wondering

Thanks @Viking. Great analysis as always. Not to be nit-picky, but I think one investment bucket which was overlooked was regular S&P500 TSX liquid stock investments like J&J, Bank of America, Wells Fargo (sold a while ago) etc. I guess they have done a lot of investing in this bucket because they have felt the margin of error wasn't there

https://www.heliosinvestment.com/uploads/files/HFP-Helios-Fairfax-Partners-2021-Annual-Report-Mar-22-2022.pdf 2021 Financial statements finally released (they were a bit slow). Net loss .24/share or $25M book value 5.47/share p 58 ..Material weakness found in the internal control of financial reporting framework. Basically, they were evaluating the portfolio investment properly. Although, the problem has been remedied and no restatement was necessary. superficial observation - the financial statements are a lot more glossier (ex more pictures) than FFH. I am guess they have to do more to market the company to potential investors. I still have to read the report in greater detail

Endorsement from National Bank analyst. - target price $1000 Cdn National Bank Financial analyst Jaeme Gloyn sees Fairfax Financial Holdings Ltd. ( FFH-T +0.81%increase ) as “a mispriced large-cap financial,” calling its stock the “best value idea” in his coverage universe and raising his target for its shares to a new high on the Street on Tuesday. In a research report previewing Thursday’s after-market release of its fourth-quarter financial results, he pointed to “two key themes investors commonly overlook.” They are: 1. Fairfax Financial’s ability to deliver “rapid and profitable premiums growth.” “Given persistent hard market conditions, we expect premiums growth to exceed 20 per cent in 2021 and to remain in the double-digits through 2022,” he said. “Moreover, we anticipate Fairfax will sustain profitable underwriting, in line with the company’s 10-year average combined ratio of 96 per cent.” 2. The expectation for “rapid growth in the investment portfolio and improving returns ease the burden to achieve double-digit ROEs.” “Invested assets of $52-billion as at Q3-21 are up 26 per cent year-over-year,” he added. “FFH’s 5-year average annual total return on its investment portfolio is almost 5.6 per cent (climbing from 2 per cent in 2017). Assuming a 96-per-cent combined ratio, we estimate FFH only needs to deliver a total return on investments of 4 per cent to reach our 12-per-cent ROE forecast in 2023. Crucially, nearly half of that total return comes from ‘locked-in’ interest & dividend income that stands to benefit from rising short-term interest rates given FFH’s 37-per-cent allocation to cash and short-term investments.” Maintaining an “outperform” recommendation for Fairfax, Mr. Gloyn raised his target to $1,000 from $825. The average is currently $802.77. “Still trading below book value at approximately 0.85 times, the market is pricing FFH at an ROE of 6 per cent,” he said. “We believe FFH can deliver sustainable long-run ROE in the doubledigits through a combination of consistently strong underwriting growth/profits and improving total investment return performance. Based on sector trading multiples today, double-digit ROE merits a valuation multiple above book value. In fact, our 2023 ROE forecast of 12 per cent implies a P/B multiple of more than 1.5 times. We apply a 1.1 times P/ B multiple (was 1.0 times) on our Q4 2022 estimate to arrive at our Cdn$1,000 price target ... Moreover, we anticipate FFH will continue to chart a more shareholder friendly course in the coming quarters that firmly started with the value surfacing sale/buyback transaction in late 2021.”

https://www.fairfaxindia.ca/news/press-releases/press-release-details/2022/Fairfax-India-to-Acquire-70-of-Jaynix--Engineering-Private-Limited/default.aspx

https://valueinvestingeducation.com/index.php/value-investing-from-theory-to-practice-a-guide-to-the-value-investing-process/ the book comes out Jan 18. I just might get a copy. I hardly buy books (I go to the library), but I might buy this one.

correct me if I am wrong, but I thought IIFL was held both in Fairfax Financial and Fairfax India. If this is true, I wonder which entity sold their shares?

A possible monetization within IIFL Finance https://www.moneycontrol.com/news/business/mergers-acquisitions/fairfax-backed-iifl-finance-looks-to-sell-stake-in-housing-finance-unit-7749421.html

glider, you do awesome research! thanks.

A bit of a promotion video, but it does highlight some of the companies Helios is invested in

https://www.theglobeandmail.com/business/rob-magazine/article-new-platforms-needs-lots-of-fresh-content-and-michael-macmillan-has/ Subscriber-only article about Blue Ant - a FFH investment Summary - media and broadcasting company funded in 2011 - content provider for streaming services - old fashion cable TV still accounts for 1/3 of revenue - 2014 purchased Omnia - gaming/YouTube content - bought a share of Enthusiast Gaming in 2020 - sold most of its shares for $100 million gain - opportunistic player -Streaming and video-on-demand has shifted because of subscription fatigue - rise of free advertiser-supporter streaming TV - platforms (ex Samsung TV Plus, Pluto, and Roku) have seen significant growth recently - Blue Ant changed by increasing its library of originally produced programming - bought and started several international production houses - this content airs on Netflix, Crave, Sky, and BBC - Love Nature (nature appreciation channel) airs in 135 markets.

The discussion on the Fairfax board recently got me thinking about which company/companies have the best investor relations websites? I am not expert, but I thought BAM wasn't too bad. Opinions?

I am pretty sure they consolidate FIH at the FFH level

Another investment in Fairfax India https://www.fairfaxindia.ca/news/press-releases/press-release-details/2021/Fairfax-India-Announces-Investment-in-Maxop-Engineering-Company-Private-Limited/default.aspx

http://choufunds.com/pdf/SEMI-AR 2021 EN.pdf I know Francis Chou gets kicked around a lot for this performance in the last few years, but he is absolutely killing it recently (see his 1 year returns). Interestingly, he took some profit on Resolute and Blackberry. I am not sure if that was because these stocks were already a major part of the portfolio, and if he had to sell because of mutual funds limiting the percentage of the portfolio that can be in one stock.

I would guess either Torstar or CanWest

Thanks for highlighting these finer aspects of the insurance operations, that isn't always appreciated by the investment community at large (and by me too a lot of times).

https://www.fairfax.ca/news/press-releases/press-release-details/2021/Fairfax-Announces-Successful-Completion-of-Sale-of-RiverStone-Europe-to-CVC/default.aspx Finally

My understanding is that the dividend will go to lower the cost of the investment in Resolute. In other words, it doesn't go to the income statements

Although I own FFH and want the stock to go up, I can understand where the skeptics are coming from. The way I see things, Prem says "Don't judge me on quarterly results or yearly results. Instead, judge me on 5 year, 10 year, 20 year averages" So now the market says, "ok Mr. Watsa, we can accept your terms of having the occasional bad quarter or bad year, but as long as we hit 13-15% return on book over a 5 or 10 year period, we'll be happy" Unfortunately, all during the 2010s this has not been the case. In my simplified and crude calculations, FFH's rolling 5 year percentage return of book value since 2013 has been subpar. Having said that, as many on the board have mentioned in the last 6 months - year, there is a lot to be optimistic about going forward. Rolling 5 year book value average.xlsx

I don't know if anyone has already posted this. The dollar amount is not huge - $30 million Cdn, but the interest rate on the debentures isn't bad 5.5% https://www.businesswire.com/news/home/20210715006111/en/Dream-Impact-Announces-Acquisition-of-Multi-Family-Assets-and-Financing-to-Be-Provided-by-Fairfax

I think that would be the case if the investment was held as mark-to-market (for example investment in Stelco). But because they have significant influence as their holding is 30- 50% of the value of the company (please correct my numbers. I am estimating FFH's holding in Resolute), FFH has to equity account which means if they receive a dividend, its debit Cash and credit investment in Resolute. I seem to remember that Paul Rivett mentioned this on a quarterly call the last time Resolute paid a special dividend a few years back.

https://resolutefp.mediaroom.com/2021-06-10-Resolute-Announces-1-share-Special-Dividend-and-50-million-in-Lumber-Investments I assume that this dividend will go to lower the book value of Resolute held within Fairfax, as they equity account this investment.

I am guessing that the OMERS managers are value-investing followers, which would explain their poor performance the last few years and the fact that they invest along side FFH so often.

There is a book about Prem Watsa's old employer Confederation Life that may be applicable https://www.amazon.ca/Who-Killed-Confederation-Life-Inside/dp/0771056311/ref=sr_1_1?dchild=1&keywords=confederation+life&qid=1619561317&sr=8-1

No big surprise - a virtual annual meeting this year https://www.fairfax.ca/news/press-releases/press-release-details/2021/Fairfax-Announces-Virtual-Annual-Meeting/default.aspx