Charles Frischer and Asheef Lalani - Fairfax Is A "Fat Pitch"
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- เผยแพร่เมื่อ 19 ก.ค. 2023
- Charles Frischer and Asheef Lalani stop by The Business Brew to discuss why they like Fairfax as an investment. Quick reminder to do your own work!!!
Asheef Lalani as an independent director to the board of Sailfish Royalty Corp. Mr. Lalani graduated from the University of Waterloo with a Bachelor of Mathematics and Masters of Accounting, earned the CA/CPA designation in 2002 and is a CFA charterholder since 2003. Asheef first started his career with PricewaterhouseCoopers in 1998 and went on to become a portfolio manager at UBS Securities. Currently, Mr. Lalani is the Chief Investment Officer at Berczy Park Capital - a private family office in Toronto, Canada.
Charles Frischer is General Partner of LFF Partners, a family office based in Seattle. Mr. Frischer was a multi-family loan underwriter and originator at Capri Capital for 10 years. As a Principal at Zephyr for 4 years, he was responsible for the asset management of more than 5,000 multi-family units and all related financings of the portfolio. Frischer sits on the Board of Kingsway Financial and Altisource Asset Management. He attended his first Berkshire annual meeting in 1998, his first Market annual meeting in 1999 and his first Fairfax annual meeting in 2010. He holds an B.A. in Government from the College of Arts and Sciences from Cornell University.
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Detailed Show Notes
4:24 - Backgrounds
9:01 - Fairfax gets interesting in Asheef's mind
11:43 - Pushback to the thesis
13:00 - Does Fairfax underwrite well?
17:00 - Why insurance companies shouldn't under reserve
25:00 - How good is Fairfax at investing in equities?
30:00 - The potential upside India brings to Fairfax
34:20 - Fairfax India background
42:55 - What people might not like about Fairfax India
45:40 - Fairfax's advantages
56:40 - What is the catalyst here?
62:00 - Does this pitch even need a catalyst?
64:00 - What does a bad outcome look like? - บันเทิง
Thanks for having Asheef and Chris on. i was lucky enough to buy at around US $ 475 last year as it looked stupid cheap. This pod makes me examine my bias to start trimming if it reaches above book. BTW., i love the pitch format. Having knoledgeable people on about misunderstodd stocks. There is a reputational overhang on the stock for sure. But if someone looked at this with fresh eyes, it seems to be a quality company. Q now is should we swap other insurers like MKL for FFH?
Great podcast guys. Really enjoyed it. “Double in three or 4 years” is still not enough to get smart people interested in understanding the transformation that has been happening at Fairfax over the past 5 years. Stock is crazy cheap not because Mr Market is discounting anything. Mr Market still has Fairfax in the penalty box (and is ignoring it). As earnings (US$150/year) get baked into historical results - and with the stock trading at US$760/share - more investors will start to get interested.
Over the past 5 years, Fairfax has been best in class at capital allocation: 1.) pivot in $40 billion fixed income portfolio to 1.2 year average duration in Q4 2021 and then to 2.5 in Q1 2023 - this generated billions in shareholder value. 2.) in 2022, sale of pet insurance for $1.4 billion ($992 million after tax gain) - a small business no one knew they owned. 3.) in late 2020 and early 2021, exposure to 1.96 million FFH shares via total return swap for US$373/share. 4.) in late 2021, re-purchase of 2 million FFH shares at US$500/share 5.) in 2022, sale of Resolute Forest Products for $626 million plus $183 million ATV at top of lumber cycle. 6.) In 2018 and 2019, purchase of Atlas/Seaspan - results in $1.3 billion gain so far. 7.) in 2023, sale of Ambridge for $400 billion - gain of $255 million. Etc, etc. there are another 10-15 more meaningful capital allocation decisions that could be listed. And of course don’t forget about Digit, their Indian insurer they funded as a startup in 2017. Bottom line, quality, durable earnings are exploding and yet investors can’t escape the shackles of the past.
Spot on.
In time, this will be priced differently I think. I'm up nearly 100% so far, but if I'd had a smaller allocation I would probably still add at this level.
Great podcast and description of FFH
I will come back in three years and gladly give you the grade Asheef & Charles!
Great episode guys
Double digit % drop today!
What happens when Prem dies or retires? I am leery about investing in companies that depend too much on the unique skills of their founders. I have the same concerns about Berkshire (Buffet) and Tesla (Musk).
He’s still pretty young at 74. His son will take over as Chairman and they have a strong bench which will be featured on conference calls going forward.
I don't believe in apple but I am extatic to own it through berkshire.
Why?
@@LocalGeezah its exspensive. with the multiple you are making a bet that in 20 years apple is still the dominant player.
I dont feel comfortable making that assumption. could absolutely happen and I dont know what could do major damage to apple but 20 years is a long time and a lot of uncertainty.
1:02:51 how does his math work? 800 book to 1300 book and the stock is a double? Huh?
Assumes some multiple expansion