Fairfax Financial - Volume 2 - 90 of the Best Posts All in One Document

[Viking]

Updated December 2, 2024

 

Another update of my book/collection of posts on Fairfax is attached below. The big updates were to Chapter 2 (earnings) and Chapter 10 (consolidated equity holdings). Lots of other smaller updates have also been made - as this continues to be a working document for me.

 

I don't re-read the entire document when I post updated versions. If you see any big errors please let me know. The document is now almost 550 pages. My goal is not size - but I will continue to add material that I think adds value for those interested in learning more about Fairfax.  

 

Please note, not everything in the book has been brought up to date. That would have required a couple of months of work… and by the time it was done, much of it would be out of date again. My current plan is to keep updating parts of the document as time goes by. 

 

The bottom line, this document should be a much better resource for board members  / investors than what existed before. I hope you find it useful.

---------

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

1. Fairfax - The Emergence of a Wonderful Company:
   • PDF file contains more than 90 of my best posts on Fairfax from over the past 2 years, organized into 17 chapters.
2. Excel workbook:
   • Companion document to the PDF file, contains 14 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.

-----------

The Excel file contains 14 worksheets:

1. FFH-24: 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. Earnings Estimate: detailed 2024 & 2025 earnings estimate
5. Premiums: the build for 'underwriting profit'
6. Interest: the build for 'interest and dividend income'
7. Associate Equities: the build for 'share of profit of associates'
8. Consolidated Equities: Non-insurance Consolidated Companies
9. Investments: the build to calculate the return on the total investment portfolio
10. Shares: reviews 'effective shares outstanding'
11. Excess of Fair Value over Carrying Value: for the non-insurance associate and consolidated holdings
12. Float: the build for float
13. 13yr View: A 13 year view of many key metrics for Fairfax
14. IFRS 17: Effects of discounting and risk adjustment - quarterly summary of historical numbers used in earnings forecast

Fairfax Financial Volume 2 - Dec 2 2024.pdf

Fairfax Dec 1 2024.xlsx

Edited December 4 by Viking

[[email protected]]

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

[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! 

[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.)

[Thrifty3000]

22 hours ago, Viking said:

Updated June 22, 2024

 

I have completed another update of my book/collection of posts on Fairfax. I am calling this version ‘Second Edition’ because it has lots of updates from the last one published in early April. I am also changing the sub-title to ‘Emergence of a Wonderful Company’ because I think it better captures Fairfax as the company/opportunity exists today (and where it is going). The original version was published 10 months ago and had 14 chapters and 192 pages. 'Volume 2' has 17 chapters and +400 pages of information/analysis on Fairfax.

 

I have also made some structure changes:

- Much of Chapter 1 (intro to Fairfax) has been changed. Most of the repetition is gone.

- Chapter 2 (earnings estimate) has been completely updated and edited.

- I added a new Chapter - for misc topics.

- A number of posts have been moved to different chapters (that better capture their content).

- I have edited some of the titles to make them easier to understand when reading the table of contents.

- Any new content from the past 2 months (since the last update) has been added.

 

Please note, not everything in the book has been brought up to date to June 2024. That would have required a couple of months of work… and by the time it was done, much of it would be out of date again. My current plan is to keep updated parts of the document as time goes by. It continues to be a working document for me.

 

The bottom line, this document should be a much better resource for board members  / investors than what existed before. I hope you find it useful.

 

Viking

Fairfax Financial Volume 2 - June 22 2024.pdf 35.51 MB · 30 downloads

Fairfax June 20 2024.xlsx 308.34 kB · 11 downloads

Thanks @Viking! Truly amazing work.

[ValueMaven]

amazing work @Viking - thank you!!  interesting that the share price hasnt moved much over the last few months.  Hoping these buybacks continue.  

[Viking]

I have completed another update of my book/collection of posts on Fairfax. It contains lots of updates since the last version was published 2 months ago. The big change is the chapter on asset sales - all of my recent posts (over about a month) have been added. All other new posts from the past couple of months have also been added. 

 

Go to the first post at the top of this thread to access the updated PDF and Excel documents.

 

I don't re-read the entire document when I post updated versions. If you see any big errors please let me know. The document now almost 500 pages. My goal is not size - but I will continue to add material that I think adds value for those interested in learnings more about Fairfax.  

 

Please note, not everything in the book has been brought up to date. That would have required a couple of months of work… and by the time it was done, much of it would be out of date again. My current plan is to keep updated parts of the document as time goes by. It continues to be a working document for me.

 

The bottom line, this document should be a much better resource for board members  / investors than what existed before. I hope you find it useful.

Edited August 22 by Viking

[menlo]

Many thanks for sharing your insight and expertise!

[whatstheofficerproblem]

@Viking, I think a 'thank you' would be too little to express what I am feeling right now. I thank god for all the detours that led me to this forum, I started reading the 500 pager at 12 AM, stopped at 6 AM. I can't recall any moment in my lifetime ever where I spent that amount of time reading. This is now my holy book. Your dedication and passion inspires me and your knowledge overwhelms me. Thank you.

Edited October 23 by whatstheofficerproblem