Spekulatius

Apparently you have a personal problem (or at least think you do) when your EBITDA shrinks by 20% since the beginning of your negotiation for a purchase of this business. I think you need to structure the compensation to mitigate the problem. It is easy to lose employees when a company restructures or ownerships changes. Any project based business is dependent on good people and competitors know who they are and can hire them away. Sounds to me like you should give performance units to the right people (not just the former owner) to adress the root cause. Disclosure: No private equity experience and only limited management experience. but I know the employees perspective and changed my job due to ongoing restructruring at rhrncompay I worked for. I had no problem finding another job. Sometimes, it is easier to move on than to stay.

In the US, with those frivolous lawsuits for damages, 500k can just be as insufficient than $10 million. I had a great insurance agent in CA that answered the question for sufficient coverage that way: You just need sufficient coverage that the insurance company fights tooth and nails with good lawyers for settlement. The counterparts knows that it is way easier to get a settlement from the insurance company than a cash payment from an individual. I settled for $1Mill umbrella. I don’t think her $1mill or $2mill makes much of a difference. You should never disclose your insurance, much less your limit to the counterparty.

i think you missed the main point in BRK shareholder letter regarding investing - WEb does not condem actual be investment per say, he condemns the high fees that come along with it and are apparently not matched with performance. Index funds win, because they are cheap, not because thrust are clever investments.

Thread went off topic, this is not a rent versus buy decision for OP. if I were Op, I would consider the alternative to sell your current home and buying another one vs rebuilding it. I am not sure where Op lives, but the cost to buy and sell in the US is 6% realtors commission, which can easily be reduced to 5% without sacrificing service. This would save about 1 1/2 years of rent and there is only one move (if timed properrly) vs 2 ( into rental place and out of). So, if you can buy a house that is similar to what you want and the pricing makes sense, then it might be better to do that. Only OP (and OP‘s wife) can do the math and weigh the intangibles.

I always said it with a rhyme: "happy wife equals happy life!" It's a big investment and a huge time sink, we'd have to get a rental house for 1.5 years, that's why I'm not too keen on it -- though i think she'll get her way in the end :) The folks above said it already, the intangible side of this makes for a good ROI. but with such a; extensive remodel, selling your house and buying another one might be cheaper. Unless the remodeling part is what your or more likely your wife enjoys.

Both the underwriting and the investment returns suck, that is why GLRE trades at 0.75x book. Maybe the new mangement fixes the underwriting, but it will some time to play out. The investment side is harder to fix, because I don’t think they can fire the investment manager. :P It is funny how Einhorn pushes for aggressive capital actions with his stock positions, but here he can buy back a dollar for 75c in his own company and dances around it.

Once sound underwriting is in place, they can easily generate 8-10% ROE just with solid income from bonds and investments - no home runs needed. That is the model thwt most insurance companies work towards like WRB or TRV (to name a few good ones) and they are doing quite well now and will do even better with higher interest rates. If they are doing well on the investment side, they probably can do a mid teens ROE and then they would deserve a 1.5-2x book value.

It seems that the current stock market woes in Canada are related to the Energy and pipeline sector mostly,which are over represented, relative to their contribution to GNP. The same sectors are not doing that great in the US either. The overvalued housing market will become a problem, but it is not the government doing, they are caused by low interest rates imported from the US. Folks should chill a bit.

Yes, insurance linked securities (catastrophe bonds ) have been used by insurerers and even reinsurers to lay off risk. I do think it changes the dynamic of he insurance Markets, since they basically allows dumb money to get into the insurance market faster. I do think it is dumb money that mostly is buying these, because I cannot imaging thst institutions or investment entities buying those know as much about the risk than the sellers. I don’t think it will smooth out the market either, the dumb money will rush in based on need (to generate income) or perceived risk and smart insurers will sell those to lay of risk., but I am guessing that dumb money will also rush out and sell those securities as well , probably at an inopportune time. So, I think these new instrument will shorten the hard/soft insurance cycle duration, but probably not reduce their severity.

Tanger guided for flat NOI/AFFO for 2018, that is enough for me to conclude that the value is stable. Your opinion is the consensus and the reason i can buy at a discount. *EDIT* It is maybe not in the original "Graham" sense (Price to book) to buy REIT`s below NAV, but why not? Since real estate is at least as liquid as inventory and has a private market with a private market price i see no reason not to. With a large enough margin of safety this should work equally good. And if the company sells assets and buys its own stock it widens this margin further. NOI trends have been down and they had to keep their occupancy up by getting into a bunch of short term leases. This is not an indication of strength. If you look at liquidation value, I think KIM and SRG (which you also own, I think) are better plays and they also have better NOI trends. The outlet malls tenants compete price and choice and price sensitive customers tend to go more and more online for bargains. Their outlets are very heavily into clothing, which helps regarding to online competition, but also gets less wallet share over time. I think KIM and SRG have better opportunities to develop their existing retail for high returns nd trade equally cheap. I have decided to exit this sector except a LT microcap holding, because I believe these are mostly melting ice cube cases.

So chicken wing consumption is correlated with sports events? I thought a lot of women watch the Winter Olympics. I do believe that you are onto something with the lower viewership for the Olympics and cord cutting.

Bought CVE - the oil sand play. New CEO, FCF and deleveraging will unlock the value that the former management had thrown away.

In my opinion, most retail investors overestimate the quality of SKT assets. SKT has two very good shopping malls in Long Island, but also a lot of malls that are of B- and C grade quality. The average sales/sqft of $380 (which has been stagnant for a couple of years ) is the telltale sign.

I would rather have FFH deliver their balance sheet a bit and reduce of the preferred or debt at the holding company. There should not be a grand plan with respect to stock buybacks either, it should be done opportunistically. They should just communicate a value framework like BRK (multiple of book) and then purchase back stock when the criteria are met

+1 to everything stated above. It is important to remember that Watsa has been able to cement his control of FFH with only 7% of the shares. This is less than Wynn owned of his namesake company, yet Wynns board was able to boot him. Watsa’s control of FFH is disproportionate of his ownership and he should exert his powers wisely.

Ouch!. This thread went downhill really fast. :-\

The telltale sign of a companies culture is how well they retain the top employees. I think as long as these employees mentioned above stay on board, we can assume that the culture is intact. If they start to leave in droves, we can assume that something is afoot and we might be better of looking st selling. Apparently FFH has traits of a family run business for the better or the worse. I don’t see this as a reason to change my investment thesis, but it deserves to be monitored.

Interesting idea and this wasn’t a name I have been familiar with, unlike CVE, which has poor mangement, IMO. I noticed that they tend to have large charges every year in the last quarter (reserve writerofd), are these in fact reserve write offs. It seems thwt these extraordinary write offs are nit thwt extraordinary and skew the numbers a bit. I have not spent much time on this stock, but would like to get involved in E&P’s again and CPG seems like a decent candidate to get exposure.

i have not done the math, but I am guessing thwt there is not enough rail capacity to move all the oil. besides, it is some what costly too to move the oil on rail, probably about $5-10/brl. I am wondering, could they build a pipeline to the east, I stead of he west. Sure the distance would be longer and the cost higher, but if that the only way it can be einem why not do it? Or would there be equal resistance to build a pipeline to the east? I think Richard is onto something when he states that BC has very little incentive to have a pipeline through their territory. If the E&P industry in Alberta has economic issues to move crude, its their problem, not BC’s. Maybe the solution is to give BC more economic incentive to let the pipeline through their territory?

It was worth a buy of a few more shares for me this Friday, but my exposure so far to FFH is small. I would not buy more, if my exposure were already fully sized or oversized.

I am guess that they passed on some premiums to a partners or reinsurances companies. This is mostly part of risk management to reduce exposure to certain (tail?) risks.

I don’t know why Parsads Personal wealth, or that of any other PDH executive, matters to evaluate PDH‘s merits as an investment. While it do feel that the discussion here is critical (which it should be), I didn’t really feel it is salty.

i didn’t now that Prem employed his failed hedge fund manager son at FFH. May be immaterial from an investment perspective for now, it certainly is not a sign of a transparent culture.

They need to generate consistent results for a few years to get rerated. There are quite a few insurers trading around book value and some have even decent results, and more consistent than FFH. That said, I am an opportunistic buyer of FFH, but I don’t think, it deserves to trade much higher than it does right now.

I agree with Cardboard here - I owned some AHL (purchased the recent downdraft) and decided to sell for a small loss. I added to ACS and FFH instead, which ai think have a better outlook. I sort of agree on FFH too, the results are too lumpy and just overall not good. Theüey should sell their crap investments and stuff like Blackberry and RFP and purchase something solid instead. Running an insurance company that has reasonable underwriting isn’t really as hard as they make it, IMO.