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You didn’t ask me but that has never stopped me before. I think this is a question that’s really about estimating intrinsic value. I use three methods to triangulate FFH’s intrinsic value range. 1. Normalized PE. 15x is generally considered a fair market multiple and FFH is a better than average business so 15x FTM EPS seems reasonable. While consensus is $155, it’s probably too low, it still gives us $2325 or ~66% above current prices around $1400. 2. Relative P/B multiple. There is an exponential relationship between P/B and ROE which makes sense. A high ROE compounds much faster so it makes sense to pay more than 2x for a 20% ROE vs a 10%. When looking at FFH peers, an ROE between 15-20% should command a P/B closer to 2.5x. With so much in the multiple we can just use trailing BV instead of making the adjustments to FV etc. 2.5x BV is ~$2585. 3. Buffett method. This is the sum of BVPS and float per share. Buffett has made it pretty clear that float in the hands of a high quality insurer is worth at least the amount of the float. This makes sense because the income associated with the float accrues to the insurer and consistently grows over time. For FFH this is ~$2800. That leaves me with an IV range of $2325-2800 which is wide but well above the current price offering large margin of safety.

@mananainvesting , that is a great question. I will admit that ‘multiple’ is the most difficult part of the valuation process for me. Back in 2021 and probably 2022, I probably would have said i would be happy with a P/BV multiple of 1.3 x. But that would have been largely built off of Fairfax version 2010-2020. Much has changed regarding Fairfax over the past 4 years. As a result, my view today is a P/BV multiple of 1.3 x is too low. What is an appropriate valuation/multiple today? My short answer is higher than where we are at today. How high? I’m not sure. My guess is I will know it when we get there (ora least get closer to ‘it’).