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torsdag 29. januar 2015

Canadas svar på Warren Buffett vedder milliarder på deflasjon


Prem Watsa er en kanadisk investor som i deler av finansmiljøet beskrives som Canadas svar på den mer allment kjente amerikanske investoren Warren Buffet. Som Buffet så har også Watsa en forkjærlighet for å drive forretning innen forsikring, og gjennom sitt selskap Fairfax Financial Holdings har Watsa siden 1985 oppnådd en 23% annualisert avkastning på egenkapitalen i selskapet, hvorpå selskapets aksjekurs har fulgt opp med å levere 19% annualisert avkastning. Det er rett og slett fantastisk gode resultater som svært få kan matche.

Gjennom Fairfax har Prem Watsa de siste årene igangsatt et finansielt veddemål som går ut på at han vil tjene store penger hvis inflasjonen, målt i form av konsumprisindekser i ulike land, faller. Det hele er altså et stort veddemål på at vestlige økonomier går inn i en periode med deflasjon. Fra Fairfax sin 3Q 2014-rapport kan vi lese at veddemålet nå har blitt så stort som 108 milliarder amerikanske dollar, tilsvarende 845 milliarder norske kroner gitt dagens valutakurs. Hvis prisnivåene faller så mye som Watsa tar høyde for så kan Fairfax tjene 14% av dette beløpet, hvilket utgjør ca. 15 milliarder amerikanske dollar, tilsvarende 118 milliarder norske kroner.

Fra Fairfax sin årsrapport fra 2013:
In this environment, with zero interest rates and high debt levels prevailing in most developed countries, giving them limited flexibility to react to unintended consequences, we think it is prudent to have a very strong balance sheet with a large cash position and to be protected on the downside. When problems hit, only those with cash and very liquid assets can take advantage of them. While it is very painful and costly waiting, we think your (and our!) patience will be rewarded. 
We are reminded again of the warning from the distant past from our mentor, Ben Graham, which I have quoted before: ‘‘Only 1 in 100 survived the 1929-1932 debacle if one was not bearish in 1925.’’ We continue to be early – and bearish! 
In this world of large unintended consequences, one of which may well be deflation, we have added to our position in CPI – linked derivative contracts...
we remind you that cumulative deflation in the U.S. in the 1930s and Japan in the ten years ending 2012 was approximately 14%. It is amazing to note that including 2013, Japan has suffered deflation in most of the last 19 years – beginning about five years after the Nikkei index and real estate values peaked.
In the last four years, we have had significant losses, mostly unrealized, from our hedging program and from our CPI-linked derivative contracts...  These losses are significant but they are mostly unrealized, and we expect both of them to reverse when the ‘‘grand disconnect’’ disappears – perhaps sooner than you think!
Watsa beskrev i Fairfax sin årsrapport for 2010 hvordan disse finansielle kontraktene fungerer i praksis:
You know our concern re deflation.Well, Brian Bradstreet of CDS fame came up with a similar idea called CPI-linked derivative contracts. These are ten-year contracts (with major banks as counterparties) that are linked to the consumer price index of a country or region. Say the consumer price index in the U.S. was 100 when we purchased this contract. In ten years’ time, if the CPI index is above 100 because of cumulative inflation, then our contract is worthless. On the other hand, if the index is below 100 because of cumulative deflation, then the contract will have value based on how much deflation we have had. If, for instance, the index is at 95 because of a cumulative 5% deflation over 10 years, the contract at expiry would be worth 5% of the notional value of the contract. That’s how it works! Of course, these CPI-linked derivative contracts, like the CDS contracts previously, are traded daily among investment dealers. Prices in these markets will likely be higher or lower than the underlying intrinsic value of these contracts based on demand at the time. So there is no way to say what these contracts will be worth at any time. However, for a small amount of money we feel we have significantly protected our company from the unintended and insidious consequences of deflation. As an aside, cumulative deflation in Japan in the past ten years and in the United States in the 1930s was approximately 14%.
Hvis Watsa og Fairfax sitt finansielle veddemål om deflasjon slår til kan vi snakke om en av dette tiårets store finansielle handler. For bankene eller aktørene som sitter på andre siden av kontrakten vil utfallet bli et ganske annet og adskillig mindre hyggelig.

Begynnelsen på Prem Watsas interesse for investering kom fra da han først leste boken The Intelligent Investorskrevet av det som var Warren Buffetts læremester, nemlig Benjamin Graham. Og akkurat som Buffett så valgte også Watsa å døpe sin sønn etter Benjamin Graham. Du finner denne boken gratis tilgjengelig både som e-bok og lydbok via denne lenken.

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