Fairfax Financial Holdings Limited (Symbol-FFH)

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George$
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Prem's letter re 2009 - 11 page pdf
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Taggart »

Back in 2009 Buffett had to make write downs by near 90% for two Irish banks he bought into for Berkshire Hathaway because at the time of purchase "they appeared cheap". Now it appears Prem Watsa of Fairfax Financial is going to attempt something similar.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Today's G&M has some grim views from Fairfax's Prem Watsa
Fairfax’s Watsa sees Dirty Thirties pain ahead
The U.S. economy appears to be heading toward a lengthy period of deflation such as the one that struck Japan, and there is little policy-makers can do to prevent it, says one of Canada’s most accomplished investors.

But it isn’t just the United States and Europe that Prem Watsa is worried about. The potential bursting of a property bubble in China has him even more concerned. And if Chinese demand for commodities dries up at the same time as U.S. consumers are shutting their wallets, then the global economy is in for a lengthy period of pain.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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I like the words "appears" and "if". They give financial articles so much flexibility. It's awesome!
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Reported after hours today
TORONTO, Oct 27 (Reuters) - Fairfax Financial Holdings said on Thursday its quarterly profit rose more than 150 percent as the insurer booked a $1.6 billion gain on investments.
I'm wondering if we will see a "pop" tomorrow or if it was already priced into FFH.

and the Fairfax press release with further details
Fairfax Financial Holdings Limited: Third Quarter Financial Results
(added later - fixed the above link)
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George$
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by George$ »

Why did my Fairfax go up today while almost every other stock went down today?

Is it because Fairfax is shorting the S&P - meaning that if the market goes down, the Fairfax asset base value increases?
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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George$ wrote:Why did my Fairfax go up today while almost every other stock went down today?

Is it because Fairfax is shorting the S&P - meaning that if the market goes down, the Fairfax asset base value increases?
Fairfax went for one reason, there were more buyers of the stock than sellers. That being said the motivation of the buyers might well be the fact that Watsa et al at Fairfax have fully hedged the equity portfolio therefore in theory their position is flat to up on a down day. Fairfax is positioned for stormy weather and the question has to be how quickly the hedges can be unwound if the market move against them, that is to say up. All that being said Fairfax has done well over the long haul Full disclosure I hold shares of FFH.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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George$ wrote:Why did my Fairfax go up today while almost every other stock went down today?
:shock:

Unless you're a trader, looking at your stock each day is likely to cause unhappiness over the long term.

Anyway, for the insta-explanation / guesstimator ... long bond prices were up today.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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NormR wrote:
George$ wrote:Why did my Fairfax go up today while almost every other stock went down today?
:shock:

Unless you're a trader, looking at your stock each day is likely to cause unhappiness over the long term.
Anyway, for the insta-explanation / guesstimator ... long bond prices were up today.
I agree that constantly watching your shares has no value. I do this in spurts and look at the whole portfolio. Today it was almost all red with a couple of exceptions. FFH was one. And for a short while I think it calibbrates my sense of volatilty.
- and I honestly don't see it causing unhapiness here. :wink:
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Wow. FFH went up again today by 2% while almost everyone else went down. (S&P 500 is down 2.8% for the day.)

Here is a Sept 2011 interview with Prem Watsa that may be part of the reason ...
Prem Watsa is Bearish on the European and U.S. Economies

With the European debt crisis threatening to infect the entire world and cause a new global recession, Watsa is playing it safe. Fairfax’s equity portfolio is 86% hedged and he is heavily invested in U.S. Treasuries. In fact, he is betting that the U.S. economy will suffer from deflation, which he calls “inevitable” given that the Federal Reserve is out of ammo and the federal government’s deficit-reduction agreement will reduce public spending at the worst possible moment. In fact, Watsa is putting his money where his mouth is by purchasing $428 million worth of 10-year consumer price index (CPI) derivatives that increase in value if the CPI in Europe and/or the U.S. falls. I think it important to note that he is not betting on deflation in his home country of Canada.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by George$ »

Interesting (at least to me).
More of the same trend - while stocks all around show negative movement today, FFH is positive.
As I post - for the day so far
+0.9% FFH
-2.1% S&P-TSX
-2.9% BRK
-3.4% S&P-500
-3.1% DJ
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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I'll see you at the next annual meeting :wink:
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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George$ wrote:+0.9% FFH
-2.1% S&P-TSX
-2.9% BRK
-3.4% S&P-500
-3.1% DJ
USD up 1.3% vs CAD
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Taggart »

The last announcement of a dividend increase for Fairfax came way back in 2009. Absolutely, nothing this year. I'm beginning to think maybe, perhaps they're not doing as well as I originally thought.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Taggart wrote:The last announcement of a dividend increase for Fairfax came way back in 2009. Absolutely, nothing this year. I'm beginning to think maybe, perhaps they're not doing as well as I originally thought.
For those who don't know, they pay an annual dividend in USD and it was not raised last time. The next dividend should be paid early next year. No idea if it'll be increased.

But it's not really a dividend stock. Indeed, they have a fairly vocal shareholder base that would rather retained earnings instead of dividends ...
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Taggart »

NormR wrote:
Taggart wrote:The last announcement of a dividend increase for Fairfax came way back in 2009. Absolutely, nothing this year. I'm beginning to think maybe, perhaps they're not doing as well as I originally thought.
For those who don't know, they pay an annual dividend in USD and it was not raised last time. The next dividend should be paid early next year. No idea if it'll be increased.

But it's not really a dividend stock. Indeed, they have a fairly vocal shareholder base that would rather retained earnings instead of dividends ...
Just goes to show there's something for all the different types of investors in the stock market. Since when it comes to individual stocks, I'm more of the "show me the money upfront" type of investor, I'd be looking for something else. I find in life, one of the most valuable traits is consistency. Not easy to find, but when I do, I latch onto it, especially if the entity keeps giving me a yearly income growing faster than the inflation rate. Over the years there's been a few disappointments along the way, but when this happens I just sell and wait. There's always something else interesting comes along to invest in without having to wait too long.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by George$ »

Fairfax dividend statement

Unchanged from Jan-2010 and Jan-2011 - $10 once a year.
TORONTO, ONTARIO--(Marketwire - Jan. 4, 2012) - Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) announces that it has declared a dividend of US$10.00 per share on its outstanding multiple voting and subordinate voting shares, payable on January 26, 2012 to shareholders of record on January 19, 2012. Applicable Canadian withholding tax will be applied to dividends payable to non-residents of Canada.

Consistent with the practice of prior years, the amount of this dividend was determined taking into account the current operating results of Fairfax and its insurance and reinsurance companies and the current cash position at the Fairfax holding company. Consequently, as each year's circumstances are different, this dividend should not be regarded as indicative of the amount of any future annual dividends.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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I see that Fairfax FFH went down 3% today.

Do I interpret this to mean that Fairfax could hold the insurance policy on the unfortunate cruise ship in the Mediterranian?

:cry: Disclosure: I hold FFH
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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George$ wrote:I see that Fairfax FFH went down 3% today.

Do I interpret this to mean that Fairfax could hold the insurance policy on the unfortunate cruise ship in the Mediterranian?

:cry: Disclosure: I hold FFH
Looks like a $10 per share dividend went Ex today?
http://www.google.com/finance?q=TSE%3AFFH
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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DavidR wrote:
George$ wrote:I see that Fairfax FFH went down 3% today.

Do I interpret this to mean that Fairfax could hold the insurance policy on the unfortunate cruise ship in the Mediterranian?

:cry: Disclosure: I hold FFH
Looks like a $10 per share dividend went Ex today?
http://www.google.com/finance?q=TSE%3AFFH
Again thanks, I should have seen that. So the $12.61 drop today in share price was really only a $2.61 drop in lost $. :oops:
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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George$ wrote:
DavidR wrote:
George$ wrote:I see that Fairfax FFH went down 3% today.

Do I interpret this to mean that Fairfax could hold the insurance policy on the unfortunate cruise ship in the Mediterranian?

:cry: Disclosure: I hold FFH
Looks like a $10 per share dividend went Ex today?
http://www.google.com/finance?q=TSE%3AFFH
Again thanks, I should have seen that. So the $12.61 drop today in share price was really only a $2.61 drop in lost $. :oops:
$10 USD ...
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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“The search for truth is more precious than its possession.” Albert Einstein
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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My guess is that FFH has been doing poorly since the end of the financial crisis because they believe the stock market is overvalued so they are under-invested and have bought puts on the stocks they have invested to protect capital in the event of a market downturn. Only time will tell if Watsa's call in long-term weakness in the economy and deflation is correct as this is what he is hedging against and this is what is preventing robust earnings presently.

This stock is a good hedge against the markets while still giving your stock portfolio some equity exposure. If the market is collapsing FFH will outperform. FFH is probably a good buy with the recent market outperformance but I would wait for shareholders to get frustrated with the stock and start selling it downward before I guy a tranche. I would like it to drop to about 350-375 before buying a good chunk of it.

I may try to sell a put at that level and collect some income in the interim.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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I was just looking at some of their recent moves which seem to big losers like buying a huge chunk of RIM at much higher prices. They apparently bought another large chunk at 26.

Watsa may have made a couple of really bad buys. I hope he hedged his exposure by buying a put on the stock. He also bought a large chunk of ABH but who knows how they are doing right now after the bankruptcy.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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My view on FFH (and on investing?)

I don't expect perfection and so I accept that FFH will make mistakes - but I do expect them to be correct in their calls at 50% or more of the time.
Why so? Given their past record (like the call on subprime) I'm confident that there is a good chance (not a guarantee) that they will outperform in the long run. They have demonstrated they are capable of independent, - not herd like - analysis and thought. Thus I'm willing to ride out the dips with FFH that are sure to come.

About RIMM. I don't know. Perhaps only a year or two from now might we know if buying RIMM at $26 was "dumb" or "smart". I bought some at $24 - for sentimental reasons - (not a sound financial reason). I respect and admire Lazarides as a human being.
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