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1. When they have the cash to buyback the shares. My guess is when they sell some Digit. Likely years away. 2. They don’t have to but it’s nice to be able to buyback shares at market without paying a premium. 3. No reason why not. Many investors are afraid of a decline in earnings from the TRS in a given quarter but from a liquidity perspective it’s a pretty low risk. The stock would have to fall more than $500/sh to approach how much FFH makes in an average quarter. It’s a risk they can easily handle.

Inventory trading may well be a consideration, it would take some of the pressure off. You just know that Fairfax will have some angle that will be enlightening

In the event of Fairfax being added to the index, I wonder if the bank will keep many of the share for their own index or mutual funds.

1. Forced index buying is my bet 2. No, just not renew. However, when the contract closes, unless the bank wants to keep the position, they will sell it into the market. Unless there is an additional source of demand, this could put downward pressure on the share price, so in the month the contract ends, this could be quite costly to Fairfax. There is also the real possibility that a lot of investors are using the TRS as a proxy on IV and may choose to exit as well. Leverage works both ways. I would see this as a short term blip, but the market can react in pretty funky ways at time 3. Yes, but remember that this could be seen as a significant funding source for the buybacks to date.