Santayana

Didn't they pay $21 for ATCO?

Thanks. Maybe all the credit upgrades at FFH and subs isn't quite a meaningful as I thought.

Won't Fairfax be able to refinance any KW debt at better rates now? Seem like that should help this work out nicely in the long run.

It’s hard for me to fault him for doing what’s necessary to make sure someone else can’t change the culture of the company.

Now who's "resulting"? I think we have to look at all the decisions they made during that time period, and IMO the positives of the Allied World purchase outweigh any negative decisions they made. I just don't think they'd be the same the company today without that acquisition.

Pretty interesting discrepancy between WRB and CB reports.

Exactly, it’s all about liquidity.

Why not 10 years or 20 years if you're going to look at it like that?

It sounds to me like you *are* concerned rates could fall, otherwise why worry about locking in the current rates when you could just roll the current bonds at maturity.

The difference in yield between the 2 year and 5 year is pretty much negligible right now. If it's not a concern about future rate changes, I don't understand why you would prefer longer duration at this point.

The presumption is that those worried about Fairfax's "macro bet" are worried because they think rates will fall significantly, at which time one could sell those long bonds for a gain, not just hold them for the 4%.

I guess technically any bond position they take is a macro bet in some way. For people concerned they have gone too short in duration, just buying some long bonds yourself seems like a great way to address that assuming you're happy with everything else they are doing.

Thanks for the explanation. It still seems like that net downside is rather small compared the potential losses to the value of the bond portfolio if they were longer in duration and rates spiked.

I don't see how rates dropping would negatively impact the equity and balance sheet. That would be caused by rising rates, especially if they were longer in duration. What am I missing?

What exactly is the macro bet you think they are making? I don't believe they are trying to make any prediction about future rates, and think they are trying to position themselves in a way that reflects that they don't know what rates will do in the future. To me this is the opposite of a macro bet.

So reducing duration is a macro bet, but extending it is not? I think what they are trying to do is keep duration at a level where they are as agnostic as possible to whatever future changes may happen.

+1. And in the case of Fairfax, that impaired balance sheet would lead to a smaller insurance business right at the time when high yields would make that business even more profitable.

I think you are underestimating the impact that higher rates would have on the capital base if duration were longer. Remember capital loss leads directly to not being able to write as much in premiums. At least in my mind, capital loss is a much bigger risk than just having a lower ROE for a bit.

At a 50%+ position size it's really hard to buy more, but I always end up buying a few shares on any $50 or so pullback and then selling on the next bounce for a little extra beer money. In an IRA so no tax issues.

Crum & Forster Upgraded to A+ (Superior) Financial Strength Rating and "aa-" (Superior) Credit Rating by AM Best 11:32:00 AM ET, 09/04/2025 - PR Newswire MORRISTOWN, N.J., Sept. 4, 2025 /PRNewswire/ -- AM Best has upgraded the Financial Strength Rating (FSR) of the members of Crum & Forster Insurance Group (C&F) to A+ (Superior) from A (Excellent), and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to "aa-" (Superior) from "a+" (Excellent). The outlook for these ratings is stable. This upgrade reflects C&F's very strong balance sheet, solid operating performance, favorable business profile, and robust enterprise risk management. AM Best highlighted C&F's significant growth and diversification in recent years, achieved through organic expansion while maintaining strong underwriting results and reduced volatility. The ratings also reflect the benefits the group derives from its role within the larger Fairfax Financial Holdings Limited enterprise. "We are honored by AM Best's recognition of our continued financial strength and disciplined growth. This upgrade to A+ (Superior) reflects the dedication and teamwork of our employees, who go the extra mile every day for our clients and partners," said Arleen Paladino, Chief Financial Officer of Crum & Forster. "It's a testament not only to the dedication and expertise of our employees, but also to the culture of teamwork and commitment that defines C&F. Together, we remain committed to delivering innovative insurance solutions with integrity and excellence to our clients."

Exactly, "it's Q3" is as good as an explanation as anything for being down on a given day.

Like I said, I don't think there's a point in trying explain a 1% move in anything.

I think trying to find a reason for a 1% move in anything is being way too short sighted.

I did a buy/write on GOSS. They're a small biotech working on approval for a drug that treats pulmonary arterial hypertension. The option premiums are insane right now.

@VikingI think I would bump up that 2025E CR a bit. It's at 95.9% after Q2 and historically Q3 is the highest number of the year. I realize the CA fires in Q1 are skewing things and that might not be the case this year, but just thinking conservatively.