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Every month I get with my wife to review our financial situation. This month the of Crip-Family net worth was not impressive, and when returns are compared against the S&P, it looks even worse. I gave her the low down, specifically, that Fairfax really killed our returns YTD and in May especially. She asked "What happened with Fairfax?"...response was "Not a damn thing, literally no bad news". This is instructive...company moves notably lower with, from what I can see, zero reason. Yes, it is frustrating to see the impact on the net worth, this is the kind of thing we live for...company getting better and price getting cheaper. We have been buying on the way down, but hindsight says we should have waited a little longer. -Crip

We need to change the title to ‘Fairfax Stock - New 52-week Low’

That’s what makes a market. I don’t expect them sell at these prices. I think they will ultimately sell the whole bank to a much larger European bank at a premium which will facilitate the exit.

Yep, the buildings in Europe are a lot nicer, the older ones at least. Modern buildings are often truly ugly. I had a friend who used to say that beauty of a city and landscape really mattered. He took his own life some years ago unfortunately. He wasn’t right about many things, but ive come to realise he was right about beauty and how it makes you feel is important.

Maybe this will help folks understand of hard/soft market cycles. Insurance market "hard vs soft" is identical to stock market "bull vs bear". Bull Market = Soft Market attitudes, Bear Market = Hard Market attitudes. In a Soft market, underwriters lose their minds, make irrational decisions with regards to fundamentals, no fear - everything is rosy, care free, underwriters say "YES" alot and "everyone is making money" attitude persists. In a soft market, the old school underwriters say "this can not go on forever" and the new guys say "you guys are dinosaurs, we are killing it".....until the roof falls in...or doesn't...thats the bet. Soft market means terms conditions get sweeter and price goes down = bad equation for insurance companies. and brokers have a field day because they are getting BETTER market execution for their clients albeit commission revenue does compress HOWEVER good brokers can sell more product into a soft market cycle. In a soft market, as a broker you just send an underwriter a competitor quote and say "youre gonna let this other idiot make all the money?" BOOM, they match or beat the price and in many cases they will increase the commission to sell their deal. Brokers really don't do a good job in soft markets for their clients because price alone is what the clients care about but a good broker can enhance the terms and conditions to the paper contract in a soft market with ease. A Hard market on the other hand, underwriters set the price, terms, conditions cause they know they are winning. Imagine being an underwriter for financial D&O for banks in 2007. You could put out quotes with a bankruptcy exclusion for a bank in a D&O policy and win! That defines what underwriters CAN DO in a hard market. Hard market you can put a roof exclusion on a property policy and client will still buy it. NUTZ right? Buyers/Brokers loose their minds in a hard market because things get tough, every underwriter says no. Gotta stick with your partners through the cycles. Its an amazing game. Mr. Buffett wins in a hard market. because he knows the risk is the same, its just he can charge more in a hard market. Think of it this way, does the hurricane know its a hard market when its coming to Florida or Texas? The hurricane doesn't care! It's coming (or not coming) just the same. The odds are the same either way, its the capacity being put into the market that drives drive up or down, hard or soft. Its just like stocks, the market doesn't know what you paid for the stock as much as you stare at it and fondle it, the price of the equity will go where it goes based on fear and greed or fundamentals of a good/great business. Just like the insurance cycles hard vs. soft. A good risk is a good risk whether its a hard or soft market, good risks just get better execution. ALL stock brokers look like kings in a bull market, just like insurance brokers look like kings in a soft market. The inverse its true as well for bear market/hard market. Dumb money shows up in a soft market. Smart money waits for the hard market. They very much rhyme.

The fact that the principals are retaining their stake in the newly formed company, makes it more likely that that is the case. Because if they felt they were getting a great deal, they probably would've cashed out.

Fairfax announced new $300M Notes offering. https://www.fairfax.ca/press-releases/fairfax-launches-c300-million-senior-notes-offering/

Perhaps KW can find something good to do with it. I of course don't know anything about the BC real estate market, but it certainly strikes me as a valuable piece of real estate in the right hands. KW has a presence in the Pacific Northwest so might not be too much of a leap.

Also gives Fairfax partners who know the company best that have skin in the game.

No, the purchaser is a new subsidiary that has been created to acquire the company.

Eurobank got busy on the buyback again post dividend payout last week.

I would assume the buybacks are absolutely ripping right now. If you look at the buyback kings like AutoZone it was steady buybacks for 25 years. It is conceivable that were under 20 million this year and much lower share count a few years out so if this process has basically just started within the past 5 years we are in for a show. Good things take time. We may bicker about value, ROE, wives and performance but the thought of FFH at 15 million shares outstanding feels pretty good if you look at AZO since 1998. The kicker is that AZO has taken on a lot of debt but I feel Fairfax will handle this better so the result could potentially be more impressive. FFH 10k anyone?

In looking at UA holders, the largest number of shares at over 32% is owned by BDT Capital…isn’t that Byron D Trott’s vehicle, and if so, then maybe that helps explain the Fairfax investment in the shares as well?

I like how the spread to the 30 year keeps tightening. Two years ago they issued at ~190bp spread, last year ~165bp and this year was ~135bp. I think Allied World is the logical place for this money. Extending the option would have been more expensive and buying Allied World minority boosts the borrowing base,

Had the exact conversation with my better half Saturday morning and she asked the exact same question. I also had no real answer other than to say these things tend to happen to Fairfax from time to time for no real reason. Kinda felt like a moron because I could not explain the situation, and yeah, there is the net worth roller coaster. I told her that I have every confidence that share price will get back on track, my only concern is when as I am not getting any younger. With Fairfax at around 50% of my portfolio I have not been adding, but I have no intention of selling either. There have been days that tend to make me reach for the Rolaids though. By the way Crip, I'm the guy that stumbled onto this board 20 years ago and paid close attention to every one of your posts at the time because you always seemed to ask or answer ask the same questions that I had and you were one of the posters that influenced me jump into Fairfax. I thank you for that. There has been a lot of ups and downs with Fairfax over those 20 years but I'm still here.

If things continue to drag out in the Middle East, it is highly likely that stock prices will continue to be volatile. Using up the whole NCIB now is like using up your firepower all at once. They've been very good about buying back shares over the last six years...let's trust them to do the right thing over time on buybacks. Cheers!