Txvestor

You are absolutely correct, for the loyal long term shareholder, the ability for the share price to stay at the current levels is a true blessing. Mainly because it puts a hurdle in front of every other investment decision that management wants to make. And when management is a major shareholder it just makes it that much more likely that they will be focused on that primary measure of shareholder returns. So if you asked me, whether Watsa would rather prefer a $250 billion company with a great shareholder return or $1 trillion company with a more mediocre one, I think most of us on this board believe he would take the first option. Buying back 21.7% of the company for $4.5B over the last 6yrs demonstrates this. Alternately the empire could have been $10B or so bigger easily. The fact that Watsa is more inclined to buy back shares, issue shares, buy companies, sell companies, TRS on their shares, partial sub sales, and do all the other sort of shareholder value accretive maneuvers to juice up shareholder returns demonstrates that priority and focus.

The compounding rate is not going to be anything close to that if you take it since 2009. Yes I agree the set up is a lot better today. And hence why I increased my position since 2023, but pretending like that lost decade didn't happen is not a good idea when doing the case study. As we saw with them reducing their bind duration recently they're still somewhat in the macro game. There are no guarantees they won't make big mistakes again. I agree less likely but not a zero likelihood event.

Thanks @Viking for your post and generously sharing your thoughts. At the risk of sounding a bit pessimistic allow me to present a few counter arguments. The change to the IFRS accounting caused a significant jump in Book value per share by around $100 per share in circa April 2023. As I recall(off my memory) it pushed it up like $650->$750 or so when they reported it. So atleast part of the BV gain is attributable to that accounting change. The share buybacks have been great but let's remember all those 6yrs of buybacks did was approximately to make up for the dilution realized when they issued shares for the Allied world acquisition in 2017. Again we are better off for it as it's been a great acquisition but we need to bear in mind we are back to where we were in 2017. With reference to the "low base" comment. As a shareholder since 2009, I can tell you till 2019 was a painful decade. Between the hedges, other poor equity investments, zero interest rates and a still evolving insurance operations, returns were dismal. A lost decade. All while the stock markets ripped easily 5x higher from GFC lows. I recollect the stock at times trading as low as 0.55 BV at one point and generally no higher that 0.85-0.9 BV for most of this time. A truly testing time for any shareholder. Not just from a valuation point of view but also from a performance perspective too. I held a smaller position all of this time and fortunately since 2023 gradually developed conviction to build my position to 3x what I previously held. So yes, I agree with most of your points, but the above items do bear some consideration in understanding the reasons for any perceived undervaluation. It may take yet another few years before the market totally shakes off those memories.

Might give them opportunities for some good exits, which would be even better while their stock is cheap and the have minority partners to buyout. but quite literally some of these HALO companies don't really have the earnings or growth prospects to justify the current prices. Just market participants looking for somewhere to hide as everyone is afraid of cash and treasuries aren't yielding very well tl compensate for the currency risk: However my view is that the AI is eating software trade is overdone. Rather than the analogy of newspapers in 2002, I'm reminded of the every bricks and mortar retailer is going to be "Amazoned" trade circa 2017 I think. I remember them taking high-quality names like Costco to the woodshed. Costco traded into the 140s. I always wanted to buy Costco, but it persistently stayed expensive. It's up 6-7x since then. Nonetheless that industry has seen some failures, has seen slower growth, and has seen certain blue chips, like target struggle. I think at times like this when there is in discriminate selling there's always some names that will come out of this with exceptional outcomes. Never easy identifying them though.

We don't know what they have in their investment pipeline or plans they have for their cash on hand and what's coming in, but I can't imagine their TRS position staying at -350M if they do any significant amount of share buybacks. Of course we never know what share prices do. Either way it's a solid investment for them until the share return to something resembling intrinsic value. 2 questions on that though. -Do you all know of those gains are settled/paid up every Q or at the closing of the position? -What is the carrying cost of this position? May apologies if this has already been mentioned somewhere, but I can't remember seeing it. Looking forward to the results later this week. I'm very bullish and see us landing in the $60-70 region.

Thank you for your efforts on keeping up with the fast paced deal making of late. This is one of the annual letters I'm most looking forward to reading. Prem's usually quite good about bringing shareholders up to speed and there's a lot to write about this time.

Well you can't completely give them credit for both increasing the size of the P/C business and buying back shares. Because as I recollect it, they issued close to 5M shares to execute the Allied World purchase. The majority of the buybacks they've done to date have served to undo that share issuance.

I don't want to make this a US v Canada discussion. But there's a lot of people in the US not named Trump that believe that that most in the western alliance were freeloading on defense, pharma, finance, innovation and many other areas without doing their part. And then lecturing the US on health policy and so much else so as to rub salt into the wound. Anyway, back to the topic at hand, the world is changing and we shall see where the chips fall. I don't think repositioning with a bunch of smaller economies is gonna work out too well. as for treasuries, yes demand will fall, and it probably means structurally higher interest rates and a lower dollar. But if there is economic lift from reshoring and automation of industries perhaps it won't be as dramatic? We shall see.

As things stand I think eurobank represents one of their largest investments and it's a big turnaround. There was a long period where they were under water and it looked destined to go under, they even had to recapitalize. I think all in they invested in the region of $1.6B over 10yrs ago. It's now nearly a 4x investment. Glamorous no, effective yes.

Agreed. This administration whilst they may not say it too loudly is in favor of a weaker dollar. If you're trying to bring in more domestic manufacturing and reduce imports and improve export competitiveness that is logical. It's admittedly a little surprising that with the weaker $ and tariffs we haven't seen the level of inflation one would have expected and it's not showing up thus far in corporate margins either. With over 50% of the S&Ps profits coming from abroad perhaps the weaker $ is helping. Would be interesting to see how it all plays out. I think gold flying is definitely reflective of aggressive central bank a large institutional buying. It was underrepresented in most portfolios and people are def hedging more.

This new EU-India as well as EU-Mercosur trade deals can't be a bad thing for Eurobank. Fairfax with its significant Greek and Indian assets in particular is well positioned to capitalize.

Bigger Q is at what price will Abel start deploying $ to share buybacks. It strikes me as a better alternative than sitting on a $386B cash pile!

I'm certainly n no position to credibly advise a Canadian PM. However I'll say this. Presidents come and presidents go. Neighbors and shares culture, values and in many cases even family relationships are much more durable. I'm not clear Carney is making the right moves here. CUSMA is up for renegotiation this summer. This trip to China and his speech at Davos was ill-timed to say the least. When he says China is Canada's second largest trade partner, he might be technically correct but when there's more than an order of magnitude difference between no. 1 and 2, a bit more tact would have been the better option. In addition hard times expose fault lines and the libertarian steak out west may take on an unexpected turn of things go too far down that road. He could have taken a page out of Sheinbaum's book. The US is in a massive struggle against China in more ways than one can imagine. It's time allies step up on Defence spending, drug spending and many other areas where the US has shouldered a disproportionate burden. Many Americans feel that way rightfully or not. Ideally they'd all sit around the table and have a grown up convo on this but that didn't work for decades so this is the outcome.

Added to that, the whole hemisphere virtually is moving right of center. More of this is expected in Colombia and possibly Brazil this year too, And Mexico is recognizing its privileged trading position and negotiating and collaborating more-so than fighting. So it's interesting that Carney is doubling down on his approach. USMCA is up for renewal this summer. We can likely expect fireworks. Additionally its striking to me that the Canadian economy outside of its natural resource abundance and auto manufacturing strengths has very little dynamism or innovation. Carney seems to be betting that he can change that. Not such an easy task. Additionally real estate particularly in its cities seems pricey. The US is a continental economy it has sufficient interconnectedness both inter state and internationally that a hit in one area can be easily absorbed by a shift to another. Economic Size, Diversification and interconnectedness is an undeniable advantage. Besides this, how reliable will China be? They have a mercantilist policy and I highly doubt anyone comes out with the upper hand trading or doing any sort of business with them. Thats been the history. Just ask Germany. But with all that said, I wish my northern neighbors well. Trump will be gone in 3yrs but the effects of these actions by the Canadian leadership may end up being more long lasting.

Thats exactly right. I brought myself up to a 30% position 1675. That's a PE of under 8 on last year's earnings. And probably 1.15x adjusted BV(adjusted for unrealized gains) for a collection of quality diversified insurances franchises with $37B of float, $26B of equity investments and locked in long term capital at good rates. I'm not seeing a ton better out there

Something that illustrates this point about share buybacks quite vividly is if you look at the dividend paid by Fairfax in 2017 it was $10, in 2026 it's $15. Yet the total amount paid will be similar. ~277M in 2017, and ~288M in 2026.

Well not just that, with a 49% stake, since it's categorized as an associate for accounting purposes this could add meaningfully to the earnings in 2026. Q3 had $39M, sounds like it's not a one off and might even go higher.

During Covid the bond buying created reserves permanently (or semi‑permanently), while repos and swap lines provided shorter‑term, elastic liquidity to market participants. They're capable of doing both if they want.

Sadly the bar for doing this type of thing has been lowered more and more post GFC and with the current president and the soon to be appointed new Fed chief at the helm, that sort of perverse level of market interference is likely to become more of a regular event. As we saw during Covid, some market participants like Fairfax and Berkshire were armed with boatloads of cash, but the calls never came because the Feds liquidity firehose was opened at full capacity in an instant. We are unfortunately not living in times of totally free markets anymore.

Not if Fed starts buying the long dated treasuries as they would no doubt use any sniff of an emergency to do! The BOE did it when gilts reacted badly to PM Truss' tax cutting proposal a couple of years ago.

I still think the risk is to a downside in rates, even if involving Fed bond buying and rate suppression to below the inflation rate. The US debt is unsustainable and the plan would be to do a soft default.

It's actually a fairly decent dining experience at a modest and affordable point. I usually go maybe 5-6 times a year. Standards are fairly well maintained across branches. I happen to have 4 within 5-6miles of where I live.

I joined you this year, as I think Q4 2025 results will be especially strong in a couple of weeks time. So, when I saw it pull back 6% with a 0.8% dividend pending, it was too tempting. Of course no guarantees as the market can behave irrationally at times, but I'm thinking it breaks to new highs after the results. I just can't find anything else which gives me such a clear path to 15+% ROE for atleast the next 3yrs. So I'm more than happy to be "trapped" in it as well.

Is there some reason GoDigit insurance isn't on this list?

Interesting. I wonder who are the sellers. Those have to be institutions at those $100M type of levels.