Fairfax 2025

[gfp]

16 minutes ago, Hsmpanl said:

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!

 

I bought all day and ended up with an average buy price of $1362.72 USD per share at IB.  Was buying through fidelity also but too lazy to figure the average.  Probably similar.

 

Certainly nothing in the weekend's reports made me less bullish.  I have a lot of cash since december and put some more of that into Fairfax.

[Buffett_Groupie]

My serious misunderstanding of Buffett's so-called "Be greedy when others are fearful":

 

On the first day when I saw the stock price fell, I quickly bought it, thinking it was a once-in-a-lifetime opportunity. The next day, the price fell even more, but I wasn't worried because Buffett once said, "Be greedy when others are fearful," so I continued to buy. However, on the third day, the price fell again and others are still fearful, but I didn't have any money left, so I became fearful, too.

 

Later, I realized that the difference between me and Buffett isn't the lack of understanding of value investing, it's the LACK of MONEY LOL

[Hektor]

2 minutes ago, Buffett_Groupie said:

My serious misunderstanding of Buffett's so-called "Be greedy when others are fearful":

 

On the first day when I saw the stock price fell, I quickly bought it, thinking it was a once-in-a-lifetime opportunity. The next day, the price fell even more, but I wasn't worried because Buffett once said, "Be greedy when others are fearful," so I continued to buy. However, on the third day, the price fell again and others are still fearful, but I didn't have any money left, so I became fearful, too.

 

Later, I realized that the difference between me and Buffett isn't the lack of understanding of value investing, it's the LACK of MONEY LOL

 Good one, @Buffett_Groupie

[MMM20]

 

If the Bangalore airport fair value is really understated by ~2-3x, would FFH’s book value upon the airport IPO be up +10-20% from that alone? Is that roughly right?

 

Edited March 10, 2025 by MMM20

[gfp]

3 minutes ago, MMM20 said:

 

If the Bangalore airport fair value is really understated by ~2-3x, would FFH’s book value upon the airport IPO be up +10-20% from that alone? Is that roughly right?

 

 

That sounds high.  Fairfax (FFH) book value is $23 Billion.  10-20% would suggest a write-up of $2.3 Billion to $4.6 Billion on their portion of Fairfax India alone.

[MMM20]

8 minutes ago, gfp said:

 

That sounds high.  Fairfax (FFH) book value is $23 Billion.  10-20% would suggest a write-up of $2.3 Billion to $4.6 Billion on their portion of Fairfax India alone.

Right, so maybe more like +7-15% to FFH BVPS unless I’m missing something about minority interest? Thanks!

 

Edited March 10, 2025 by MMM20

[gfp]

8 minutes ago, MMM20 said:

Right, so maybe more like +7-15% to FFH BVPS unless I’m missing something about minority interest? Thanks!

 

 

My understanding is that Fairfax mother ship (FFH) has about a 29.5% look-through ownership interest in BIAL currently.  This does not factor in any shares sold in an IPO but does factor in the 11.5% of Anchorage they have apparently already sold to OMERS.

 

So your 7-15% bv bump still sounds high

 

Fairfax Financial owns 42.7% of Fairfax India, Fairfax India economically owns 68.99% of BIAL (Controls 74%)

Edited March 10, 2025 by gfp

[Blugolds]

19 minutes ago, Buffett_Groupie said:

My serious misunderstanding of Buffett's so-called "Be greedy when others are fearful":

 

On the first day when I saw the stock price fell, I quickly bought it, thinking it was a once-in-a-lifetime opportunity. The next day, the price fell even more, but I wasn't worried because Buffett once said, "Be greedy when others are fearful," so I continued to buy. However, on the third day, the price fell again and others are still fearful, but I didn't have any money left, so I became fearful, too.

 

Later, I realized that the difference between me and Buffett isn't the lack of understanding of value investing, it's the LACK of MONEY LOL

 

I used to do that as well, like a 17 yr old boy on prom night...I've also waited and missed my pitch, now I try to wade into the pool rather than cannonball, once in a while I get lucky and bottom tick, but "I'd rather be mostly right, than precisely wrong" when buying. With names like BRK/FFH Im not worried about being precisely wrong anyway. 

[SafetyinNumbers]

58 minutes ago, gfp said:

 

My understanding is that Fairfax mother ship (FFH) has about a 29.5% look-through ownership interest in BIAL currently.  This does not factor in any shares sold in an IPO but does factor in the 11.5% of Anchorage they have apparently already sold to OMERS.

 

So your 7-15% bv bump still sounds high

 

Fairfax Financial owns 42.7% of Fairfax India, Fairfax India economically owns 68.99% of BIAL (Controls 74%)

Plus the FIH performance fee to FFH. 

[value_hunter]

FFH bought $150M worth stock on Mar 7.

https://ceo.ca/insiders-dashboard?symbol=ffh

[Redskin212]

And hopefully another $150 million today

[MungerWunger]

48 minutes ago, value_hunter said:

FFH bought $150M worth stock on Mar 7.

https://ceo.ca/insiders-dashboard?symbol=ffh

Transaction date Feb 28 but filed Mar 7

[SafetyinNumbers]

4 hours ago, MungerWunger said:

Transaction date Feb 28 but filed Mar 7

They cancelled the shares they bought in all of February on Feb 28 but they are capped at repurchasing 9,360 shares per day unless they get the opportunity to use the weekly block exemption.

[Junior R]

Quote

08:02 AM EDT, 03/10/2025 (MT Newswires) -- CIBC Capital Markets raised its price target on Fairfax Financial Holdings Ltd. (FFH.TO) to $2500 from $2400.

Analyst Nik Priebe maintained an Outperform rating on shares of the Canadian financial holding company following the release of its 2024 annual report on Friday.

"Some of the commentary in the annual report seemed to corroborate our belief that the rate of change is slowing," Priebe said in a note to clients.

"The dramatic build and expansion of earnings power that occurred over the last few years could be plateauing on a go-forward basis," the analyst said.

"...We see potential for a much more moderate rate of earnings growth and some downside risk if the pricing environment softens more meaningfully across P&C markets or if an economic shock causes bond yields to drop," Priebe said.

 

[SafetyinNumbers]

5 minutes ago, Junior R said:

 

Prem guides to $150/sh before gains for the next 4 years and CIBC is at $127 and $146 for 2025 and 2026, respectively. They are less optimistic on underwriting and don’t understand how duration works in the bond portfolio as they fear lower rates.

[MMM20]

5 hours ago, SafetyinNumbers said:

They cancelled the shares they bought in all of February on Feb 28 but they are capped at repurchasing 9,360 shares per day unless they get the opportunity to use the weekly block exemption.

So now on pace for almost 10% total annual shareholder yield? Am I missing something? 

[SafetyinNumbers]

2 minutes ago, MMM20 said:

So now on pace for almost 10% total annual shareholder yield? Am I missing something? 

If they bought the max every day but they haven’t done that historically. 

[nwoodman]

6 hours ago, Junior R said:

 

I tend to agree. I wouldn’t see it as a negative though.  I think where analysts are missing  the mark arises from the unknowable (timing wise) but inevitable rise in yield spreads. Howard Marks touched on this recently and rationalised it but  you can guarantee he’s not swinging for the bleachers.

 

https://www.oaktreecapital.com/insights/memo/gimme-credit

 

 

 

Edited March 11, 2025 by nwoodman

[Viking]

On 3/10/2025 at 10:25 AM, bluedevil said:

 

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.  

@bluedevil , a pivotal time for both Markel and Fairfax was 2016 and the Allied World acquisition. I think Markel was interested but the deal did not happen due to ‘culture compatibility concerns’. I wonder if this has something to do with centralization/decentralization organization structures.

 

Fairfax is very decentralized - insurance and investments. My guess is Allied World wanted a parent where AW would be allowed to be run as a stand alone company. Fairfax was the perfect fit.

 

Markel? Do they have a more centralized structure - ie the Markel Way - with head office wanting a say in how things are run? I’m not sure.

 

Prems annual letter this year did a great job of explaining Fairfax’s decentralized structure and its importance to the company. Insurance alone has 250 profit centers - essentially 250 companys being run by entrepreneurs. For this to work, you need someone like Andy at the top. But if you can pull it off, it is very powerful over time.

 

Fairfax’s insurance business is not one company. It is many companies (250):

- large and small

- located all over the world

- exploiting local/different insurance markets

 

It has taken Fairfax decades to build this model. That is why they view it as part of their moat. Makes sense.

 

—————

 

I worked at Kraft Canada for years - a great example of a highly centralized / top down organization. Very bad at innovation/growing organically so cost cutting/restructuring was constant (very disruptive). Focus at the end of every quarter was hitting the numbers so Wall Street would be happy with senior management/the company. Tail wagging the dog. Good place to work - terrible investment. 

Edited March 11, 2025 by Viking

[mananainvesting]

1 hour ago, Viking said:

@bluedevil , a pivotal time for both Markel and Fairfax was 2016 and the Allied World acquisition. I think Markel was interested but the deal did not happen due to ‘culture compatibility concerns’. I wonder if this has something to do with centralization/decentralization organization structures.

 

Fairfax is very decentralized - insurance and investments. My guess is Allied World wanted a parent where AW would be allowed to be run as a stand alone company. Fairfax was the perfect fit.

 

Markel? Do they have a more centralized structure - ie the Markel Way - with head office wanting a say in how things are run? I’m not sure.

 

Prems annual letter this year did a great job of explaining Fairfax’s decentralized structure and its importance to the company. Insurance alone has 250 profit centers - essentially 250 companys being run by entrepreneurs. For this to work, you need someone like Andy at the top. But if you can pull it off, it is very powerful over time.

 

Fairfax’s insurance business is not one company. It is many companies (250):

- large and small

- located all over the world

- exploiting local/different insurance markets

 

It has taken Fairfax decades to build this model. That is why they view it as part of their moat. Makes sense.

 

—————

 

I worked at Kraft Canada for years - a great example of a highly centralized / top down organization. Very bad at innovation/growing organically so cost cutting/restructuring was constant (very disruptive). Focus at the end of every quarter was hitting the numbers so Wall Street would be happy with senior management/the company. Tail wagging the dog. Good place to work - terrible investment. 

 

 

@Viking : Having 250 profit centers / insurance companies also helps with risk management. One really bad judgement/decision/risk assessment by one insurance company doesn’t take Fairfax along with it. 

 

One thing I wonder is how they manage exposure to certain events as a combined entity? who overseas that and how effective is it  over the long run. 

 

[mananainvesting]

National Bank on $FFH.TO 

 

https://x.com/acorn_capital/status/1899557738361077921

Edited March 11, 2025 by mananainvesting

[Cigarbutt]

6 hours ago, mananainvesting said:

One thing I wonder is how they manage exposure to certain events as a combined entity? who overseas that and how effective is it  over the long run. 

See pages 13-14 of their report:

https://www.fairfax.ca/wp-content/uploads/2023-Fairfax-Financial-Holdings-Limited-ESG-Performance-Report.pdf

Overall, it seems that they have done well over the last few years with the risk 'appetite' aspect and maybe they are getting better?

It may take something like 250 years to know with more certainty though.

[mananainvesting]

@Cigarbutt Thanks for the share

[nwoodman]

Some notes on Amy Sherk, Fairfax’s new CFO attached.  Another 20+ year appointee, succession planning at its finest. 

Amy Sherk- The New Chief Financial Officer of Fairfax Financial Holdings….pdf

[Hoodlum]

This is an interesting development from India.  It looks like Valueattics Re will be operating separately from Go Digit, but with the same ownership structure.  They are the first private reinsurer approved by IRDA in India.

 

https://economictimes.indiatimes.com/industry/banking/finance/insure/valueattics-re-gets-reinsurer-licence-from-irdai/articleshow/118978805.cms?from=mdr

 

Valueattics Re, promoted by GoDigit promoters Kamesh Goyal and Prem Watsa, has secured reinsurer licence from insurance sector regulator Irdai. The company will start with an initial paid-up capital of Rs 210 crore to begin operations, it said in a statement on Thursday.

 

Approval was accorded to grant Certificate of Registration to Valueattics Reinsurance Ltd, the Insurance Regulatory and Development Authority of India (Irdai) said in an order.

 

It is the first reinsurer to be granted registration to carry out exclusively reinsurance business in the revamped regulatory landscape, Valueattics Re said quoting Irdai order.

Edited March 13, 2025 by Hoodlum