Fairfax Financial - 80 of the Best Posts All in One Document

[Viking]

Updated April 8, 2024: Chapter 1 (overview of Fairfax) and Chapter 4 (float) have been updated. Updated versions of both the PDF file and Excel workbook are attached below.

 

For members who enjoy reading my posts on Fairfax I have attached at the bottom of this post two documents:

1.) Fairfax - Hiding in Plain Sight: PDF file contains about 80 of my best posts on Fairfax, organized into 16 chapters (now +350 pages long).

2.) Excel workbook: companion document to the PDF file, contains 11 worksheets (see below for details).

 

Sanjeev, thanks for everything you do running this board. For all the members on this investing forum, ‘thank you’ for breaking bread on a daily basis and sharing your thoughts on investing and life. Over the years, it has been a life changing experience for me and my family. What is contained in this document is the collective wisdom of this group. Let’s hope i have captured it reasonably well.

 

I always appreciate getting some feedback… maybe one or two things you like and one or two things you don’t. What is missing? Thank you.

 

A message from the legal department: Both documents are incomplete and contain errors. What is contained in the attached documents is not intended to be investing/financial advice. Its purpose is to educate and entertain.

 

Have a great 2024! Viking

-----------

The Excel file contains 11  worksheets:

1.) FFH-23: lists and tracks many of Fairfax's equity holdings in real time 

2.) Size: ranking of Fairfax's equity holdings by size 
3.) Moves: detailed compilation of many on Fairfax's transitions going back to 2010 - organized by year

4.) 23 Earn Est: detailed 2023 earnings estimate

5.) Premiums: the build for 'underwriting profit'
6.) Interest: the build for 'interest and dividend income'

7.) Associates: the build for 'share of profit of associates'

8.) Investments: the build for return on the total investment portfolio

9.) Shares: reviews 'effective shares outstanding'

10.) Float: the build for float

11.) 13yr View: A 13 year view of many key metrics for Fairfax

12.) Effects of discounting and risk adjustment - IFRS 17: quarterly summary of build

 

Fairfax Apr 8 2024.pdf Fairfax Apr 8 2024.xlsx

Edited April 8 by Viking

[anshulpuri54@gmail.com]

Thanks for sharing this, looking forward to reading. 

[cwericb]

Viking, I just want to say thanks once again for all your work on Fairfax that you have been so kind to share with us.

 

Relative to many here, I am just a small (and relatively clueless) investor. But when I first decided to enter the stock market Fairfax intrigued me and then I stumbled on to the predecessor of this forum - thank you Sanjeev. I followed the old forum(s) for about a year before I made my first venture into the market. The first stock I purchased was Fairfax in 2007 and I jumped in with both feet at $220/share.

 

Since then I have added FFH at the dips and have yet to part with a single share. While there were times when Fairfax under performed, there were also a number of times when the markets seemed to be falling apart, yet Fairfax either held it’s own or outperformed, especially during the GFC.

 

With the runup over the past couple of years, FFH has now worked itself up to about 55% of my stock portfolio, while that does tend to make me a little nervous at times, I ain’t going anywhere yet.

 

But the insight that you and others on the Board have shared, has given me a much better understanding of the company and much more importantly, insight into the company’s most likely future trajectory.

 

There are a good number of regular contributors here, some are newer and some are ‘the old guard’, but all have shared their valuable insights into the inner workings of Fairfax in a forum that could have been assembled in no other way. Sincerest thanks to all and especially Sanjeev for making the board possible.

 

CWEB

[Maverick47]

Thanks @Viking!  I’ve learned a lot from your posts, and am grateful that you’ve consolidated so many of them in a single document.  With your generous sharing, I feel as if I have gained a comprehensive understanding of the company that makes up a large portion of my retirement account.  Much appreciated!

[Parsad]

Hi Viking,

 

Just an extraordinary collection of posts!  Thank you so much for doing this and contributing to the COBF!

 

Sanjeev

[Xerxes]

Absolutely amazing. Thanks for all of your support and generosity. 
 

Cheers !

[thowed]

Yes, many thanks.  I knew a little bit about Fairfax before, but it has been this Board, and especially your posts that have been the foundation for my understanding of the company that has led to my investments.

 

Also thanks to Sanjeev.

 

And we shouldn't forget Prem and the Fairfax team, too!

 

Cheers!

[John Hjorth]

@Viking,

 

Thank you for what is to me a gem! -Yes, it's contextual, but still a quite comprehensive write-up on an Insurance company, that is actually quite complicated.

 

One question here for both Lars [ @Viking ] and Sanjeev [ @Parsad ] : I suppose it's intentional, that non-CoBF members [so called CoBF guests] can download the attached file in the starting post of this topic, right? [Actually, that is not an obviousness to me personally.]

[Viking]

6 minutes ago, John Hjorth said:

@Viking,

 

Thank you for what is to me a gem! -Yes, it's contextual, but still a quite comprehensive write-up on an Insurance company, that is actually quite complicated.

 

One question here for both Lars [ @Viking ] and Sanjeev [ @Parsad ] : I suppose it's intentional, that non-CoBF members [so called CoBF guests] can download the attached file in the starting post of this topic, right? [Actually, that is not an obviousness to me personally.]

 

@John Hjorth thank you for your comments.

 

To answer your question, yes, guests can download the PDF file for free. That is why the post was put in the Books thread. Making the file available for free was very important to me - its goal is to educate and entertain. To do this it also needs to be accessible to all. Hopefully it pulls more investors to this wonderful forum and motivates them to become active, contributing members.   

[John Hjorth]

Thank you for elaborating, @Viking,

 

Makes lot of sense, based on what you want to achieve with it.

[TorontoRaptorsFan]

Thank you Viking!!!!

[Munger_Disciple]

Thanks for posting your work @Viking. You are certainly the most enthusiastic & prolific FFH poster. 

[Parsad]

5 hours ago, Munger_Disciple said:

Thanks for posting your work @Viking. You are certainly the most enthusiastic & prolific FFH poster. 

 

After seeing Vikings compilation, I was going to get Gregmal to do one for JOE, but it would be littered with eff bombs!   

 

Equally interesting and a stock that I had no particular love for over the last 15 years...but he similarly changed the thinking of a lot of investors on it.  That being said, I still missed it!

 

We're lucky with the members we've had on here...past and present...they've illuminated ideas for many and many have become wealthy from them!  

 

Cheers!

[Munger_Disciple]

29 minutes ago, Parsad said:

 

After seeing Vikings compilation, I was going to get Gregmal to do one for JOE, but it would be littered with eff bombs!   

 

Equally interesting and a stock that I had no particular love for over the last 15 years...but he similarly changed the thinking of a lot of investors on it.  That being said, I still missed it!

 

We're lucky with the members we've had on here...past and present...they've illuminated ideas for many and many have become wealthy from them!  

 

Cheers!

 

 

@Viking certainly made me a take a look at FFH with a fresh pair of eyes. I am glad I did thanks to his prodding & bought FFH after re-analyzing it this year. I agree with you however that it would be nice to see less leverage & more unencumbered cash at the parent. 

Edited August 6, 2023 by Munger_Disciple

[backtothebeach]

Great work! It's eye-opening to see how much information is actually out there about a company's dealings, if one reads absolutely everything available. I assume you are not only reading FFH's filings, but also filings of a long list of companies they are involved with, press releases, maybe even court cases, and who knows what else. Doing that over years/decades and keeping track of all of it...amazing. Thank you for sharing it so generously!

 

One aesthetic point, the disclaimer in the footer "This document is not intended to be financial advice. Its purpose is to educate and entertain." on every page is the same size as the main text and very close to it, so it kind of interferes with the reading. Maybe make it half size, a different font, and a bit further from the text.

[Ghost]

Thank you Viking for all the work you have done. 

 

Perhaps a very minor edit...adding USD on the worksheet "23 Earning Est".  (but I believe most people here would know the figures are quoted in USD)

Edited August 8, 2023 by Ghost

[Viking]

6 hours ago, backtothebeach said:

Great work! It's eye-opening to see how much information is actually out there about a company's dealings, if one reads absolutely everything available. I assume you are not only reading FFH's filings, but also filings of a long list of companies they are involved with, press releases, maybe even court cases, and who knows what else. Doing that over years/decades and keeping track of all of it...amazing. Thank you for sharing it so generously!

 

One aesthetic point, the disclaimer in the footer "This document is not intended to be financial advice. Its purpose is to educate and entertain." on every page is the same size as the main text and very close to it, so it kind of interferes with the reading. Maybe make it half size, a different font, and a bit further from the text.

 

@backtothebeach Yes, I also found the footer to be annoying. I changed the footer as you suggested. I also did a re-write of Chapter 1, making the information current. Scroll up to the first post in this thread to view the new (updated) PDF file. Please keep the suggestions for improvement coming. 

[Gregmal]

On 8/5/2023 at 9:36 PM, Parsad said:

 

After seeing Vikings compilation, I was going to get Gregmal to do one for JOE, but it would be littered with eff bombs!   

 

Equally interesting and a stock that I had no particular love for over the last 15 years...but he similarly changed the thinking of a lot of investors on it.  That being said, I still missed it!

 

We're lucky with the members we've had on here...past and present...they've illuminated ideas for many and many have become wealthy from them!  

 

Cheers!

This is a world class document/collection of analysis/thought process crystallization/whatever you wanna call it. I simply dont have the skillset or attention span to produce something this organized so it would be a nonstarter anyway. I kind of thrive off moving parts and disfunction. Vikings work was so precise it was impossible to miss. Still working though it all but indeed so much of this stuff is shifting and pivoting when called for and that begins with ones own biases. 

[vinod1]

I missed this the first time you posted. You should be calling this "Security I Like Best"

 

Fantastic job! Thank you for posting.

 

Vinod

[Morgan]

Incredible work Viking! 

 

Thank you for sharing! 

[Viking]

On 8/4/2023 at 6:07 PM, Viking said:

Updated January 13, 2024: For members who enjoy reading my posts on Fairfax I have attached at the bottom of this post two documents:

1.) Fairfax - Hiding in Plain Sight: PDF file contains about 70 of my best posts on Fairfax, organized into 16 chapters (now +300 pages long).

2.) Excel workbook: companion document to the PDF file, contains 11 worksheets (see below for details).

 

Both documents have seen a fair number of updates/changes from my last update (Dec 23). Of interest, the PDF file had 477 downloads over the past 3 weeks. 

 

Sanjeev, thanks for everything you do running this board. For all the members on this investing forum, ‘thank you’ for breaking bread on a daily basis and sharing your thoughts on investing and life. Over the years, it has been a life changing experience for me and my family. What is contained in this document is the collective wisdom of this group. Let’s hope i have captured it reasonably well.

 

I always appreciate getting some feedback… maybe one or two things you like and one or two things you don’t. What is missing? Thank you.

 

A message from the legal department: Both documents are incomplete and contain errors. What is contained in the attached documents is not intended to be investing/financial advice. Its purpose is to educate and entertain.

 

Have a great 2024! Viking

-----------

The Excel file contains 11  worksheets:

1.) FFH-23: lists and tracks many of Fairfax's equity holdings in real time 

2.) Size: ranking of Fairfax's equity holdings by size 
3.) Moves: detailed compilation of many on Fairfax's transitions going back to 2010 - organized by year

4.) 23 Earn Est: detailed 2023 earnings estimate

5.) Premiums: the build for 'underwriting profit'
6.) Interest: the build for 'interest and dividend income'

7.) Associates: the build for 'share of profit of associates'

8.) Investments: the build for return on the total investment portfolio

9.) Shares: reviews 'effective shares outstanding'

10.) Float: the build for float

11.) 13yr View: A 13 year view of many key metrics for Fairfax

12.) Effects of discounting and risk adjustment - IFRS 17: quarterly summary of build

 

 

Fairfax Jan 10 2024.pdf 14.48 MB · 0 downloads Fairfax Jan 10 2024.xlsx 212.38 kB · 0 downloads

 

For board members who are interested I have just posted an updated version of 'Fairfax - Hiding in Plain Sight' and the companion Excel workbook. It includes lots of updates from the past 3 weeks: Chapter 1 has been updated. Updates to Fairfax India, BIAL, Hellenic Bank/Eurobank as well as estimated Q4 equity gains and YE equity rankings. I have also added Chapter 16: Education/Information on P/C insurance - just a few items today; moving forward, as i find good material i will add to it. 

 

The document is now contains over 300 pages of information on Fairfax.   

 

Let me know if you have any suggestions for improvement. Missing material? Errors?

 

Have a great 2024!

 

PS: FYI, I will always keep the most recent version of both documents (PDF file and Excel workbook) in the first post of this thread. 

Edited January 13 by Viking

[Dinar]

There is a write-up on VIC from December 13th pitching Fairfax India.  The India based writer states that in his opinion, the value of the airport is more than $4.2bn not counting the land (probably worth several billion more in my uneducated opinion) vs $2.7bn valuation by Fairfax India.  If the writer is correct and land is say worth $3bn, then value to Fairfax India is higher by $2.7bn or so and to Fairfax by billion to billion and a half.  At an extreme, could be another $100 per share, if land is worth $6bn+ and airport is worth north of $5-6bn.  (The writer uses a 12% discount rate.)

[Viking]

4 hours ago, Dinar said:

There is a write-up on VIC from December 13th pitching Fairfax India.  The India based writer states that in his opinion, the value of the airport is more than $4.2bn not counting the land (probably worth several billion more in my uneducated opinion) vs $2.7bn valuation by Fairfax India.  If the writer is correct and land is say worth $3bn, then value to Fairfax India is higher by $2.7bn or so and to Fairfax by billion to billion and a half.  At an extreme, could be another $100 per share, if land is worth $6bn+ and airport is worth north of $5-6bn.  (The writer uses a 12% discount rate.)

@Dinar I agree that BIAL is an undervalued asset. When we see that illusive Achorage IPO from Fairfax India we should get some clarity. One of the things that I like about Fairfax today is they have a number of assets that are undervalued in ‘book value’, some significantly so. Eurobank is another example. As is Thomas Cook India. And Digit. What about private holdings like AGT and Peak Achievement (Bauer Hockey) etc? And each year the ‘hidden value’ just keeps growing. Chug, chug, chug. This is setting the table for the next round of sizable realized gains at Fairfax. $500 million here… $500 million there… pretty soon you are talking real money. This is all upside to current earnings estimates. 
 

Unlike Berkshire, Fairfax is much more likely to surface value via a sale/merger/partnership etc. I like Fairfax’s approach. Selling pet insurance for $1.4 billion last year was brilliant. As was selling Resolute at the top of the lumber cycle. Buying more of GIG will result in an upward revaluation of Fairfax’s legacy position (about $290 million when they report Q4)? The recent Ambridge sale looks very opportunistic. All the cash from the sales has since been redeployed smartly… keeping the compounding machine going.
 

Fairfax now has a pretty good collection of insurance and equity holdings ($18 billion in total for equities) that are growing in value each year, a chunk of which is not captured in book value. Fairfax has not been in this position that i can ever remember - in terms of most of their equity holdings compounding in value at the same time. As a reminder, total investments are likely over $60 billion (including GIG). Significant value has been created in recent years. And much more value will likely be created in the coming years. Another tailwind that will likely surprise people in the coming years… like who could possible have known? Even when it is staring them right in the face. 

Edited January 15 by Viking

[Viking]

Updated April 8: For board members who are interested I have posted an updated version of 'Fairfax - Hiding in Plain Sight' PDF and the companion Excel workbook. Chapter 1 (overview of Fairfax) and Chapter 4 (float) have been updated.

 

The PDF contains 350 pages of information on Fairfax. The Excel file contains a detailed build for my earnings estimate. Let me know if you have any suggestions for improvement. Missing material? Errors?

 

Happy reading!

 

PS: FYI, I will always keep the most recent version of both documents (PDF file and Excel workbook) in the first post of this thread.

 

Fairfax Apr 8 2024.pdf Fairfax Apr 8 2024.xlsx

Edited April 8 by Viking