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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’

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!

Fairfax Completes Sale of Portion of its Interest in Poseidon Corp. Fairfax Financial Holdings Limited announced today that it, together with certain of its affiliates (collectively, “Fairfax”), has completed the previously announced sale of an aggregate of 67,618,981 common shares (the “Shares”) of Poseidon Corp. (“Poseidon”), the holding company that owns Seaspan Corporation, at a price of US$28.30 per share, for aggregate proceeds of approximately US$1.91 billion and a pre-tax realized gain of approximately US$837 million.

130k was traded at the close today but I don’t know who was the buyer.

I was having a long conversation with an AI model about Fairfax's 10 year history of reserve redundancy / positive development of prior years reserves and how Fairfax has been very good at over-reserving up front, which has the effect of over-stating "float" and understating "shareholders equity" - since a fairly predictable chunk of "liabilities" is actually equity that just hasn't been released yet. This also has the effect of lowering the coveted leverage ratio (2.5-3x) we receive because equity is actually probably higher than stated. A similar lowering of the leverage ratio results from the under-marked assets we know are worth a few billion more than the accounting books say ("excess of fair value over carrying value"). Either way, Fairfax is working hard to shrink their equity through repurchases and maintain their leverage and they have a higher leverage ratio than Markel. Berkshire lost its leverage a while ago. Sad. The conversation moved into a discussion of the behavior of these prior years reserve releases (mostly in Q4s) in the 3-6 year period after a "hard market" and it became pretty clear that a whole lot of the past several years of hard market benefit has not actually been reflected yet on the books. A major counter-cyclical earnings buffer that makes those softer years a lot more enjoyable (another added bonus is growth slows, freeing up capital to be distributed down to the holdco). Because Fairfax grew so damn much during the hard market years, the annual contribution from reserve releases / positive development will likely be much higher than the $500m annual "typical" release and 2025's $751.5m. If you believe Fairfax has maintained the same over-reserved conservatism - and I don't know any reason to assume otherwise - then they already have a higher shareholders equity and lower liabilities than their accounting book indicates.

Who are the progressive, drunk, inexperienced FFH people here?

The key is a management team that takes advantage of the opportunity. Fortunately for us, unlike a lot of management teams, Prem, won’t take the company private and keep the opportunity for themselves which is a big risk in this market structure. Please see KW.

Ensign Energy and Garret Motion are small position but they are performing quite well

completely agree with this 100%. It’s based of my lived experience that most investors I know have studied or are invested in BRK/MKL but haven’t studied Fairfax or rejected it after a cursory look. Which explains to me why it trades at a big discount to peers. Nothing that time and continued execution won’t solve as long as we are right on management and their capital allocation. Bonus points: we get meaningful buybacks while we wait.

This is a small position for Fairfax, but Ensign Energy services is up ~72% YTD! Fairfax owns ~20% of $ESI.TO. Current Mcap of $ESI.TO is ~$800M CAD.

Does the 3:1 leverage give us 3 times that?

Ok. Let’s use a 40 year time horizon (I don’t). Their stock price compounded at better than 19% per year (US$, dividends included). And for the first 25 years of this time period they had some pretty crappy insurance businesses. Their stellar results were driven primarily by their investment decisions - which you characterize as ‘mediocre.’ Please square that circle… PS: Fairfax is a contradiction. What people think about the company. And what the company actually did. There is, IMHO, a massive disconnect.

100% I agree Francis would be a great addition to the board! Loved his presentation shared by @mananainvesting It reminded me a bit of watching Li Liu present. I wonder why it hasn't happened yet? Seems like it would be a win win (as long as Francis has the time).

Nor do I. Lauren was speaking to a very specific audience of people who were in attendance at the annual meeting of Berkshire Hathaway. I have been a 30 year holder of Berkshire Hathaway myself, and have never gone to the Woodstock for Capitalism myself. Nevertheless I have often privately bemoaned that by the time I learned about the company and had enough personal resources to invest in it, that the glory years were behind it. I tell myself and the family members on whose behalf I have also invested in Berkshire that we can be proud of owning a company with integrity and based on value investing principles…but that its size will work against the likelihood that our investment in it will compound at much more than the stock market index as a whole. For 20 years now, I have also been searching for smaller Berkshire like companies that I can place part of our retirement accounts in…to include Markel, Alleghany and Fairfax since that time. Berkshire bought out Alleghany, so we’ve been left with Markel and Fairfax as potential smaller companies that might be able to compound in our portfolios faster than a mature Berkshire. Berkshire has benefited over the years from having attracted a very loyal shareholder base who have held the stock for years and years, and even decades and decades. If a company happens to have a similar value investing philosophy, and envies the shareholder base Berkshire has maintained, what better place to share the story of your company with than those same folks? That’s why Markel has long held meetings in Omaha during the Berkshire meeting to share the story of Markel with Berkshire meeting attendees. A less than 30 minute presentation on Fairfax at Guy Spier’s conference, which mostly regurgitated slides already made public at the Fairfax annual meeting, and which annual meeting had already touted the CAGR for Fairfax stock since 1985 doesn’t seem to be beyond the pale to me. And at the Fairfax annual meeting, it was explicitly shown that since 1985, Fairfax’s market value per share had compounded even faster than Berkshire over the same period. So the Fairfax annual meeting was already comparing the performance of Fairfax to Berkshire. As a longtime Fairfax holder (20 years now), I would prefer to have more long term Berkshire owners take a look at the company than the kind of folks who listen to short seller reports. If I had not already known about Fairfax, I would think of Lauren’s presentation as being a public service. I first heard of Fairfax years ago when reading a book called “Selling America Short”. Some time later I remember hearing Whitney Tilson referring to the company as “crappy underwriters with a great investment arm”. Lauren has made a small addition to publicly available comment on the company, and it’s a bit of a counterbalance to a lot of the negative commentary the company has experienced over the years.

I don't understand the condescending attitude. It's as if you're married to ideas and and hate pushback/other views; be it SCR/MEG, Atento (bust), Lavoro (bust) or CNXC (close to bust?). I'm trying to add perspective and gain nothing from pushing back a bit against a board of Fairfax followers. Personally, I'm here here for the pushback. Hopefully it makes me avoid some pitfalls and aware of whatever blind spots I might have (there's plenty!).