SafetyinNumbers Posted January 2 Posted January 2 A lot of investors avoid Fairfax India because of the management and performance fees paid to FFH. If you’re in that camp but also own FFH, do you think that it paying fees to WEF to own GFR and SCR or to KW, BDT etc… is a bad capital allocation decision?
Xerxes Posted January 2 Posted January 2 4 hours ago, Hoodlum said: I would prefer no increase as well, but I think they will try to keep the dividend close to 1% of share price. During the decade span of $10/share dividend, we did not have the growth in book that we are experiencing now. FFH management does not target preferred “dividend yield” for retail
Xerxes Posted January 2 Posted January 2 32 minutes ago, SafetyinNumbers said: A lot of investors avoid Fairfax India because of the management and performance fees paid to FFH. If you’re in that camp but also own FFH, do you think that it paying fees to WEF to own GFR and SCR or to KW, BDT etc… is a bad capital allocation decision? it is not bad capital allocation decision if mathematically the recipient of the fees does not “siphon” all of the economic juice of the payer of the fee, over extended period, thus leaving an empty shell. but then again admittedly I don’t know much about how the above 5% performance fee would go about if the BV were to surge from $21 to $40.
SafetyinNumbers Posted January 2 Posted January 2 56 minutes ago, Xerxes said: it is not bad capital allocation decision if mathematically the recipient of the fees does not “siphon” all of the economic juice of the payer of the fee, over extended period, thus leaving an empty shell. Is this how you think about FIH? The intrinsic value isn’t there because it’s not reflected in book value? I’m trying to understand the empty shell reference. If they were creating less value than the fee, then I get it. I have been in some net nets like that.
Buckeye Posted January 3 Posted January 3 Looking for the Next Berkshire Hathaway? Experts Are Circling In on This 1 Little-Known Stock https://finance.yahoo.com/news/looking-next-berkshire-hathaway-experts-173021170.html
Junior R Posted January 3 Posted January 3 11 hours ago, Buckeye said: Looking for the Next Berkshire Hathaway? Experts Are Circling In on This 1 Little-Known Stock https://finance.yahoo.com/news/looking-next-berkshire-hathaway-experts-173021170.html easy for it to happen given the small size of ffh compared to brk
dartmonkey Posted January 3 Posted January 3 1 hour ago, Junior R said: easy for it to happen given the small size of ffh compared to brk Easy for what to happen ? The article says that Berkshire’s 20% annualized returns, over 60 years, means it has outperformed the S&P 500 (9.9% annualized, including dividends) by 100%. Great, huh? Except that that would mean a Berkshire investor would have twice as much as an index investor, whereas the total return with Berkshire over 60 years would be 55,000 times your initial investment, whereas with the S&P it would be 391 times. In other words, the Berkshire investor would have 141 times as much as the index investor, not twice as much. Compound math is hard…
hardcorevalue Posted January 4 Author Posted January 4 I'm always holding on to the hope that they suspend the dividend instead but I know the odds of that...
Xerxes Posted January 5 Posted January 5 On 1/2/2026 at 5:13 PM, SafetyinNumbers said: Is this how you think about FIH? The intrinsic value isn’t there because it’s not reflected in book value? I’m trying to understand the empty shell reference. If they were creating less value than the fee, then I get it. I have been in some net nets like that. siphoning economic juice was probably the wrong statement by me. I probably meant that just more and more shares will go to FFH, making the public float even less liquid and the discount more extended. The FIH share buyback will of course offset the dilution but not the ownership shift. I guess will see what happens.
SafetyinNumbers Posted January 5 Posted January 5 9 hours ago, Xerxes said: siphoning economic juice was probably the wrong statement by me. I probably meant that just more and more shares will go to FFH, making the public float even less liquid and the discount more extended. The FIH share buyback will of course offset the dilution but not the ownership shift. I guess will see what happens. Each minority shareholder is making their own decision to sell and at what price. It seems like under your framing, FFH is the bad guy if shares are bought back or not.
Crip1 Posted January 5 Posted January 5 No divvy change for 2026 https://www.fairfax.ca/press-releases/fairfax-declares-annual-dividend-01-05-2026/?utm_source=press-release&utm_medium=email&utm_term=Mon+Jan+05+2026&utm_campaign=Fairfax+Declares+Annual+Dividend -Crip
Hoodlum Posted January 5 Posted January 5 (edited) As expected the Dividend stays the same at $15/share. The comment from the press release would seem to suggest that the dividend is not locked at $15, and could increase when cash is not needed for other areas. https://www.fairfax.ca/press-releases/fairfax-declares-annual-dividend-01-05-2026/ Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) (“Fairfax”) announces that it has declared a dividend of US$15.00 per share on its outstanding multiple voting and subordinate voting shares, payable on January 22, 2026 to shareholders of record on January 15, 2026. Applicable Canadian withholding tax will be applied to dividends payable to non-residents of Canada. Consistent with the practice of prior years, the amount of this dividend was determined taking into account the current operating results of Fairfax and its insurance and reinsurance companies and the current cash position at the Fairfax holding company. Consequently, as each year’s circumstances are different, this dividend should not be regarded as indicative of the amount of any future annual dividends. Edited January 5 by Hoodlum
SafetyinNumbers Posted January 5 Posted January 5 28 minutes ago, Hoodlum said: The comment from the press release would seem to suggest that the dividend is not locked at $15, and could increase when cash is not needed for other areas. They write the same thing every year. It’s discretionary as always.
backtothebeach Posted January 5 Posted January 5 I wonder what happened this morning, someone bought CA$ 8 million of FFH with a MOO (market on open) order and got royally screwed?
cwericb Posted January 5 Posted January 5 (edited) 8 minutes ago, backtothebeach said: I wonder what happened this morning, someone bought CA$ 8 million of FFH with a MOO (market on open) order and got royally screwed? I saw some trades like that go through, I think on Friday. Looked strange to me when the trading price was around $2026 but a few shares traded at exactly $2700 and thinking I must remember to remind myself not to put in buy orders without a limit price. Kinda strange? Edited January 5 by cwericb
Hoodlum Posted January 5 Posted January 5 It looks like Canada Feds are going to review preparedness for major BC earthquake with the P&C insurance companies. not sure how long this gift link will work for this article. I provided a couple of paragraphs from the article. https://www.theglobeandmail.com/gift/88b464f77c2863c66a9326ee3eb93664ae337885ca5483f02881b645ad033c36/UNDXRFRAUREIJK4GKWACFLTWRA/ The federal government is launching consultation with insurers to review the industry’s resilience to earthquakes – a catastrophic event that experts say could hit Canada within the next 50 years. For decades, Canadian property and casualty insurers have been sounding the alarm on the country’s unpreparedness for a major earthquake off the coast of British Columbia. Natural Resources Canada estimates the province has a 30-per-cent chance of experiencing a significant quake by 2075. “Insurers are well-positioned to respond to earthquakes, with sufficient resources to cover insured losses for a one-in-500-year event,” Mr. Sabourin said in an e-mail. “However, more can be done to ensure Canadian consumers are protected by a resilient financial system in the face of more extreme earthquakes.” The largest Canadian earthquake ever recorded was in 1700 – estimated to be between an 8.7- and 9.2-magnitude event off the coast of Vancouver Island. In a report released last month, the IBC estimates a 9.0-magnitude earthquake would result in total economic losses of $128-billion and 43,700 jobs over the subsequent 10 years. Insured losses could cost the insurance industry about $52.6-billion, more than 11 times the Fort McMurray wildfire in 2016, which cost insurers $4.7-billion in losses.
TwoCitiesCapital Posted January 5 Posted January 5 (edited) 14 minutes ago, backtothebeach said: I wonder what happened this morning, someone bought CA$ 8 million of FFH with a MOO (market on open) order and got royally screwed? $8 million seems like a lot relative to the daily trading volume of the Canadian shares. Something like 3-4% of daily volume in a single order. Seems like that would be expected to move the price some to ensure a full, no? I'd have personally used a GTC limit order and filled throughout the day, but if you're looking to ensure getting filled on an order of that size.... Edited January 5 by TwoCitiesCapital
backtothebeach Posted January 5 Posted January 5 3 minutes ago, TwoCitiesCapital said: $8 million seems like a lot relative to the daily trading volume of the Canadian shares. Something like 3-4% of daily volume in a single order. Seems like that would be expected to move the price some to ensure a full, no? I'd have personally used a GTC limit order and filled throughout the day, but if you're looking to ensure getting filled on an order of that size.... With a little patience and skill you could buy 3000 shares during a trading day without moving the price too much. 100 at a time, hidden orders, midpoint between the bid/ask for the most part. Whoever bought here apparently doesn't care about giving up a few %.
gfp Posted January 5 Posted January 5 There was also a strange large trade on FIH.U at today's open. 45k shares traded around the open? weird
backtothebeach Posted January 5 Posted January 5 11 minutes ago, gfp said: There has been a weird open on FFH for several days in a row. There is usually no volume on these spikes, but today was different.
Txvestor Posted January 5 Posted January 5 (edited) On 1/3/2026 at 9:03 AM, dartmonkey said: Easy for what to happen ? The article says that Berkshire’s 20% annualized returns, over 60 years, means it has outperformed the S&P 500 (9.9% annualized, including dividends) by 100%. Great, huh? Except that that would mean a Berkshire investor would have twice as much as an index investor, whereas the total return with Berkshire over 60 years would be 55,000 times your initial investment, whereas with the S&P it would be 391 times. In other words, the Berkshire investor would have 141 times as much as the index investor, not twice as much. Compound math is hard… Yeah pretty crazy to see that. Another way to say it is even if BRKB share was trading at $5 Mr Buffett would have beaten the S&P by a cumulative 50% or so. So the other $495 is pure alpha. Hence the Einstein quote about compounding being the 8th wonder of the world. Edited January 5 by Txvestor
Viking Posted January 5 Posted January 5 (edited) 2025 Top 10 List: Fairfax – The Compounding Machine (Part 1 of 2) Below is our annual review of major developments at Fairfax. What is missing from the list? Please share your thoughts. In 2025, Fairfax quietly delivered another exceptional year. That makes five in a row, and that matters. Fairfax is delivering consistent, very strong performance. What happened? This is where the story gets interesting. No one thing. It was everything: insurance, investments and capital allocation. It was Fairfax’s people (culture) and their business model. What we learned in 2025 is Fairfax doesn’t have to do anything spectacular to deliver spectacular results. That is what an exceptional business looks like. Fairfax has re-emerged as a compounding machine. Importantly, this version of Fairfax is much better than past versions: earnings streams are more balanced and higher quality, and the company is more experienced and mature. It’s like Fairfax has grown up right in front of us - after 40 years of refinement, Fairfax has figured out how to best exploit the model pioneered by Buffett at Berkshire Hathaway – with P/C insurance at its core. Fairfax today looks like a star athlete entering their prime - performing to their full potential. It has become fun to own and follow. That is the definition of a high-quality business. Financial Performance Snapshot Earnings, Book Value and ROE Fairfax is on pace to deliver record earnings in 2025. Earning Accounting EPS estimate: ~ $200 per diluted share (my guess today) Economic EPS estimate: ~$240 per diluted share (conservatively calculated) Book Value Per Share 2024 YE: $1,060 2025E: $1,255 (current) Increase: $195 per share Return on Equity Accounting ROE (rough): ~17.3% Economic ROE: ~20%+ The accounting change in BVPS and ROE does not include an additional ~$40 per share of economic earnings. Fairfax’s book value is materially understated. Share Price Performance In 2025, Fairfax’s share price increased: +31% (C$) +38% (US$) For comparison: S&P 500: +16% S&P/TSX: +28% Five-Year Performance Fairfax: +503% (C$) | +461% (US$) S&P 500: +82% S&P/TSX: +82% Fairfax has outperformed market averages every year over this period. Dividend Fairfax paid a dividend of $15 per share in 2025. Valuation Versus Peers Relative to a group of high-quality P/C insurance peers, Fairfax: Has dramatically outperformed on total shareholder return and BVPS growth over the past six years Trades at the lowest valuation, on both P/BV* and P/E The best performer remains available at the cheapest price. * Important caveat: Fairfax’s BV is understated. Its economic P/BV is materially lower than the reported ~1.59x. The Fairfax Business Model: What’s Driving Results? To understand 2025, it helps to break Fairfax into its core engines: Insurance operations (net premiums written and underwriting profit) Investments (fixed income and equities) Capital allocation (reinvesting, harvesting, and buybacks) Final observations (ratings agencies, currency, book value) Personnel changes (succession and bench strength) Insurance Operations 1. The Top Line: Net Premiums Written The hard market that began in late 2019 is moderating, and top-line growth is slowing. 2025 Estimate Net premiums written (NPW): $26.6B (+5%) Six-Year Growth (since the start of the hard market) Total growth: $13.3B (+100%) CAGR: 12.3% These are solid numbers – but total dollars are not what matter most to shareholders. Per-share results do. Per-Share Metrics 2025 NPW per share (estimate): $1,265 (+9%) Six-year per-share growth: $770 (+156%) Per-share CAGR: 16.9% Measured per share, Fairfax’s insurance business has been growing like a weed. Over the past six years, it has effectively been a growth company. Early in the hard market (2021–2022), top-line growth was strongest. In later years, growth has slowed—but aggressive buybacks materially accelerated per-share results. Fairfax has delivered a textbook example of how to manage the hard-market phase of the insurance cycle. 2. The Bottom Line: Underwriting Profit Underwriting performance determines the value of an insurance business. 2025 Estimate Combined ratio: ~93.5% Underwriting profit: ~$1.7B Underwriting profit per share: ~$80 Six-Year Growth Underwriting profit per share: +443% Drivers: Strong NPW growth (16.9% per-share CAGR) Structural improvement in combined ratio Aggressive share buybacks (~20% reduction in shares) Fairfax operates a high-quality, consistently profitable P/C insurance franchise – and that franchise is very valuable. An underwriting profit means Fairfax is being paid to hold float—estimated at $37B at YE 2025—which it can then invest for its own benefit. Investments After strong years in 2023 and 2024, Fairfax is having a blowout investment year in 2025. 2025 Investment Snapshot Average investments: ~$72B Estimated total return: ~$7.56B (~10.5%) Breakdown by Asset Class Fixed income: ~$2.92B (5.1% yield + gains) Equities & other: ~$4.64B (20.1% return) This estimate includes the annual change in excess of fair value over carrying value for non-insurance associate and consolidated holdings, which is not captured in accounting earnings. Even so, the 10.5% return figure remains conservative. 3. Fixed income – Interest Income Interest income (2025E): $2.46B (record) Average yield: ~5.1% Drivers Growth in the fixed-income portfolio from ~$46.5 (2024) to ~$50 billion (2025) First-mortgage partnership with Kennedy Wilson increased by $800M (9 months) Portfolio grew from $4.8B to $5.6B (Sept. 30, 2025) Blizzard Vacatia investment ($835 million). Five-Year Growth Interest income per share: +393% Drivers: Larger portfolio. Much higher interest rates Aggressive share buybacks (+20% reduction in shares) Interest income has become Fairfax’s largest income stream – and it’s a high quality source of earnings. Part 2 follows below in this thread. Edited January 5 by Viking
Viking Posted January 5 Posted January 5 2025 Top 10 List: Fairfax – The Compounding Machine (Part 2 of 2) Equities At December 31, 2025, Fairfax’s Fairfax equity portfolio was valued at approximately $26 billion, split roughly 60% public and 40% private. Fairfax runs a concentrated portfolio. Focusing on the 10 largest publicly traded holdings provides a fact-based view of what is happening across a significant portion of the equity book. 4. Publicly Traded Equities Top 10 Holdings – 1-Year Return Total shareholder return: $4.3 billion (47%) No, that is not a typo. Yes, that is outstanding performance. For context, Fairfax’s common shareholder’s equity was $23 billion at 2024 YE. Generating ~$4.3 billion (pre-tax) in gains from just 10 holdings is a big deal. Notes: The top 10 holdings are ~50% of the equity portfolio This data is not cherry picked - we didn't just include the good stuff The performance is broad based: 7 of 10 holdings are up +30% The group is not expensive: the strong performance is not due to 'euphoria' Much of the gain is not yet captured in the accounting results Importantly, each of the holdings (as a whole) are well managed, not expensive with solid prospects. You are probably thinking this is just a one-year wonder. It isn’t. Top 10 Holdings: 5-Year Return Total Shareholder return: $10.1 billion (242%) 5-year CAGR ~30.6% Again, not a typo. Are you surprised? For context, Fairfax’s common shareholders’ equity at 2020YE was $12.5 billion. Generating $10.1 billion (pre-tax) in gains from 10 equity holdings is a big deal. (Of course, this is just one part of what has been happening ‘under the hood’ at Fairfax in recent years.) Details: Two holdings were sold at peak valuations: Stelco (steel consolidation mania late in 2024) and Resolute Forest Products (top of the lumber cycle in 2022). Two positions were initiated at very low valuations: Orla Mining (2022 to 2024), a gold producer, and Foran Mining (2021 to 2025), a copper start-up. Other positions were opportunistically added to: Fairfax India (2022), Thomas Cook India (2022) and Metlen (2022 and 2025). Fairfax has been patient with other positions: Eurobank, FFH-TRS and CIB. Over the past 5 years, Fairfax has been very busy with its total equity portfolio - watering its flowers and pulling its weeds (fixing/exiting poorly performing legacy holdings). It has also been very opportunistic, exploiting volatility - buying low and selling high. Fairfax is partnering with outstanding CEO’s/entrepreneurs. Fairfax has been quietly putting on a clinic on how to do active management well – with the performance of the equity portfolio being just one example. Built over the past 40 years, Fairfax has skills sets (and relationships) that appear to be the perfect match for the current economic/macro environment. For 5 years they have been feasting. And they are licking their chops right now… patiently waiting for Mr. Market to serve up more wonderful investment opportunities that fall into their circle of competence. Narrative The narrative is Fairfax are not very good equity investors. Yes, this is complete crap. The next time you talk to an investment professional about Fairfax - and they say they do not like their equity portfolio - ask them how the top holdings have actually performed over 1- and 5-year periods. My guess is they will have no idea. But when it comes to Fairfax knowing nothing and having a strong opinion usually go hand-in-hand. Crazy but true. 5. Non-Insurance Consolidated Companies (NICC) Let’s pivot and look at some of Fairfax’s private holdings. NICC includes Recipe, Sleep Country, Peak Achievement, Grivalia Hospitality, AFT Food Ingredients, Meadow Foods and Dexterra. Fairfax has 5 income streams that flow through to earnings. NICC is the smallest. But that is changing. Fairfax has been investing heavily in recent years in NICC and the income stream is inflecting higher. Pre-Tax Income* 2020 to 2023 average per year: $12M 2024: $212M 2025E: $360M 2026E: $450M Fairfax has created a new, meaningful fifth income stream: Not correlated with P/C insurance With significant reinvestment opportunities Rapidly scaling * Pre-tax income (loss) before interest expense; excludes interest and dividends, share of profit (loss) of associates and net gains (losses) on investments. Capital allocation Capital allocation is a competitive advantage of Fairfax’s business model. 6. Investments P/C Insurance Investments Fairfax continued to invest to grow its insurance business: Albingia SA (33%): $216 million (closed in May) Gulf Insurance Group: $165 million (payment 2 of 4). Eurobank Cypress (45%): $69 (expected to close in Q1 2026) Buyouts of minority partners at Allied World (16.6%) and Odyssey (9.9%) remain future catalysts. Equity Investments Watering Flowers: Buying More of What it Already Owns Metlen: $119M (March) - 2.75M shares at €40 per share Increased ownership from 9.2 to 11.95M shares. Recipe (three transactions): $157M (Q1): took out minority partner (16%); now own 100%. $75M (May): take private Keg Royalty Income Fund. Now control Keg banner. Purchased rights to Olive Garden Canada + 8 locations (July) Foran Mining: $53M (May) – 25M shares at C$3 Ownership increased from 96.9 to 121.9M shares. John Keells - $18M (Sept); 230M shares at Rs 23.20/share Ownership increased from 4,282 to 4,512M shares. Kennedy Wilson: take private offer (Nov) at $10.25/share (38% premium) Awaiting response from KW special committee (timing: 2026) Pulling Weeds Blue Ant reverse takeover of Boat Rocker Boat Rocker impairment charge of $108.6M over first 6 months. Another example of Fairfax dealing with a poorly performing legacy holding. Solution: merge with a stronger player (and take the impairment charge). Over the past 7 years, Fairfax has dedicated significant resources (time and money) to deal with a number of poorly performing legacy holdings (purchased 2014-2017). It looks like they might be done. The equity portfolio has been significantly upgraded. New Investment Blizzard Vacatia: $835 million (Jan) Partner with entrepreneur Caroline Shin. Boosted interest income by $86M 7. Asset Sales Asset sales have always been an important part of Fairfax’s capital allocation framework. Sigma (March) - $327M proceeds; 178.7M realized gain. Orla (December) - $316M proceeds; ~$216M gain vs. original cost (estimate). Praktiker - (July) - Greek home improvement retailer. No details disclosed. Eurolife’s life insurance business: $945M proceeds; expected to close in Q1 2026 and result in ~$250M pre-tax gain. 8. Share buybacks Fairfax remained aggressive in 2025. 2025 (estimate) Shares repurchased: ~670,000 Cost: ~$1.1B (at ~$1,625 per share) Shares outstanding at year end: ~21M Five-Year Impact Shares reduced: 20% Cost: $4.3B Average price: $833 per share At 2025 YE, shares closed at $1,908. At September 30, 2024, book value was $1,204. Over the past five years, a significant number of shares were repurchased at very attractive prices – delivering enormous value to long-term shareholders (and reinforcing that Fairfax is being run for owners). 9. Final Observations Ratings Agency Upgrades In 2025, Fairfax and its P/C insurance subsidiaries were upgraded by both AM Best and S&P Global for the second time in three years – the result of strong performance and improving overall financial strength. Currency Tailwind Given Fairfax’s significant international exposure (insurance and investments), currency has been a headwind in recent years (strong US$). In 2025, currency flipped to a tailwind (weak US$). This gain should be reflected in OCI and book value (net of any hedging done by Fairfax). Book value is losing its relevance for investors Buffett banished BV Berkshire Hathaway in his shareholder letter in the 2018AR. Fairfax is not there yet, but it is moving in that direction. Fairfax’s economic results have exceeded accounting results for years and the gap in 2025 is especially wide. A key reason: more than 50% of the equity portfolio consists of associate and consolidated holdings. Carrying value for many of these holdings is much lower than their market value. This hidden value will get surfaced in the coming years (boosting accounting results like EPS, BV and ROE). Fairfax is helping investors. They publish the excess of FV over CV for non-insurance associate and consolidated holdings with their accounting results. Eurobank alone represents ~$100 per share of hidden value. This helps explain why Fairfax has continued being very aggressive with buybacks at 1.5 x BV. And why they continue to hold the FFH-TRS position. Management knows book value is understated – and the stock is even cheaper than it appears. 10. Personnel Changes Fairfax is very good at succession planning. A slow and thoughtful transition to the next generation of leadership has been happening in recent years at all parts of the organization: insurance, investments and capital allocation. The old guard is moving into mentorship and stewardship roles while the next generation takes on operating leadership/greater responsibilities. Appointments: Andy Barnard - Chairman - Fairfax Insurance Group (was President) Brian Young - President - Fairfax Insurance Group (was CEO Odyssey) Carl Overy - CEO – Odyssey Jennifer Allen - Chief Business Officer (was CFO) Amy Sherk – CFO Christine Magee - Fairfax Board Mr. Amitabh Kant - Senior Advisor
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