Prem Watsa

Prem Watsa

Last Update: 04-03-2017

Number of Stocks: 29
Number of New Stocks: 4

Total Value: $1,168 Mil
Q/Q Turnover: 9%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Prem Watsa Watch

  • Nuggets From Prem Watsa

    Every March, Prem Watsa (Trades, Portfolio) of Fairfax Financial Holdings Ltd. (TSX:FFH) releases his annual letter to shareholders.


    In it, he addresses the successes and failures of the companies within the Fairfax portfolio, along with other issues all investors face, including asset bubbles and economic circumstances. And, with those comments there are usually some quotable quotes and sprinklings of humor.

      


  • 5 Lessons From the Top 10 Gurus

    In recent weeks I have profiled the eight gurus with the best average annual returns over the past 10 years, as shown on the GuruFocus Scoreboard. The investing philosophy of another other guru, Seth Klarman, had been provided recently by GuruFocus writer Rupert Hargreaves, while I had profiled Donald Yacktman in late 2016.


    As the process unfolded, some themes started to appear, although not always immediately obvious. This article explores those themes, following brief overviews of each of the gurus. I am not prepared to say these explorations are definitive, but would hope they stimulate further thought and discussion.

      


  • Warren Buffett and Prem Watsa Have Dramatic Week With United and BlackBerry

    The travails and triumphs of the market visited two of its mavens this week, when a PR fiasco sunk Warren Buffett (Trades, Portfolio) stock United Airlines (NYSE:UAL) and an unlikely burst occurred in one of Prem Watsa (Trades, Portfolio)’s most stubborn stocks, BlackBerry (NASDAQ:BBRY).


    Shares of United Continental Holdings dropped 4.29% on Monday and Tuesday, shaving $88.9 million off of Buffett’s holding as it sunk from $2.07 billion in value to $1.98 billion. The drop came not from operational trouble but from investors turned off by the airline’s treatment of a passenger aboard a flight and its subsequent handling of the blowback.

      


  • A Socially Conscious Guru


    “We seek to invest in good businesses with increasingly relevant products or services, sustainable competitive advantages, quality management teams and ethical business practices.” – Jerome Dodson (Trades, Portfolio) at the Parnassus web site.

      


  • The Mutual Fund That Is a Top 10 Guru


    "A core tenet of our philosophy is the importance of using a longer-term horizon to evaluate secular themes and health care trends as well as individual companies on a global scale." – Manager Jean Hynes in the Vanguard Health Care Fund (Trades, Portfolio)'s Annual Report for 2016

      


  • Destination Maternity Down With Sears and Macy's

    Destination Maternity (NASDAQ:DEST) is the largest manufacturer of maternity clothing in the world. The stock has languished with many other retailers, including two of its distributors, Macy’s (NYSE:M) and Sears (NASDAQ:SHLD).


    In December, the company merged with Orchestra Premium. I got the idea to write on the company by looking at Fairfax Financial (FRFHF) and Prem Watsa (Trades, Portfolio)’s holdings on GuruFocus. According to GuruFocus, Fairfax owns 70,000 shares.

      


  • Soros, Watsa, Icahn Divided on Shorting or Going Long Trump Rally

    As the Trump rally plods along, investors dispute whether the market is heading for a plunge or toward more blue skies – no less for investors who have billions to put down on their divergent views, like Carl Icahn (Trades, Portfolio), George Soros (Trades, Portfolio) and Prem Watsa (Trades, Portfolio).


    Carl Icahn (Trades, Portfolio) and George Soros (Trades, Portfolio) both expect a market meltdown and have lost big on their short positions against the market over the past months and years and maintain them out of continued apprehension. Prem Watsa (Trades, Portfolio) also lost money on his market short for years but has dropped the hedges on faith that President Donald Trump will spur the economy to prosperity.

      


  • Behind the Bill Ackman Controversies


    "The 55% of our capital in activist investments has produced more than 90% of our returns." Bill Ackman (Trades, Portfolio), as quoted by Advisor Perspectives

      


  • Prem Watsa’s Place in the Benjamin Graham Universe


    “Since we began paying dividends in 2001, we have paid cumulative dividends per share of $93. Hope you have used them wisely!” – Prem Watsa (Trades, Portfolio), in the 2016 Fairfax Financial Letter to Shareholders

      


  • Prem Watsa Ends Period of Shorting Market With $1.2 Billion Loss

    One of the premier employers of Buffett-style investing, Canada’s Prem Watsa (Trades, Portfolio), posted $1.20 billion in investing losses Thursday after closing short positions against market indexes when the election of Donald Trump pivoted his outlook from cautious to bullish.


    Watsa’s Fairfax Financial realized $2.681 billion in losses on its equity hedges and short equity exposures in the fourth quarter, with $2.67 billion in unrealized gains, leading to a net loss of $347.3 million in the positions. Combined with net bond losses totaling $781 million, $153 million in net gains on long equity positions and other investments, he netted a loss of $1.07 billion.

      


  • Francis Chou Adds to Valeant, Trims Sears in 4th Quarter

    Francis Chou (Trades, Portfolio), founder of Chou Associates Management, started an investment club in 1981 with six of his fellow telephone repairman. Throughout the next five years, Chou worked as a retail analyst at GW Asset Management where he met “Canadian Warren Buffett (Trades, Portfolio)” Prem Watsa (Trades, Portfolio). The successful guru established his flagship fund, the Chou Associate Fund, in 1986. On an annual basis, Chou’s fund outperformed the Standard & Poor’s 500 index benchmark by approximately 7% on average from 1986 to 2010.


    Chou invests in companies with a value-oriented approach involving a detailed analysis of the strengths of companies, especially in regard to the balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability. During fourth-quarter 2016, the Chou Associates Fund manager expanded his position in Valeant Pharmaceuticals International Inc. (NYSE:VRX) and trimmed his position in Sears Holdings Inc. (NASDAQ:SHLD).

      


  • Prem Watsa Significantly Increases US Bancorp, Buys 4 Stocks

    Prem Watsa (Trades, Portfolio) devoted most of his fourth-quarter portfolio activity to building onto holdings he already owned, starting only four small new stock positions, the Fairfax Financial CEO reported Monday.

    Watsa’s meager stock buying seemed to be at odds with the upbeat outlook for the economy under a Donald Trump presidency he gave in December. Policies that reduce taxes, bureaucracy and regulation while boosting infrastructure spending would spur significant growth, Watsa, said.  


  • IBM Continues Strong Earnings Growth for Full-Year 2016

    On Jan. 19, International Business Machines Corp. (NYSE:IBM) reported net income of $4.5 billion and diluted earnings per share of $4.73 based on U.S. generally accepted accounting principles for fourth-quarter 2016. These values outperformed fourth-quarter 2015 values, with net income and EPS increasing 1% year over year and 3% year over year respectively. The higher net incomes resulted from higher IBM Cloud revenues.


    Brief summary of earnings report

      


  • Recent Declines Are Opportunity to Buy Fairfax Financial Holdings

    Shares in Warren Buffett (Trades, Portfolio)’s insurance and manufacturing conglomerate Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) have been on a staggering run over the past six months.


    Since the beginning of July 2016, the shares have added nearly 11%, outperforming the Standard & Poor's 500 by around 5.5%. Unfortunately, as the shares now trade at $161 and change, they look relatively expensive compared to the conglomerates' estimated book value of around $130, which may put some investors off.

      


  • 'Canada's Warren Buffett' Prem Watsa Praises Trump, Forecasts Stock Pickers' Market

    Prem Watsa (Trades, Portfolio) embarked on his “largest and best” acquisition in his company’s 31-year history this week, encouraged by what he views as a pro-business environment ushered in by the election of President-elect Donald Trump.


    Watsa is known as the "Warren Buffett (Trades, Portfolio) of Canada" because he operates a giant insurance conglomerate, invests the float according to value principles and allows his acquired companies to run on a decentralized basis. After years of being cautious of financial markets, Watsa poured $54 per share, or $4.9 billion, into his company, Fairfax Financials (TSX:FFH)’s “transformative” acquisition of global property and casualty reinsurer Allied World Assurance Co. (NYSE:AWH).

      


  • 4 Corporate Bonds That Yield Over 3%

    The bond market has completely changed in the last few weeks. A bond buyer can now find hundreds of blue-chip fixed income products with years. With Donald Trump's election, the bond market took a dive (bond prices dropped and yields rose).


    First though, how does a bond work? Bonds are sold in $1,000 increments and pay a coupon twice a year. Depending on the size of the coupon, the bond will rise or fall in price so the total return matches prevailing interest rates. If you hold a bond until maturity, you will receive your principal and income and will know the payments to the penny.

      


  • Prem Watsa Reduces Defensive Equity Hedges on Trump Election

    Prem Watsa (Trades, Portfolio) announced today that the results of the U.S. election had mitigated his concerns about the economy that prompted his decision to fully hedge his equity portfolio for years. In a press release, the Fairfax Financial Holdings founder said he reduced the hedges and that "there is the potential for a longer term rally in U.S equity markets that reduces the need for the capital preservation protection of equity hedging."


    Just last week, Watsa had remarked in his third-quarter financial results that he remained hedged and cautious.

      


  • Canadian Warren Buffett Prem Watsa Bought 2 Stocks

    Frequently dubbed the “Warren Buffett (Trades, Portfolio) of Canada,” Prem Watsa (Trades, Portfolio) executed two trades in the third quarter, his exclusive portfolio changes.


    The new positions, Virgina America (NASDAQ:VA) and NetEase Inc. (NASDAQ:NTES) are among the smallest ten of his 29 long equity positions. His top three positions, BlackBerry Ltd. (NASDAQ:BBRY), IBM Corp. (NYSE:IBM) and Kennedy Wilson Holdings Inc. (NYSE:RFP), dominate more than 70% of his portfolio. The portfolio, valued at $1.1 billion, is part of his investment vehicle, insurance conglomerate Fairfax Financial Holdings (TSX:FFH), whose structure and historical book value growth loosely parallel Warren Buffett (Trades, Portfolio)’s $396 billion behemoth Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B).

      


  • Watsa's Fairfax Sees Profits Wilt on Investment Losses

    Prem Watsa (Trades, Portfolio)’s Fairfax Financial Holdings (TSX:FFH)(FRFHF) hosted a conference call to discuss its third-quarter results Friday morning. The results were released at market close Thursday.


    The Toronto-based company said in its report that in response to the appreciation in equity market valuations and uncertainty in the economy, it has hedged its equity investment exposure. As of Sept. 30, equity hedges represented 112.7% of the company’s equity and equity-related holdings.

      


  • 17 Questions With Scott Philips

    How did you get started investing?


    When I was around eight years old, I played little league baseball and learned that certain baseball cards could become more valuable over time. That idea had instant appeal. So I would spend my allowance on baseball cards, and hunting through all of them for a quality player was part of the fun. Soon after, I added early edition comic books, and I accumulated boxes of them over time. This made the occasions I got dragged as a child to an antique shop or market more tolerable. I rifled through boxes of discarded baseball cards and comic books looking for a hidden gem. The idea of buying something discarded for a few cents that could be worth more in the future was an exciting discovery. Stock investing came later, right after college. I was set on law school, but my future father-in-law advised me that “you cannot opt out of the money game in life” and so he reasoned that spending at least a year or two in the financial world would create a lifelong skill. I agreed, and was very fortunate to get hired in the research department of Robinson-Humphrey in Atlanta. It was an amazing time and learning experience. This was in 1999, at the height of the tech bubble, and I was reading "Security Analysis, The Madness of Crowds," and had just met Sir John Templeton (who was shorting tech stocks at the time). In the dotcom bust, I was a junior analyst writing an earnings note on a carpet tile manufacturer called Interface, and realized that one division in the company was depressing the share price, and that on a sum of the parts basis, the business was potentially worth multiples of its share price at the time. It was a simple insight, but powerful. The stock eventually rose sevenfold during the next several years. However, long before that I knew that I was forever hooked on investing.

      


Add Notes, Comments

If you want to ask a question or report a bug, please create a support ticket.


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)