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Morningstar has a fair value for Fairfax of C$730 = US$537/share. Fairfax shares are trading today at US$714. What can we learn from Morningstar's report on Fairfax? Unfortunately, I think we learn much more about Morningstar from this 'report' than we do about Fairfax. And it does not inspire confidence. If this organization can be so out of touch on Fairfax - is this representative of the quality of rest of their research? ---------- Why am I so bullish on Fairfax? Because I am focussed on the present and the future. Graham (the guy who taught Buffett) teaches us a stock is simply worth the present value of its future cash flows. Yes, the past matters... but what matters much more is the future. The Morningstar report is focussed pretty much solely on the past. 2008. And 2010-2016. And this might generally be ok for most companies. But it does not work for companies where important things have changed. Turnarounds. And lots of important things have changed at Fairfax over the past few years. Things that already had a big, positive impact on earnings in 2021 and 2022. With much more to come 2023, 2024 and 2025. This explains, at least partially, why it takes turnaround type stocks like Fairfax so long to re-rate. It takes years of better/excellent results before analysts and investors get comfortable that things have indeed changed in a sustainable way for the better. Only after the new and improved financial results are embedded in historical results for years does the ‘narrative’ change. This actually makes sense for a company like Fairfax that was so out of favor. ————— What is Morningstar missing in their report? An analysis of Fairfax as it exists today: a company that is earning: 1.) record underwriting profit 2.) record interest and dividend income 3.) record share of profit of associates 4.) solid investment gains While also reducing their share count. They do not provide any detailed forward looking information and estimates. No detail of the important building blocks. No math. In sort, their analysis is exclusively backward looking. And as a result, worse that useless for a company like Fairfax (a turnaround). ---------- Conclusion: Fairfax, as it exists today, is misunderstood. Lots of analysts and investors are stuck in the past. So what is an investor to do? Patience and time. Fairfax needs to deliver results. The narrative will slowly change and reflect the current reality. And Fairfax shareholders should be rewarded handsomely.

Yes! If you read his reports going back, it's pretty much been the exact same report for like 5 years now. The analysts will turn bullish when the stock hits $1,500 in a couple years.