dartmonkey

Yes, this seems to be the purchase price, but FFH has kept the P&C part of the business, responsible for about 15% of the net premiums written but probably a higher proportion of profits (about half, back in 2016 when Watsa described the business.) So with the simplifying assumption that the P&C portion of Eurolife is worth 15% of Eurolife FFH (knowing that it is probably worth more), the selling price of €813 million is only for 85% of the 80% stake that FFH owned. In other words, this indicates that the full value of the stake would currently be 813/.85= €956.5 million, for a pre-tax gain of €640 million. Additionally, Grok estimates that Eurolife FFH has delivered US$132m in dividends since the purchase in Q3 of 2016 (announced in December 2015). By my calculation, this would give them a pre-tax annualized return of 15.8%, or about 12% post-tax, although this is surely an underestimate because of the additional value of the P&C business retained and the value of the float over this time. BTW, does anyone have any ideas about what might be meant by " with Fairfax retaining a minority interest via other structures"? Fairfax will sell to Eurobank the 80% of the Eurolife FFH business that Eurobank didn't already own, so in principle, Eurobank will now own 100%. Of course, FFH owns about 33% of Eurobank, is that all they mean by 'other structures'?

These are my favourite days, for some reason - yes, Fairfax and Fairfax India are down a bit (about 0.4-0.5% as I write), but the S&P 500 is down 2%, and the S&P 50 (XLG) is down 2.2%. We've had so few of these days in the last couple of years, we forget that FFH is poorly correlated with the general market. A few more days like this, and the stuff I want to buy will become more reasonably priced, and the stuff I'll sell to buy it with (FFH) will hopefully have held most of its value, as it is not particularly bothered by AI or tariffs or whatever the worry du jour might happen to be.

This is also my situation and my view. In fact, since my FIH position is so big (ever since they travelled back down well under $10 5 years ago, and I doubled down), the lower fees from the ‘conservative’ marks are a net benefit for me. I own .007% of FFH but 0.11%of FIH, 15 times more, so for every dollar FFH leaves on the table for FIH, I get $15 back (unrealized) from FIH. Because of my outsized position, I would like FIH shares to trade up closer to the $40 I think would be their value, so that I could at last rebalance, so I can understand This2ShallPass’s frustration. We just have to take his screen name to heart, though, since I don’t see what FFH or FIH can really do about it. Intrinsic value won’t pay for my cottage, but I’m not going to accept $17 for $40 in value just because I feel impatient, especially since I will be doubly frustrated if the discount closes in 6 months, just after I have thrown in the towel.

I can't square why they would use 1.5% terminal growth rate if real growth is much higher (for Maxop they use 4%). The stake has grown for sure, but I still feel any business need a cohesive strategy. Defining the target market is imp and it sets the stage for everything else. Bidding for IDBI on one end and Jaynix on other is trying to do it all. We are not told how they get these precise-sounding parameters (23.0% discount for Jaynix, not 20% or 30% or 40%, and not even 23%, but 23.0%!) or 1.5% for the growth rate (not even keeping up with inflation, which is 1.55% yoy at last count), but I wouldn’t read too much into them. Clearly the business is growing fast, 29% annualized over the past 3.5 years in fair value increases, and they describe a lot of growth potential. If it does that for another 5 years while they wait for the slow wheels of the Indian bureaucracy to turn, it would be worth $283m, or more if they lower the discount parameter a bit (say to 15.0%?). Still small potatoes next to a couple of billion for the airport, but it pays the bills and gives them something to do to make the wait not seem so long. And as they say, a few hundred million here and a few hundred million there, …

I guess the question is, is Jaynix (the one with the 23% discount rate and 1.5% growth rate) really growing at 1.5%? This is what they said in the annual report: In other words, they are growing a lot faster than 1.5%. That 1.5% is just the parameter they are using to calculate what they call 'fair value' for this holding. Muddy Waters should be outraged at this parameter, as well as the 23% discount rate, because they are clearly sandbagging the company's present value this way - oh wait, MW is making the opposite claim. Anyways, the 'fair value' of this 70% stake has grown from $32.5m when they acquired it in February 2022 to $49.3m at the end of 2023 and to $81.6m at the end of 2024 (and down a bit to $78.7m at the end of 2025 Q2.), so that 1.5% growth rate has not applied in the past few years, and doesn't seem to apply for a company whose "growth prosects remain very robust." They are obviously allowed a lot of discretion here, and they could no doubt say that they are just being conservative, but their results and their description are not those of a low growth business.

This. Pretty much any business that you discount at 15.5% (Maxop) or 23.5% (Jaynix) is going to look super cheap. They bought about 70% of both of these in 2021 and 2022, so they are consolidated and carried at super low prices, and despite that, they have 26% and 38% annualized returns. Imagine what the returns would be like if they were discounting them at 10%! Yes, they are small and dwarfed by BIAL (they are now carried at $97m and $82m), but they are growing like weeds. A few more distractions like these, PLEASE!

It's hard to speak for the hive mind, but Fairfax continues to perform brilliantly, looks set to have another great quarter of earnings, and its price is actually down about 4% from mid-year, now at about 9x trailing 12 months' earnings, with fairly predictable operating earnings for the next few years. Down from 1.73x book at mid-year to 1.53x book at the end of Q3, which often happens because of fear of hurricanes, but this season is looking calm. Lots of excess of value over carrying value, with unrealized value accumulating in big investments like Eurobank, Digit, and Ki. Improving credit ratings reflect the fact that it is in a much more comfortable position than a few years ago, with accumulating cash at the holding company level, and opportunities to take out minority partners or, at current prices, repurchase a lot of shares. In a market that is generally at nosebleed prices, it seems like a great choice.

St-Hubert's is pretty big, mostly in Quebec. It seems they had $1.8b in sales last year, whereas the Keg in 2023 was $740m. It looks like they are transferring Keg management to someone who they think can do a better job. When we get more details, presumably with the Q3 report which is October 29, we will maybe get some idea of how much they are getting for what is likely a majority stake, and that will help us decide whether they are just taking advantage of a great price that someone offered them (à la Pet Insurance) or, if the price looks ordinary, maybe they are just throwing in the towel. Hopefully the former.

Looks like Humberto wants to head back east before it gets to the US coast. And then there is tropical depression Nine, which might turn into tropical storm (called Imelda, if it does) pretty soon. To do that, it would need sustained winds averaging 39 mph, and is currently at 35 mph. It too is projected to be pulled east soon, partly by Humberto. So it looks like we are still ok at the end of September, with only 8-20% of the season left (depending on whom you ask). However, the forecasts seem to suggest that we may have more than 8-20% of the risk left, since water temperatures suggest a higher than average risk for the end of the season.

Yes, you can have 74% appreciation in 5 years if you look back 5 years, or 74% in 10 and a half years, if you go back to the February 2015 launch. Like for Fairfax, the returns sure look better if you avoid looking at any years starting with the numbers 201…

Yes. I think when Watsa says this: "In 2024, we had record operating income from our insurance and reinsurance operations of $4.8 billion because of record underwriting profit of $1.8 billion, interest and dividend income of $2.2 billion and share of profits from associates of $745 million. As we suggested earlier, there is no certainty in life, but we feel this level of operating income may be repeatable in the next few years", e I believe what he means is that CURRENT ASSETS are likely to produce these earnings. End of 2024 equity was $26.8b, but if there are $5b in pre-tax earnings in each of the next few years, it would be logical to expect additional upside, earnings on these earnings, so to speak. Watsa is (probably) not including these earnings on new assets in his conservative projection of foreseeable earnings in the next few years.

Agree that this seems quite likely, i.e. we might well get $175/share in earnings, and a multiple of 12, putting the USD share price at $2100 (22% up from today) is a reasonably likely outcome. That might be enough to get me to reduce it to 40%of my holdings. 14x might get me down to 30%. I think aggressive share repurchases are probably helpful; I would argue that some other events might also qualify, like opportunistically selling a gold miner for a huge profit, or finally dumping Blackberry after the recent share price gain, or maybe even more reassuringly, continuing to buy high quality assets (say, Strathcona instead of Lululemon). BTW, what do you mean by hurricane risk 80% less than at the beginning of the season? Grok says 80% of the risk would be behind us by September 30 (78% of named storms, 80% of hurricanes, 83% of accumulated cyclone energy...) Is this what you mean?

Dixit KW in its 2024 annual report: " Our biggest partner over the last 15 years has been Fairfax Financial." But given the fact that there has been no announcement on Fairfax's side, I am presuming that one of these KW partners is not Fairfax this time. Still good for Fairfax, though, since Fairfax has a 10% stake in KW itself (worth about $120m) plus preferred stock.

You are only allowed to look at 2019 to 2024. The period you referred to (although you should not have) is like Voldemort. Please never do this again. No seriously, Fairfax has a very good long-term return, even when you include the Voldemort period. Like myself, Fairfax probably had to get the shorting bug out of its system, and hopefully there will be no back-sliding for either of us.

It’s pretty amazing to think that despite the strong share price rise in each of the last 3 years (23%, 58%, 53%) and 2025 to date (24%), it STILL only trades at about 10x next four quarters’ estimated earnings. No supercats, bond rates a bit lower since the end of Q2 so some (possibly unrealized) gains there, strong Eurobank results, etc., so there’s plenty of upside. But in a market trading at such high multiples, it seems like Fairfax should be able to extend its winning streak to at least 4 years.

I think for most insurers, no hurricanes is obviously good for this year's returns but bad for long term returns. For Fairfax in particular, I would posit that it is actually good to have some good years and some bad years. In the good years (i.e few hurricanes), they have great underwriting results, and build up their war chest. Then when the market softens and premiums are inadequate, they can redirect their investment elsewhere, something which other insurers that only really do insurance are less able to do. Inevitably there will eventually be hurricanes again, and companies that have kept focusing on insurance despite the soft market will be hurt more than Fairfax, and premiums will rise again, allowing Fairfax to write more policies again. Rinse and repeat. So I am happy to see that hurricane activity is low so far*, both because I am a human being, and also because in the short term this helps Fairfax, and in the long term, it is good for us to have both good hurricanne years and bad. *The ACE index is one way of measuring a year's total activity, with the score currently at 40. As the median date for the year's ACE activity is apparently September 10, we should be on track for a score of <80, which compares well with the 30-y average of 122, and with 162 last year and 134 in 2023. So we are below forecast, despite the fact that the NOAA predicted this would be a bad year. But Grok says that "major forecasting agencies continue to anticipate an above-normal season overall, driven by favorable conditions like warm sea surface temperatures in the tropical Atlantic and Caribbean, reduced wind shear, and a neutral-to-weak La Niña pattern" - so we'd better keep the Champagne on ice for a bit longer.

That’s another possibility - I guess it depends how the committee defines ‘domicile’ which they define as to “be domiciled or incorporated in Canada.” The proposition is for the head office and the chief executives to be in Vancouver, so that might be enough: “with its global headquarters located in Vancouver and corporate offices to support the global group in London and Johannesburg. With key leadership roles based in Canada, including Duncan Wanblad as CEO, Jonathan Price as Deputy CEO, and John Heasley as CFO, with Sheila Murray as Chair, …” On the other hand, “Anglo Teck will remain domiciled in Britain and the primary stock listing will be the London Stock Exchange.” I dont know why that should be so important to the Canadian government, but maybe the government’s reaction is just for political points. I can’t see why Anglo American couldn’t sweeten the deal in what seems like a trivial way by redomiciling in Canada (whatever that means) but I am not a lawyer…

Munger also said this: "The Mungers have three stocks. We have a block of Berkshire, we have a block of Costco, we have a block of Li Lu's Fund, and the rest is dribs and drabs," Munger said at the 2017 Daily Journal Corp. annual meeting. "So am I comfortable? Am I securely rich? You're damn right I am." and this: "What are the chances that Costco's going to fail? What are the chances that Berkshire Hathaway's going to fail? What are the chances that Li Lu's portfolio in China is going to fail?" he said. "The chances that any one of those things happening is almost zero. The chances that all three of them are going to fail..." However, I think one should add that although there is a very low chance that all 3 would fail, if one were to fail, you might lose a third of your portfolio. For Munger and his family, this would just mean a different number in their brokerage account, not a different lifestyle, but this might not be the case if you have $1 million that needs to last for the rest of your life. So I think you can take more chances of having a significant loss once your savings are well above what you need to be comfortable, but a little more diversification probably makes sense when your savings are small or when you aren't able to make them back by working harder or retiring later.

You are right and I was wrong. Comparing the top 60 from the TSX Comp versus the TSX 60, as you say, the big ones are the same so they end up being about as correlated as the top 500 in the USA compared to the S&P 500. In the case of the TSX 60, the top 30 are almost identical (Fairfax and Great West being exceptions), and that's where 80% of the value is. Although there are more differences in the bottom 30, many are still the same, so only about 10% of the total capitalization of the S&P TSX 60 is not in the top 60 of the TSX Comp, which is about the same ratio as the S&P 500 compared to the biggest 500 US firms.

It matters a lot to their valuation multiples. TD estimates that the passive demand for S&P 500 members is 17%+ of the float. That is a different point, and I'm not disagreeing with it. I'm just saying that the TSX 60 is quite different from the S&P 500, in that the S&P 500 ends up being almost identical to the biggest 500 USA firms, even if there are 15-20 different companies in the smallest 280 or so companies that represent 10% of the market cap of the S&P 500. Whereas the TSX 60 is quite different from the biggest 60 Canadian-based firms, and the committee making the choices really is using sector membership as an important criterion. The Dow Jones does this too, but it has an additional crazy twist, by virtue of the fact that the weighting its members is by share price and not by market cap. This makes Goldman Sachs its biggest component (0.4% of the S&P 500 because of its $238b market cap, but 8.8% of the DJ because of its $786 share price), explaining why some of the biggest companies like Alphabet or Berkshire will likely not be included, because of their high share prices. The TSX 30, which I had never heard of, is quite different again, and uses 3-year outperformance as its only criterion, not market cap, reevaluated every year. So it is completely different from all the others discussed, in addition to having very little money invested in it.

The 60 uses market sector representativity as a criterion, and none of the other indexes mentioned in this thread do, except the Dow Jones, for which market sector is one criterion among many. Most indexes are mostly or almost entirely market cap based, including the S&P 500 and the TSX Composite. The S&P 500 does have some other criteria, in addition to market cap, including having several quarters of profitability, but it is almost identical to the biggest 500 USA-based public companies, just because it includes all of the biggest 220 or so companies, and these already account for 89% of the index, by my calculation. Another way of looking at this is that the biggest 500 companies have a total market cap of $59.6 trillion, and the total market cap U.S.-based companies within the top 500 that are excluded due to failing other criteria is $2.1 trillion. (The biggest ones are Super Micro Computer, The Trade Desk, CoinBase Global and Palantir, all less than $55b.) The S&P 500 is really concentrated - to calculate these numbers, I looked at the cumulative percentage of the S&P 500 market cap, and this is already 49% for the first 20 companies, 75% for the first 100, and 89% for the first 224 (stopping at Kroger, market cap of $45.2b), all bigger than the biggest firm excluded, Super Micro Computer. So it doesn't matter much if ~15 of the remaining 276 smaller companies between #225 and 500 are excluded or not.

I see. $12.2m in distributions since February 2017, when they FIH bought 51% of Saurasthra for $30.081m, for a total returrn of 12.2% as of June 30, 2025 (including distributions), when the fair value was reported to be $60.824m. Given the fact that the sale was for $75m (approximately), one can calculate how much of an extra boost this extra $14.2m return would have generated, provided there were no additional distributions between June 30 and now. By my calculation that would be another 5.2%, for a total of 17.4% annualized over a period of about 7.5 years. That is actually a pretty good return, considering the exchange rate headwind. Too bad it was such a small investment, representing only about 1/40 of the giant BIAL investment ($1.2b) initiated just a month later. But it is one more indication that at least for the investments they have monetized, like the $27m National Stock Exchange investment, initiated in 2016, and which gave them a 33% annualized return, the returns have been quite acceptable.

While I agree that Fairfax is a big opportunity and worth a big bet, just in case anyone takes this too literally, Munger would also have said that (a) never use leverage, i.e. don't invest more than 100% of your capital, and (b) you don't need more diversification than 3 solid companies with a predictably great outcome. Many of us think FFH constitutes such an opportunity, but I doubt Munger would have ever advised going over 50%. I am at 46% and I think that's enough. Even an almost sure bet like FFH is not 100% guaranteed not to get into trouble, not least because of its heavy exposure to supercats and the possibility that a lot of things could go wrong at the same moment (soft insurance markets, lower interest rates, a few investments going south, and a couple of supercats all in the same short timespan.)

I think the screenshot you are referring to is saying what the total value of FFH shares is in the TSX completion ETF, i.e. the TSX Composite companies that are NOT in the TSX 60. It is not saying what their market cap is, which is considerably higher.

Right, you have put emphasis on what comes later in the sentence. Their primary criteria is "large cap securities" and the rest is a "view". This means that they will look at sector if there was a close/tie on the size. They had confirmed along same lines to the analysts when asked about it. What they actually do may be different but size matters more as per policy. Given the language from the S&P document, with criteria such as 'the S&P/TSX 60 covers large cap securities' and 'with a view to matching the sector balance of the S&P/TSX Composite', I don't know how anyone could be as confident as you seem that 'size matters more'. You may be right about size mattering more, but I would be much more confident if they expressed this clearly, along the lines you propose, saying we "will look at sector if there was a close/tie on the size." In particular, how am I supposed to understand 'covers large cap securities'? Do you think this means 'will include all or pretty much all the largest cap securities'? I think you could equally well understand this to mean that all the securities chosen will be large caps, say out of the biggest 100 or so, with market sector being a secondary criterion (note that this is the singular word, not criteria which is plural.) Anyways, this is idle speculation on my part, since we will probably never have any way of really knowing, and it may just depend on how committee members choose to interpret these somewhat vague criteria.