You also had that "Buffett put" strategy with Berkshire trading down near 1.1x book value.
Fairfax bought none! That seemed to be a possible holding for them that wouldn't require too much (if any) hedging, and could compound away tax-deferred for a long time. Perhaps they think they can do better than Berkshire with their delta? Or they don't believe in the Buffett put, or they don't want to own Berkshire. Or they believe the hedges won't take long to be wildly useful. Hmm... It's got to be better than JNJ as a defensive blue chip holding, either way.
Good points were made about the potential correlation with other insurers, and the possible conflict of interest issue. In addition, the so-called Buffett put means that Berkshire might be expected not to fall below 1.2x book. But in a market rout, there is no guarantee that Berkshire's book might not fall pretty precipitously - after all, a good part of Berkshire's value comes from its major equity holdings. In addition, it might well be that Buffett would see other, better sources of value if there were a general downturn in the markets, and not buy back Berkshire shares, even if they fell below 1.2x book. Buffett has been pretty explicit about this.
