Fairfax 2025

[Junior R]

23 hours ago, Viking said:

@Parsad, if I was in Wade’s shoes, and I wanted to sell some Fairfax for estate planning reasons I probable would start with my RRSP. Actually that is what I have been doing.

RRSP’s are wonderful accounts but too much is not a wonderful thing. One day they will be taxed at +50% (at death).
 

It is great to grow an RRSP to a couple of million. But much more than that and it becomes pretty much impossible to ever wind down in a tax efficient manner. Especially if you plan on working into later in life. 
 

All of my Fairfax is held in my TFSA and non-registered accounts today (those are the accounts I want to grow the fastest). I put my best ideas in those accounts. Today I hold very little Fairfax in my RRSP/LIF’s (this is where I do my tactical trades with Fairfax).

There is one way lol...say your rrsp is huge ...you could become non-resident in Canada move to country with no taxes ...pull out the money pay 25% withholding tax and then couple years later come back to Canada ...efficiently doing this makes it same percentage as capital gains...another thing about rrsp if you are really good at picking stocks (short term vs long term)...you could use it to just swing trade...but if you don't do any of the above then yup might screw you over in long run

[dartmonkey]

20 hours ago, Viking said:

RRSP’s are wonderful accounts but too much is not a wonderful thing. One day they will be taxed at +50% (at death).
 

It is great to grow an RRSP to a couple of million. But much more than that and it becomes pretty much impossible to ever wind down in a tax efficient manner.

My thinking is different. If I have $5m in an RRSP, yes, I will have to pay half of that (actually, more like 54%) in taxes. But if I so I really have $2.3m in that account, and the federal government has $2.7m. Like for any other investment, I will have to pay 54% of income generated by my $2.3m in funds, and also 54% of whatever income is generated on the $2.7m of government assets that I am allowed to manage. But the amazing feature of an RRSP is that the government will allow me to keep the other 46% of income I might generate on ITS FUNDS. That $2.7m acts sort of like insurance float, investing other people's money with the return coming to you. 

[Junior R]

19 minutes ago, dartmonkey said:

My thinking is different. If I have $5m in an RRSP, yes, I will have to pay half of that (actually, more like 54%) in taxes. But if I so I really have $2.3m in that account, and the federal government has $2.7m. Like for any other investment, I will have to pay 54% of income generated by my $2.3m in funds, and also 54% of whatever income is generated on the $2.7m of government assets that I am allowed to manage. But the amazing feature of an RRSP is that the government will allow me to keep the other 46% of income I might generate on ITS FUNDS. That $2.7m acts sort of like insurance float, investing other people's money with the return coming to you. 

thats also good point to...

[MMM20]

On 8/8/2025 at 5:32 PM, Haryana said:

 

Did he really sell all of his Fairfax shares? Maybe, he doesn't like holding them as he keeps getting more in compensation?.

https://www.theglobeandmail.com/investing/markets/stocks/FFH-T/pressreleases/33993853/public-market-insider-selling-at-fairfax-financial-holding-ffh/

"This represents a $15,518,472 divestment of the company's shares and an account share holdings change of -100.0%." 

 

Has anyone asked Fairfax to confirm that this is a true sale / to be taken at face value? If so, has anyone seen a key insider sell 100% of their holdings and not leave the company shortly thereafter? I hate to speculate, but I've always wondered if Wade wouldn't rather start his own thing at some point. Would he really eventually work for Ben? How much of a dent would that put in Fairfax's succession planning? I'm wondering if this is my cue to take this down to a normal core position, but I wanna avoid being too reactive and appreciate the board's thoughts.

 

 

Edited August 11, 2025 by MMM20

[gfp]

4 minutes ago, MMM20 said:

 

Has anyone asked the company to confirm that this is a true sale / to be taken at face value? If so, has anyone seen a key insider sell 100% of their holdings and not leave the company shortly thereafter? I hate to speculate, but I've always wondered if Wade wouldn't rather start his own thing at some point. Would he really eventually work for Ben? How much of a dent would that put in Fairfax's succession planning? I'm wondering if this is my cue to take this down to a normal core position, but I wanna avoid being too reactive and appreciate the board's thoughts.

 

 

It was a true sale of Wade's shares but he has a history of always doing this.  He still owns options to acquire over 25k FFH shares at prices far below the current market price.

 

He receives FFH shares and he periodically sells them all.  Look at his history on Sedi - he does the same thing over and over across many years.  

[MMM20]

3 minutes ago, gfp said:

 

 

It was a true sale of Wade's shares but he has a history of always doing this.  He still owns options to acquire over 25k FFH shares at prices far below the current market price.

 

He receives FFH shares and he periodically sells them all.  Look at his history on Sedi - he does the same thing over and over across many years.  

 

Thanks, I hadn't thought to check that. Long weekend! 

 

Not ideal from my POV but not a dealbreaker either.

 

Edited August 11, 2025 by MMM20

[thowed]

Thanks @gfp, that's very good info, to stop me wondering!

[Parsad]

6 hours ago, MMM20 said:

 

Has anyone asked Fairfax to confirm that this is a true sale / to be taken at face value? If so, has anyone seen a key insider sell 100% of their holdings and not leave the company shortly thereafter? I hate to speculate, but I've always wondered if Wade wouldn't rather start his own thing at some point. Would he really eventually work for Ben? How much of a dent would that put in Fairfax's succession planning? I'm wondering if this is my cue to take this down to a normal core position, but I wanna avoid being too reactive and appreciate the board's thoughts.

 

 

 

It's on SEDI...so it's a legitimate sale filed directly by Wade or Fairfax on his behalf.  Possible he could leave...I mean Paul had to leave for personal reasons, so it could be something like that.  But we have not heard anything about him leaving and he still has some of his other FFH-related positions.

 

Also, why do people think he'll be working for Ben?  He'll be reporting to Peter Clarke as President and future CEO.  He's worked with Peter as long as he's worked with Prem.  If and when Peter retires or leaves, the board will select a new President and CEO...it could possibly be Ben, but there is no guarantee it would be him.  Wade himself probably has as much chance to lead Fairfax one day as Ben...so I don't believe that has anything to do with it.

 

Cheers!

[gfp]

Dude likes to stay diversified and have some folding cash to impress the wife

[MMM20]

1 hour ago, Parsad said:

 

It's on SEDI...so it's a legitimate sale filed directly by Wade or Fairfax on his behalf.  Possible he could leave...I mean Paul had to leave for personal reasons, so it could be something like that.  But we have not heard anything about him leaving and he still has some of his other FFH-related positions.

 

Also, why do people think he'll be working for Ben?  He'll be reporting to Peter Clarke as President and future CEO.  He's worked with Peter as long as he's worked with Prem.  If and when Peter retires or leaves, the board will select a new President and CEO...it could possibly be Ben, but there is no guarantee it would be him.  Wade himself probably has as much chance to lead Fairfax one day as Ben...so I don't believe that has anything to do with it.

 

Cheers!

Yeah I got that wrong. My bad. Thanks for your thoughts. 

[Hoodlum]

Fairfax is securing another $700m in debt at very favourable rates  I wonder what they have planned for all this cash. 
 

https://www.globenewswire.com/news-release/2025/08/12/3131383/0/en/Fairfax-Launches-C-700-Million-Senior-Notes-Offering.html

 

Edited August 12, 2025 by Hoodlum

[Hoodlum]

6 minutes ago, Haryana said:

Buyout of Allied/Odyssey minority positions?

I am thinking Allied, as the option to purchase that minority interest expires in 12 months.  I don’t think there is any large share purchase planned as Fairfax slowed down on share purchases during q2. They could take out some of the TRS shares. 
 

Fairfax likely won’t follow through until Q4, after hurricane season. 

[villainx]

2 hours ago, gfp said:

and have some folding cash to impress the wife

 

Never heard this expression before?  origin?

 

 

[glider3834]

1 hour ago, Hoodlum said:

Fairfax is securing another $700m in debt at very favourable rates  I wonder what they have planned for all this cash. 
 

https://www.globenewswire.com/news-release/2025/08/12/3131383/0/en/Fairfax-Launches-C-700-Million-Senior-Notes-Offering.html

 

not sure what they will do, but I think one option on the table is to take out some or all of the Preferred shares with possible redemption dates later this year - if they were to decide to redeem preferred's G,H,I,J then I estimate a potential gain of US$126M at a cost of US$399M (C$550M) 

 

I am just estimating using the rate today CAD/USD 0.726 (but if Fairfax chooses to redeem their forex rate will likely be different! my numbers are just an estimate & please check my math thanks!)  & with rounding nearest $M

 

G shares - cost C$193M ( US$140M) vs carrying value US$182M - gain US$42M

H shares - cost C$57M (US$41M) vs carrying value US$54M - gain US$13M

I shares - cost C$261M (US $189M) vs carrying value US $251M  - gain US$62M

J shares - cost C$40M (US$29M) vs carrying value US$38M - gain US$9M

 

 

 

 

 

this was the gain they recorded from redeeming C,D preferred shares in 2024

 

 

 

 

 

 

Edited August 12, 2025 by glider3834

[SafetyinNumbers]

12 minutes ago, Haryana said:

Does anyone know why they had non-controlling interests of only 7mm for 2025Q1?

Allied and Odyssey had a lot of CAT losses

[gfp]

1 hour ago, villainx said:

 

Never heard this expression before?  origin?

 

 

 

folding money?  I don't know the origin but down here in the Deep South we have a lot of expressions that are kind of redundant in a cute way.  Instead of hose, like a garden hose, you hear "hose pipe."  You hear old timers say "silver dime."  Or "turkey bird."  "eating pear"   And one of my favorites is "sitting chair."

 

Maybe folding cash / folding money is like those.  Somewhere above pocket change

Edited August 12, 2025 by gfp

[villainx]

20 minutes ago, gfp said:

Maybe folding cash / folding money is like those.  Somewhere above pocket change

 

For a sec, with all the Canadians here, I thought it was from the North. Deep South would have been my second guess!  Or I guess anywhere else.  I assumed it was pocket change type of meaning, but folding cash definitely has a nice ring to it.

[adventurer]

On 8/8/2025 at 8:54 PM, Hsmpanl said:

We newer Fairfax holders have been spoiled... Since buying in January I thought this was a one way rocketship and any marginal decline has me searching for answers and worried about the health of my new favorite holding.

Though I am not too worried about the stock retreating with the management Fairfax has (stock buybacks), I am a bit worried as to how Fairfax intends to surface value over the years. Most people here agree that Fairfax owns a lot of hidden value that seems to be out of sight for analysts and the investing public. But as to how this hidden value will find its way to the surface remains somewhat unclear to my mind....

[SafetyinNumbers]

20 minutes ago, adventurer said:

But as to how this hidden value will find its way to the surface remains somewhat unclear to my mind....

I think all of the gains that are being recognized annually as the portfolio turns over gives some clues as to how value surfaces over time. 

[dartmonkey]

9 hours ago, villainx said:

For a sec, with all the Canadians here, I thought it was from the North. Deep South would have been my second guess!

I thought the Deep South would be anything between Hamilton and Pointe Pelée...

[gfp]

4 minutes ago, dartmonkey said:

I thought the Deep South would be anything between Hamilton and Pointe Pelée...

gulf of america baby!

[Viking]

3 hours ago, adventurer said:

Though I am not too worried about the stock retreating with the management Fairfax has (stock buybacks), I am a bit worried as to how Fairfax intends to surface value over the years. Most people here agree that Fairfax owns a lot of hidden value that seems to be out of sight for analysts and the investing public. But as to how this hidden value will find its way to the surface remains somewhat unclear to my mind....

It is normal for a stock to fluctuate 40% in value over the course of one year (comparing 52 week high with 52 week low). Buffett says a long term shareholder should welcome a low stock price - it gives management the opportunity to buy back stock on the cheap.
 

One of the keys with share price changes is timeframe… if it is today or this week or this month… well, good luck with that. If it is 5 or more years… well things get much easier the longer your timeframe. Chapter 8 of the Intelligent Investor is the best thing to read to help build a good mental model on this topic.
 

In terms of how Fairfax intends to surface value, they have lots of options. Two quick examples for perhaps the two largest ‘hidden values’:

1.) Eurobank - reduce ownership stake to below 20%. 
2.) BIAL - Anchorage IPO should do the trick.

But why would they want to sell an asset that is cheap, has strong fundamentals, is well managed and has strong prospects? Let these puppies compound in value for a few more years. 

Every year Fairfax is opportunistically harvesting/surfacing ‘hidden value’. So far this year it was Sigma (Q1) and Praktiker (Q3). In 2024 it was the Digit IPO (confirmed value), Stelco and Peak. In 2023 it was Ambridge and GIG. In 2022 it was pet insurance and Resolute Forest Products. In 2021 it was the sale of their corporate bond portfolio (at 1% yields). The buyback of their preferred shares is surfacing ‘hidden value’. 
 

The recent split of Quess into three companies is an example of Fairfax surfacing value (this time hidden in Quess). The same playbook was used when IIFL was split into 4 companies and it worked out fabulously well.
 

Yes, we do not know what Fairfax will do or when. And we don’t need to. What we need to know is that value is being created. That is what I focus on. And given the quality of Fairfax’s collection of equity holdings significant value is now being created each and every year. It is like a spring that is getting coiled - tighter and tighter every year (hidden value is spiking higher). And I love it. Welcome to new Fairfax. All that is required is patience.

Edited August 12, 2025 by Viking

[petec]

16 hours ago, Parsad said:

Peter Clarke as President and future CEO

 

Is Peter confirmed as the next CEO? If so where - is it in writing? I missed that.

[Parsad]

3 hours ago, petec said:

 

Is Peter confirmed as the next CEO? If so where - is it in writing? I missed that.

 

I think Andy would be too long in the tooth by the time that opportunity arrives.  Andy has essentially handed the reins over to Brian Young as well.

 

While Wade is head of Hamblin-Watsa, he lacks the insurance background.

 

Peter Clarke is already President & COO of Fairfax...so Wade and Brian report to him.  He also has the longest tenure of the three, was compliance officer, is well-versed on the investment and insurance sides, and is already leading the calls...even Paul wasn't leading the calls.

 

So if I was a betting man, it already looks like Peter is the anointed one if something happens to Prem.  And frankly, while no one can ever replace Prem...Peter is an excellent choice!

 

Cheers!

[Viking]

An Overview of Fairfax's 5 Income Streams

 

Fairfax has 5 income streams that flow through to reported earnings. What are they? How big are they? How have they changed over the past 4 years? What are we forecasting for 2025 and 2026? What are some of the key take-aways?

 

What are they?

1. Underwriting profit
2. Interest and dividend income
3. Share of profit of associates
4. Non-insurance consolidated companies
5. Net gains (losses) on investments

How big are they?

 

Below is a chart which provides a summary of the size of each of Fairfax’s 5 income streams. 

 

Included is:

• For context, the average for the six years from 2016 to 2021. 
• Actuals for the past 4 years: 2021 to 2024.
• My current forecast for 2025 and 2026.

Forecast for 2025 and 2026

 

I am forecasting that Fairfax’s 5 income streams will come in at about $7.6 billion in 2025 ($354/share), which would be a solid increase compared to $6.5 billion in 2024 ($301/share). 

 

 

How have the income streams changed in recent years?

 

There are a couple of things that immediately jump out:

 

1.) The total growth of the 5 income streams since 2021 has been significant.

• From $2.5 billion (average from 2016-2021) to $7.4 billion (estimate for 2026), and increase of 196%.

2.) The per share growth of the 5 income streams since 2021 has been much better than the total growth.

• From $96/share (average from 2016-2021) to $349/share (estimate for 2026), an increase of 263%. 
• Fairfax has been very aggressive with share buybacks in recent years and this is delivering significant value to long term shareholders.

3.) Most of the significant growth seen in recent years has been in the four buckets that comprise operating income (underwriting profit, interest and dividend income, share of profit of associates and non-insurance consolidated companies). This is important because operating income is considered to be the highest quality sources of income for a P/C insurance company. They are considered to be high quality because they tend to be predictable and durable.

 

The growth of operating income at Fairfax since 2021 has been exceptionally large.

• From $1.25 billion (average from 2016-2021) to $5.89 billion (estimate for 2026).
  • From $49/share to $278/share, an increase of 467%. 
• Operating earnings now represents about 80% of total income streams at Fairfax, up from 51% (average from 2016-2020). 

The dramatic spike in income streams over the past 5 years has transformed earnings at Fairfax – they are much larger and of much higher quality.

 

4.) Underwriting income is 23% of total income streams

• For most P/C insurance companies, underwriting income is closer to 45% of their total income streams. 

Fairfax is MUCH LESS exposed to the P/C insurance cycle (i.e. a soft market) than other P/C insurance companies. For two important and very different reasons:

• Underwriting income is a much smaller income stream (as a percent) for Fairfax compared to traditional P/C insurance companies.
• At Fairfax, capital can be shifted from P/C insurance to its investment management business. This will allow Fairfax to continue to compound capital at high rates even as the hard market slows. 

This is important to keep in mind in the coming years as the hard market comes to an end.

Edited August 14, 2025 by Viking