your analysis are very accurate. thanks for share.
What could happen when the rates, start to cut? book value still be growing but with lower YoY change? or it will be the best moment to sell?, it's expected rate cuts in 2024, but looks like it could delay. You mention FFH will do a pile of cash in the next 3 years, in this time is expected to be affected by the Cut rates.
Fairfax's bond portfolio has a duration of about 3 years with an interest rate of 4.8%. If interest rates were to drop by a lot, you would not notice until year 4, when they start renewing the bonds at a lower rate. For 2024, 2025 and 2026, the high interest income is guaranteed, but after that, interest rates could be lower.
Thanks Oscar,
your analysis are very accurate. thanks for share.
What could happen when the rates, start to cut? book value still be growing but with lower YoY change? or it will be the best moment to sell?, it's expected rate cuts in 2024, but looks like it could delay. You mention FFH will do a pile of cash in the next 3 years, in this time is expected to be affected by the Cut rates.
Thanks!
Fairfax's bond portfolio has a duration of about 3 years with an interest rate of 4.8%. If interest rates were to drop by a lot, you would not notice until year 4, when they start renewing the bonds at a lower rate. For 2024, 2025 and 2026, the high interest income is guaranteed, but after that, interest rates could be lower.