Fairfax 2023

[giulio]

21 hours ago, Candyman1 said:

I agree that it will likely be positive for the stock, but on a net basis, we just took likely over reserving out of the liability side of the balance sheet. I always expected FFH to be over reserved and over time the over reserving of those past years would have made it in into the income statement anyway. That overall has been going on for some time at FFH, but since they are growing their book long term, it tends to be hidden. So yes, likely people will look at book value per share is higher and stock could trade up, but operationally nothing seems to have changed. That $94 dollars in book value per share was just moved from the liability side of the balance sheet to equity.

@Candyman1 thank you for this perspective!

 

I think this article does a good job of summarizing IFRS 17 

https://www.footnotesanalyst.com/prudent-versus-unbiased-ifrs-17-insurance-liabilities/

 

"IFRS 17 requires that the fulfilment cash flows included in the best estimate liability must be unbiased probability weighted expected values. This component of the total insurance liability should not depend on management policies and should therefore, in theory, be fully comparable between companies. In particular, the amount should not be affected by the insurer’s policies regarding prudence or conservatism, sometimes previously referred to as the ‘strength’ of reserving"

 

Not only will insurers need to discount liabilities (change in interest rate will affect both sides of BS now), but they need to report liabilities in a more standardized way.

If an insurer estimates a loss reserve to be 80, they cannot report 100 for the sake of conservatism anymore. Please correct me if I am wrong.

 

G

 

[Candyman1]

44 minutes ago, giulio said:

@Candyman1 thank you for this perspective!

 

I think this article does a good job of summarizing IFRS 17 

https://www.footnotesanalyst.com/prudent-versus-unbiased-ifrs-17-insurance-liabilities/

 

"IFRS 17 requires that the fulfilment cash flows included in the best estimate liability must be unbiased probability weighted expected values. This component of the total insurance liability should not depend on management policies and should therefore, in theory, be fully comparable between companies. In particular, the amount should not be affected by the insurer’s policies regarding prudence or conservatism, sometimes previously referred to as the ‘strength’ of reserving"

 

Not only will insurers need to discount liabilities (change in interest rate will affect both sides of BS now), but they need to report liabilities in a more standardized way.

If an insurer estimates a loss reserve to be 80, they cannot report 100 for the sake of conservatism anymore. Please correct me if I am wrong.

 

G

 

Insurance companies were already somewhat limited in their ability to book reserves. Reserves already needed to be somewhat in line with expected cash payouts. Now they are finetuning it even more in order to get as close as possible to "the exact number". To me it feels like regulators trying to be too perfect. It will lead to FFH, and the rest of the insurance industry, being more closely to the line and we will likely in the whole insurance industry see more case of reserve development volatility because of this. Leaving some leeway for somewhat conservative reserving was a good idea. In the end, the only thing that matters is how much cash were you paid for providing the insurance, what were your cash returns on the float, and how much cash did you payout for a specific vintage closed. The rest is just all assumptions. But I do understand why regulators want to do this. It is not the people that are too conservative they are targeting, it is the people/companies that are not conservative enough with their reserving assumptions. FFH has had plenty of experience buying insurance companies in the past that had used to optimistic reserve assumptions in order to be able to book better results in the short-term. And the regulators think they have a "perfect formula" which is bs. The perfect formula for me would be to take the actuarial assumptions and double them, but I am side tracking. That is why you see Prem almost dismissing IFRS 17 and he would rather not implement it, but he has no choice.

Over reserving is not just good policy for insurance companies, but it is also for other companies and even people. All my regular bills I pre pay many months ahead of time. I do not have a mortgage on my residence, I pay cash for cars, etc. Yes, as many have said, those prepaid bills are float I could have used to invest, but one never knows what setbacks happen, I am now 55 and believe me, setbacks happen to people, I have seen plenty of it as well have experienced them myself, and if I end up with a setback I have many months where I can figure out how to replace income for my coming bills. Now at this time it has way less impact as I have enough money to not have to work again, but it has been a great principle the live by till now. Well, those principles could be just as relevant for companies.

 

In the long-term for FFH the impact of IFRS 17 will be small.

 

A similar thing hit BRK recently as now they have to include the unrealized part on their public asset book in their earnings statement, while the past it just was the realized part. And we have seen the impact of that recently. On paper one could argue that it represents the exact situation at a specific time of BRK better, but I would not call this new system an improvement over the old one.  

Edited April 19, 2023 by Candyman1

[TwoCitiesCapital]

1 hour ago, Viking said:

We can add GIG to this list. I see Fairfax buying another chunk of Allied World this year. They have an enormous amount of cash to invest:

- Resolute sale just closed $625 million

- Ambridge sale is pending $400 million

- interest and dividend income in 2023 = $1.5 billion

- underwriting profit = $1.1 billion (95 CR)

- earnings from consolidated equity holdings (Recipe etc) = $250 million

- additional asset sales / monetizations

 

What's interesting is how the structured the purchase. 

 

$200 million upfront with annual payments for the next 4 years. Seems like they have something in mind for this cash that WASN'T the purchase of GIG. 

 

I think you're right on Allied World along with another few hundred million in share repurchases. 

[Xerxes]

Word on the street is that Prem Watsa will reveal tomorrow at AGM the “handle” he uses when he posts on Corner Berkshire & Fairfax. 

[Dudley]

43 minutes ago, TwoCitiesCapital said:

 

What's interesting is how the structured the purchase. 

 

$200 million upfront with annual payments for the next 4 years. Seems like they have something in mind for this cash that WASN'T the purchase of GIG. 

 

I think you're right on Allied World along with another few hundred million in share repurchases. 

 

Yep, @Viking nailed it on the corporate cannibalism here. Looks like Fairfax is purchasing the interest in GIG at a 15x P/E (based on 2022 earnings). The structure of the purchase is amazing. In a high(er) interest rate world, the ability to stretch out these payments essentially "for free" over 4 years is fantastic. 

[giulio]

@Candyman1 100% agree with your framework, "an ounce of prevention..."

 

In the end nothing is going to change business wise, this is just an accounting trick with some numbers moving around. What matters is FFH conservative underwriting discipline and culture.

 

Thanks for the discussion!

 

G

[Parsad]

5 hours ago, Xerxes said:

Word on the street is that Prem Watsa will reveal tomorrow at AGM the “handle” he uses when he posts on Corner Berkshire & Fairfax. 

 

I can assure you that Prem does not post, but he and others at Fairfax may read from time to time.

 

Cheers!

[Viking]

Some random thoughts on the GIG purchase:

 

This purchase is a great example of a couple of under-appreciated strengths of Fairfax: 

1.) international - this has been a growing part of Fairfax’s insurance business for 20 years.

2.) partner with leading organizations- in this case Kipco.

3.) long term focus - this transaction was incubating for 13 years.

Total purchase price:

• Kipco 46.32% $860 million = $200 million + $165 million x 4 ($660)
• Price paid to Kipco values all of GIG at $1.856 billion.
• Takeout of 10% minority ownership: cost = $186 million
• Is Kipco getting a premium to sell to Fairfax? Yes. This is a quality asset with an impressive track record since inception in 2010. It should sell at a premium.
• the question now is does Fairfax get the remaining 10%? I would assume yes given the KWD 2.00 price. 

Potential total cost to Fairfax for 100% of GIG is $386 million upfront plus $660 million (over next 4 years) = $1,046 million. 

• What is present value of payment stream of $165 million per year over next 4 years at 8% discount rate? Less than $660 million.

Financials: upon close, bump to book value of:

• Fairfax owns 43.7%
• Dec 31, 2022 carrying value $403.4 million
• Suggest Fairfax current stake is now worth $811 million = gain of $407.6 million = $17.50/share pre-tax

Paying for the purchase in instalments over 4 years is a big win. In 4 years time, GIG will be a much larger organization. Fairfax could use earnings from GIG to fund a large part of the future payments.
 

GIG reported earnings of $125 million in 2022 (92CR)

• investment portfolio is $2.4 billion at Dec 31, 2022
• gross premiums were 2.7 billion in 2022

Strategically, this secures Fairfax’s position in MENA. This is a big deal. This could also be viewed as a play on oil/energy. If we are in a decade long secular bull market in energy, Gulf economies are going to be strong growers. A young and growing population is another tailwind. Growing economies should be good for insurance businesses.

Edited April 19, 2023 by Viking

[glider3834]

16 hours ago, Candyman1 said:

Insurance companies were already somewhat limited in their ability to book reserves. Reserves already needed to be somewhat in line with expected cash payouts. Now they are finetuning it even more in order to get as close as possible to "the exact number". To me it feels like regulators trying to be too perfect. It will lead to FFH, and the rest of the insurance industry, being more closely to the line and we will likely in the whole insurance industry see more case of reserve development volatility because of this. Leaving some leeway for somewhat conservative reserving was a good idea. In the end, the only thing that matters is how much cash were you paid for providing the insurance, what were your cash returns on the float, and how much cash did you payout for a specific vintage closed. The rest is just all assumptions. But I do understand why regulators want to do this. It is not the people that are too conservative they are targeting, it is the people/companies that are not conservative enough with their reserving assumptions. FFH has had plenty of experience buying insurance companies in the past that had used to optimistic reserve assumptions in order to be able to book better results in the short-term. And the regulators think they have a "perfect formula" which is bs. The perfect formula for me would be to take the actuarial assumptions and double them, but I am side tracking. That is why you see Prem almost dismissing IFRS 17 and he would rather not implement it, but he has no choice.

Over reserving is not just good policy for insurance companies, but it is also for other companies and even people. All my regular bills I pre pay many months ahead of time. I do not have a mortgage on my residence, I pay cash for cars, etc. Yes, as many have said, those prepaid bills are float I could have used to invest, but one never knows what setbacks happen, I am now 55 and believe me, setbacks happen to people, I have seen plenty of it as well have experienced them myself, and if I end up with a setback I have many months where I can figure out how to replace income for my coming bills. Now at this time it has way less impact as I have enough money to not have to work again, but it has been a great principle the live by till now. Well, those principles could be just as relevant for companies.

 

In the long-term for FFH the impact of IFRS 17 will be small.

 

A similar thing hit BRK recently as now they have to include the unrealized part on their public asset book in their earnings statement, while the past it just was the realized part. And we have seen the impact of that recently. On paper one could argue that it represents the exact situation at a specific time of BRK better, but I would not call this new system an improvement over the old one.  

https://www.theglobeandmail.com/investing/markets/inside-the-market/article-wednesdays-analyst-upgrades-and-downgrades-for-april-19/

 

* In response to its Tuesday release on the effect of IFRS 17 on common shareholders’ equity, BMO Nesbitt Burns’ Tom MacKinnon raised his Fairfax Financial Holdings Ltd. (FFH-T) target to $1,225 from $1,150, reiterating an “outperform” rating. The average is $1,169.64.

“FFH is by far the biggest beneficiary amongst its Canadian P&C peers on the transition to IFRS 17 (which calls for discounting), largely because of its current conservative practice of not discounting its reserves—IFC, DFY, and TSU currently discount,” he said. “The substantial increase in interest rates is primary driver of the bigger increase at Q4/22 versus the Q4/21 guide. Unlike its Canadian peers (IFC, DFY, TSU), FFH conservatively does not currently discount its claim liabilities under IFRS 4 to reflect expected yields earned on its assets. We expect the increase in Q4/22 BVPS upon transition to IFRS 17 to be similar to the impact provided in company guidance for Q4/21, which was a 2.9-per-cent increase for IFC (already in our estimates), a 5.0-6.0-per-cent increase for DFY (already in our estimates), and a 1.0-5.0-per-cent increase for TSU, with these increases driven by the deferral of additional insurance acquisition expenses, and, in the case of DFY and TSU, a lower risk adjustment due to the change in methodology for calculating the risk adjustment on reserves.

“Now on an apples-to-apples basis FFH appears even more attractive relative its Canadian peers.”

[bluedevil]

Good nugget from Prem's presentation - going on now:

 

They have been working on extending the duration of the bond portfolio, and he is now confident they will earn 1.5 billion in interest and dividends for the next three years - 2023, 2024 and 2025.

[MMM20]

On 4/19/2023 at 9:03 AM, Viking said:

We can add GIG to this list. I see Fairfax buying another chunk of Allied World this year. They have an enormous amount of cash to invest:

- Resolute sale just closed $625 million

- Ambridge sale is pending $400 million

- interest and dividend income in 2023 = $1.5 billion

- underwriting profit = $1.1 billion (95 CR)

- earnings from consolidated equity holdings (Recipe etc) = $250 million

- additional asset sales / monetizations

  

2 hours ago, bluedevil said:

Good nugget from Prem's presentation - going on now:

 

They have been working on extending the duration of the bond portfolio, and he is now confident they will earn 1.5 billion in interest and dividends for the next three years - 2023, 2024 and 2025.

 

Right. At this point, ~$800M for GIG is about one quarter (maybe two) of sustainable and growing free cash flow. Stock still screams cheap to me every day it trades below US$1000 if not US$1500.

 

Edited April 20, 2023 by MMM20

[Luke]

2 hours ago, bluedevil said:

Good nugget from Prem's presentation - going on now:

 

They have been working on extending the duration of the bond portfolio, and he is now confident they will earn 1.5 billion in interest and dividends for the next three years - 2023, 2024 and 2025.

Thats massive. 

30 minutes ago, MMM20 said:

  

 

Right. At this point, ~$800M for GIG is about one quarter (maybe two) of sustainable and growing free cash flow. Stock still screams cheap to me every day it trades below US$1000 if not US$1500.

 

+1

[TwoCitiesCapital]

4 hours ago, bluedevil said:

Good nugget from Prem's presentation - going on now:

 

They have been working on extending the duration of the bond portfolio, and he is now confident they will earn 1.5 billion in interest and dividends for the next three years - 2023, 2024 and 2025.

 

I want more details before getting too excited. Maybe the fragility in the banking system and the slide in rates was the motivation needed...

 

That being said, $1.5 billion was the annual run rate from December report. 

 

That represented a ~2.9% yield on the portfolio at that time. Current yields on a 3-year Treasury are 3.8%.

 

So we're expecting to under-earn a static 3-year Treasury over the next 3-years despite

 

1) knowing they own some spread products that pay 5-6% and

 

2) the expectation that the portfolio would grow from reinvestment of dividends/coupons/maturities over that time

 

Seems to me that this still very much suggests that they're barely inching out from the 1.6 years disclosed in Q4. Can't think of any other way they are under-earning a 3-year treasury otherwise. 

 

Would feel more comfortable if we were at least locking in a yield of a 3-5 year treasury over that time, but $1.5 billion consistently for the next 3 years isn't bad. It's just not GREAT relative to what it could be without much risk. 

Edited April 20, 2023 by TwoCitiesCapital

[jbwent63]

Is there an expectation that the video recordings will be made available after the meeting? I unfortunately could not attend nor have I been able to pay attention during the day. My feed for India didnt come on line until just after the management presentation (boo!). TIA

[bluedevil]

It seemed from the AGM that their thesis is that if a recession happens, risk spreads will blow out and if so would intend to extend duration significantly (from 3 years to five or six years) and potentially take on credit risk rather than just being in government bonds, but didn't want to do that at current rates.

 

[glider3834]

2 hours ago, jbwent63 said:

Is there an expectation that the video recordings will be made available after the meeting? I unfortunately could not attend nor have I been able to pay attention during the day. My feed for India didnt come on line until just after the management presentation (boo!). TIA

usually they just publish the meeting presentation - but agree they should record the meeting and make it available 

[Viking]

7 hours ago, bluedevil said:

Good nugget from Prem's presentation - going on now:

 

They have been working on extending the duration of the bond portfolio, and he is now confident they will earn 1.5 billion in interest and dividends for the next three years - 2023, 2024 and 2025.

@bluedevil extending the average duration of the bond portfolio in Q1 is a big deal. Especially if they were able to push it over 2. I think Fairfax has to keep $9 billion of their $38 billion portfolio largely in cash (very short term). So that only allows them to extend $27 billion. This suggests to me the $27 billion could be over a 3 year average duration. We will learn much more when Fairfax reports Q1 results in a couple of weeks.

[Viking]

Here are some random thoughts from the AGM. First, thanks to all the board members who organized events and were such great hosts to newbie’s like me. I had a great trip and it was due mostly to your efforts. Thanks as well to all the other board members who reached out to say hi. Lots of people are getting an enormous amount of value from ‘Corner of Berkshire and Fairfax’ and we all have Sanjeev to thank for that.
 

I was able to attend this year so some of my comments below are also from some random discussions.

 

• “Fairfax has been transformed over the past 5 years.”
• Top 20 P&C Insurers in the world; Fairfax is actually #12 (only looking at like companies)
• Significant growth happened in hard market… took share from competitors.
• Effective cycle management.
• Prem has put together a very strong senior leadership team - insurance and investments, including external CEO’s (Allied, Eurobank etc).

 

• The duration of the bond portfolio was extended in Q1. This is a big deal in that it extends the runway for ‘$1.5 billion in interest and dividend income’ - 2023, 2024 and now 2025.
• Interest and dividend income in Q1 may come in over $1.5 billion run rate: “actually a little more”
• Operating income of $100/share for next 3 years
• Ben Watsa gave an impromptu short speech at one of the small dinners. He talked briefly about the benefit of being a family controlled company. The example: in 2021 ( and the years before) Fairfax went extremely short duration on the fixed income portfolio. Doing so carried a material short term cost. This would have been very difficult to do if they had not been family controlled due to the short term impact on reported results. He seems like a capable, nice kid.

 

• The hard market in insurance is likely in the 9th inning; top line growth for 2023 might slip to mid single digit levels (property cat reinsurance higher); we might see peak CR in 2023, slowly rising CR in future years.
• Odyssey CEO: shifting from a growth story to a margin story. Significant rise in property cat rates. 2024 and beyond will be about protecting margin.
• Allied World: monster year in 2022: 12% growth; 90.7CR, $338 million in underwriting income. We are at a very predictable place in the cycle (top). Rate continues to exceed cost inflation. Company was dramatically scaled up in size on purpose the last couple of years; as a result, currently has a very low expense ratio.

 

• GIG: dividends paid to Fairfax from GIG will largely pay $165 million payments due over each of the next 4 years.
• Eurobank: guiding to euro 0.22/share earnings in 2023 (euro 0.18/share in 2022) and ROE of 13% in 2023 to 2025. Starting modest share buyback of 1.5% in 2023 and targeting a 25% payout ratio in 2024 (mostly as a cash dividend).
• Fairfax India: future acquisitions in India will be funded internally or perhaps with an external partner (someone in India or Fairfax, the parent). Fairfax India will not issue shares (and dilute existing shareholders) given extremely low share price. 
• AGT: 60% Fairfax, 12% OMERS, 28% management
• Bauer: Hockey share about 50/50 with CCM; Lacrosse: small business (less than 10%); leader in NE US

Edited April 20, 2023 by Viking

[Xerxes]

"... I can tell you, this is 2023, 24, 25 ... we have extended our term by buying treasury bonds in the last 2-3 months ... so we are confident that we will have $1.5B in interest & dividend income in 23, 24 and 25, by buying about 80% of our fixed-income portfolio in government bonds etc."

 

Above is the statement from Prem W. during AGM. 

 

So if the size of the fixed-income portfolio is $38 billion based on Dec 2022 data, of that $9B was in cash and short-term treasury bills and $29B in bonds. So 76% of that portfolio in treasury bonds.

 

Today, based on the comment from the AGM, about 80% of that is now in bonds. So $30B vs. $7B in in cash and short-term treasury bills (assuming $38B as constant). 

 

@TwoCitiesCapital

 

If you measure $1.5B as yield against the $38 fixed-income portfolio (as oppose to $52B), the yield looks better at 3.94%

 

[TwoCitiesCapital]

1 hour ago, Xerxes said:

 

@TwoCitiesCapital

 

If you measure $1.5B as yield against the $38 fixed-income portfolio (as oppose to $52B), the yield looks better at 3.94%

 

 

But it's not against the fixed income portfolio. It's interest AND dividends. It's the whole $52B portfolio. 

Edited April 21, 2023 by TwoCitiesCapital

[Parsad]

4 hours ago, Viking said:

Here are some random thoughts from the AGM. First, thanks to all the board members who organized events and were such great hosts to newbie’s like me. I had a great trip and it was due mostly to your efforts. Thanks as well to all the other board members who reached out to say hi. Lots of people are getting an enormous amount of value from ‘Corner of Berkshire and Fairfax’ and we all have Sanjeev to thank for that.
 

I was able to attend this year so some of my comments below are also from some random discussions.

 

• “Fairfax has been transformed over the past 5 years.”
• Top 20 P&C Insurers in the world; Fairfax is actually #12 (only looking at like companies)
• Significant growth happened in hard market… took share from competitors.
• Effective cycle management.
• Prem has put together a very strong senior leadership team - insurance and investments, including external CEO’s (Allied, Eurobank etc).

 

• The duration of the bond portfolio was extended in Q1. This is a big deal in that it extends the runway for ‘$1.5 billion in interest and dividend income’ - 2023, 2024 and now 2025.
• Interest and dividend income in Q1 may come in over $1.5 billion run rate: “actually a little more”
• Operating income of $100/share for next 3 years
• Ben Watsa gave an impromptu short speech at one of the small dinners. He talked briefly about the benefit of being a family controlled company. The example: in 2021 ( and the years before) Fairfax went extremely short duration on the fixed income portfolio. Doing so carried a material short term cost. This would have been very difficult to do if they had not been family controlled due to the short term impact on reported results. He seems like a capable, nice kid.

 

• The hard market in insurance is likely in the 9th inning; top line growth for 2023 might slip to mid single digit levels (property cat reinsurance higher); we might see peak CR in 2023, slowly rising CR in future years.
• Odyssey CEO: shifting from a growth story to a margin story. Significant rise in property cat rates. 2024 and beyond will be about protecting margin.
• Allied World: monster year in 2022: 12% growth; 90.7CR, $338 million in underwriting income. We are at a very predictable place in the cycle (top). Rate continues to exceed cost inflation. Company was dramatically scaled up in size on purpose the last couple of years; as a result, currently has a very low expense ratio.

 

• GIG: dividends paid to Fairfax from GIG will largely pay $165 million payments due over each of the next 4 years.
• Eurobank: guiding to euro 0.22/share earnings in 2023 (euro 0.18/share in 2022) and ROE of 13% in 2023 to 2025. Starting modest share buyback of 1.5% in 2023 and targeting a 25% payout ratio in 2024 (mostly as a cash dividend).
• Fairfax India: future acquisitions in India will be funded internally or perhaps with an external partner (someone in India or Fairfax, the parent). Fairfax India will not issue shares (and dilute existing shareholders) given extremely low share price. 
• AGT: 60% Fairfax, 12% OMERS, 28% management
• Bauer: Hockey share about 50/50 with CCM; Lacrosse: small business (less than 10%); leader in NE US

 

Nice post of the AGM Viking! 

 

Didn't anyone take photographs with others or of the booths, etc?  If you have some nice pictures please feel free to post them. 

 

Cheers!

[Saluki]

I've been to the AGM 2x before the lockdown (It makes more sense, in some ways than the BRK meeting b/c you can meet Prem and upper management, which isn't really possible in Omaha).  I would go again if it wasn't so close in time to the BRK AGM.  I hate to fly and don't like to do trips too close together. There's definitely more fun things to do in Toronto, and the side events are much smaller and there is much more signal to noise than in some of the retail oriented side events in Omaha which are like a sales pitch for some firms hawking newsletters (not naming names). 

 

I got a picture with Prem and one with Mason Hawkins one year.  And I got to meet Arnold Van Dem Berg the first year I went.  When people say what a nice guy he is, it's not an exaggeration.  I'm not a billionaire so his time would've been better spent talking to the deep pockets, but we had a great conversation and he gave me a copy of a book of quotations that he compiled, and wrote a nice inscription in it, then when I was about to leave he told his son to take a picture of us.  Class act!  

 

I enjoyed watching it online, but it's not the same.  I think I'll be back next year

[bluedevil]

Another nugget that stuck out to me.

Prem does not seem interested in paying down the debt.

When asked about it (almost pressed a bit by a SH) he said he thought in the context of Fairfax, it was very manageable given maturity profile and the fact that Fairfax ran its insurance companies separately and could sell one without disruption if it needed to raise capital.  Noted that selling Odyssey alone would leave everything ese with no debt. 

 

I thought it was a bit dismissive given the level of debt that Fairfax carries, but regardless thought it was clear about what the capital allocation priorities will be going forward.  We are going to be seeing Fairfax buy back shares and bring in minority equity interests over the next three years, rather than pay down debt.

[Daphne]

I think this was one the best FFH AGMs. The fewer slides had a strong focus on how the strategic plan is being executed and how it will deliver in coming years. Not dissimilar to what Viking has been saying. The Q&A was bolstered by market perspectives from some key insurance heads and brief, off the cuff remarks by associate leaders on the theme of how to succeed through opportunistic investing with an eye to longer term results. The mood, during and after, reflected the satisfaction most investors are feeling both with the current results and their sense of the longer term prospects. Generally no concern about softening insurance markets because we could see that it would be well tempered at FFH by growing strength in the bond portfolio and the growing power of compounding. The future is looking very bright and maybe, dare I say, somewhat less lumpy. 

[modiva]

Thanks Viking and everyone for sharing notes.  I couldn't come there in person and had to settle for live webcast which I enjoyed listening to.  Besides all the things about strategy, numbers, market etc. I am impressed by their culture. How they treat their people, how they don't do layoffs, the long tenure of the leaders, and importantly how they sustain their culture across geographies and acquisitions.  Culture is #1 determinant of long-term scale and success, and their success in this area further reinforces long-term conviction in Fairfax for me.