Fairfax 2025

[gfp]

1 hour ago, Munger_Disciple said:

 

Yes I was happy to read his discussion on treasury shares. Super helpful.

 

Me too! 

[treasurehunt]

3 hours ago, benchmark said:

I agree it's cheap. But if it takes 10 years to get to 100B, it will be disappointing, as the annualized return would be roughly 11.6%.

 

We should get an extra 1-1.5% from dividends and 2-3% from buybacks. If the market cap goes up by 11.6% per year, our total return will probably be around 15% annualized. I'd be thrilled with that over 10 years.

[ValueMaven]

US ADR holder here - love the letter ... really enjoyed the section on the treasury shares...read that twice.  Seems very Constellation like.  

11.6% over 10yrs with dividends and buybacks ... plus some opportunistic buys/sells is a homerun in this market

[73 Reds]

53 minutes ago, ValueMaven said:

US ADR holder here - love the letter ... really enjoyed the section on the treasury shares...read that twice.  Seems very Constellation like.  

11.6% over 10yrs with dividends and buybacks ... plus some opportunistic buys/sells is a homerun in this market

+1. Anyone here who would not be happy with such a 10-year return has never lived through a prolonged downturn.  Not talking about the onset of Covid which was a mere blip on the radar or some prior recessionary drawdowns which were over before the recession was even evident.  When broad markets go down - and stay down 30%, 40% or more, you'll understand.  It is going to happen, the only question is when.

[investmd]

On 3/7/2025 at 3:03 PM, Junior R said:

 

This is odd. Screening of asymptomatic heart disease has not yet been shown to save lives. In some cases, based on the anatomy, the benefits of intervention do outweigh the risks. However, blanket screening and treatment just because of asymptomatic finding leads to worse outcomes due to complications from the procedure. International guidelines do exist for reasons. 

[dartmonkey]

5 hours ago, investmd said:

Screening of asymptomatic heart disease has not yet been shown to save lives. In some cases, based on the anatomy, the benefits of intervention do outweigh the risks. However, blanket screening and treatment just because of asymptomatic finding leads to worse outcomes due to complications from the procedure.

 

Do we know what procedure they have offered to their employees who are 50 and over? Screening for risk factors and offering target therapies to reduce risk factors, to people identified as being at high risk, is standard medical practice. Fairfax is probably doing more than this, perhaps testing Lp(a), or doing a scan for coronary artery calcification, or doing an exercise stress test on a treadmill. These 3 screening techniques may not be cost effective, but it is hard to see how they could lead to worse outcomes, and it is quite plausible that any of them, or all 3, would lead to better outcomes, even if they are not recommended as cost effective by organizations like the USPSTF. 

[investmd]

7 hours ago, dartmonkey said:

 

Do we know what procedure they have offered to their employees who are 50 and over? Screening for risk factors and offering target therapies to reduce risk factors, to people identified as being at high risk, is standard medical practice. Fairfax is probably doing more than this, perhaps testing Lp(a), or doing a scan for coronary artery calcification, or doing an exercise stress test on a treadmill. These 3 screening techniques may not be cost effective, but it is hard to see how they could lead to worse outcomes, and it is quite plausible that any of them, or all 3, would lead to better outcomes, even if they are not recommended as cost effective by organizations like the USPSTF. 

@dartmonkey: agree. Don't know what "test" the original post was referring to. Here is the post: "Vinodh had a cardiac arrest because he did not know that one of his arteries was 99% blocked and needed a stent. Because of Vinodh, we have initiated a simple testing of the heart across all our companies in the world for any employee 50 years or older and their spouse. Already, we have saved about 10 employees in North America who needed a stent and didn’t know about it. Vinodh’s legacy!" 

 

What is odd is saying they have saved lives of 10 presumably asymptomatic employees age > 50 who underwent a stent procedure. 

 

I think Prem Watsa has good intentions and aims to help. The translation of medical information to him is another matter. 

 

While starting a statin or medical mgmt may be low risk and appropriate, I've seen lots of folks have interventional procedures like stents, CABG that may not be considered guideline directed therapy. Over treating is  especially common in countries where there is a fee for service medical system. 

 

 

[gfp]

I got a fill at $1388 USD so far this morning - how low we gonna goooo

 

and another at 1386

and another at 1376!

and 1374.52

and 1370. 1369!

Edited Monday at 02:18 PM by gfp

[yesman182]

Why is it down? Because of not being added to the index, or people mad because the letter didn't indicate we would grow at 30% forever? 

[gfp]

15 minutes ago, yesman182 said:

Why is it down? Because of not being added to the index, or people mad because the letter didn't indicate we would grow at 30% forever? 

 

Who knows who cares - the whole stock market is down today.  It's a bear market baby

[gary17]

Market didn't like Mark Carney win i think.  Now the conservatives won't stand much of a chance of a majority. Maybe a minority or some other form of government...

[adventurer]

52 minutes ago, gfp said:

I got a fill at $1388 USD so far this morning - how low we gonna goooo

 

and another at 1386

and another at 1376!

and 1374.52

and 1370. 1369!

How many orders do you have in place?  Why not wait for a bigger pullback and then make a bigger order? 

[gfp]

1 hour ago, adventurer said:

How many orders do you have in place?  Why not wait for a bigger pullback and then make a bigger order? 

 

I always buy like this - one after another lower and lower and lower.  The lower it goes the more fills, you never know when it will stop going down.  I don't have any interest in waiting around for one big order down low that may go completely un-filled.  Just got 20 at 1366.  And 1359!  And 1354!

 

So far, $1339 USD is the lowest I have been filled on

 

By the way - I sell like this also.  Look at this screenshot from last week - each tiny red line is a sell order.  It's like a red cloud

 

Edited Monday at 03:45 PM by gfp

[thowed]

18 minutes ago, gary17 said:

Market didn't like Mark Carney win i think.  Now the conservatives won't stand much of a chance of a majority. Maybe a minority or some other form of government...

 

Would be very grateful if you can give me a quick explanation of why markets not liking Carney win.  I only know him as our ex-Bank governor where he seemed pretty sound and sensible.  Thanks

[gary17]

i'm not qualified at all to give any opinion, there are many intelligent investors here.

it's just a feeling more than anything else,  that a conservative government would likely see policy shifts away from higher taxation and towards one that is more pro-business. The Liberal government is the one that taxed financial instituions.      The current conservatives in Canada are in opposition and had a real great chance of forming a majority government up until about 6 weeks ago.  Trump & Carney win in my view seems to have solidified another minority government, probably a minority Libearal , and that means the chance of a shift in policy that the market may be expecting will not be materializing. 

[thowed]

@gary17 Many thanks.  I'll read up on it, but interesting to get a person's perspective too.

[Xerxes]

41 minutes ago, gary17 said:

Market didn't like Mark Carney win i think.  Now the conservatives won't stand much of a chance of a majority. Maybe a minority or some other form of government...

I am not sure if it relates to Carney. 
 

I think the Canadian bellwethers (like RBC, TD) would be falling first if that was indeed the reaction, not some obscure family-controlled out of index insurance company 

[adventurer]

1 hour ago, gfp said:

 

I always buy like this - one after another lower and lower and lower.  The lower it goes the more fills, you never know when it will stop going down.  I don't have any interest in waiting around for one big order down low that may go completely un-filled.  Just got 20 at 1366.  And 1359!  And 1354!

 

So far, $1349 USD is the lowest I have been filled on

 

By the way - I sell like this also.  Look at this screenshot from last week - each tiny red line is a sell order.  It's like a red cloud

 

Interesting way. Might do it myself, only with less shares 

[gfp]

4 minutes ago, adventurer said:

Interesting way. Might do it myself, only with less shares 

 

1339 usd so far - that's basically $29 Billion USD.   Not a lot of risk in my book

[TwoCitiesCapital]

I trust Fairfax is buying on my behalf - would want a larger pullback to allocate additional capital of my own to it. Was surprised to see the -5% activity today after the recent earnings report was so strong. 

[bluedevil]

On 3/8/2025 at 4:49 PM, Viking said:

I think that is the best letter that Prem has ever written.

• It is full of super valuable information.
• And it has multiple layers of really good information (for people like me who like to get into the weeds).

Great discussion of:

• The culture/people of Fairfax. 
• The importance of their decentralized operating structure.
• The insurance business - and its quality.
• The various equity holdings - including their level of profitability

Prem also answered a number of questions that had been circulating on CofBF (how to think about diluted shares etc). And he clearly laid out where Fairfax is today (its fundamentals/prospects) and why it is a great investment.

 

Now compare Prem’s letter to Tom Gaynor’s letter. In terms of giving shareholders useful information to help them understand the company/their investment. There is no comparison - one is like watching a high school basketball game and the other is like watching an NBA game.
 

Prem’s letter this year is one of the best that you will find from a CEO - in any industry. It really demonstrates just how well the team at Fairfax (insurance and investments) is executing today (truth be told - for the last 5 years).

 

Anyways, I just wanted to post a short/incomplete summary while I have time. I am helping a close family member prep their house for sale… I am going to be busy for about a week - my posting will be minimal (like it has been for a couple of days).

 

While I am a long-time fan of Tom Gaynor, I have to agree.  The biggest contrast that stands out to me is what is going on in the insurance operations between FFH and MKL.  I totally get that Gaynor has a different style on equity investments, and i think it is very well explained and i understand and admire it, he is always true to it, and the results have over the long-term been great.  But on the insurance side, Fairfax does really seem to be operating at an entirely different level ever since they promoted Andy Barnard to oversee it all.  The performance since then has been very consistent and stellar.  On the Markel side, they have been talking for some period about the problems but it is hard to get a real sense of what is going on from Tom's letter, and the gentleman running it does not have a long record of success on the insurance side.  And what happens to investments after Gaynor, whereas Fairfax seems to have a great succession plan in place.  Not saying Markel is not a good stock for the long term, but Fairfax does seem like they are operating at a higher level for the long term.  

[Junior R]

most likely the sell off is due to people thinking this was getting added to Index Friday...nothing to do with new Canadian government as @Xerxes also stated 

[MMM20]

The right answer is probably “noise” / unwinding of index add speculation, but I did see that Andy Barnard sold almost C$5mm of stock last week. Of course, that’s only ~5% for him and insiders sell for many reasons.
 

Edited Monday at 05:00 PM by MMM20

[73 Reds]

56 minutes ago, TwoCitiesCapital said:

I trust Fairfax is buying on my behalf - would want a larger pullback to allocate additional capital of my own to it. Was surprised to see the -5% activity today after the recent earnings report was so strong. 

Me too.  But anyone who follows our favorite Morningstar analyst probably sold because y/y earnings were down.  He's probably congratulating himself and cuing up another piece on why FFH has no moat.

[Hsmpanl]

No clue why it sold off but I followed gfp and took the opportunity to add. Hope Fairfax was buying on my behalf as well!