FairFacts

I sincerely hope that they have started to lighten their position at these levels (above $10). Even if they sold 10-20% at these levels it would be a start. If they are really true to buying back their own stock, this is a real opportunity. Each 1% of outstanding shares (of FRFHF) will cost them about $122mil at current prices. If they were to sell 25% of their current BB shares they could raise this ($122mil) and reduce their shares outstanding by 1% while still holding the remaining 75% of BB shares PLUS the convertible debt. Its a no brainer to me!

Well that was some day!. Up 20% on big volumes this morning BB finished up 1% for the day on +115mil shares (normally about 12 mil per day). My guess the reddit crowd were pushing the shorts out then some big sellers showed up (hopefully PW & co).

Don't look now, BB up 11%

‘We expect to compound our mark-to-market book value per share over the long term by 15% annually’ Quoted from the opening line of the annual report and previously stated Fairfax objective. How can investors hold this investment if they doubt that this is achievable? (I do and with the current set-up expect to see them achieve/exceed this objective over the next few years).

What expected return over the next 5 or 10 years would make you consider FFH? What are some of these better opportunities and what are their expected returns? At a $455 CDN average cost, I expect Fairfax to return 15-22% annualized over the next 3 years...so it will hit $700-850 CDN conservatively over the next three years. Holding beyond that isn't a concern...but if markets go sideways, I'm comfortable enough to hang on longer and continue to add if it remains at a significant discount. Personally, in this market, I see fewer and fewer opportunities as good. If you think you know of some, please share. Cheers! Parsad, you are too conservative! (all numbers in US$). Fairfax stated objective is to compound bv at 15%. BV at 12/31/20 was $478, if compounded for the next three years it increases as follows: Yr 1 $550, Yr 2 $632, yr 3 $727. After three years the multiple should revert towards the historical mean ~1.2x bv (if they execute at 15% growth the multiple could well be significantly greater than 1.2). At a multiple of 1.0 and BV of $727 = share price of $727, at a multiple of 1.2 = a share price of $872. If they fail to execute at this level then the long-term investment thesis is gone. I sense that they are better positioned now than in recent history and hopefully have learnt from their mistakes. The bottom line for me is (and always has been) that they have an uncanny knack of staying defensive enough to weather the storm(s). I think this is sometimes overlooked!

Sale of a Brit subsidiary, announced by the acquirer, no press release from Fairfax.... https://finance.yahoo.com/news/accelerant-acquires-commonwealth-insurance-company-130000763.html

Best quote..... "Nothing that a $1,000 share price won't solve"....Prem

Atco (Seaspan) announces yet another acquisition of 8 newbuilds plus an option on an additional 4. https://finance.yahoo.com/news/statement-minister-veterans-affairs-minister-140000272.html

Altius IPO’d today, closing just below it’s C$14 opening price.

Eurobank closed in Athens today up 9.58% on 3 times normal volume.

I’ll revise my earlier answer, the chances of a US $750 price within 5 years should be a forgone conclusion YES! it will. A better question is what are the chances within 24 months. 1. Y/e reported book value was $477 per share. 2. Stated long-term objective is to achieve 15% BV growth. 3. BV of $477 compounded at 15% for two years gets to $630 4. Reversion to mean multiple on BV of 1.2 gets you to a share price of $756! With all of the tailwinds discussed this should be a ‘mid-point’ estimate (the $750) it could easily by higher. If not questions must be asked....I’m optimistic..... Three IPO’s in the hopper already, bring it on.

It would be unforgivable not to have locked in at least a meaningful portion of the gain. Unless there is a technical/contractual limitation I will be amazed if something hasn’t been done. Would certainly cause one to question why not?

Has anybody done the arithmetic to figure out what value this might place on FFH India's 48.5% ownership? The only hard number I could find is the initial press release in March 2019 announcing Fairfax India's initial purchase for INR 5bil (US $72.1mil at then current rates) for a 41.4% holding. Not sure how that holding grew to 48.5% SJ

https://finance.yahoo.com/news/fairfax-india-announces-filing-prospectus-124500982.html IPO of Seven Islands Shipping. Fairfax India owns 48.5%

Finally, how much of the BB position is locked into this deal??

From what I could understand, FFH basically wrote a put on the public equity portfolio in order to derisk the Riverstone purchase for the buyer. Presumably if they sell positions before then, it reduces the size of the put. I'm not sure it is a put. That implies CVC has the right to choose whether to put the investments or not, which would imply FFH can't win. The wording implies to me that FFH have simply underwritten the value of these investments. FFH might lose, but also might win. So that would make 'the arrangement' a call option for Fairfax and a put option for Riverstone?

Has anyone any idea what this is all about, here is an excerpt from the press release and Prem was questioned about it on the call..... “On closing the company expects to receive consideration of $730 million for its 60% joint venture in Riverstone Barbados and a contingent value instrument……. of up to $235.7 million…”. “Pursant to the agreement, prior to closing the company entered into an arrangement with RiverStone Barbados to purchase certain investments owned by Riverstone at a fixed price of approximately $1.2 billion to the end of 2022”.

Very high indeed, we’re starting at a low base BV of $442/sh at 9/30 coming out of the pandemic. Hard mkt for the insurance cos (tempered by low interest rates), too many possible home runs BB, ATCO, EuroBank, Digit, FDGE, India... I agree mostly with Parsad on this one $750 within 24 months.....

Remember Fairfax holds $675mil in convertible debt which matures in November 2020, its only earning 3.75%. I wonder will they exercise or take the money?

Wondering, See www.GroCapitalHoldings.com at the bottom of their home page which shows the corporate structure including Fairfax Holdings and Fairfax Africa. Ihave edited the link to the correct one, thanks Petec.

I emailed investor relations about this and here is their reply "Thank you for your email. Fairfax India Holdings Corporation has been listed on the Toronto Stock Exchange in US dollars under the symbol FIH.U since it's inception year end 2014. The company files all required news releases, financial reports and other disclosures only under the SEDAR system in Canada as required by the Ontario Securities Commission. The Company does not market or disseminate information in the United States or through the SEC. The Company has not created or supported any other listings beside the FIH.U symbol on the TSX." Not sure where this leaves us.

Changes at the top at Atlas Mara..... https://www.bloomberg.com/news/videos/2019-02-06/bob-diamond-steps-down-as-atlas-executive-chairman-video More details here and their relevance to Fairfax https://www.dailymail.co.uk/money/markets/article-6673811/Former-Barclays-boss-Bob-Diamond-gives-chairmanship-African-venture-Atlas-Mara.html?ns_mchannel=rss&ns_campaign=1490&ito=1490

I tried to add some FFXDF in my IRA account at Fidelity today (I have been accumulating small purchases regularly without any issue). Today however, Fidelity gave an error message "Error (146834) Securities flagged as Rule 144A cannot be traded through this electronic channel". I called Fidelity who told me that I can only issue sell order and only through their desk (not electronically). They said it is because Fairfax India has not complied with all SEC filings therefore they will not allow any further purchases. Anyone else seeing this??

Great post Parsad, please keep them coming.

Don’t forget Kennedy Wilson Holdings....