petec

Exactly. I absolutely agree on the humility and learning from lessons. I just thought this was an odd way to end the para. If it was tongue in cheek, fine, although I would have preferred him to lay out exactly what he intends to do differently in future. Is it really no tech investments? Or is it: only tech investments that have strong fundamentals and deep competitive moats, rather than those facing rising competition that only look cheap based on backward-looking metrics. Anyway, I am splitting hairs. The letter was excellent and a testament to all the hard work that has been done to create these results.

If Strathcona and Eurobank dividends are not included in guidance, that's quite a bump!

Does the dividend go into the partnership and get reinvested somehow, or does it come to FFH?

Perfect, thanks. I missed the Waterous comment on the call. Wasn't a complaint, more a comment that the whole sector (with some clear exceptions) is fairly cheap. I didn't realise SCR was growing that fast, I admit.

Like many EM banks, it is an exceptional business but the returns will be dominated by government choices. Ultimately if Egypt stays socialist, this won't work out, because inflation will be higher than the ROE. If Egypt reforms, however...

I'm coming late to this s sorry if these questions are stupid. 1) What are these limited partnerships, exactly? Investments in funds? Or specific investments alongside a GP/manager? IN which case who is the GP? 2) Why do we think this is Strathcona? 20% at $80WTI doesn't feel outstanding given the other fossil fuel FCF yields out there?

I love how he has started putting valuations on the unlisted investments. Peak on 5x FCF - I had not guessed that. While I love the mea culpa, I really hope this isn't the lesson they draw. Nothing wrong with investing in technology - just maybe not the place to go looking for value among broken entities. Yes, it's captured in the gains, NOT in FFH's reported operating earnings, which is what he is referring to. This would in effect wipe out their surplus capital at every insurance subsidiary, and get them into serious regulatory trouble.

Not necessarily - the 50% includes buybacks. But it is still great. Don't Fairfax have 1224m shares in total? If so, by 2026 the BVPS is expected to be E2.65 and rotbv 13% so it's more like 2.65*0.13*.5*1.09*1224=$230m. Lovely!

I'd missed that one.

I think they have a chunk of Ensign (ESI.TO) as well, which trades at a >40% FCF yield and is highly operationally and financially levered to oil/gas prices.

Thanks.

Why *such* a big uplift from 2022? Thanks. And yes this is very meaningful going forward. Buybacks in a soft(er) market...

Yes - I've been thinking this for a while. Don't they have equity in Altius as well as warrants?

Lovely, thanks.

There is a comment on the 4q call that Atlas projects $600m of earnings in 2025. From the context it is not clear whether this is for the whole company or just Fairfax's share. I could probably find out if I could be bothered, but I can't, so...does anyone know?

This is fantastic - thanks. I have no idea how to value the company but I get the sense Prem picked an incredible partner in Murad.

This is an excellent catch which would have taken me some time to figure out - thanks.

Agreed. It is a core position for me. I would add that it's basically a collection of royalties - collectively it is a very cash generative portfolio. And he does something I can't replicate in the hedges, which are executed very well.

Interesting. What caused you to pull the trigger?

They took huge advantage of the market dislocation - what's actually been harder is the market normalisation! But yes, I get what you are saying - I don't know why they didn't fix more of their financing at record low rates. Either they could but didn't which seems unlikely me because they're smart people; or they couldn't, which says something about the quality of the business in the eyes of lenders. I wonder if the answer is they could not finance the *construction* on long term low rate debt. Maybe once the assets are built, financing is easier because the risk is lower. That's certainly the case in some asset classes.

I hadn't noticed - good spot. I would not read much into it though. Agreed. It is not a great business, but with rates (maybe) more likely to drop than rise from here, it should be able to show its earning power. And it is well run.

Yes - Poseidon's earnings are always going to be cyclical, so it's hard to judge progress at any given point in time. Let's see in a few years.

I was referring to Eurobank making great decisions for a decade! What's the stumble at Poseidon? Just interest rates rising, or something more. This was my big worry when I was a shareholder of Atlas - floating rates vs fixed revenues. I decided I preferred Brookfield's inflation-linked revenue asset classes.

I think they've been making great decisions for a decade - it's just taken until now for us to see it. Question for me is whether rising interest rates has driven an unsustainable burst of earnings (if their assets reprice faster than their liabilities - I have not checked). But even if this is true they are in a much better place than a few years back, and the stock is not expensive.

We should definitely include the asset value note shares. Doesn't that expire soon? I have a feeling they have to buy back those shares. Good luck valuing AGT and Bauer! I'll be fascinated to see your workings.