Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Spekulatius who wrote (60381)	2/14/2018 7:17:34 PM
From: Graham Osborn	Read Replies (2) of 78741

FRFHF has 4.9B in holdco/ insurance debt and 1.5B in noninsurance debt. Although Fairfax does not guarantee the noninsurance debt I count it anyway since the purpose is to measure risk, and a struggling subsidiary affects the parent whether or not the parent chooses to sacrifice it. So that accounts for the 6.4B in LT debt. Book value is 11.6B and goodwill is 5.8B for tang book of 5.8B. So LT debt exceeds tang book. Cash and short-term investments is about 400M - the rest is bonds and stocks which I don’t count. No insurance liabilities counted. As far as the underlying question of what ratios should be used to measure risk at an insurer, whether you consider tangible equity or tangible equity plus discounted float depends on how renewable you consider the float to be. Buffett considers float more valuable than equity - I guess that's true in a low-interest rate environment. I tend to prefer the more conservative ratios.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next