obtuse_investor

Agreed. I put the back of the napkin aside and did some real math on the BVPS annual return since very first filing. The return has been 11.3%. Note that this return is after fees to FFH. For comparison, stock has returned about 3% over that same period. Buyer from 2015 IPO (with cost of $11) lost about 8% each year on multiple compression. Full disclosure, I am not planning to tender my shares. And no, I fortunately didn't buy at IPO. ?

I could see the book value rising at a reasonable clip, like it has. Can’t predict if it would be at 25. What do think has to be true for it to trade close to book value per share? Multiple compression has been the biggest detractor of return for security holders since 2015, while book has grown at about 10% per annum.

Interesting development! Fairfax India Announces US$105 Million Substantial Issuer Bid https://www.fairfaxindia.ca/news/press-releases/press-release-details/2021/Fairfax-India-Announces-US105-Million-Substantial-Issuer-Bid/default.aspx Curious timing. FIH stock was down 5.3% today. This press release came out after market close today.

I expect they did something with their BB position, but it was probably something complicated and too smart. I miss the time when Prem and team only stepped over 1ft hurdles.

There was a disturbance in the space time continuum when that BB rip happened. Bloomberg caught it.

Thanks for your post, Viking. For the first time since deep water horizon I am looking at oil sector again. Instead of buying specific names, why not pick up a low cost energy ETF? It reduces specific company risk and still lets you play your thesis out. Maybe it’s my lack of sophistication in the sector, but I am starting to get interested in XLE or similar ETFs.

This is standard annual filing. Fairfax financial did a similar one at the same time.

Very lacklustre on repurchase front. This will disappoint the market. I am not surprised though. I have long maintained that Buffett is playing the very long game (which will long surpass his own expiry date). While market has basically discounted COVID-19 already, Buffett is likely thinking much longer term. Almost all scientists agree that we are in for the long haul of virus induced disruption. Market isn’t discounting that (yet).

If the government is successful in passing the risk off to insurance companies then in one month they’ll have to bail out the sector. Interesting times we live in. ~~ In FFH AGM Prem mentioned that there was no known pandemic risk on their books. They are expecting their combined ration was below 100 for Q1.

What's your estimate for the current book value though? I don't have any fancy models. Two of their biggest assets are the airport and IIFL (finance & banking). Both these are going to get hit severely due to COVID, but we also know that the impact would not be forever. People will fly again and use their financial institutions again. Do a DCF of a sample company... even if first two years there is zero earnings, the value drops much less than 30%. If I simply assume that their Q4 book value has dropped ~30% similar to overall Indian stock market, then it will be around 11.8/shr. As of this writing FIH is selling at P/B of 0.57. If the underlying businesses return nominal 10% p.a. then at current price buyer is earning ~18% p.a.

Of all the things I own right now, FIH certainly looks the cheapest right now. If the book value growth is about 6-8% per annum for next 10 years, with current discount to book you can lock in a very healthy rate of return even after fees. Book should grow at a higher rate than that.

There are couple issues with Markel vs BRK: - Markel's fully owned business part is much smaller and lower quality than BRK's. - With low/zero/negative interest rates, fixed income from (re)insurance is low and float is not worth a lot. - (Re)insurance has had weak pricing. This may change, but overall (re)insurance returns have been weak. Personally, I'd probably rather buy a stock portfolio via good mutual fund rather than buy MKL that's a stock portfolio + (re)insurance and fixed income. I'm not as positive on BRK as a lot of people are either. Like you said, the size is an issue. There are other issues (Buffett's age, conservatism, portfolio composition, etc.). I would not be surprised if BRK and MKL won't outperform the index long term coming out of the crisis. Disclosure: I hold BRK position. I have sold most of MKL position. I don't plan to buy MKL. I may add to BRK for the conservative side of my portfolio. I may be totally wrong about everything above. Thanks for your perspective, Jurgis. I find that both these businesses are rather anti-fragile. That is, they get stronger when put under stress. There is no shortage of stress these days. Berkshire gets stronger in large bursts (thanks to Warren's elephant gun), while Markel gets stronger in a slow methodical manner (thanks to Ventures, new business like ILS, algorithmic investing of equity portfolio). I ran a twitter poll for the same question: FWIW, BRK.B 60%; MKL 20%; Both: 20%

Hah! That's why it is better to take the other side of that trade-- own insurance companies.

Markel is now selling at similar valuation as Berkshire. If you wanted to start buying more of these two, which one would you choose? I currently own both (about equal amounts). I am thinking to pick Markel because of longer runway and a much younger company.

TD allows it too. ••• I wish it didn’t. In May 2009, I bought small bit of Harley Davidson puts in my TFSA thinking it was a false rally since March. Rest of my portfolio was long. No leverage. The puts went to zero in 3 days with no capital losses to show for it. I recently calculated what that cash would have been worth today if it was invested long as rest of my portfolio. The answer: about $50k.