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@steph , I agree. Over the past 2 years, have we just witnessed the one of the greatest investments in the recent history of the P/C insurance industry? When he retires (hopefully not any time soon), my guess is Brian Bradstreet will be a unanimous selection for entry into the fixed income Hall of Fame for P/C insurers. Yes, that sounds like hyperbole. But outside of Berkshire Hathaway, can anyone provide me with a better example? 1.) aggressive move to 1.2 years average duration late 2021. Selling all corporates (locking in realized gains) and moving into treasuries. This protected Fairfax’s balance sheet. 2.) aggressive move to 3.1 years average duration in Oct 2023 with the long end of the curve around 5%. This locks in record/high interest income for the next 3 years. The team at Fairfax just successfully navigated Fairfax (and Fairfax shareholders) through the greatest fixed income bear market in history. The bond market was in a bubble of epic proportions - and it popped in late 2021 and 2022. It will take years for the carnage to fully play out (it is still mostly hidden on balance sheets). How many billions did this freaking crazy set of decisions make Fairfax shareholders over the past 2 years? Does anyone have an estimate of what the financial benefit to Fairfax shareholders has actually been? - The avoidance of losses? - The ability to quickly pivot into higher yielding fixed income instruments? - And now the extension of duration locking in higher yields (likely in the 5% range)? This string of decisions was done with a portfolio close to $40 billion in size. WTF? And the table is now set for Fairfax to earn in the range of $2 billion in interest and dividend income in each of the next 4 years. Add underwriting profit and share of profit of associates and you are over $4 billion per year. My guess is some people on this board do not yet grasp the significance of what Prem opened the Q3 conference call with - so is it surprising Mr Market doesn’t get it yet? Q3 Conference Call - Prem: “As I've said for the last number of quarters, the most important point I can make for you is to repeat what I have said in the past. For the first time in our 37-year history, almost 38 years now, I can say to you we expect, of course no guarantees, our operating income to be more than $3 billion annually for the next three years.” (Edit: this number is now comically low…). “Operating income consisting of $1.5 billion-plus from interest and dividend income we earned $1.4 billion year-to-date, $1 billion from underwriting profit, we made $943 million year-to-date, and $500 million from associates and management companies versus $1 billion year-to-date. This works out to be over $100 per share after interest expenses overhead and taxes.” (Edit: Fairfax has exceeded their annual guidance in 9 months…) “We continue to exceed our expectations for the year with the year-to-date operating income already at $3.1 billion, excluding the effects of discounting and risk margin. Fluctuations in stock and bond prices will be on top of that. And this only really matters, as I've said many times, over the long-term.” (Edit: this is the really important part) “Recently, in October, during spike in treasury yields, we have extended our duration to 3.1 years with an average maturity of approximately 4 years, and yield of 4.9%.” (Edit: and the table is set for the next possible move) “In the next four years, we are likely to have a recession in the United States, resulting in corporate spreads widening, allowing us to extend our maturities further.” ————— Fairfax detractors say “yes, earnings are great in 2023 but they are not sustainable.” Well, we have just learned earnings ARE sustainable. $150/share is the new baseline for earnings. This number should grow nicely over time (as capital allocation and compounding work their magic). What is an appropriate PE? 8X is low. That would be a share price of US$1,200. What is an appropriate P/BV? 1.3 is low (given a +20% ROE in 2023 and high teems ROE likely continuing for the next few years). That would be a share price of about $1,200 (assuming BV comes in around $920 at year end). So US$1,200/share looks like a cheapish reasonable valuation for today. Add in E$160/share in earnings in 2024 and that would bump the share price to $1,360 as a reasonable target looking out 12 months. Shares closed Friday at $897. That suggests significant return potential over the next 12 months. Despite the stellar run up over the past 3 years, Fairfax's shares still look significantly undervalued to me. The gift that keeps on giving...

I think the best rebuttal is that the "bullish assumption" is from our odd crowd that represents ~1% of the composition of the market. It's still crickets from the 99%. And the opposite of love is not hate but indifference, right? I just can't see (though I guess that's your point!) how is this close to bullish sentiment just b/c like 12 of us on this niche value nerd forum are bulled up and while it still trades at what seems to me at least like a pretty depressed (or at least nothing close to stretched) valuation and with 2 questions on the call. As far as I can tell, we started off ~2-3 years ago at "child slave labor strip mine" sentiment and are like ~25% of the way to "generally recognized as the next BRK" levels. That's my proprietary scientific scale.