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Strategies & Market Trends : Value Investing
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To: Jurgis Bekepuris who wrote (55430)6/29/2015 5:04:27 PM
From: Graham Osborn  Read Replies (1) of 78627
 
Hi Jurgis,


Re: FRFHF


Seems roughly comparable with Berkshire on PTB, A/E, ROE, ROA. Prem has lagged Warren on 10-year tangible book growth, no surprises there. As with Berkshire, I'd question whether a 60-80% premium to book provides the desired margin of safety. Of note, FRFHF is selling near an all time premium to tbook. To me this more than offsets the equity hedge of the underlying portfolio. As to the hedge itself, it might perform as in 2007-2008 - ample protection, no upside. And if the S&P should remain bullish another 3-5 years, he's dancing in chains. So why not just hold the cash for a firesale rather than risking a short-term haircut?


- Graham
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