How Long Have you been a Continuous Shareholder of Fairfax Financial?

[SharperDingaan]

Bought my first shares in FFH way back when SAC was trying to put FFH under. Everything about it was just flat out wrong; and super pissed about it, I bought some shares cheap, and found COBF. Crip, Dazel, and a few others were the main posters at the time ... and I learnt at the feet of the many masters. Hopefully; I gave back as much as I learnt!

 

We haven't been in FFH for many years, but periodically visit as dividend, climate change, and short attack (MW) opportunities present. Had CS not blown up, and the BTC-ETF not become a 'thing', we would probably be using FFH as one of our 'near' cash equivalents  

 

FFH is a great learning experience, but all fledglings eventually need to leave the nest and do their own thing. Today, we're good enough at risk management that we can comfortably afford the higher risks that we take, and earn that higher 'Sharpe' ratio. There's a reason for the 'Sharper' in SharperDingaan!

 

Good luck to all.

 

SD

 

Edited January 15 by SharperDingaan

[73 Reds]

On 1/13/2025 at 3:10 PM, mananainvesting said:

How Long Have you been a Continuous Shareholder of Fairfax Financial? 

2021.  Thanks almost entirely to Viking.

[dartmonkey]

I have lost my records of exactly when I bought things before the year 2020, but I probably bought my first shares in around 2008, when they would have been at about $200 US a share, meaning my returns are not really that great, 13% per annum not counting the dividend, maybe 2-3% more with the dividend, let's say 15% or roughly FFH's target ROE. I've had much higher amounts invested in the last 5-6 years, so if I could actually calculate the total return accurately, it would likely be over 20%.

 

I found this old email I sent to a friend of mine in 2010, who turns out to be a distant cousin of Prem's :

 

Quote

Watsa has set up an insurance business that is in many ways similar to Buffett's, on a much smaller scale of course. I have a small investment in this company, Fairfax Holdings, which owns 3-4 medium sized insurance companies, and invests insurance premiums in the general market. It has done extremely well in the last 20 years, I believe they have increased book value 1,000 times over that period. Had you invested your money in his company, rather than in Law School, you wouldn't need to work for the Law Society, except as a pastime.

I noticed that he was an investment advisor for the Anglican Church of Canada and figured you could hardly not know him, being of about the same age, hailing from Bombay, belonging to the same cult, etc. I am glad you think highly of him - it is always reassuring to have an investment with an honest man, which is why most of my money is invested with Buffett, my brother, the Jean Coutu family, and a little bit with Watsa. To paraphrase Buffett (since I can't remember the exact quote), you need your partners to be smart and honest, but if they are not honest, it is better that they not be too smart.

 

[Dazel]

Different recap…”when I went all in” always owned shares sometimes much less than others.

 

2002/2003

Peter Cundill was buying Fairfax hand over fist and that is what brought me here. I was able to buy shares in free fall at $67 per share during bear raid in 2003. It was an american holiday and it was an epic crash day i will never forget it. Sanjeev put a crew of vagabonds together and we all made small fortunes on the upswing into $300. (Cdn) analyzing and more appropriately believing in Prem Watsa…we have bonded (pardon the pun) forever. Brian Bradstreet had a billion dollar gain on “the long bond” bet in 2003 and that was the size of the market cap at the time. 
(I recently came across momento’s from that time and sent them to Prem’s office)
 

2007/2008

We were able to calculate the credit default swap values by looking at the financials and calling traders for quotes in the marketplace. Our AI! Fairfax made $2b plus on those bets and we all knew it but the market did not…had 50% of my net worth in Fairfax. It was the third best performing stock in the world in 2008 up 50%. Did you know that Brian Bradstreet offered to buyout all Michael Burry’s clients at 100 cents on the dollar? Very disappointed Fairfax was not in “the big short”. 

 

Covid debacle/2021

Once again I loaded up in the $350 range…unfortunately I sold the largest of my position after the tender offer…there were many other bargains around but i highly regret missing a lot of the $700 move up…I have been a buyer this year though Fairfax has become a powerhouse!

 

There are high quality people on this board and with regards to Fairfax that certainly could be a movie but they would rather watch “Roaring Kitty”! Lol. Sign of the times. 

 

I cut my teeth here and Prem and Fairfax are the foundation of what I am good at…we learned how to fish on this board and I will never forget it. Thank you Fairfax team you have been feeding my family for more than two decades.

 

cheers,

 

Dazel

[Dynamic]

I'm in the 1-3 years category.

 

I made my first investment in September 2023 at about 1140 CAD and have since rapidly become confident enough to nearly quintuple my holding to become my largest concentrated position, adding FRFHF and FFH.TO during the Muddy Waters short decline (910 USD and 1365 CAD) and at later points in 2024 (1535 CAD, 1570 CAD, and 1455 CAD).

 

My current expectation is that it will compound at a baseline 15%+ CAGR (albeit lumpy) in the long term with some quite possible kickers to boost that return especially in the near term. My intention right now is to let it run even if becomes very outsized in my portfolio. Anything that replaces all or part of my Fairfax position would probably need a superior long term outlook.

 

Huge thanks to all the people who post here for helping me quickly gain that confidence, in particular Viking and SafetyInNumbers.

 

Viking's posts (and the PDF book/compilation) read like a really rational and well constructed crash course on Fairfax and its hidden value drivers and really do have a hugely worthwhile impact. I do understand how the writing process can help you clarify your own thoughts and to check facts but I wanted to acknowledge how much they had clarified mine too and how much in accord with my investing style theirs is that I had very little to fill in from my own research to become very confident in making it my largest position.

 

It could have been too easy for me as someone casually interested in Fairfax a couple of years ago to dismiss the run up in the last few years as "I missed the boat already" and to retain the impression I had carried that Fairfax's investing was a bit too macro oriented (hedges, now abandoned had seemed to be chasing a replication of their last enormous success of profiting from the GFC) or prone to falling into value traps (Blackberry), when's the truth is the portfolio as a whole had for years been doing just fine with many exceptional investments more than making up for those that haven't been great. The discipline and patience to keep bond duration short while rates were so low then lock them in for longer duration as they went higher is good risk management and capital allocation that inspired confidence.

 

Combine that with disciplined underwriting and a Hard Market that may persist for longer than historically normal due to the whole industry that

 

1. fears falling interest rates and bond returns, and

 

2. has perhaps been conditioned by a decade of low interest and bond returns to avoid chasing market share and float instead of underwriting profit 

 

3. is conscious of recent extreme weather events, including many where the losses weren't as bad as they might have been, pandemics and other geopolitical risks.

 

So not only did I feel early last year that at least four years earning $125+ annually (and probably closer to $160+) was pretty much locked in thanks largely to the bond duration, but also that there's still a fair chance that this hard market won't swing to a soft market very quickly, given how recent history has affected the other actors in the insurance market, hopefully extending Fairfax's appetite to write a lot of well priced business and maintain good float leverage on mostly pretty safe investment assets that far exceed the market cap of Fairfax, thus amplifying a solid and sometimes boring single digit return on that portfolio to a mid teens+ return on equity.

 

Thanks to everyone here for sharing their thoughts on Fairfax.

[Buffett_Groupie]

On 1/15/2025 at 5:27 AM, Parsad said:

Buffett Groupie is one of the largest individual shareholders in Fairfax...he was at our first dinner as well!  He was smart enough to keep adding and adding over time.  Cheers!

Not smart at all, Sanjeev because being smart means the ability to accumulate FFH in 2020, not 2 decades too early (1998), i.e. smart folks can time it right before it started to rise while I had to hold 26 years to get the same result 

[dealraker]

7 hours ago, Buffett_Groupie said:

Not smart at all, Sanjeev because being smart means the ability to accumulate FFH in 2020, not 2 decades too early (1998), i.e. smart folks can time it right before it started to rise while I had to hold 26 years to get the same result 

As I've posted several times there's been ways to make an incredible amount of money being "associated" with Fairfax through the years regardless of Fairfax's stock price.   The Hub insurance brokerage connection is or was the most important wealth builder for me outside of Berkshire and AJ Gallagher and probably the most significant investment I've ever made.  It was just as successful as Fairfax has been in the last few years, an incredible literally guaranteed investment - but only in plain sight if you were associated with Fairfax.

Edited Friday at 12:12 PM by dealraker

[cwericb]

Here is a thought from out of left field.

 

There are many longtime Fairfax shareholders on this board. But I wonder how many FFH shareholders are NOT on this board and have no idea of its existence? It is not like the board advertises itself.

 

And to follow up, is there some way that we could introduce CBoF to those who might wish to join us?  Would it ever be possible to have an some sort of mention, invitation or something made at a FFH annual meeting or sent to shareholders? Just a thought, but it might be something that would be of value to all concerned. Or just a dumb idea? Just thought I would raise the subject.

[wondering]

Hey, that's a good idea.  I only found this board by doing lots of Google searches.  I am sure there is lots of shareholders that have no clue of this board.  Not sure if Fairfax would allow Sanjeev to set up a table at the AGM, but it's worth a try.

[mananainvesting]

4 hours ago, dealraker said:

As I've posted several times there's been ways to make an incredible amount of money being "associated" with Fairfax through the years regardless of Fairfax's stock price.   The Hub insurance brokerage connection is or was the most important wealth builder for me outside of Berkshire and AJ Gallagher and probably the most significant investment I've ever made.  It was just as successful as Fairfax has been in the last few years, an incredible literally guaranteed investment - but only in plain sight if you were associated with Fairfax.

@dealraker Could you please explain what the hub insurance brokerage is and how would one invest in it? is it publicly traded?

[dealraker]

1 hour ago, mananainvesting said:

@dealraker Could you please explain what the hub insurance brokerage is and how would one invest in it? is it publicly traded?

We were bought out.

[Parsad]

On 1/17/2025 at 6:54 AM, cwericb said:

Here is a thought from out of left field.

 

There are many longtime Fairfax shareholders on this board. But I wonder how many FFH shareholders are NOT on this board and have no idea of its existence? It is not like the board advertises itself.

 

And to follow up, is there some way that we could introduce CBoF to those who might wish to join us?  Would it ever be possible to have an some sort of mention, invitation or something made at a FFH annual meeting or sent to shareholders? Just a thought, but it might be something that would be of value to all concerned. Or just a dumb idea? Just thought I would raise the subject.

 

Actually, I'll add some merchandise (baseball cap and shirts) with the logo and name in the shop section, and the web address on the back.  If you want to buy it and wear it to the AGM, go ahead.  Maybe we'll be like the Yellow BRK'ers at the Berkshire AGM with the big yellow cowboy hat!  It will also let you connect with other COBF'ers at the AGM or elsewhere.  Cheers!

[Parsad]

On 1/17/2025 at 8:04 AM, wondering said:

Hey, that's a good idea.  I only found this board by doing lots of Google searches.  I am sure there is lots of shareholders that have no clue of this board.  Not sure if Fairfax would allow Sanjeev to set up a table at the AGM, but it's worth a try.

 

I'm sure Prem would accomodate, but the AGM is really about Fairfax businesses and their philanthropy, so I would rather not.  They do plenty to support the dinner that Rob is doing.  Thanks for the thought, though!  Cheers!

[KFS]

On 1/15/2025 at 4:39 PM, Dazel said:

Did you know that Brian Bradstreet offered to buyout all Michael Burry’s clients at 100 cents on the dollar? Very disappointed Fairfax was not in “the big short”. 

 

Wow, that's interesting.  Has anything been written about this?  I'd be curious to read about it.  

 

[KFS]

On 1/13/2025 at 2:10 PM, mananainvesting said:

How Long Have you been a Continuous Shareholder of Fairfax Financial? 

 

In 2017, first took a very small position only because it appeared that Fairfax's insurance business had improved significantly, and the stock simply looked very cheap.  They had also mostly stopped the shorts/hedges which had held them back for years.  

 

In 2020, became far more interested in the company (beyond just a "cheap stock") after reading some very convincing posts here on COBF (much thanks to Viking and others).  When Prem announced his purchase of ~$150 million worth of shares in 2020, I said "game on" and I decided to swing big myself.  Bought my largest chunks of shares around $280 - 320 (US).  

 

((I also had concerns that the huge amounts of Covid stimulus $ being pumped into the economy would eventually lead to higher inflation and higher interest rates, and FFH felt like a safe way to invest in something that would potentially benefit from higher rates.  In hindsight, this was probably a silly "macro bet" mentality which would have been difficult to defend at the time.  But there were plenty of other good reasons to invest!))

 

2022 was particularly stressful, as my employer (at the time) was in the process of shutting down my plant (chemical plant operations mgr).  Oddly enough, it turned out to be a wonderful problem, because after I left this job I had the option to "rollover" my old 401k into an IRA which gave me the opportunity to buy additional FFH shares with funds that had previously been restricted mostly to index funds.  I was following this very board closely (mostly lurking and reading, rarely posting since I didn't feel I had much to contribute) and had been amazed the stock price had not increased much.  Bought another large chunk at ~$460.

 

Folks will call me crazy for doing this, but over the past 5 years my Fairfax investment has ranged between 60% - 90% of my net worth.  Currently trying hard to re-diversify and get it back down below 50%, but I struggle to find investments where I have the same level of conviction.  Slowly but surely I am diversifying, although I have a fair amount in my taxable account which I will probably never sell.

 

It has been a life-changing investment for me and my family, and I can't say enough to thank people here.  

 

Cheers, 

Kevin

 

 

 

 

[Buffett_Groupie]

On 1/17/2025 at 7:08 AM, dealraker said:

As I've posted several times there's been ways to make an incredible amount of money being "associated" with Fairfax through the years regardless of Fairfax's stock price.   The Hub insurance brokerage connection is or was the most important wealth builder for me outside of Berkshire and AJ Gallagher and probably the most significant investment I've ever made.  It was just as successful as Fairfax has been in the last few years, an incredible literally guaranteed investment - but only in plain sight if you were associated with Fairfax.

Easy to be a sporadic shareholder and difficult to be a CONTINUOUS shareholder (the trick is to be locked out of the brokerage account after enough unsuccessful attempts with the wrong password) 

[John Hjorth]

27 minutes ago, Buffett_Groupie said:

Easy to be a sporadic shareholder and difficult to be a CONTINUOUS shareholder (the trick is to be locked out of the brokerage account after enough unsuccessful attempts with the wrong password) 

 

 - There is nothing like getting up quite early, grabbing a cup of coffee, and go to CofB&F and start the day with reading good humor like this!

 

[dartmonkey]

8 hours ago, Buffett_Groupie said:

Easy to be a sporadic shareholder and difficult to be a CONTINUOUS shareholder (the trick is to be locked out of the brokerage account after enough unsuccessful attempts with the wrong password)

Another trick is to hold the shares in a brokerage account with transactions that cost $9.99 (TD) instead of $1 in Interactive Brokers. This small fee is enough to influence the behaviour of someone as cheap as me, and has surely improved my returns enormously. Some broker should market this : a lockbox for core investments you know you should never sell…

[villainx]

On 1/18/2025 at 3:27 PM, KFS said:

 

Wow, that's interesting.  Has anything been written about this?  I'd be curious to read about it.  

 

 

 

 

 

[MMM20]

Jan '21 at $360. Better lucky than good.

[Mystery Guest]

I had been a Shareholder a little over a year when the SAC short attack happened. I recall my first lot of shares were about $120. When the short attack happened I did some investigation and found that Prem had not left town with his church funds... and backed up the truck with my limited means. Since then I have reinvested dividends and bought and added when I would be forced to sell other holdings because of take private or tender offers, the Home Capital turn around comes to mind. Beyond occasionally having to sell a few shares to finance life ie an overdue home reno. I sold 30% of my holdings at the start of the Pandemic and rebought at a discount (tax free accounts) a few months later to capture more shares.  If I believe my own math, my POSITION via reinvested, dollar cost averaging and opportunistic buys is 210x my original investment. Of course I will not disclose how tiny that original position was. I am no where near as smart as any of you, but a buddy once said... if you can get him to open his wallet, It creaks. (he thought he was insulting me)  I do not trade, those $9.99 TD fees are ridiculous. Recently TD called me and offered to manage my money for .75% fee. They suggested they might be able to help me keep up with the index...  my wife had a good chuckle at that one ...