How did you do in the downturn? What helped performance?

[WEB-CM]

"This board is the best investing board. "

 

Fully agree! But nothing is as good as it can't be improved. Concentrating very much on North America and Insurance.

[beerbaron]

Thanks for the compilation DP, I added this year's results. As they were not included in my first post.

 

                         2008               2009

beerbaron            Down  26%      UP      77%

 

There is one trend among almost everybody... the trend is green big times. There won't be many years like that in an investor's lifetime! I hope that everybody took the opportunity to back up the truck on equities that will give ever increasing returns over the years. These are the rarest opportunities.

 

Two thumbs up for all the ones who managed to stay green last year. Not many money managers could say the same.

 

BeerBaron

 

[rranjan]

2008 +36%

2009 YTD +42%

 

Thank Fairfax team with their fantastic performance. This board is the best investing board.

 

Yes, they did very good job during last 1-2 years. I do need to pay more attention to FFH and swing hard during next fat pitch. It seems lot of you owned FFH/ORH which worked out quite well. I never owned FFH/ORH so far and one of them is gone :). Although I have been reading the forum for long time and as result I did identify FFH/ORH as fat pitches. But I couldn't resist some other ones and  ran out of money. I personally find it very difficult to sell existing security for a newer one unless newer one is selling at bigger discount by big margin. Unless difference is too much, its just an rough estimate and I don't feel that I will be right 9 out of 10 times with exact valuation so it was difficult to sell something else to buy FFH for me.

 

All of you guys are fantastic bunch and there is always something to learn from you. We can all take different path but one thing will be common , all of us want to receive more value than the price we are willing to pay. I can't imagine why doing anything else should be called investment  ???

 

On the side note  - Does anyone know, which IIT Prem went for his undergraduate?

 

 

[Parsad]

On the side note  - Does anyone know, which IIT Prem went for his undergraduate?

 

Prem went to IIT - Madras.  Interestingly enough, Ajit Jain went to IIT - Kharagpur.  Neither knew each other during their university days, but got to know each other through the insurance industry. 

 

Funny, how one single-handedly made more money for Berkshire than anyone except Buffett, and the other did the same at his own company.  Both are true gentlemen as well.  Cheers!

 

 

[rranjan]

On the side note  - Does anyone know, which IIT Prem went for his undergraduate?

 

Prem went to IIT - Madras.  Interestingly enough, Ajit Jain went to IIT - Kharagpur.  Neither knew each other during their university days, but got to know each other through the insurance industry.  

 

Funny, how one single-handedly made more money for Berkshire than anyone except Buffett, and the other did the same at his own company.  Both are true gentlemen as well.  Cheers!

 

 

 

Thanks for the info.

 

It always feels good to see them doing well! I knew about Ajit Jain going to IIT but not Prem before coming to this forum . I grew up in  small places with no electricity and I personally benefitted from that system so it feels good to see other's doing well, although they are very senior and its unlikely that I will ever meet them. What Mohnish is doing with his foundation is also fantastic and inspiring, because its the biggest bang for his donation. So its not surprising that I end up putting my point across whenever Mohnish is being criticized for no good reason :)

 

It is not surprising at all that they didn’t know each other during their undergrad. There isn’t much interaction among students at different IIT’s and often they compete among themselves for job prospects or higher education scholarships. Although  IIT’s follow similar process and take students through common entrance exam, they operate independently and there is hardly any interaction except during some sports or music competitions.

 

 

[Parsad]

although they are very senior and its unlikely that I will ever meet them

 

Anyone can meet Prem briefly at the Fairfax AGM each year in Toronto, and all you have to do is look for the big, tall Indian guy in Omaha each year to find Mohnish.  Ajit Jain is a bit harder, but you can usually find him in Omaha as well.  Cheers!

[oec2000]

I have two accounts. Returns are in C$.

 

Account A: 2008 +15%, 2009 +80%

Account B: 2008 +35%, 2009 +80%

 

2008 - What I did right: Waiting for fat pitches; FFH (thanks to this board and HWIC), Cdn preferreds (high yields kept me patient to wait), silly returns (almost 100% compounded) on BNA.PR.B retraction arbitrage, SCP-T.

          What I did wrong: BCE arbitrage (this one hurt!), KFS-T, AIG, small exposure in some risky stocks (e.g. CGS-T (no thanks, HWIC!), OIL-T, PFE-T, QEC-T - bought these as insurance in case I was wrong about the market because I was seriously underweight equities).

 

2009 - What I did right: US bank and ORH preferreds in Feb/Mar; SCP-T; Citigroup preferred conversion arbitrage; BX LEAPs; Canadian split corp preferreds; FFH leaps (thank you again HWIC! and thank you Mr Market for keeping it cheap!).

          What I did wrong: Not going all in in March (cash level did not go below 30% I think), especially in US bank preferreds (which I had been pounding the table on) - a couple of them are up 500%!; not hedging USD exposure effectively.

 

It was only in 2007 that I started to look at North American markets seriously so I had the disadvantage of not being very familiar with the companies. This is what caused some of my disasters in 2008 - buying before making thorough due diligence. What saved me was my style of not taking big positions until I have done more detailed work (and even then, I like to keep track of a few quarters of results as I scale into positions.)

 

I have a risk averse style because I have gotten used to retirement (in my 8th year now) and never want to have to go back to work again. I manage risk by a) Not having more than 33% exposure in anything even if it is a "sure thing."  b) Using options (they are not as risky as some posters think if used correctly). c) Assuming that my first entry into any position will not be a good one. Thus, I leave lots of dry powder to average down on a position. This way, I am assured that I will never be completely exposed at market tops. (As stocks move up sharply, I look for lower risk situations to switch to or substitute positions with LEAPs (e.g. with FFH now). d) Taking advantage of arbitrage positions whenever available.

 

Unfortunately, the easy money has been made and it will be a harder slog from here unless Mr Market cooperates by giving us a significant correction. I will be happy if I can average 15% over the next five years.

[FlyingArrow]

I haven't posted as I haven't had the time to figure out my returns. As I am and have been heavily weighted FFH for years the numbers are pretty nice. And I have virtually no tax bill to pay. Most of the opportunistic trading I've done (switching into ORH from FFH then back) has been in registered accounts so no friction there. I've got some nice returns on GE calls and SKF but I'm just as likely to sit on those as I just hate paying the taxman if I don't have to.

 

I wonder how many of the returns in the above posts are before or after taxes? It seems there are many here who trade at a meaningful level which can have meaningful friction costs.

[Uccmal]

STD,  (still like this moniker because it reminds me of well std's)

 

After tax!  Actually on an after tax basis this years return is better than I posted since I will either shield future gains from taxes or get money back from taxes paid in prior years from the capital losses to March 8th.  I will probably elect to get past cash back from past taxes paid as you never know when the government's generosity will change. 

 

Its all part of the plan.  The same goes for holding options.  I am down to small options positions in KO, AXP, and Home Depot that will most likely become permanent holdings as common stock to avoid taxation and collect dividends in perpetuity. 

[oec2000]

I wonder how many of the returns in the above posts are before or after taxes? It seems there are many here who trade at a meaningful level which can have meaningful friction costs.

 

My returns are pretax as, I presume, most of the other numbers posted here are. For this discussion, the aim of which is to learn from each other's styles and successes & mistakes, pretax numbers make sense. Trying to use after-tax numbers causes complications such as whether we should provide for taxes on unrealised gains the way corporations do.

 

Nevertheless, you make a valid point about the frictional costs of taxation. It is something that I am struggling with this year - the eternal question of whether investment decisions should be influenced by tax considerations. This is an interesting enough subject on its own so I will start a new thread so as not to muddy this thread.

[Rabbitisrich]

Good point FlyingArrow. I haven't shed my major positions, but I have had more short-term froth than usual. It brings up an interesting question of what to do with your tax reserves. I've had between 5%-8% my portfolio in a business checking account collecting less than 1.5% apr.

 

 

Oec2000, the only reason I avoided BCE is that a friend who works as a financials analyst warned me to stay away from ANY high leverage deals. The KPMG solvency opinion came out of left field and demonstrated more convenience than intelligence.

[Smazz]

I will also state that 2010 may be a 0 sum game for me.

I dont see alot of positives out there and I dont see risk accounted for in pricing so I will prob have a zero gain/loss but would be surprised if i dont beat the indexes.

 

Having written that, I understand the only thing constant in the world is change so we will see......

[ericd1]

Very interesting thread...Obviously a lot of talented investors hanging around here...Hopefully I'll learn more from the group!

 

2008  -22%

2009  +57% (stk +38%, pfd +107%)

 

I was lucky last year...sold junk into the decline and held/bought (too soon) quality (BRK & FHH). As the decline continued into this year I moved some of the quality to cash (~33%).

 

I was focused on market charts that compared the current to previous historic declines. As the S&P dipped through 800 early in the year I started re-investing the cash in stocks and preferreds. With pfds priced for default, I moved more quality in to pfds. (thanks guys).

 

Could of, should of...I had some employer stk options I did not sell, or hedge on the way down and should have...expensive lesson.

 

My portfolio is now 40% stk / 60% pfd (current yield ~11%) at 62 the allocation seems age appropriate and the yield is higher than I ever expected to earn in my retirement portfolio. I'm reinvesting the pdf dividends into stks and expect in a couple of years to be up to a 60/40 mix.

 

I appreciate the individuals openly sharing their knowledge here...Thanks