All Activity

Explained a few times already why I don’t think that’s the case but we’ll find out for sure when they report.

I asked ChatGPT how the Fairfax TRS on its own shares is taxed, and it took the answer from posts by @gfp on CoBF. https://thecobf.com/forum/topic/16427-fairfax-stock-positions/page/87/ If the massive repurchase in June was from the TRS counterparty, I trust there were good reasons. Wasn't the whole reason for the TRS that they were liquidity constrained at the time? If liquidity is not a problem now, closing it out partly at a low price is tax efficient. Or maybe it just was the counterparty asking them to reduce it.

I am preparing a pre-view of Q2 earnings for Fairfax. Part of the process is listening to the prior quarters conference call. The comment below from Wade Burton, President and Chief Investment Officer, from the Q1 2026 call caught my attention (again). It is stuffed full of important and useful information (this is becoming typical for Wade's comments on the calls). Public versus private (advantages of each) Criteria used (profitability, balance sheet, management) Value investing (price paid matters) Update on recent investments (Meadow, Peak and Sleep Country) The advantage of partnering with Fairfax The strong team that has been built over the past 10 to 15 years at Hamblin Watsa (mirroring what Andy Barnard has said happened at the insurance business). How the company is positioned today: "especially important now" Welcome to "new Fairfax." ----------- Wade Burton: Fairfax Q1 2026 conference call ... I thought it would be a good quarter to give a discussion about how we look at investments in publicly traded common stocks versus investing in private companies. The underlying process is the same. We work to uncover true economic profits and or profit capacity. We think about where those profits are going. We focus on balance sheet and balance sheet flexibility. We think about the price we pay for those profits. The same underlying process for both public and for private. In both cases, we know management is a key factor. As Buffett pointed out, a great manager can’t save a leaky boat, but what we have learned is that they make a huge difference paddling boats that do float. The advantages of buying public common stocks is: the ability to capitalize on the moods of the stock market and liquidity. The ability to enter and exit an investment quickly is a good thing. The advantages of making direct investments in private companies is we control the profits. That is, we can choose to reinvest the profits in the businesses we’ve invested in, or we can take the profits out and invest them elsewhere. In general, the flexibility to invest in either public or private companies is a huge advantage for us. It allows us to be opportunistic, agnostic, and truly seek the best possible investments. For example, today, with the Shiller PE at all-time highs, you would not expect we’d find a lot of fifty cent dollars in the stock market, and we aren’t. We have been able to make outstanding acquisitions on the private side, including Meadow Foods, Peak Achievement, and Sleep Country. We have the advantage of a history of being terrific long-term partners. 40 years of fair and friendly transactions with a long line of very happy partners, along with permanent no call capital, makes us an attractive home for many companies. To do all of this well takes a skilled and focused investment team, and I’m so proud of the team we’ve built over the last 10 or 15 years. Our people are decision-makers. They are analysts and value investors. We have skilled defensive players and skilled offensive players. All have experience in public and private investments. You know, having the independence to make decisions is so important, and they’re all doing it. We call them in where we need them on the bigger investments. With that, it is amazing to watch them come together as a group. Having this team in place is especially important now, given how big and globally spread out we are and how big we hope and plan to be in the next 50 years.

The $2.5b includes Q425. I don’t think it’s helpful to look to try to match the source of earnings. This is another attempt from me to consider the holdco operations differently from the insurance subsidiary operations. In this case, the holdco did own $400m of Poseidon at the holdco at the sale price so I suspect that is capital available for buybacks. The rest of it would come from new debt like the recent $750m 30-year issue and mostly dividends from the insurance subsidiaries which have a lot of cash on hand to pay dividends.

Agreed. I like the idea of a stable company like Berkshire buying highly cyclical businesses that generate significant free cash flow at the top of the cycle, and over earn on average across the cycle. They’re almost uniquely positioned to own businesses like these given the stability of the energy assets, the strength of the balance sheet and the constant need to put float to work.

It doesn’t matter he will be pardoned.

Of the 2.5 billion or so in buybacks, how much of it can we estimate came from FCF? Is most of it from the Poseidon sale?

Much to your chagrin, you just earned a MAGA cap...ha!

Yeh some dudes have lost their mind, but need to remember that Trump is a vaccine for woke. It wasn’t too long ago that men were women, you were a bigot for not agreeing so, kids should be injected with hormones, white privilege means you can’t have an opinion, can’t talk about immigration without being a racist, discrimination in college admissions…. Pretty long list. And I’d say that many of the aforementioned ills haven’t really gone away either, Trump is great in some ways but terrible in others too.

Smart man turns into moron...MAGA to blame! They need to create a MAGA vaccine, but I doubt this administration will since they don't believe in them unless there is a world-wide pandemic. Another of the mighty who have fallen after associating themselves with Trump and his beliefs! Literally went from brave soul conspiracy nut to right wing loser conspiracy nut...the chart looks nearly identical to Giuliani's fall except replace the underaged hotel room sexcapade with a Russian double-agent girlfriend scandal! Cheers! https://www.yahoo.com/news/politics/articles/judge-awards-hunter-biden-1-153923367.html

Sorry if the quality is bad. In retrospect, it's kind of amazing just how stupid the Dot Com bubble was.

Wow. Really interesting. The last few moves have been awesome...high quality companies in depressed industries: OxyChem, Taylor, and now another homebuilder

Cato Institute: World Hyperinflations

I figured out how to get ahold of some and thought they were cool. 2008 - Washington Mutual.pdf 2008 - Lehman Brothers.pdf 2008 - Freddie Mac.pdf 2008 - Fannie Mae.pdf 2008 - Countrywide Financial.pdf 2008 - American International Group.pdf 2002 - Yahoo!.pdf 2001 - eToys.pdf 2001 - Enron.pdf 2000 - Yahoo!.pdf 2000 - Cisco Systems.pdf 2000 - Amazon.com.pdf

Sure but it would give a certain short seller another opportunity or at least something to think about - especially if they still hold the same beliefs about the company. Just thinking out loud - you guys are great and help crystalize these issues.

They will get more creative. Yes, the TRS trick could always be used again.

They will get more creative.

You might have a higher return hurdle than they have. To me it easily clears their 15% return hurdle.

Can't really speak to UA and Andrew Peller b/c admittedly don't follow those industries and candidly don't understand what Fairfax management sees there. So to answer your question, would probably prefer Fairfax buybacks to THOSE investments (little as I know or care about either). And b/c of your point that dividends are and can be sent by insurance subs to holding company, not sure it matters specifically which is buying what - they're all part of Fairfax Financial. The point I was trying to make is that Buffett passed on repurchasing BRK shares at times when the stock traded at and below BV, i.e., ridiculously cheap - for reasons I could never understand. Fairfax is not at such a price, though it is cheap enough for me to have purchased shares this year at various times. But it raises the thought that what if Fairfax repurchases its limit of stock for the year and then the stock price craters to BV or below?

I don’t think they want to sacrifice the 3:1 investments to equity leverage. I’m very happy for that. They are turning over the portfolio which allows them to keep making new investments. The risk/reward buying FFH is better than anything else they could buy.

The $1.7b they have spent on share repurchases is a big investment, and I agree that it is reasonable to ask whether they didn't have other, better opportunities. I wouldn't want them to buy back shares if it meant they couldn't take out minority holdings like Allied. But how would you compare buying more Fairfax to buying Under Armour, for instance, or buying wine producer Andrew Peller? I have SafetyinNumbers on the conscience, and I am imagining him saying, right now, that we are failing to make the distinction between the insurance companies (who are buying Peller and UA) and Fairfax the holding company, buying Allied and doing repurchases. But to some extent, the insurance subs could be buying more things like Peller and UA instead of sending dividends to the holding company to repurchase shares and buy out preferred shares and buy out the minority interest in Allied. So it may be fair to compare acquisitions, whatever level they are at. I for one think that Fairfax repurchases are a very sensible investment, and if they can't sensibly expand their insurance holdings, I would just as soon see them repurchasing rather than increasing the dividend or, like Berkshire, just holding onto a mountain of cash. And I like to see them stay small and nimble, like Berkshire was at an equivalent point in its trajectory. By my calculation, that would be in 1992, when Berkshire had a market cap of $15b, which would be the equivalent of Fairfax's current market cap of $35 in 2026 dollars. I expect Fairfax will keep growing, but I selfishly want it to stay under $100b for the foreseeable future, and not get to Berkshire's $1.1t where small opportunities like the $1.4b Fairfax paid for Eurobank in 2014 don't move the needle.

I thought your reasoning was correct, then it occurred to me that, if they're bumping up against the 10% limit, they might not want to close the positions, because they don't have the capacity available to buy back the shares. In that scenario, if you pretend the TRS is approximately like a buy back if you squint, then the volume of shares the company can acquire through the combo of a maximum 10% buyback and maintaining the TRS is effectively higher than the combo of a maximum 10% buyback and closing the TRS (while being unable to buy back shares equivalent to the TRS because of the 10% limit.)