The Fairfax Way: Inside Prem Watsa's Secret to Lasting Success - David Thomas

[anshulp]

 

Really looking forward to this one - Fair and Friendly gave a wonderful internal perspective on Fairfax’s early years, and Viking’s research has added so much depth over time. This seems like the first full independent deep dive into the company. Can’t wait to read it

 

Link (US)

https://www.amazon.com/Fairfax-Way-Inside-Lasting-Success/dp/1037802195/ref=tmm_hrd_swatch_0?_encoding=UTF8&dib_tag=se&dib=eyJ2IjoiMSJ9.Lyz48uuHVGaRYVUzTT_P9g.ut7y8K3wZwip__t0Cv250a-66qTwVLm-rDoNkEOMbpE&qid=1761151647&sr=8-1

 

 

[Viking]

@anshulp, thanks for creating a separate thread for this topic. I am looking forward to getting a full picture of the company. And getting a behind the scenes look to many important events. 'Fair and Friendly' was a revelation in that regard and this new book should be even better.

 

It cracks me up how most Canadians have never heard of Fairfax or Prem, given what they have accomplished. This book should really help in that regard.  The author has started posting on X/Twitter so board members might want to follow him to get insights into the book. 

 

Edited October 22, 2025 by Viking

[Hoodlum]

While we wait for the book to ship next week, David Thomas provided a little snippet of what to expect in the book.  

 

https://www.theglobeandmail.com/business/article-the-fairfax-way-prem-watsa-investing-transformation-buybacks/

 

For those behind a paywall to the above link, hopefully the below will work for you.

 

https://www.theglobeandmail.com/gift/88b464f77c2863c66a9326ee3eb93664ae337885ca5483f02881b645ad033c36/ODOUNSVLH5EZ3KKKE3AQNGQPUE/

[gfp]

1 hour ago, Hoodlum said:

While we wait for the book to ship next week, David Thomas provided a little snippet of what to expect in the book.  

 

https://www.theglobeandmail.com/business/article-the-fairfax-way-prem-watsa-investing-transformation-buybacks/

 

For those behind a paywall to the above link, hopefully the below will work for you.

 

https://www.theglobeandmail.com/gift/88b464f77c2863c66a9326ee3eb93664ae337885ca5483f02881b645ad033c36/ODOUNSVLH5EZ3KKKE3AQNGQPUE/

 

Thanks Hoodlum, that's a great excerpt and the book sounds really promising.  

 

Surely this is a typo and they meant Canadian Dollar

"By the time the stock passed that level in January, 2024, the stock was in full sprint, reaching US$2,000 before the end of the year. "

[Viking]

Here is a review from Paul Deegan of David's book. Looking forward to getting a copy of it. 

 

https://www.policymagazine.ca/more-than-a-canadian-warren-buffett-prem-watsa-and-the-fairfax-way/

 

Edited November 13, 2025 by Viking

[Jaygo]

The book is now in stock at most Chapters locations. I bought mine last night in Newmarket for $26.99 CAD

 

It was placed front and centre in the business section.

 

I plan to dig into it tonight. 

[John Hjorth]

28 minutes ago, Jaygo said:

The book is now in stock at most Chapters locations. I bought mine last night in Newmarket for $26.99 CAD

 

It was placed front and centre in the business section.

 

I plan to dig into it tonight. 

 

I'm looking forward to read what you think about it, @Jaygo,

 

I just checked, actually available to me here in Denmark at Saxo.com [no hazzles with import handling and duties, and risk of not getting it] at DKK 259.95 for Saxo members [free shipping built-in to membership], and for non-Saxo members at DKK 284.95 + P&P, with presubscription avalilable, release date here set to 18^th November 2025. I'll order it in the coming weekend.

[Hoodlum]

1 hour ago, Jaygo said:

The book is now in stock at most Chapters locations. I bought mine last night in Newmarket for $26.99 CAD

 

It was placed front and centre in the business section.

 

I plan to dig into it tonight. 

 

Thanks for posting this.  I will pick up a copy and cancel my Amazon order.  

 

I noticed that it is the #1 seller on Amazon Canada, under the Business Biography category.

 

https://www.amazon.ca/gp/bestsellers/books/935138/ref=zg_b_bs_935138_1

 

[SafetyinNumbers]

1 hour ago, Haryana said:

I got my hardcover from Indigo, their business shelf was hard to find but a proactive employee guides the way; then the copies of this book were in a bottom shelf as if hidden in corner.

Quite the opposite of your Chapters.

 

Many here will understably get very annoyed to discover the name of Mr. Mohnish Pabrai right on top of front cover as the prime reviewer of book.

I think he’s friends with Prem, they both invest for absolute returns and the Dhando Investor is a great book. I like it.

[John Hjorth]

On 11/14/2025 at 3:36 AM, SafetyinNumbers said:

I think he’s friends with Prem, they both invest for absolute returns and the Dhando Investor is a great book. I like it.

 

V. Prem Watsa, personally, is the largest donor every year, now for many years, by horse lengths, to the very successful Dakshana Foundation, set up by Monish Pabrai and his former, now diworsed wife, their daugther Monsoon [what a cool name that is!] now has taken over the mothers position, and the foundation set up originally by large economic means from Monish Pabrai, the foundation creates social upwards mobillity to talented young Indian persons with parents without any or limited means, not sufficient to provide education for their talented kids. We are here talking about figures, that surpass V. Prem Watsas personal gross salary before wihheld income taxes at  Fairfax Financial Holdings.

 

One can bash both men of Indian origin here on CofB&F as much one may want, it doesen't matter anymore to me, I consider both men in their very own league alone because of those facts. Fun, joy and all good things need be to considered separated from all the snot.

Edited November 15, 2025 by John Hjorth

[Viking]

Ok. Just finished the book. What is my key take-away? I think ‘we’ have a very good handle on Fairfax. By ‘we’, I mean the members of this board. Does this mean I learned nothing from reading the book? Of course not. I learned plenty. But it is good to know that we are generally on the right track today with our analysis/understanding of Fairfax and our assessment of where the company is likely headed in the coming years. 
 

The book spends a fair bit of time chronicling the evolution over the past 40 years of the P/C insurance business at Fairfax. What a crazy ride the first 25 to 30 years were. We get to hear directly from all of the top executives in the P/C insurance part of the business. I really liked the case studies at the end (for the many insights they provided). My guess is this focus was by design - P/C insurance has transformed over the past 10 years into a high quality business and has become today the engine at the core of Fairfax’s business model. I don’t think you could make this claim for the first 25 years of the company’s existence. This, of course, has important implications for Fairfax’s fundamentals today, its future and how the company should be valued. I don’t think this is the current/consensus view with investors and analysts. 
 

What is something I learned?
 

All parts of Fairfax are stuffed with exceptional people. I kind of understood this already - one of the big benefits of attending Fairfax’s AGM each year is the opportunity to hear directly from the various executives at the different events. The book introduces us to a wider range of key players at Fairfax (past and present). One of these was Rick Salzburg (he passed away last year). Rick plays a prominent role in the book - so readers get an introduction and hear directly from  one of the individuals who was critically important to Fairfax’s evolution into the powerhouse company that it is today. It is super helpful/informative to hear firsthand from many of the first class people at Fairfax, like Rick. 
 

Anyways, I don’t intend this post to be a complete review of the book. I will have more to say about the book, which I really enjoyed reading (David, well done!).

 

What are some of the key take-aways from board members?

Edited November 19, 2025 by Viking

[Jaygo]

I'm about half way through. Its a really enjoyable read and the early days history is so interesting but I feel I want a bit more granular detail on some of the transactions. The description of the deals is like the yada yada episode of Seinfeld. So Prem goes in for $100,000.00 and yada yada he get he completes the deal with Steve Markel!

 

Since i'm only part way through the book the main thing that jumped out to me is that the deals at the time were so small. Obviously $ for $ 5 million in the 80s was worth more than 5 million today but the snowball really did start out very small. I also was really happy to finally understand better the connection with Markel 

 

Its a really interesting history, kind of reminds me of the brass ring about Brascan. Tiny obscure deals that grew to be a behemoth. 

 

If i have any complaints about the book its that the print is too small, and I want graphs and some more granular details about the business deals in the early days but I would give it 5 stars anyway. I really appreciate the author for doing the work and I hope he does well with his endeavor. 

[Xerxes]

Sounds like a great book to buy and read !! 

[Viking]

On 11/18/2025 at 7:17 AM, Jaygo said:

I'm about half way through. Its a really enjoyable read and the early days history is so interesting but I feel I want a bit more granular detail on some of the transactions. The description of the deals is like the yada yada episode of Seinfeld. So Prem goes in for $100,000.00 and yada yada he get he completes the deal with Steve Markel!

 

Since i'm only part way through the book the main thing that jumped out to me is that the deals at the time were so small. Obviously $ for $ 5 million in the 80s was worth more than 5 million today but the snowball really did start out very small. I also was really happy to finally understand better the connection with Markel 

 

Its a really interesting history, kind of reminds me of the brass ring about Brascan. Tiny obscure deals that grew to be a behemoth. 

 

If i have any complaints about the book its that the print is too small, and I want graphs and some more granular details about the business deals in the early days but I would give it 5 stars anyway. I really appreciate the author for doing the work and I hope he does well with his endeavor. 

The book is short, at about 340 pages. That likely limited the author quite a bit in terms of what to talk about out. It appears one of the core objectives was to communicate extensively on Fairfax’s culture, primarily through the lens of the build out of the P/C insurance business.
 

The investment management side of the business is discussed, but more at a very high level. To do this part of Fairfax’s business justice, it likely would have needed another +200 pages. That would have made the book too long. And taken it off topic (away from the culture theme). 
 

What is amazing to me is what the company was able to accomplish over the past 39 years when different arms were tied behind their back:

• 1985 to 2011 - insurance was generally underperforming, some years massively. In some respects, for the first 15 years, this was kind of by design (what do you expect when you are buying a lot of clunkers from highly motivated sellers)?
• 2011 to 2020 - investment management was underperforming massively. This was not by design. And the underperformance was caused by three different problems:
  • Equity hedges - removed in late 2016
  • Significant short positions - last one was removed in late 2020
  • Too many terrible equity investments, made largely from 2014-2017 - last one, Boat Rocker, was finally ‘fixed’ in 2025.

The interesting thing to me is this - despite the issues I outline above, Fairfax was still able to compound at 19.2% for 39 years. What happened that allowed the company to do this? In some respects, that to me  is the real story of Fairfax. Because today Fairfax no longer has any hands tied behind their back.
 

The version of Fairfax that exists today has never existed before. If they can compound at 19.2% when facing big headwinds for much of the time, what can they compound at today? Yes, we need to exclude some of the massive growth in the very early years, so that would take down the 19.2% CAGR. But regardless, there is some magic in the Fairfax business model that we still do not fully understand today (I sure don’t). And that is one of the reasons I am confident the company can compound ROE at a mid to high teens rate over the next 5 years, and perhaps longer. 
 

What is the ‘something that happened’ at Fairfax that allowed them to compound at 19.2% for 39 years despite the big set-backs?

• Decentralized structure?
• Long term focus?
• Culture?

These are important parts of the answer. But I think there is more. One example is how good they are at incubating start-ups on the insurance side of the business (First Capital, ICICI Lombard, pet insurance, Digit) and then monetizing them for big gains (each of these delivered an investment gain of about $1 billion or more). Perhaps I am looking to quantify things too much.

Edited November 19, 2025 by Viking

[anshulp]

I get to read my copy on Friday, can't wait. 

[gfp]

This book was delivered to United States pre-order customers yesterday.  I've got my reading glasses ready!  My wife took one look at it and said, "you can't read that!"

 

https://caddislife.com/collections/eye-appliances

[OracleofCarolina]

i was thinking the same thing yesterday when my book arrived...sheesh, we need bigger fonts!

[Jaygo]

Page 79 towards the bottom reading through page 80 is so informative about the use of shares as currency for growth. Looking at the tripling of debt and 50% gain in shares outstanding makes some of my growth plays look downright conservative. 

 

I really wonder if I would have looked at Fairfax in 1994 and balked at the debt and share issuance. Most likely I would have passed on it out of 

 

 

 

[Hoodlum]

David Thomas posted some excerpts from the book related to Fairfax's "Big Short" play.

 

https://financialpost.com/fp-finance/inside-story-fairfax-financial-even-bigger-big-short

 

 

[Junior R]

14 hours ago, Hoodlum said:

David Thomas posted some excerpts from the book related to Fairfax's "Big Short" play.

 

https://financialpost.com/fp-finance/inside-story-fairfax-financial-even-bigger-big-short

 

 

I don't think they would put hedges on like that again

[djokovic1]

Just went through the book. It was an easy read. It was good on the qualitative aspects but personally think could have gone deeper on quantitative aspects given that all the numbers are out there. For example, what has been their return on each of their big insurance M&A decisions. Similarly, what has been their return on their big equity investments. Personally, would have made the book more valuable for me but understand the space limitations and the qualitative focus that the author has decided to pursue.

[NormR]

David will be at the 2026 AGM and seems to be open to appearing at community events. Which ones should I invite him to?

[Redskin212]

Norm, I would suggest we invite him to the shareholder dinner and maybe he can speak on the writing of the book. It would be interesting to hear how he developed the story, researched, interviews…Obviously, he read all Prem’s letters but I am guessing he referred to this message board a fair bit.  

[longlake95]

I like the book so far. Except, the print is too small. 

[dlr1493]

Hi everyone! Excited to read this. I had it on preordered on Amazon but cancelled as it won't arrive to me in time before I travel! However, I have seen it on Audible. From those that have read, am I best waiting to get my hands on a physical copy or do you think it'll still be good audio format? I live in UAE and can't find any physical copies here!