petec

This is exactly right but if they didn't break it out, how would you know how to calculate a normalised CAT number? You wouldn't know how much of the long term average was normal and how much was CAT, and I think that helps you judge the risks. Said another way, if they didn't disclose it you can bet your bottom dollar that this board would be full of posts about how they should disclose more to help us understand the underwriting.

Me too. Wow. I agree that these items flatter earnings, but IMHO they make book value more reflective of underlying value, so if that's your main valuation metric (it is mine) then I'm happy to see them. This is key. With luck it means they are reserving conservatively and have stocked their cookie jar for a rainy day.

Does anyone know if they wrote down the carrying value of Toys R Us Canada at any point since they bought it? If not then hats off to them - great investment given they still own the RE.

Noted, thanks.

Viking, doesn’t Fairfax own more of Atlas than 37%? I thought it was nearer 50%.

I haven't checked the AR so these might be dumb comments, but: - Might beverage be the Sokol JV? Can't remember the name nor, when it was sold. - And wouldn't oil & gas be Exco post bk? I'm not aware of another big oil and gas investment unless its a collection of Ensign, H&P, and others? Another one we have not heard about in ages is Quantum, which was meant to be India's Vanguard but doesn't seem to have made much progress.

The dividend policy is a credit to Prem. I’d far rather share in the payout than watch him pay himself through the nose like (IIRC) someone like Berkeley does.

Agreed. I also wonder if the Cairo notes might have some value over time.

It’s almost as though Fairfax are good at this

Agree with all of this.

Yes - I think the better analogy is ICICI Lombard, which was built from scratch into a very valuable asset. But even that was only sold because the other side wanted control. I suspect Fairfax might keep Digit for good, making it effectively the next big insurance subsidiary rather than an “investment”.

Oh, I love it when the bears come out to play. Hello, old friends For me it's very simple. Fairfax trades at well below pre-covid valuations and yet everything that has happened over the last couple of years has been positive. Listed investments have worked, internal investments have flowered, combined ratios have been good, leverage has fallen, a healthy chunk of shares have been effectively taken out at a good price (the TRS), numerous deals have been completed that demystify the company and potentially create value, and the chances of higher rates in the future have arguably risen as governments progressively break monetary taboo after monetary taboo. I do not think the improved investment performance and the deal activity are coincidental. I think Prem is likely to have been motivated by the bad years. I think that he is working feverishly to secure his legacy. Each to their own, but one final thought. I wonder when the last FFH follower on this board changed their mind? Not on the price/value relationship, but on whether the company is going in the right direction. I do worry that we are all slightly entrenched. Definitely the fans were during the bad years (I'm guilty here). But my personal view is that the bears might be in that position now. Time will tell. FWIW I had pretty much given up by late 2019. I am not sure if that was reflected in my posts on here - I think I just posted less - but I started planning a exit. Then covid struck and the thing just got too cheap. Everything that has happened since has made me glad I added near the bottom, and I am adding more now. I think of it as a trade now, but if management nail it over the next couple of years it could morph back into a long term hold. Let's see.

Yes - especially if they IPO in the US.

Pedantic point, but interesting: do you think they consider Gulf a stock investment or an insurance subsidiary? I assume the latter.

I think the performance fee is well designed. I also know of several holding companies that have traded at persistent discounts even while paying a dividend. In fact often the best reason to hold the holdco rather than the underlying is the yield pickup. The other thing I have seen in several holdcos is that persistent discounts become self-justifying - stock X trades at a discount of Y because it always has. I don't hold FIH but if I did I think I would assume a 25% discount in the long run. That might be conservative, but it would not be the first holding company to do so.

The funny thing is, when everything is listed the portfolio becomes easy to replicate. Listings won’t necessarily solve the discount problem, although they do make calculating the NAV easier. Many holding companies trade at persistent and sizeable discounts to book even when most of the NAV is listed and management have a good track record. BTW, referring to the debate above, the other reason Prem will care about the FIH stock price is that they originally intended to raise “billions” more in this vehicle - which would be great for fees but which they can’t really do unless it trades near book.

+1

This is what I was getting at. Thanks. I think when FFH report their excess of fair value over carrying it includes the gap from 9 to 13, but not the gap from 13 to 20?

To what extent is inflation a risk for FFH? Presumably it impacts claims, and they can only offset that with higher interest income to the extent that bond yields rise with inflation?

Can someone remind me what price per share FIH is carried at on the FFH balance sheet? Or do they consolidate the individual holdings at the FFH level? The answer is buried deep in my notes but it's easier to ask!

I don’t know it well. Can you walk me through the summary valuation to get to 2x? Thanks!

Yea I wouldn’t expect updates or assume the majority happens. These are standard filings to give management flexibility - they are not promises.

I think this is just a standard filing - they always have an authorisation open, but that doesn't mean they can or will use it. I think they can and will, but I don't think this announcement itself means anything much.

Thank you!!

Wow - yes please, if you have time!