005

77%                                          2006

62%                                          2007

77%                                          2008

64%                                          2009

47%                                          2010

 

 

Vinod

[watsa_is_a_randian_hero]

you would need to model this net of hedges 06 and 08 look the same right now, but really with hedges accounted for they were very different

[ERICOPOLY]

Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.

 

Have they ever taken this percentage meaningfully higher?  Or have they ever indicated at what level they consider to be "maxed out"?

 

Yes. I was trying to model their returns so I had noted down this % way back in 2011 and here it goes:

 

Equities/Shareholders Equity  Year

40%                                          2002

47%                                          2003

59%                                          2004

76%                                          2005

77%                                          2006

62%                                          2007

77%                                          2008

64%                                          2009

47%                                          2010

 

 

Vinod

 

 

Thanks Vinod.  I knew somebody had it already organized.