Viking

Fairfax owns an extensive number of equity positions. This leads to the question: is it better to own Fairfax or one or more of their undervalued equity holdings (or some combination of holdings)? When Fairfax was trading crazy cheap (pretty much all of the past 2 years) my strategy was to keep things simple and usually (not always) to go with an overweight position in Fairfax. We have some new news… Fairfax is now trading at a multi-year high (US$555) and it looks poised to break out to new all time highs. This is especially impressive performance given the decline we have seen in most market averages to start the year. My read today is Fairfax is still cheap… but it no longer looks crazy cheap. Especially when compared to some of its equity holdings. What of Fairfax’s equity holdings look crazy cheap today? Three names jump out to me: 1.) Fairfax India at US$12.50 - BV is close to $20. Catalyst? Another Dutch auction. Rebound of BIAL asset. 2.) Recipe at C$14.30 - market cap is C$840 million; net debt is $350 million. Stock was trading at over $18 pre pandemic (and +$25 from 2017-2019). Dominant family causal player in Canada with strong brands (Keg, Swiss Chalet, Harveys, St Hubert, Kelseys, Montanas etc). Q1 results will be weak (Omicron hit to Jan sales from lock downs in Ontario and Quebec). Q2-Q4 sales should ramp higher. Stock will likely pop significantly on ANY good news. 3.) Atlas at US$13.40 - see Atlas thread for thesis On Friday i sold a little more Fairfax and used the proceeds to build positions in Fairfax India and Recipe. Are there other equity positions of Fairfax that board members view as crazy cheap today?

Agreed… we are in a bit of a holding pattern until results are released. To your list above i would also add a couple of watch outs: 1.) losses as a result of Ukraine war. Especially reinsurance. 2.) mark to market losses from fixed income portfolio (driven by spike in bond yields)

Podcast Odd Lots just released an episode on housing... ping pongs around but a decent listen for those interested in housing / home builders. This Is What 5% Mortgage Rates Mean Now for the Housing Market - https://www.bloomberg.com/news/articles/2022-04-11/this-is-what-5-mortgage-rates-mean-now-for-the-housing-market?srnd=oddlots-podcast

I used to follow Gwynne Dyer when i was younger for his international political reporting. He has been posting a few things on Russia/Ukraine. - https://gwynnedyer.com ————— Do the Russians Have War in Their Blood? https://gwynnedyer.com/2022/do-the-russians-have-war-in-their-blood/ “The Russians are deluded, but it’s a delusion that has struck almost all the former European colonial powers after they lost their empires. You might call it ‘post-imperial muscle memory’, like the phantom sensation that an amputated leg is still there even after it’s gone. It generally involves several foredoomed wars. The peak period for this was 1950-1975, when the French, the British and the Portuguese each fought several futile wars to hang on to their colonies, or at least to ensure that ‘friendly’ regimes inherited power after independence: Algeria and Vietnam; Kenya and Cyprus; Angola and Mozambique. The Russian empire died much later (1991), partly because it was a land empire, with lots of Russians settled in all the colonies, and partly because it pretended not to be an empire for its last seventy years, calling itself the Soviet Union instead. So most Russians don’t even grasp the connection with decolonisation elsewhere. But it is really the same transitory phenomenon, with the same inevitable outcome. The Russians don’t really have war in their blood permanently. No more than everybody else does, anyway.“

Smart. Like a fox. Please keep posting and sharing your thoughts (i was ignoring most of those threads a year ago…)

The big no brainer loser from continually rising bond yields - especially further out on the curve - will be bonds. If this plays out over the year (bond yields across the curve increasing every month) i wonder when Mr Market will just panic and try and unload all bond holdings? At what point will the pain of falling values - month after month - become too great for most investors to bear? What do you do after you sell bonds? Real estate? Tougher in a rising rate environment; but a good inflation hedge. So real estate could hang in there. Stocks? Probably will do ok. Especially sectors that provide some protection to high inflation. 2023 is when things could REALLY get interesting. What if inflation is still high single digit. And labour markets are still super tight. And the economy is still doing OK. And the Fed KEEPS TIGHTENING.

P&C insurers have been big stock market out-performers YTD 2022. Why? My guess: 1.) viewed as being big beneficiaries of higher interest rates. 2.) continuing hard market for pricing is perhaps also a factor I am starting to wonder IF interest rates will not move much higher over the next year than Mr Market currently expect. Could we see short term rates over 3.5%? And 10 year rates over 4.5% by the end of 2022? If rates continue to move higher Fairfax stands to be a big, big winner. And that is because the average duration of its bond portfolio is 1.2 years, well below all other p&c insurers making Fairfax both an absolute and relative winner). We will see interest and dividend income increase each quarter moving forward. And the increases should pick up steam with each passing quarter. A target of $1 billion in interest dividend income in 2023 is looking more and more like a CERTAINTY. This would be about a 50% increase over 2021. Material. If Fairfax does nothing to duration they will still see a spike in interest and dividend income, especially in Q2 if we get a couple of 50 basis point increases in short term rates from the Fed. But it is likely (i think) that Fairfax will be given an opportunity to increase duration at some point over the next 6 months. I think there is a good chance we also could see credit spreads increase. Much higher US treasury rates + an increase in credit spreads = wonderful opportunity for Fairfax and its bond portfolio and its interest and dividend bucket. One big benefit for shareholders of Fairfax increasing duration (at the right time) is it would provide better visibility/sustainability into the future of the level of the interest & dividend bucket. Which would then likely support multiple expansion. ————— It will also be super interesting to see if we are still in a hard market for insurance pricing. Was Fairfax able to grow net written premiums at 20% in Q1? If so, this means float will continue to grow rapidly. And with bond yields spiking… more good news.

@Ross812 will pass it on (she actually listens to advice). Thanks

I managed sales teams for years… the light bulb for me went off when i realized my ‘star’ employees (whether they were 60 with no degree or early 20’s right out of university) had in common: good/great attitude, strong work ethic, high personal standard, open to change, results oriented, problem solvers (no victim think), team focussed, able to work independently etc. These traits are much more important than type of education. Now if you have these traits and you combine it with education then you will likely smoke. My advice to my kids is to do stuff you love (then you will work your ass off). Importantly, you also want to ride a ‘winning horse’ - find an industry with a long runway. You might think you love that ‘donkey’ today but the ride sure will get stale fast in a couple of years. My oldest daughter is doing a marketing degree. My advice to her is to stay away from the big multinational packaged goods companies (who will probably be downsizing their marketing departments over the next decade) and instead focus on where marketing is going… work for companies where she will build out her tool kit - don’t chase the cash (it will come flooding in as the tool kit gets filled up). Be forward looking and get the marketing skills today companies are going to be looking for over the next decade that will be in short supply. One of the challenges with universities is they tend to be a few years behind industry in terms of what they are teaching. My goal with my kids is to have them pursue something they love but to also be rational about it - be creative and open minded about the passion - find the angle where it also rains down cash in the future (that ‘ride a winning horse’ thing and not a ‘donkey’.) The problem for lots of parents is the specific model that worked for them likely will NOT work for their kids. The economy is dynamic. So i tell my kids they will have a great life… but they need to figure out their own way. Lots of great options.

@maplevalue i did not realize there was a ‘cap rate’ option available when picking a variable rate mortgage at the traditional big banks. So it looks like buyers can go with a traditional variable rate mortgage (payments fluctuate with prime rate) or a ‘cap rate’ mortgage where the payment is fixed (interest amount fluctuates). I think the ‘cap rate’ products have a higher mortgage rate (than a traditional variable rate mortgage). And i think ‘cap rate’ also have a max cap (if the prime rate goes up beyond a certain amount like 1.25% or 1.5%) the borrower will see a higher payment. I will do some snooping to try and understand what the split is between regular variable and cap rate variable. Thanks for pointing this out. ————— What does a potential rate hike mean for your mortgage? - https://www.scotiabank.com/ca/en/personal/advice-plus/features/posts.what-interest-rate-hikes-mean-for-your-mortgage.html A potential rate hike will affect you in different ways depending on if you're a first-time homebuyer or if you already own. For first-time homebuyers, any increase in interest rates will reduce how much home you can afford. That's because your carrying costs (a.k.a. your costs for owning a property) will increase. For example, let's say you need a $500,000 mortgage and the interest rate is 3%. Your monthly payment would be $2,366 on a 25-year amortization. However, if the interest rate was 4%, your monthly payment would be $2,630. That would mean you would have to pay an additional $264 each month. Current homeowners that have a variable rate mortgage would also be affected. At Scotiabank, you can either have an adjustable variable rate that fluctuates as BoC rates rise or you could have a variable rate with Cap Rate Protection. A Cap Rate Protection mortgage has fixed payments for the term of the mortgage that are calculated based on a cap rate rather than the current variable rate; as rates rise more of your payments would go towards interest, and less to the principal. However, if you have an adjustable variable rate, the amount you're paying would change as interest rates rise. A fixed rate mortgage customer would see no impact from a BoC rate increase during the term of their mortgage.

@Spekulatius the mortgage market in Canada is completely different than in the US. My understanding is the majority of mortgages being taken out today in Canada are VARIABLE RATE. The 5 year fixed rate used to be the norm (but even then was only about 60% of all mortgages). So a pretty high number of total borrowers are on variable rate mortgages so short term rates are what matter to them. Also, 20% of those on 5 year fixed reset every year so this is also significant. MY GUESS is most new home buyers today in Canada are getting the majority of the down payment from their parents. And where are the parents getting the money from? Lots probably by dipping into their own equity via home equity line of credit. More debt exposed to short term rates. Where monthly payments will spike when short term interest rates spike. This is all just conjecture on my part… but i have started following the housing/mortgage market here in Canada the past couple of weeks (as interest rates have spiked) and it is super interesting. I used to think the Bank of Canada 5 year bond was the the key variable… but now i am thinking short term rates might be more important today.

@maplevalue i think the key is how high rates go and how fast. The move in interest rates the past month HAS BEEN breathtaking. But with inflation raging at 6-8% (or more) interest rates are still HIGHLY ACCOMMODATIVE. So i do not expect the current level of interest rates to be a problem for the economy. However, if @wabuffo - Bill - is correct and we see the yield on the 10 year US treasury over 5% by year end then i think we will likely see a significant impact on the US and Canadian economies. CONSENSUS OPINION in Canada (i think) is that interest rates here CANNOT and WILL NOT go up meaningfully from current levels because ‘THEY CANNOT’. And people feel they CANNOT because of the high levels of consumer debt. Consumers in Canada do not have 30 mortgages (like in the US). The majority used to have 5 year fixed - so 20% of these will re-set EVERY YEAR. However, today i think most people are taking out variable rate mortgages and have been for a while (to be able to afford the 50% increase in prices the past 2 years). Rising interest rates will be hitting these borrowers immediately. (Canada’s mortgage system - with short term mortgages - works wonderfully in a disinflationary environment with ever falling interest rates - like we have seen the past 40 years - but could be catastrophic in a multi-year spiking interest rate environment.) The consensus opinion is high rates would pop the housing bubble and no central bank will want (or be stupid enough) to go there. I think what consensus opinion is missing is how hot the labour market is (both in Canada and the US). And in Canada, the labour situation is going to get much, much tighter the next few months… we are a massive producer of commodities (oil and gas, mining, agriculture - just look at how the economy in Alberta is heating up) and these industries will be hiring and paying up to do so. And we are in a massive housing bubble - new home construction is booming and there is a severe shortage of housing. And with covid ending the services part of the economy (restaurants, travel etc) - which is the largest part of the economy (in terms of employment) - will be doing major hiring moving forward. Government is ramping spending (and hiring). All of this suggests to me that inflation, and wage inflation, is going to continue to gather steam. Commodity price increases (like oil) will be driving inflation higher. Severe labour shortages and run away inflation will likely force the Bank of Canada to raise interest rates much higher and more quickly than consensus currently expects. We will see. The move in rates the past month has been a complete shocker. I am starting to think rates will go much higher… closer to what Bill is thinking (+5% on the 10 year by YE). ————— i wonder if we are not seeing a paradigm shift. From disinflation (past 40 years) to high single digit inflation for the next few years. If so, the obvious thing to do from an investment perspective is to punt fixed income. In terms of where to put money commodities might be at the top of the list. Stocks will likely have big winners and big losers (so owning an index fund might not work out so great). I still like US real estate; Canada not so much. And in terms of currencies, like the Canadian $ because of commodities and immigration (with housing a big watchout). US$ would be second choice. Euro does not look good (due to war/economic outlook and demographics).

@wabuffo thanks for taking the time to lay out your thinking… 1.) how high do you see interest rates getting in the coming months? Do you think we could see 3% right across the curve (2 year to 10 year)? Is 3.5% possible (likely?) for the 10 year in 2H should inflation remain elevated? 2.) when the Fed raises rates, is housing not the main mechanism to slow the economy? So if housing continues to rip in the US does this not suggest the Fed will be forced to raise rates much higher than what is currently ‘priced in’ by the market? 3.) balance sheet run off: how do you see this impacting interest rates/the economy? Especially if it happens quickly? I think you posted on this in the past… can you point me to what thread you posted your thoughts in? 4.) where do you get your information? Web sites? Podcasts? Your thesis that the current environment most closely resembles the US 1940’s is also shared by Lyn Alden.

@Spekulatius i think housing might be the thing to watch moving forward. Obviously, how high interest rates (and mortgage rates) go is the million dollar question. Canada’s housing market is flashing red, given: 1.) how insanely high prices have gotten (pretty much straight up for 20 years). House prices - across the country - are up close to another 50% in just the past 2 years. 2.) it appears wicked low mortgage rates are on their way up. 5 year fixed rate mortgage is now 3.7%. But you can still get a 5 year variable mortgage for under 2% today - but as short term rates pop higher this will change. Having said that, supply of housing is constrained (driven by municipal building restrictions etc). And demand seems insatiable. Canada is bringing in 400,000 immigrants every year. And demand for housing as an inflation hedge appears to be increasing. At the end of the day housing in Canada has been a freight train. So it would not surprise me to see it continue to chug higher… ————— So when i look at the US i see lots of room for housing to run. Prices are not nearly as frothy as Canada. As Bill mentions, demographics are very favourable. Demand from investors looks solid. It is a great inflation hedge. Covid continues to stoke demand (work from home). And it was under built for almost a decade. But the US market has MUCH HIGHER mortgage rates than Canada (30 year mortgage at 4.5% and perhaps on its way to 5%) and interest rates are THE KEY VARIABLE from my perspective.

On the inflation front, below is the link to a great podcast with Larry Summers. One hour discussion. Host asks great questions. Lots of great discussion on THE topic of today. Summers thinks the Fed will need to get to 4-5% interest rate (high enough that they get close to a real interest rate) in the next couple of years to break inflation. Why will inflation stay higher in 2023 and 2024 than Fed models currently expect? Here are some thoughts after listening to Summers: - only 1/3 of government stimulus has been spent. Rest will be spent over next couple of years. Too much money chasing too few goods. - Fed policy (higher rates) impacts economy with considerable lag. As of last month Fed policy was still ACCOMMODATIVE. - labour market is exceptionally tight, especially when you add in extreme level of job vacancies. Might be tightest labour market in +50 years. - negative interest rates: even with a 2% interest rate, with inflation at 6% the real interest rate is -4%. This rate is still HIGHLY ACCOMMODATIVE. - new news: War in Europe adding to inflation issues. How high commodity prices go and how long they stay elevated is key (to impact on future inflation) - new news: China covid policy (lock downs) will continue to restrict supply of goods - which is inflationary - perhaps for next year - bottom line, inflation expectations might be getting embedded at +5%. Workers now need and are increasingly demanding big wage increases to keep up with rising prices they see every day now - food, energy, goods, housing. Businesses are now planning (and needing) on getting big price increases not just this year but also IN FUTURE YEARS to offset increases in costs. ————— I keep hoping Larry Summers Is Wrong. What if He’s Not? https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zaW1wbGVjYXN0LmNvbS84MkZJMzVQeA/episode/ZjIyOGZlZmEtYzZlZC00Zjk5LTkxN2YtODQ0ZDQ2NTdjNjJh?hl=en-CA&ved=2ahUKEwi5xfW-1Pv2AhVnHzQIHdhBDHwQjrkEegQIBRAI&ep=6 For over a year now, Summers — a former U.S. Treasury secretary and current Harvard economist — has been warning about the economy that we appear to be entering. So I invited him to the show to make his case and paint a picture of what he thinks comes next. We discuss why he thinks we’re almost certainly headed toward a recession, why he believes the Fed is engaged in “wishful and delusional thinking,” whether corporations are using this inflationary period as an excuse to goose profit margins, how to avoid a 1970s-style stagflation crisis, whether interest rates are the right tool to be addressing inflation in the first place, why he thinks much more immigration is one of the best tools we have to bring down prices in the long term and much more.

@scorpioncapital I agree that where inflation goes from here (2H 2022, 2023 and 2024) will be super interesting and super important for investors in the coming years. My base case is most investors simply follow the trend - and that IS normally the best thing to do. However, when long term trends change then ‘what works for investors’ can also change in important ways. The rub, of course, is we will not KNOW there has actually been a trend change for years. Is any of this actionable for most investors? Probably not. ————— i love history. The10 year US Treasury had a yield of 15.5% in 1982. In March of 2020 it had a yield of 0.5%. We had a 40 year period of continuously and methodically lower interest rates. So investors in anything bond/fixed income related have just experienced the greatest bull market in history. And what was the key driver of ever lower bond yields? Continuously and methodically falling inflation. (Over the past decade unprecedented central bank intervention has also been a factor.) ————— And what is the most important input for an investor when assessing any investment? Well, according to Buffett it is interest rates. “The most important item over time in valuation is obviously interest rates,” Buffett said last year. “Any investment is worth all the cash you’re going to get out between now and judgment day discounted back.” - https://www.cnbc.com/2018/10/11/warren-buffett-on-why-interest-rates-matter-so-much-for-investing.html ————— So what about inflation? Well a year ago EVERYONE thought inflation would be transitory. A year later, that word is no longer mentioned in polite company. Today everyone now understands, yes, we have an inflation problem AND IT IS NOT TRANSITORY. And as this realization sets in bond yields are now spiking. And Q1 was the worst quarter for fixed income since 1980. ————— So, to weave it all together, can we say the long term trend down in bond yields (and interest rates) is broken? No, i don’t think we can say that YET. We need to see what happens the next couple of years. My read is Mr Market today is very confident that the Fed over the next year will be able to engineer a soft landing for the economy and also bring inflation back down to a more acceptable level. Absent a recession (hard landing for the economy) i am not convinced inflation is going to come down over the next year as much as Mr Market currently expects (looking at bond yields). Why? 1.) labour: Is there a large structural shortage of labour in the US economy today? 2.) housing: is there a large and structural shortage of housing in the US today? 3.) ESG: how fast do we transition to electric vehicles? And to alternative energy sources? 4.) war in Europe: do we see spending on the military ramp significantly higher in countries around the globe? Will NATO countries spend 2% of GDP on military moving forward? 5.) commodities: are we at the beginning of a commodity super cycle? 6.) globalization: is globalization dead? How much production shifts back from Asia to NA and Europe (computer chips being just one example)? 7.) covid: the pandemic is still with us. China and its policy of zero tolerance being but one example. If inflation continues to come in higher than expected then it also makes sense to me that interest rates will continue their march higher. We will see. Interesting times indeed.

@Gregmal here are some answers to your questions: 1.) why do i invest? To make money. 2.) what is my holding period? It depends. See 1.) 3.) what are some core strategies used? Here are a few: - Buy low (usually when they are on sale/out of favour). Sell high. - Concentrate, especially when the risk/reward is very favourable. I rarely own more than 10 stocks at any time. I have had > 50% of my portfolio in one stock for short periods of time. - Stick to stocks/industries that i think i understand well. - am i ok holding cash? Yes. Sometimes i will be 100% cash (short term). Why? Because it allows me to take advantage of fat pitches when they are offered up by Mr Market. - capital preservation is super important. I have enough. Buffett’s first rule: “don’t lose what you’ve got”. Buffett’s second rule: “don’t forget the first rule” 4.) do i like to use macro in my investment process? At times, yes. 5.) what about taxes? The vast majority of my investments are in tax advantaged accounts (multiple LIRA’s, RRSP’s, TFSA’s, RESP) so i do not, for the most part, have to think about taxes when investing. This is a big advantage. So what has all the above delivered? An annual return of a little over 15% per year for the past 20 years (11.5% YTD). Retirement at 40 (mid 50’s now). Opportunity to spend some of the best years of my life with my wife and 3 kids when they were growing up - priceless. So you say that what i am doing is not investing. All i know is it works.. for me and for my family. ————— Yes, i did sell Stelco when steel prices were falling and Kestenbaum was having his moment. And i think i mentioned i moved the proceeds into oil (which was my top pick to start the year). Regardless, i will admit i do lots of dumb things. And that is what i love about investing… just avoid the big mistakes… soon enough more fat pitches (that i understand) will be coming right down the middle of the plate again and again and again…

@Gregmal We all need to find strategies that fit how we are wired and that also hit our return objectives. Paying attention to macro has worked very well for me for 20 years. “Running around full of fear all the time is no way to invest.” Ouch! Thanks for that solid advice. But i think i’ll stick to what actually works for me

Europe’s economic situation certainly looks completely messed up today. War in Ukraine. Inflation is ripping at generational highs. Energy crisis bordering on a catastrophe. Economic confidence levels are plummeting (back to levels seen at the start of covid). ECB is even further behind the Fed (in terms of normalizing interest rates) so financial repression (very high negative real interest rates) will continue (and is becoming defacto ECB policy). Putin wants payments for energy in Rubles. Europe is united today driven by Russia’s invasion of Ukraine. As economic stagnation sets in (a serious recession for some geographies and industries) the unity will likely get severely stressed later in 2022. Hard to see how the economic situation in Europe does not get much worse as the year progresses and Putin’s energy leverage increases. It really is crazy how many super important things are being juggled by the global economy right now… But hey, investors don’t have a thing to worry about… because its all ‘priced in’. (Just like it was all ‘priced in back in Feb of 2020?)

Fairfax's equity holdings (that I track) finished Q1 down a little under 1% (about $110 million); given S&P500 is down 5.5% Fairfax delivered a solid quarter. Mark to market equity positions were essentially flat for the quarter. Of course, my spreadsheet does not capture a bunch of equity holdings (partnerships etc) so what Fairfax actually reports Q1 will be different. Biggest Gainers? 1.) Eurobank + $195 million 2.) Stelco + $117 3.) FFH TRS + $103 Biggest Decliners? 1.) Blackberry - $192 2.) Quess - $123 3.) CIB - $109 (Egyptian pound was devalued) Fairfax Equity Holdings March 31 2022.xlsx

@maxthetrade i am constantly flexing my stock positions depending on changes in ‘the story’ and changes in a stock’s price. I am a big believer in holding concentrated positions (in stuff i think i understand reasonably well) when the risk / reward set-up looks very favourable to me. In terms of Fairfax i reduced my position today from about 30% to about 17% today. And i have had positions in Fairfax much higher than 30% (like in Nov 2020). For reference, my total portfolio is 80% cash today. Concentration has been one of my keys to growing my investments over the years (i have averaged a little over 15% per year for 20 years). However, i am starting to think it is time for me to execute a more traditional (diversified) approach to portfolio construction. Why change? 1.) my portfolio is now ‘big enough’ 2.) my life situation has changed (i am older) 3.) my ability to handle volatility is diminishing I think we will get lots of volatility in the stock market over the next 6-12 months = lots of opportunities to buy lots of great companies when they are on sale. My ‘problem’ is what inevitably happens is a situation comes along that is simply too good to pass up… like Fairfax trading below US$480 a couple of weeks ago. Simply nuts. I love those kinds of ‘problems’ when they come along (and they ALWAYS do - and often multiple times each year - if a person is patient enough).

Q1 results for Fairfax will be super interesting: 1.) CR? Can they deliver a CR at 94 or even lower? 2.) cash and short term investments balance? Are they re-investing some of this at higher yields? IF we get a CR below 94 and rising interest and dividend income then i will likely be pounding the table again that Fairfax is stupid cheap again (despite the run up in shares). ————— Part of my reason for selling 1/3 of my position in Fairfax earlier today is i also expect another sell off in the coming months in the overall market. I expect lots of companies to be on sale (regardless of where Fairfax trades).

Well Fairfax stock has certainly started the year well, up about 10% YTD. Pretty good outperformance compared to market averages. And Fairfax has been on fire the past 3 weeks up about 20% from its March low. Up +1% today in a market that was down 1.5%; pretty solid outperformance. Why? As with all things Fairfax, not really sure. But i am wondering if big investors are starting to initiate new positions in Fairfax. It is poised very well for a rising rate environment. Perhaps Fairfax is buying back stock. ————— Trading today at US$545 (C$680) the stock is now trading back near its all time high price band. The stock has doubled over the past 18 months. This is not to suggest the stock is fully valued (or even close). But i would say the stock price is no longer stupid cheap. —————- i did sell 1/3 of my position today to lock in some gains. I was way overweight and now i am back to what i consider a more normal core weighting. As we have all learned over the past 18 months Fairfax’s stock price often moves in rapid 20% swings (up and down). Getting back to a more normal size position will let me buy stock should we see another big sell off.

It looks like Fairfax India got a good exit price as well. I wonder if the proceeds will be used to buy back more Fairfax India shares. Perhaps Fairfax India is raising cash to support future growth of Anchorage (via infrastructure investments). ————— Bain Capital, global private equity firm, on Thursday said has agreed to acquire 24.98% stake in IIFL Wealth Management Limited for ₹3,680 crore ($485.6 million). Existing investors General Atlantic and Fairfax India Holdings Corporation will make a partial exit from IIFL Wealth, part of the homegrown financial services firm IIFL Group. Bain Capital is proposing to acquire 2.2 crore shares constituting 24.98% stake in the company at ₹1,661 per share for a total consideration of ₹3679.95 crore "by way of a share purchase agreement executed on March 30, 2022 with General Atlantic Singapore Fund Pte. Ltd. and FIH Mauritius Investments Ltd," IIFL Wealth said in a regulatory filing. The exact shareholding post-acquisition is yet to be disclosed. The deal will be through Bain Capital’s investment vehicle BC Asia Investments X Ltd. The transaction is subject to regulatory and other customary approvals, the filing added. As on December 2021, General Atlantic owned 21% in IIFL Wealth, while another 13.64% was held by FIH Mauritius Investments Ltd, a wholly owned subsidiary of Fairfax India Holdings Corporation, owned by Indian born Canandian billionaire Prem Watsa. Mumbai-based IIFL Wealth Management is among the leading wealth and alternative asset managers in India with ~$44 billion (around ₹3.3 trillion) in assets (as on December 31, 2021). https://www.livemint.com/companies/news/bain-capital-to-acquire-25-in-iifl-wealth-general-atlantic-fairfax-part-exit-11648701785729.html

All countries are basically the same when it comes to foreign policy: they largely do what is in their strategic national interest. And the bigger the stick the more forceful they can be with execution. It has been this way for all eternity. And today, when times are good we also get lots of pontificating in the West (human rights, rights of women, democracy etc); when times are bad this tends to move to the back burner.