Hoodlum

CIBC raised their target from $2500 to $2700 today. Unfortunately, I don't have access to their report. National Bank also increased their target to $2600 two days ago.

Murad Al-Katib of AGT Foods was on the Bloomberg Odd Lots podcast today https://player.fm/series/series-1504378/what-the-lentil-king-of-saskatchewan-knows-about-world-trade

Lol. It has been a long week.

Since Recipe purchased 16% of outstanding share at $157.6M, that would put its current market value at ~$2B. The 2024 report has both the Carrying and Market value of Recipe at $669M. Wouldn't the Market value need to be adjusted now to provide a more accurate gap between Carrying and Market values of Recipe.

I don't think I saw this mentioned previously regarding Recipe ownership. During the first quarter of 2025 Recipe repurchased and cancelled its common shares not owned by Fairfax, which increased Fairfax's ownership interest in Recipe from 84.0% to 100.0%.

if shipping companies start struggling, that could provide an opportunity for Seaspan. As a private company with access to funds, they would be able take advantage of the situation and possibly pick up ships at below the current build cost.

It was posted here.

ORLA rebounded nicely this week, closing at a new all-time high. Those recent warrants are looking better every week.

It is not so much a bullish direction but rather the additional volume in EU debt would allow for current US treasury owners to spread their risk to other countries. We will certainly see more volatility going forward with both bonds rates and currency exchange rates.

It is interesting to see what can happen in just a few days. 10 year treasuries are up 0.50% since last Friday's close. We may be entering new territory, with US treasuries loosing some lustre. We could start to see more emphasis towards EU bonds, especially as Germany ramps up their bond sales. While the emphasis at Fairfax is likely on Corporate bonds in the coming months/year, I do wonder if they will eventually start considering other government bonds as a higher percentage of their liquid holding.

That is an interesting point regarding the impact of existing Fairfax owned equity getting hit during a market sell off. These equities did well during q1, but as we saw this week there are very few equities not impacted as the sell off deepens. That would impact Fairfax’s ability to buy significant equities. This is likely why BRK was selling as much of their Apple stake as possible over the past year. So most of Fairfax’s investing will be done on the corporate bond side with likely some unique setups, including convertible debt to take advantage of this downturn. Fortunately, we have the best bond managers handling this so I will leave it up to them for the appropriate timing and best opportunities .

it may allow Fairfax to acquire future equity based on distressed stock valuations now, outside of the current $3B limitation.

Would convertible notes count toward the equity portion, or would that only occur when the warrants are exercised. This could be another tool to use as long as Fairfax sells some of their acquired equity before the warrants expire.

i don’t think we can have treasury rates and $US dollar dropping at the same time if inflation takes off. Something has to give at some point. I believe inflation will take hold shortly in the US, and then treasury rates will need to rise to become attractive to foreign bond buyers if the US$ is dropping. I am still leaning towards stagflation with higher interest rates in the coming year. But I also agree that the spread with some corporate bonds is going to spike. A lot this will depend on how long the Tariffs stay in place.

My error.

There is also the $15 dividend this past qtr, so I am expecting well under $60 EPS. But both the wildfires and dividend impact were known from Year End results, while the investments gains are likely less well known. So the results may still be looked at as very positive, especially in comparison to other in the industry such as BRK that will will post a loss on their mark to market stocks.

Grant White commented on Bloomberg Canada today regarding Fairfax. Nothing much new but probably helped bring in buyers today. Starts at 2:25 https://www.bnnbloomberg.ca/video/shows/the-open/2025/04/01/pulse-check-on-fairfax-mercado-libre-cnq-more/

Waterous closed another $1.4B round capital for their private equity fund. I wonder if Fairfax added to their stake in Waterous as it has been successful so far. Hopefully, this gift link will work for a while. https://www.theglobeandmail.com/gift/88b464f77c2863c66a9326ee3eb93664ae337885ca5483f02881b645ad033c36/YHL34SAZVFGSXF5BKVUYCLLJLY/ Comments from the latest Fairfax Shareholders Letter regarding Waterous. We met Adam Waterous and the team at Waterous Energy Fund (“WEF”) in 2018. After a storied 27-year career in energy in Calgary, Adam was raising money for a fund to invest in and consolidate sub-scale, long life oil and gas businesses and assets in Canada. We were impressed by Adam’s focus on long term returns on capital. The WEF team had extensive experience in investing in oil and gas and Adam had built Waterous & Co, starting in 1991, into the largest oil and gas M&A firm in the world before selling it to Scotiabank in 2005. We invested $129 million which is currently valued at approximately $290 million through a stake in publicly traded Strathcona Resources. WEF built this company from scratch over 7 years into Canada’s 5th largest oil company producing close to 200,000 barrels per day of long life, low cost, very profitable oil. We then committed another $750 million to WEF’s next fund. The WEF team has already deployed a total from the fund of $323 million for a controlling stake in Greenfire Resources, a publicly traded oil company located in the Athabasca region of Canada. WEF’s latest investment is another business with long life (even longer than Strathcona!), low decline assets producing approximately 20,000 barrels per day that is Canada’s 11th largest oil company by proved plus probable reserves. In every respect, Adam has proven an outstanding Fairfax partner

It is likely too small to be much of an impact. This link provides some additional details surrounding the transaction. https://www.broadcastnow.co.uk/broadcast-international/blue-ant-plots-more-manda-following-boat-rocker-deal/5203321.article Fairfax offered Blue Ant the RTO with Boat Rocker’s senior management already preparing to exit the business via a management buy-out, and MacMillan told Broadcast International the deal immediately appealed. “We think there are opportunities in this disrupted time for us to grow significantly, including via M&A. To do that, we need to have reliable access to permanent capital,” he said, pointing out that Blue Ant has not raised any financing since 2016, with growth instead fuelled wholly organically. “We also think quite firmly that media companies should not be borrowing a lot of money. Leverage is a dreadful thing for companies that need to be nimble and agile, which need to zig and zag. A lot of debt prevents that.”

Definitely not since we have owned them, but that doesn't mean there won't be more volatility going forward. I am fine with Fairfax gradually buying backing the shares from the TRS as funds become available. The initial intent for TRS was to access shares when they were cheap and the market was hardening. As the market gradually turns to a somewhat softer market, Fairfax is then able to buy these shares with available cash.

Thanks Daphne. That was a great read on AGT and Trade in general. It looks like this article is not behind the paywall and I would recommend others to read it as well. This is looking like a great investment by Fairfax, under the leadership of Murad Al-Katib.

I haven't done it myself but have seen the reports from Fairfax and Viking here regarding the TRS contributions.

Whether we keep the TRS or buy back the shares, the net impact over the long run will be the same as the earnings/share will increase with share buybacks and eventually that will show up in the share price. The TRS does provide some additional short term fuel to earning as long as the share price increases. But as we have seen this qtr, there are some things outside Fairfax's control that can impact this. Reducing the TRS over time will help reduce earnings volatility, while providing the same net impact to earning/share and conversely share price over the long run.

@Viking Thanks for the detailed writeup as usual. I agree that the gains from the TRS will be much smaller going forward, especially as Fairfax slowly closes this out by purchasing these shares. Currency fluctuations due to current volatilities could be a tailwind for Q1, as the GBP/EUR has bounced back to end of Q3 levels. We could get back some of the $22/share loss from Q4.

I could look at it earlier, but now I cannot see the whole report.