Crip1

Well said.

After taking the time to read through this, it’s really easy to see his consistency bias. For those unfamiliar with this bias, Charlie Munger covered this in interviews over the years and in Poor Charlie’s Almanac. A few examples: “We think Fairfax's performance will continue to hinge on whether Watsa's investment theses play out, but results on this front have become increasingly hit and miss over the years.” - An unbiased review of this would state that results have been increasingly hit and hit over the years…things were a ton more hit and miss in the 2005-2015 timeframe compared to 2015-2025. “Fairfax has seen a lot of ups and downs, but its performance over time has been trending toward mediocrity”. Toward? When a company puts out multiple years of the best financial performance in its history, how can one state that it’s trending toward mediocrity? “Our Capital Allocation Rating for Fairfax is Standard. In our opinion, the company’s balance sheet is sound, its capital investment decisions are fair, and its capital return record is mixed.” – In retrospect, what does Brett think Fairfax SHOULD have done from a capital investment perspective in the past 10 years that they didn’t? 14 Mar 2025 - We are increasing our fair value estimate to CAD 1,540 per share from CAD 1,290 due to time value and a change in the exchange rate since our last update, as well as some adjustments to our assumptions given the company's recent performance. Brett has raised the fair value of Fairfax from C$600 to C$1,290 in 4 years (a CAGR of over 26%), yet the market values the company at close to 60% more than his fair value estimate. Minimal credibility. It’s interesting to contemplate what his higher-ups think about this. He took a position years ago that Fairfax was mediocre, and simply cannot escape that paradigm. -Crip

Many thanks for the Viking-esque review of Eurobank. I really appreciate the balance of your observations, and I'll bet others on the board feel the same way. -Crip

It also leads me to believe that they are not anticipating a decline in interest rates anytime soon. -Crip

I have a tendency to harvest my flowers and water my weeds. Had it not been for Viking, there's a solid chance I'd have harvested some of my Fairfax when it it US$1K or thereabouts. The fact that I didn't has allowed me to be notably closer to retirement than I'd have been otherwise. -Crip

Curious to know why the $3 billion mark is target. Not saying that I agree or disagree, it would just be helpful to understand the rationale. -Crip

So, what other stocks are "such as Fairfax"? -Crip

I went with the $40 to $49 range. In terms of top things to look at: * Combine ratio, and the impact reserve releases. * Stock buybacks and or change in the TRS position. * New developments. -Crip

Two dispirate thoughts: What a change from a decade ago when conversations like this would be focused on “How badly they did on an investment their getting rid of” as opposed to the current “How can we calculate how much money they made on this investment”. Fairfax and EuroBank are down today on the news. That’s not remotely bothersome, but it’s curious as I can’t see anything here that can be painted as a negative to the short, intermediate or long term value of either firm. Just strange. Years ago there would seem to be a 2-3 day delay in FFH pricing appreciation when they released positive earnings. It was really odd, but it was consistent for multiple quarters. Maybe a redux of that? Either way, this looks to be another example of monetizing value that we had very little, if any, knowledge of. -Crip

The references to book value I recall from Buffett were: Berkshire’s intrinsic value changes year by year were roughly (my emphasis) in line with changes in book value. As Berkshire became more of an operating company than an insurance company, book value became increasingly less representative of intrinsic value. Combining these two (and over-simplifying) is that, in a given year, book value may increase by 12% but intrinsic value may have increased by 10%-14% or thereabouts. The next year may see a BV increase of 15% with IV increasing by 13%-17%. So, year over year change in BV is reasonable to assess the increase in value of the company for that year. This was especially true when Insurance was such a huge portion of Berkshire’s revenue/earnings. More often than not the change in IV was in excess of the change in BV and, as the years go by, that mismatch would grow…the longer the timeframe, the more it grew. Trying to put a number on this year after year is hugely tedious, and inexact. Over the past 5-10 years (really starting in 2016 with the removal of the hedges), Fairfax has been similar. Right now, as has been pointed out, BV is understated considering the excess of FV over CV. Furthermore, that BV is earning is earning a helluva return. I’d love to put a number on it, but that’s beyond my analytical skill. But it looks to me like the company is worth at least what it’s selling for, and likely more. This compels one to think of the Buffett quote: "It is better to be approximately right than precisely wrong". Approximately, it’s worth more than it’s selling for. -Crip

I really underappreciated RATM when they first came out...repetitive lyrics, mainly bi***ing about stuff, but as years went on I came to appreciate the greatness that is RATM. Wish I could have seen them live. -Crip

Much appreciated...quite humbling coming from you. -Crip

No-brainer vs Brainer Back in 2022 or 2023 when Fairfax was trading below BV, many folks on this board were frustrating on how the market had not yet figured out the value that the company offered. I offered a slightly different take on things, specifically, that with the company’s intrinsic value increasing at the rate it was, trading below BV was a blessing in that it was a complete no-brainer to hold or even buy more. Further, if the company did see substantial expansion of Price to BV, it would increase temptation to sell…and that’s what has happened. Now that it’s selling at 1.6x BV (arguably 1.3 or 1.4 real BV, holding or buying more Fairfax is less of a “no brainer”, and the more the price to BV expands, the less of a no-brainer it’s going to be…that simply makes holding it more difficult. And I am likely not the only one who has seen Fairfax become a substantial portion of their overall portfolio. It has been my top holding for a while, but with the increase in value, it was a little less in percentage terms than #2 and #3 combined. Now, it’s in excess of numbers 2 through 5…that’s pretty big. And, yes, I am quite familiar with the Mae West quote of "Too much of a good thing can be wonderful". Personally, I am not tempted to sell right now for a few reasons: · Sometimes I will sell a holding that I like if it becomes wildly over-valued with the belief that it will, in time, become more appropriately valued by the market and I can get back in at a better price. My experience in doing this is mixed, but slightly more positive than negative. · As referenced in other posts, Fairfax’ BV is understated but the earning power of the company is not. · I can’t think of another company I think is clearly a better but. But, as these things change, then there will be a stronger temptation. The game has changed. -Crip

I said that several times over the past few years. My net worth has increased by Fairfax NOT following my capital allocation advice. Accordingly, I've given up... -Crip

The groove of this song influenced countless musicians. Absolutely infectious. -Crip

And there were a few folks on this message board who pounded the table in fall of 2022 that it was a bargain, even after tripling in the previous 2-3 years. My thought at the time was "I own enough of this through Fairfax so I'll pass". Those folks were right, clearly, and just as clearly I forgot the Mae West quote that Buffett will refer to: "Too much of a good thing can be wonderful". -Crip

Only speculating here, but thinking that for every two shares Eurobank buys on the open market, FFH is selling one to Eurobank in order to maintain the 33.3% max. Presuming that the FFH-Eurobank transaction is for either a set dollar amount or, more likely, for the average cost/share that Eurobank is buying on the open market. Interested if anyone has more knowledge of this. -Crip

The 10-Year US Treasury is above 4.6% and the 30-Year is 5.15% this morning...quite interested to see how, if at all, Fairfax is positioning their fixed income portfolio, -Crip

A drop of 7% does compel any holder to ask "What happened?" as, normally, there is a reason for a market move of that size. I didn't detect anyone freaking out. Your point is valid though, as if volatility is that concerning, then don't take a big position. -Crip

I was just going to comment that the board's been rather quiet in the lead up to the earnings release today. No idea what that means, or if it means anything at all...it's just a little odd. -Crip

In Buffet's article "The Superinvestors of Graham-and-Doddsville" he spelled out the successes of those students, but noted that their portfolios over the years were quite dissimilar. The bottom line is that there are multiple avenues to wealth-generating heaven. @cwericb I'll grant you, it is a little odd...wonder how many don't hold Berkshire? -Crip

It's my #3 position and I put in a buy order today for more...US$15.00 or so is going to look like a steal a couple years down the road. -Crip P. S. When my buy orders get filled, it normally results in a 5% decline in share price, so...

It depends a certain amount on how it impacted the share price of FFH but, excluding that, I'd be less than overjoyed. India is an interesting macro market. It is outside of my circle of competence so rather than picking my own stocks to hold, I like the idea of letting a more informed money manager do so for me, hence my FFHI investment. If this happened, I'd likely get an India Index fund or two. -Crip

That's fair (right back atcha!). My other concern is the currency depreciating against my home (USD) currency. Now, of course I need to ask...other opportunities? Do tell. I'm not seeing much. -Crip

Maybe you’re right on the timing of the IPO, or maybe you’re inferring more than what’s there. Either way, the fact of the matter is that whether or not the IPO happens in ’25, ’26 or ’27, what’s less debatable is that the intrinsic value of FFHI continues to increase. BAIL, unless something unforeseeable happens, is going to be worth more in March of 2026 than it is currently in March of 2025. That only makes the IPO more attractive. So I am OK with letting this sit and increase in value for the next 12-24 months, even if the stock price does not reflect this. And to the extent we get buying opportunities like we’ve seen in the past few weeks, any dry powder can be used to buy more. -Crip