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Thanks for this, seems a very full price on recent numbers. So one can only conclude they see a path to $150m +in EBITDA. COVID obviously compressed sales, so in recent years they will have been suffering through a “COVID hangover.” Through cycle I am sure Schaeffer will make it work (quick and dirty IRR based on 55% FCF conversion, exit multiple 6x’s EBITDA) Sales & EBITDA over the last 7 years.

To evaluate Fairfax’s performance today, I like to use 5 years. Because I think we now have 5 years of relatively ‘clean’ results/history. The challenge is a fair bit of stuff is happening under the hood and is not captured in the accounting results. Some of it gets picked up by excess of FV over CV. But there is more than that. On leverage, I think the preferred shares are mostly gone, replaced with debt. Their bond portfolio is very conservative… mostly government debt (85%?). No private credit at all. Very different from P/C insurance peers.

Where on bloody earth do you get that most Americans are not doing well? If you exclude those who either became seriously ill or had someone in their immediate family become seriously ill, what % of people who acquired useful skills, worked hard, lived within their means and invested their savings did poorly? And no, someone who went to Columbia and got a degree in gender studies and now can't get a job does not qualify.

Anyone buying or currently have a position in a company that Is trading at <6x FCF or Earnings? Thanks

What timeframe do you guys view as the best to assess Fairfax performance. I agree quarter to quarter or even year to year is difficult. Because for many reasons their earnings are lumpy. I was thinking five years but wanted to see what others think. On leverage, Fairfax tilts towards the higher side, compared to most insurers. They not only hold float leverage, but also debt leverage and even preferred shares. If you consider minority shareholding and pref equity as a form of leverage, that's additional on top of that. Perhaps as a result of this, they also are the most careful towards how they invest and hedge on interest, rate swings, etc. So they are approached towards leverage is perhaps the most complex one of all P&C insurers. The role of redundancy in reserves. I think this is like 20 out of the past 21 years or so. And on average it's around 2% of underwritten premiums. I think there's a small tax advantage, and also allows for some flexibility in maintaining a more smooth doubt, Insurance operations.

Now the second largest sleep retailer in the world apparently. I’m curious how they financed the deal. They levered up a bit on the acquisition but it’s a strong FCF business so might be financed by debt.

The current inefficient market is a great hunting ground for them. When they do acquisitions most investors don’t like them because they don’t screen well. I think any concerns around insurance are more short term in nature. The longer the outlook the less it matters. In the short term if the market hardens that would accelerate multiple expansion which will otherwise trend towards whatever Fairfax’s limit is on the NCIB for open market purchases. That should more than offset any slow down in BVPS growth from a higher combined ratio in the short term.

Half of the hate to Argentina is the historical rivalry from Europe to south American's footbal. The other half is the rivalry from South America to Argentina for winning that many American tournaments (this hate changes hands, before it was to Brasil in the 90's). It works looking at fouls from Argentina and making blind eyes to everything else. Fernandez got the first yellow card by talking to the referee, that probably pissed him off, it's a questionable decition. The second was yellow, of corse, but there was a theatrical dive by the Spanish player that made it look much worst than what it was. If Argentina did that dive everyone will be complaining. Spain played better, but the same happened to France and we don't see this level of hate. Other factor is that they had 1 day less to rest, and all the midfield were lessioned. Half of the players are the champions from 22. Same happened to France last final, and may happen to Spain next tournament. The only injustice for me is the biased attack, even from the press, and that Messi didn't got the ballon d'or with his incredible performance at 39 years old. Messi should have the record in goals, if not for Mbappe making two in the bronze match (that he lost). Has beaten many other records. Instead they give to this player in midfield position, that didn't score, and not to this guy that did what was demmed impossible at 39. I think is impressive what Spain did, but I will atribute it to the team, not to a single player. As a single player Messi did the impossible. Compare the foul of Fernandez with this, that was not even called for penalty or yellow card, and cost Argentina the 2014 world cup final. Agree with the yellow, but injustice is this kind of things, not a yellow served.

Cpac reported post close. Despite no price increase, volumes up 15.5 percent, revenues up 15.4 percent, ebitda up 34.3 percent and net income up 61.5 percent

Why Soccer Is Boring The Better Team Loses Almost Half the Time One of the best ways to determine how much luck is involved in a sport is to measure how often the worse team beats the better one. If the favourite wins 80 per cent of the time, that’s a high-skill sport: the better side reliably prevails, and the remaining 20 per cent is luck. If the favourite wins 55 per cent of the time, you’re watching something closer to a coin flip. https://archive.ph/vSNN3#selection-1033.9-1033.29

I really hope, bullet point 3 and 4 will last. If they don't do any major blunders, the compounding goal of 15% on the average looks more than achievable. The outcome could be much higher. But then again, it's insurance and there are unknown unknows in the risks they cover.

It is certainly ironic. Given that Spain is the biggest leech in NATO - it's really Europe that should be pissed and not the USA!

@djokovic1, I think what makes today unique is a number of things have converged: Higher interest rates, which you mention. Higher quality insurance business Higher quality equity holdings Better capital allocation (matured?) The 4 have come together at the same time. Bodes well for future returns. The good news is that it appears little of that is priced into the stock today.

Yes you are right. But I still think the leverage increases, not for the reason I said but just because an equal decrease in investments and equity will make the ratio higher. For instance, with $74.9b invested and $26.3b in equity at the end of 2025, for a 2.85 ratio, buying a million shares this year might cost about $1.6b, bringing the ratio to 73.3/24.7=2.97. Pretty big improvement.

Doesn’t it reduce book value by the same as a $ of repurchasing? That’s the accounting entry. BVPS doesn’t go down as much because the denominator goes down too.

Sleep Country has bought Sleep Number assets from bankruptcy after increasing their offer to $700M during the auction. https://www.reuters.com/legal/litigation/mattress-company-sleep-number-sells-assets-700-million-bankruptcy-2026-07-20/

@Viking I love the flywheel especially because it's true! A lot of other insurance companies operate at a similar leverage, I would argue thats not what makes Fairfax special. What makes them special is they operate at that leverage with 30% in equities whereas most other insurers only have 5% in equities. So the other insurers have much lower ROE. Markel and Berkshire used to operate at much higher leverage when they had a lower amount of equity investment % in the book, not dissimilar to Fairfax today. So I don't think the leverage is an outlier / risky. What makes today unique is a healthy return on the FI book which allows Fairfax to have an exceptional ROE in most circumstances.

Repurchases are good for increasing value per share, but they are even better for maintaining the leverage. It would be interesting to see how the last few years of repurchases have changed the leverage, but without access to the numbers (long drive home) I suspect it will have increased. $1 of repurchasing obviously decreases cash by $1 but at a P/B of 1.4, it decreases book value by only 70c. So the ratio of investments to equity should increase.

@73 Reds, I think Buffett's view was (is?) that high quality float is better than equity - the key is the quality of the insurance operations. This is one of the reasons I am so happy with what Andy Barnard has done with Fairfax's insurance operations over the past 15 years (they are much higher quality today). This means Fairfax is a much more valuable company today - one of a couple of reasons why it should trade at a higher multiple today than it did 15 years ago. Fairfax's leverage is similar to what is was 15 years ago (if memory serves me correct). It's not like Fairfax has been aggressively levering up the business. Instead, spiking earnings (and shareholders' equity) is not driving leverage lower. At least not right now. (Having a low share price is a big deal - for management teams focussed on per share value creation over the long term). ---------- Another angle to the leverage discussion is size, sources and diversity of earnings. Fairfax is in a very strong position today - much stronger than at any time in its history. It really is remarkable what Fairfax has accomplished over the past 10 years. And how the stars have aligned - insurance, investments, capital allocation etc.

It’s a bit of a philosophical question. For the benefit of others, the base assumptions are that over the long term for a high quality insurance business, the combined ratio will average below 100 and that premiums will grow. If accepted that means float is always growing albeit on a revolving basis. Under these conditions, the float is the equivalent of owning a growing income stream that never has to be paid back. Those are the characteristics of an asset not a liability. The insurance subsidiaries themselves are not that levered and in fact carry extra capital. The additional leverage at the holdco and it’s structured very intelligently with no near term maturities and long duration issues. The leverage at the non-insurance subsidiaries is not relevant as they are non-recourse to the insurance subsidiaries that are mainly the shareholders. Slide from @djokovic1

starter in HUBB

C'mon...Shakira's hips definitely did not lie! It was the only part of the half-time show I thoroughly enjoyed! Cheers!

The best chocolates and 7,000 types of beer powered Belgium! I didn't even recognize Ronaldo! Cheers!

I just asked ChatGPT what percentage of Americans work full time, and the answer was 48.6% with another 10% working part time. It doesn't seem like any huge surprise that the bottom 50% generally possess less purchasing power since they're not working... If 50% of a society doesn't work, then they will have the most purchasing power when there's a stronger safety net. Meanwhile, it seems like a lot of the countries with great safety nets don't have as much opportunity for wealth creation from looking at the numbers you're presenting. As far as the median net worth, I feel like the health insurance setup in the USA probably plays the biggest role in this. The biggest obstacle (in the USA) to starting a business, is being able to maintain/afford health insurance. Same problem for anyone who doesn't have a corporate/government job. But you can get free or nearly free insurance by keeping a low income (with ACA) and almost zero assets (with Medicaid). There are plenty of Medicaid recipients that could save some money, but it would be foolish to do so since it would mean getting kicked off of medical insurance. If you're in the bottom 50%, you probably need to bridge the gap to the top 20-30% just to make up for the differential in health insurance costs. When you factor in SNAP, discounted utility rates, section 8 type housing, and EITC, these all act as a huge disincentive for the poor/lower middle class to make otherwise good financial decisions. This framework keeps lots of people poor, costs the taxpayers (almost exclusively the rich by the way) more in the long run, and steers more of our economic activity under the table.

Well, Buffett has said that Berkshire's float is better than equity. As a shareholder, I've never bought into that (it is a liability) yet it has some of the same characteristics as equity but solely because of Berkshire's underwriting discipline. In that vein, and with more leverage than Berkshire, do you view Fairfax's float the same or any differently? When does leverage get excessive?