Fairfax and EL Financial

[Guest glavacem]

http://www.wellingtonfund.com/blog/2014/04/11/fairfax-has-been-swamped-by-e-l-financials-quiet-steady-winning-gains/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+WellingtonFinancial-Blog-NewsViewsPurviews+%28Wellington+Financial+-+Blog++-+News%2C+Views+%26+Purviews%29

 

Another interesting post. Ingesting to note that over the last 15 years Fairfax is down $100 a share.

[frog03]

Thanks for sharing.  There are actually a few managers that have done better than Mr. Watsa over the long term, just in Canada for instance, and many more outside of Canada.

[StubbleJumper]

I'd say the post is pretty superficial.  The measuring stick that the author used was share price, which can be completely unhinged from the actual performance of the business.  At a minimum, the focus should first be on the relative performance of growth in BV.  On this count, both the Jackmans and Watsa have done well. 

 

The other interesting point is to even suggest that the companies are trying to do the same thing.  Clearly they are not.  Watsa is into P&C insurance simply to give him float that he can invest -- and it is the investing side of the game where he has generally excelled.  The Jackmans used to be into both P&C and life, but have since sold their P&C subsidiary and are now only into life.  IMO, they are insurance guys first and investing guys second.

 

This is not to say that there is any fatal flaw in either business or in either business model.  But, I'd say that they are not directly comparable to start with, and if someone does insist on comparing them, it would be better to use a measure other than share-price with a cherry-picked starting date.

 

 

SJ

[frog03]

Agree that it would be better to measure book value per share than price per share.

This being said, the track record for FFH over the last 15 years is less than overwhelming.

[berkshiremystery]

I might bump up an old thread from last year about EL Financial.

Cheers!

 

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/elf-to-e-l-financial-corp-ltd-(-the-jackman's)/

[Guest glavacem]

Thanks for that link, lots of good info.