Fairfax Financial Holdings

Stocks
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I recently researched the popularity of the stocks I own among Nordnet users. Fairfax had only 312 shareholders. That’s incredibly low for a service with over 630,000 Finnish users alone and millions across all Nordic countries. At the same time, Berkshire has nearly 20,000 owners and Investor over 60,000. To improve the company’s recognition, I decided to write a discussion opener about the company on the forum. I believe the company deserves its own thread.

Fairfax Financial Holdings (FFH)

Fairfax Financial Holdings (FFH) is a Canadian insurance and investment company. The company’s headquarters are located in Toronto. Fairfax operates through several subsidiaries. Prem Watsa leads Fairfax. The company’s website can be found here: https://www.fairfax.ca/

Originally, the company was founded as Markel Service of Canada in 1951. The name was changed in the 70s to Markel Financial Holding Ltd. In 1985, Prem Watsa, who serves as the company’s CEO and Chairman, took the helm. In 1987, Watsa reorganized the company and renamed it Fairfax Financial Holdings Ltd. Watsa owns approximately 9% of the company’s shares. Fairfax’s current market capitalization is ~55 billion CAD.

FFH’s Business Model

Fairfax combines insurance and investment operations. The company invests the capital (‘float’) accumulated from the insurance premiums it collects. This business model allows the company to have both stable cash flows and to capitalize on market investment opportunities.

Fairfax aims to achieve a 15% growth in book value per share over the long term, which it has historically achieved. The company’s toolkit includes share buybacks, which it has used quite aggressively. The company distributes a small dividend, currently around one percent.

FFH’s Goals and Culture

  • Our objective is to achieve a 15% annual increase in book value per share over the long term by managing Fairfax and its subsidiaries for the long-term benefit of customers, employees, shareholders, and communities – at the expense of short-term profits if necessary.
  • We focus on long-term growth in book value per share, not quarterly earnings. We grow both organically and inorganically.
  • We ensure that our financing is always on a sound footing.
  • We keep our shareholders well informed.

The company’s stated values include:

  • Honesty and integrity are essential in all our relationships and are never compromised.
  • We adhere to the Golden Rule: treat others as we would like to be treated ourselves.
  • We work hard, but not at the expense of our families. ( :+1:)
  • We are always looking for opportunities, but we emphasize risk management and seek ways to minimize capital loss.
  • We believe in having fun – at work! ( :+1:)

Other aspects related to the company’s culture can be found here: https://www.fairfax.ca/about-fairfax/#values

FFH as a Driver of Shareholder Value

Since its inception, Fairfax’s book value per share has grown by over 18% annually. The S&P500 index has yielded approximately 9% annually during the same period. However, Fairfax’s journey has not been smooth sailing. Far from it. The journey includes bumpy periods in addition to success.

Between 1985 and 1998, the company’s book value per share grew at an annual rate of up to 43%. Watsa was lauded as the “Canadian Warren Buffett,” and the stock was valued at nearly 4x book value in 1998.

The first difficult period for the company came at the turn of the millennium. Fairfax acquired two insurance companies whose balance sheets were in poor shape. Fairfax had to raise new capital in the following years, even fighting for survival. Another period of weaker performance came after the financial crisis. Watsa and Fairfax’s investment team took a pessimistic view of the market and hedged away potential returns for several years, as the market developed against their view.

Since 1986, the stock’s book value, underwriting profit, investment income, and share price have developed as follows:

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Last 15 Years

After the financial crisis, from 2010-2017, the company experienced the weaker phase mentioned above. After that, the company corrected its mistakes. In the 2020s, Fairfax’s results have developed excellently, which has also been reflected in the share price.

Operating profit, last 10 years:

  • 2016 - 2020 ~1 billion CAD,
  • 2021 ~1.8 billion CAD,
  • 2022 ~3.3 billion CAD,
  • 2023 ~4.4 billion CAD,
  • 2024 ~5.3 billion CAD.

Why has the company performed so well now? The short answer is that both the company’s insurance and investment operations have been of very high quality during this period. Lessons have been learned from past mistakes.

Fairfax expert on the forum, @Hades, has already elaborated on this in the Investment Companies thread. I will quote his excellent points below:

https://keskustelut.inderes.fi/t/sijoitusyhtiot-salkun-ytimena/34448/163

Fairfax’s sources of income and brief comparisons to 10 years ago:

1. Underwriting profit - efficiency has significantly increased (CR ~93%) and scale has more than doubled over the decade through both acquisitions and organic growth.

2. Interest and dividends - zero interest rates curbed returns from the 2010s until 2023. Fairfax managed this situation well and multiplied its interest income from debt securities in a couple of years.

3. Results from associates - Fairfax’s investment portfolio is significantly better in quality than 10 years ago, and this has become a relevant segment for the firm.

4. Operating profit from non-insurance sector companies - this segment is practically still under construction, but this revenue stream will also grow strongly.

5. Investment returns - growth has been seen, but these are also by far the most volatile and therefore the weakest source of return. The hedge positions held in the 2010s and shorting of the bull market were also discontinued, which removed a nine-figure drag from operating profit annually since the aftermath of the pandemic.

Returns have grown across a broad front, but very safe and high-quality interest income, income from good associates and subsidiaries, and a growing and improving insurance business have replaced the previous reliance on successful investments and their returns, which are harder to predict and replicate. In addition, diversification away from the insurance cycle will smooth out fluctuations when the market turns sooner or later. Of course, profitability may weaken and interest rates may fluctuate, but Fairfax’s operating profit is of significantly better quality than before.

Then there’s also:

6. Number of shares - almost stable compared to ten years ago, but has decreased very significantly in the shorter term (for example, over 20% since 2017). Share issues financed the growth of the insurance segment, e.g., the acquisition of Allied World - now shares are being bought back again.

7. Valuation level - Fairfax’s valuation bottomed out at approximately P/B 0.5 during the COVID dip, from which it has now risen to around P/B 1.5.

FFH’s Investment Portfolio

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About Valuation

It must be said that the stock’s valuation is no longer “junk” level, having risen to its current P/B 1.5 (2025e) and P/E 10.5 (2025e). The company is predicted to generate a return on equity of +15% for the third consecutive year. So, the valuation is no longer as cheap as it was a while ago. But the stock still doesn’t look particularly expensive when you can buy it at ~10x earnings.#### Top-10 Largest Owners (February 2025)

number of shares / percentage of all shares

image

Why Own FFH?

A few reasons (why I personally own the stock):

  • Business Model: Fairfax’s business is based on combining insurance operations and investment activities. Both Berkshire and Fairfax have shown how good a combination this can be at its best.
  • Long-term Track Record: FFH’s value creation is unparalleled over approximately 40 years (although returns have not been consistent).
  • Performance: The insurance business and capital allocation have been refined to excellent condition, which has created enormous value for shareholders in the 2020s.
  • Growth Potential: Fairfax is still a relatively small ‘large-cap’ company on a global scale, with room to grow.
  • Boring is Good: FFH is a suitable investment for long-term ownership, where the power of compounding can do the work (and the investor only needs to wait patiently).

More Discussion on Fairfax (in addition to this thread)

https://thecobf.com/forum/5-fairfax-financial/

Now, let’s discuss. :blush:

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Mallisalkut sijoittamisen inspiraationa
Sijoitusyhtiöt salkun ytimenä
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Thanks (also @Hades, once again) - interesting company.

I went to initially check if it’s even available for purchase at Nordea

“Uhhhhhh..cumulative sub voting floating reset” :face_with_spiral_eyes:

What are those series?

image

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The top one looks like the right stock based on the price. I don’t know what “Sub Voting” means though. Nordnet’s search lists FFH like this. Check if the ticker is FFH.
image
I don’t know more about those series either.

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Well, it was the top one there :smile:

(The above sentence is one example of the richness of our language)

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On YT, in the Newcomer Investor’s investment podcast, an interesting-looking episode titled “Fairfax Financial: Canada’s Hidden Gem”. Published 7 months ago. Duration 139 min. Listened to the first 42 minutes and it’s good stuff. :folded_hands:

https://www.youtube.com/watch?v=BB9LuiYexEM

Episode Highlights:
(0:00) - Intro
(1:45) - Asheef’s career in finance
(5:00) - Asheef’s investing style
(7:50) - The evolution of markets
(18:45) - Fairfax - what do they do? what is a p&c business?
Who is Prem Watsa? What is the Fairfax culture?
(27:20) - Fairfax’ largest stock: Eurobank
(29:45) - Understanding Fairfax’ valuation and some of its “hidden” components
(36:45) - Breaking down Fairfax’ insurance business
(41:55) - Downside protection
(47:27) - The float!!!
(49:20) - Global diversification
(53:25) - Fairfax India
(1:05:20) - Book value - comparison with Intact
(1:08:00) - genius move: Fairfax’ Total Return Swaps
(1:12:50) - catalyst: Fairfax’ potential inclusion into the TSX 60
*(1:19:00) - How all Fairfax segments come together *
(1:20:30) - Brookfield & Fairfax similarities
(1:22:00) - Fairfax vs Fairfax India
(1:26:00) - Fairfax Stock: Strathcona Resources
(1:43:00) - Mako Mining and execution risks
(1:47:00) - Fairfax recent acquisitions: Sleep Country Canada and Peak Achievement
(1:58:45) - Fairfax stock’s exceptional return
(2:00:00) - Stock splits
(2:08:45) - Why some people choose to avoid Fairfax (and Brookfield!)
(2:12:30) - How Prem treats people
(2:17:00) - Asheef’s advice to investors

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We can expect a positive Q2 report.

  • Equity investments are up approximately $90 per share for the quarter
  • Interest rates are lower than in the previous quarter, which is reflected as returns on bond investments
  • Currency gains are expected as the USD has weakened
  • A good insurance result is expected

Growth in equity investments of 8.5% or ~2 billion for the quarter
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Top-performing equity investments (figures in millions)
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https://www.cfins.com/the-once-and-future-cf-landing/

For those interested in Fairfax and the insurance industry, there’s some evening reading at the link. The e-book, written by CEO Marc Adee, tells the 200-year story of Fairfax’s insurance company Crum & Forster, illuminating the stages of both the company and the insurance industry over a long period. The Fairfax section covers about twenty pages, but other sections also hold good lessons.

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Consensus estimate for Fairfax’s Q2/2025 earnings is around USD 48. Will it be reached?

  • Equity investment returns alone, excluding Eurobank*, generate approximately USD 1 billion in earnings, as the table shows (USD 49 / share). I can’t say about the fixed income portfolio, but let’s assume a zero result (the appreciation of fixed income securities matters very little anyway).
  • Dividend and interest income are presumably quite stable, but for the sake of easy math and conservatism, let’s say around USD half a billion (USD 23 / share).
  • The quarter’s underwriting result is presumably strong, with catastrophe losses remaining clearly lower than the previous quarter, when a fantastic result was lost to the California fires. Competitors have reported excellent insurance results, but let’s take an almost ridiculously conservative assumption and say the result is USD 350 million (approx. 2% premium growth and 95% CR). Earnings of USD 16 / share.
  • Associate company results are difficult to estimate, but the largest of them is Eurobank. Let’s throw in USD 200 million (USD 9 / share).
  • Non-insurance sector profits fluctuate, but USD 75 million is probably a sufficiently cautious estimate (USD 3 / share).
  • Interest and administrative expenses were USD 250 million in the Q2/'24 report, so let the figure for this quarter be USD 300 million (USD -14 / share).
  • The tax rate is about 25% (USD -21 / share).
  • 10% of net income to minority interests, as, for example, Allied World’s result has likely been very strong (USD -6 / share).

= Earnings attributable to Fairfax shareholders are approximately USD 60 / share before currencies. I didn’t even try to be very precise, but rather to estimate the figures conservatively and roughly correctly, but the estimate clearly exceeds the consensus. There will be tailwinds from currencies, but that is a secondary matter.

(*The appreciation of Eurobank shares will not be transferred to Q2 earnings due to accounting reasons, but it will be accounted for under “unrealized fair value of associate companies above book value,” which, according to Raymond James analysts’ forecasts, is already USD 2.5 billion, or USD 117 / share. Fairfax’s book value is thus undervalued by that much in terms of investments, if market opinions are to be believed.)

Two things are of particular interest in the Q2 report:

  1. Underwriting result. Q1’s insurance result was completely ruined by the California fires, and their impact on the company’s combined ratio was 12.7 percentage points. Few major catastrophe losses were reported for Q2, so what figures has Fairfax produced without that approximately USD 700 million drag from one major catastrophe? A combined ratio starting with 8 is not impossible in the long run, but are we still seeing such figures? We’ll see.
  2. The situation with total return swaps. Fairfax significantly slowed its share repurchases during the quarter, and if the swaps have not been closed, the number of shares has hardly changed. This naturally leads to the question of whether the swaps have been kept open, given that share repurchases have not been as appealing as before. The value of the “position” is calculated in billions, so this has a surprisingly significant impact.
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:canada: Fairfax Q2 '25 results are out.

  • Insurance premiums 7257 MUSD, growth of 4.8% Y-o-Y.
  • Underwriting profit 427 MUSD, combined ratio 93.3%. Moderate improvement from a year ago, but a huge one from Q1.
  • Large losses amounted to 140 MUSD, pretty much in line with a year ago.
  • Newer reportable companies Gulf Insurance and Ki were both profitable in terms of underwriting profit. All but one of the others also recorded a combined ratio below one hundred for Q2, with Allied World naturally as the star of the show with its 91% figure. It’s refreshing to see such figures after the previous quarter.
  • Insurance reserves of 163 MUSD were released. Even without these, the underwriting profit would have been quite good.
  • Interest and dividend income 666 MUSD, growth of 8.5% Y-o-Y. My conservative estimate was clearly an overestimation, as this seems to be a quarterly record. Compared to Q1, the investment portfolio had grown by 2.6 BUSD, so the quarterly growth in interest income of 60 MUSD is quite in line with that.
  • Investment income 952 MUSD. Billion-dollar equity returns didn’t quite materialize, but interest income almost perfectly compensated for the forecast. Most of the appreciation is unrealized.
  • Share of earnings from associates 130 MUSD. My own forecast was vastly missed despite good performances from Eurobank and Poseidon. The report mentioned an investment made in Waterous Energy Fund as one factor – in itself it doesn’t raise concern, but it’s noteworthy that Fairfax has already invested over a billion dollars in Waterous’ funds.
  • Operating income of non-insurance companies 126 MUSD. The acquisition of minority stakes in Recipe, as well as the full acquisition of Peak Achievement and Sleep Country, significantly increased earnings from last year. Earnings have fluctuated significantly from quarter to quarter, so it’s still difficult to say anything about a sustainable or normalized earnings level. It would also be good to see additional acquisitions in this segment!
  • Float amount approx. 40 BUSD (cf. approx. 40.5 BUSD market value). Insurance operations are growing, and at the same time, the magnitude of this valuable but zero-valued line item on the balance sheet.
  • EPS 61.6 USD. Currencies provided a strong tailwind as the US dollar weakened. The estimate for 10% of earnings allocated to minority interests hit the mark.
  • Book value 1158 USD / share.
  • Annualized ROE 19.1%.
  • Unrealized fair value of associates above book value is approx. 2.4 BUSD, or approx. 111 USD / share. Eurobank’s share price increase alone explains that nearly billion-dollar jump from Q1 – as mentioned earlier, it doesn’t show up in the income statement or balance sheet, but it does show in this figure. Taking these into account, the P/B at the time of writing is approx. 1.4 – no longer a bargain price, but by no means expensive either.
  • Cash at the parent company 3.0 BUSD. Fairfax issued debt securities during the quarter, which explains the increase in the cash position. Preparing for something? Who knows.
  • Share capital grew by 10,000 shares from Q1 (21.6 million shares outstanding). The first time in my investment period that the direction was this. :smile: The slowdown in buybacks has been monitored throughout the quarter, so it will be interesting to see if the same trend continues for the rest of the year after the stock has performed strongly.
  • Total return swaps generated a profit of almost 550 MUSD during the quarter (included in equity returns in the results). However, the more significant news for me is that this position was kept unchanged. I was quite sure that the swaps would have been at least partially terminated, but apparently Fairfax still has strong confidence in the development of its stock. From a risk management perspective, I would like to see the position reduced – in a widespread market crash, it would be nice if the negative development of the swaps didn’t deplete Fairfax’s cash reserves precisely when buying opportunities would be available (a 10 percent movement = approx. 300 MUSD impact on earnings).
  • No very significant news has occurred at the beginning of Q3.

A strong quarter, it can’t really be interpreted any other way. Although the company’s nature involves numbers fluctuating from quarter to quarter, the overall situation is such that profit is made quarter after quarter – and in this case, quite a lot. The strong growth in interest income was probably the biggest highlight of the quarter, as the operating profit of an insurance company doesn’t get much safer than that. :+1:

EPS of 104 USD for the first half of the year raises hopes of breaking the 200 USD milestone for the full year – if that is achieved, the valuation at year-end would be roughly 9x earnings and 1.3x adjusted book value.

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RBC has raised Fairfax’s price target to USD 2200 (approx. CAD 3030).

Here is a link to the news, where you can find a summary of the price target’s justifications.

https://www.marketscreener.com/news/fairfax-financial-price-target-raised-to-us-2200-at-rbc-ce7c5ed8d989f32c

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Fairfax, “Canada’s Berkshire”, released strong Q3 results last Thursday.

Highlights

  • Quarterly net income of USD 1.15 billion (1.038) or USD 52
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Thanks for the tip, CAD is also so weak that one could even buy a share for the portfolio!

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Let’s keep the thread alive.

This blog post about Fairfax is from February of this year. So, it’s not brand new, but that doesn’t matter much, as the fundamentals of a company like Fairfax don’t change in just a few months.

Fairfax Financial: A Generational Opportunity

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Fairfax FH:sta on aivan hiljan julkaistu uusi kirja. Kirja on saatavilla mm. Amazonin, Google Booksin, Apple Booksin ja Kobon kautta. Ohessa Amazonin ja Kobon linkki. Kobossa näkyy olevan hieman halvempi (e-kirja).

Amazon

Kobo

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Prem Watsa, now 75, stole a page from Warren Buffett in building a $45 billion global empire built on value investing and insurance assets. Its bold and creative trades are legendary, often moving against the herd and making billions while others lose their shirts. These days, the company is back winning billion-dollar bets, but away from the headlines. The Fairfax Way explores the lessons learned and why skies are now blue above a transformed company.

In its 39-year history, Fairfax’s annual compound return of 19.2% trounces the S&P 500’s 11.3%. Lately, it is outperforming even Silicon Valley tech stocks and winning back an investor following. It’s time to get to know Fairfax better. The company’s holdings include strategic investments like Bauer hockey sticks, William Ashley wedding gifts, Sleep Country mattresses, Golf Town stores, and Seaspan container ships. If you took home Swiss Chalet chicken last week or went for steak at the Keg, you ate at Fairfax restaurants.

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Fairfax will be added to the S&P/TSX 60 Index on December 22nd. Here is the News.

Going forward, those investing in this index will also own Fairfax. This increases the demand for the stock and also its visibility.

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Free article from Fairfax, which also touches on adding the stock to the index.
https://www.theglobeandmail.com/gift/b04eb1bcd666173196423362ad31a8785d529ba1ad1cee14b25891c6ca2ccfbf/AKS47ZLUWZFSXEKQVGUNGOWYCU/

Why Fairfax shares have been struggling – and are now due for a rebound

Investing is hard, and it has changed substantially since the global financial crisis. Today, most institutions use a “core and explore” strategy: They allocate the majority of client capital to a core portfolio of high-quality stocks that broadly track the institutions’ benchmarks, then deploy the remainder into less conventional sectors or stocks that may not screen as well.

The best practitioners of this approach know not to overstay their welcome in lower-quality stocks. They look for reasons to sell quickly. That instinct, however, often leads to mispricing. In the case of Fairfax Financial Holdings Ltd. FFH-T, it appears that the marginal holder has been selling for reasons unrelated to intrinsic value. That creates an opportunity for investors who are focused on absolute, not relative, returns.

Fairfax is trading near price levels first reached this past June, but its price-to-book multiple has declined from 1.7 times to 1.4 times. Historically, Fairfax shares underperform seasonally from June 30 to Oct. 31, when the property and casualty insurance company faces greater exposure to catastrophic losses during U.S. hurricane season. Unsurprisingly, investors are weary when short term earnings are at their highest risk! In fact, over the past 11 years, Fairfax has underperformed the S&P/TSX Financials ETF (XFN) in nine of them since 2015.

In 2025, that seasonal underperformance reached its widest margin in more than a decade – nearly 20 per cent versus XFN – despite no major hurricanes making landfall in the continental United States. What explains this disconnect? Investors appear to have broadly sold down P&C insurers insurers amid concerns about slowing premium growth in a softening insurance market and weaker investment income as interest rates declined. Yet Fairfax still outperformed its Canadian peers – Intact Financial Corp. IFC-T, Definity Financial Corp. DFY-T and Trisura Group. Ltd. TSU-T – while banks led the broader financial sector.

Fairfax has several reasons to outperform and I expect it to continue. Relative to peers, it trades at a lower valuation, is actively buying back shares and will be added to the S&P/TSX 60 Index this month, increasing demand for shares and reducing supply – all while expecting a comparable and potentially significantly higher return on equity given the nature of its investment portfolio, which has much higher exposure to equities. Being in the S&P/TSX 60 also means more institutions may choose to add Fairfax to their core portfolios, which will only help expand the company’s price-to-book multiple.

Another source of selling appears to come from value investors. Many of them held through the stagnant 2010-to-2020 decade, when the stock barely moved, and have since enjoyed a remarkable rally. Over 15 years, their compounded annual return now approaches 15 per cent. Some of these investors cite the historical price-to-book range from that period as a reason to take profits, arguing the stock is once again near the top of its range. But such reasoning assumes mean reversion and overlooks fundamental changes in Fairfax’s balance sheet and business mix.

While short-term interest rates may decline, long-term rates could rise. And while certain insurance markets may soften, lower premium growth means more capital for share buybacks or to buy out minority interests of insurance subsidiaries Allied World Assurance Co. Holdings Ltd. and OdysseyRe. Both actions are accretive to Fairfax’s forward return on equity.

Investors also confuse a soft insurance market with lower underwriting income, but that ignores the cyclicality of reserve releases from the previous hard market, which should support profitability for years to come. Too often ignored is the company’s equity portfolio, recorded well below fair value, which could meaningfully lift future return on equity as gains are realized over the medium term.

Fairfax’s historical price-to-book range from 2005 to 2025 has little relevance today. Fairfax has amortized roughly US$2-billion in goodwill and intangible assets since 2017, following its Allied World acquisition – despite substantial premium growth. It has also repurchased shares above book value, which reduces equity and, from an accounting perspective, boosts return on equity. Both developments support a higher price-to-book multiple, all else equal.

With hurricane season now over, the company’s usual seasonal headwinds turn into tailwinds. Over the past decade, Fairfax has outperformed XFN seven times between Nov. 1 and June 30, with the past four years particularly strong.

This year may follow the same pattern. Since Nov. 1, Fairfax has outperformed XFN by about 4 per cent. If the shares trade up another 25 per cent from here by next June 30, Fairfax would once again trade at 1.6 times book value – similar to where it traded in June, 2025.

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Free excerpt from the book Fairfax Way behind the link. A PDF is also attached in case the link ever goes down.

Book excerpt.pdf (140.7 KB)

https://www.theglobeandmail.com/business/article-the-fairfax-way-prem-watsa-investing-transformation-buybacks/

An interesting point from the 2010s, when aspects that didn’t work were cut from the value investing strategy.

For Fairfax, the mid-2010s were a time to reset and fine-tune its value strategy. That meant letting deflation fears slide and preparing for a big turn in inflation and bond yields. It also meant it was time to finally say goodbye to ill-suited short sales in the form of equity hedges.

“Despite our earlier success, it turned out our skills were not in short selling,” Rick Salsberg observed in hindsight years later. “It works differently from value investing where you buy and there is no nasty consequence for holding on for a while,” added Mr. Salsberg, chief executive Prem Watsa’s trusted consigliere up until his passing in 2024. “With short selling, you have to realize you can’t always outlive the market if the bet is going in the wrong direction. It’s almost infinite how much you can lose.”

Mr. Watsa, Fairfax’s chairman and CEO, admits that this time, unlike with the Big Short, the whole hedging effort was a mistake. The failed bet wiped out years of profits and served as a wake-up call that Fairfax had lost the script a bit on its own value playbook. There were smarter, cheaper ways to play both defence and offence. It was time to get back to value basics.

Another point. Buy big when a rare good opportunity arises. In this case, the opportunity was seen in their own stock.

Fairfax shares spent a lot of time in the $600 to $700 range in the 2016–18 period, a level at which many frustrated investors had bought the stock, way back in 1999. In the aftermath of COVID-19, the stock reeled all the way down to the $350 level several times. “I couldn’t believe what we were seeing,” says Mr. Watsa. “The fundamentals were all improving and the stock went south. It just did not make any sense.” As contrarians, he and Fairfax decided to buy as much as they could afford, in as many ways as they could come up with.

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Fairfax repurchased and retired 275k of its shares in November. Approximately 21 million shares remain outstanding. Monthly repurchases of approximately 1.3% of all shares. :folded_hands:

IMG_7297.thumb.jpeg.49e2e2c960e04df18c0d6e29a065a7c1

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“Is Fairfax too cheap or are comparables too expensive?”

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David Thomas, author of the book Fairfax Way, has been discussing the company on the Yet Another Value Podcast. There are many interesting topics.

E: After listening to this to the end, I have to say that the interviewer had some basic things wrong, e.g., information about stock valuation and buybacks, etc. Fortunately, the guest corrected some misunderstandings. Not the best interview, but it did contain some good information about the company.

https://www.youtube.com/watch?v=C1Xoozz9O20

[00:00:00] Andrew returns with David Thomas
[00:02:31] David’s background in business journalism
[00:06:25] Fairfax’s long-term investment returns
[00:08:16] Evolution of investment and insurance strategy
[00:13:01] Fairfax’s stock picking and equity style
[00:16:39] Inflation themes in stock selection
[00:20:32] BlackBerry investment strategy and challenges
[00:24:14] Macro success: shorting housing and tech
[00:29:20] 2010–2016 bearish misstep reflection
[00:35:12] Politics influence on macro decisions
[00:36:56] Prem’s current macro outlook
[00:40:55] Discussion of Fairfax valuation
[00:41:34] Book value and buyback logic
[00:44:28] Overview of the short seller campaign
[00:49:04\] Perspective on Fairfax’s hedge fund lawsuit
[00:51:14] Succession planning at Fairfax
[00:53:44] Stability of all business segments
[00:57:45] 15% target: still realistic?

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