gfp Posted January 23 Posted January 23 I think that one of the only muddy waters points that actually landed was that Fairfax is more active in surfacing this "hidden value" (under marked assets) than many other companies that are similarly situated (Berkshire being a good example because Berkshire almost never writes anything up or sells non-mark-to-market investments). Its something to pay attention to, but just like for Berkshire over many years, I just incorporate the knowledge of under marked assets into what price to book value ratio I am willing to pay and leave it at that. An insurance company can sell for 3x book to another company, but guess what, that same dollar amount is now marked at 1x book on the next guy's balance sheet. I don't think this "hidden value" is unique to Fairfax and they are actually one of the most active in realizing / marking up these types of things.
RichardGibbons Posted January 23 Posted January 23 I'm pretty lazy, so I largely don't think about the hidden value. My typical method of keeping up to date on Fairfax is to let you and others on this thread do all the work. (Thanks!) I like diversification, so I'm only likely to trade Fairfax if it becomes wildly over- or undervalued. Today, at ~$150/share, it's still an amount that's within my error range when calculating the value of Fairfax. As such, at this point, it's not a number that would likely impact my buy/sell decision because right now I only care about extremes. If I thought we were at a valuation where I might want to trade Fairfax, I'd spend some time thinking about the hidden value estimate to see if it changes my opinion (though I think it's unlikely it would change a decision in the next 5 years because it's just not big enough.)
SafetyinNumbers Posted January 23 Posted January 23 (edited) 2 hours ago, gfp said: I think that one of the only muddy waters points that actually landed was that Fairfax is more active in surfacing this "hidden value" (under marked assets) than many other companies that are similarly situated (Berkshire being a good example because Berkshire almost never writes anything up or sells non-mark-to-market investments). Its something to pay attention to, but just like for Berkshire over many years, I just incorporate the knowledge of under marked assets into what price to book value ratio I am willing to pay and leave it at that. An insurance company can sell for 3x book to another company, but guess what, that same dollar amount is now marked at 1x book on the next guy's balance sheet. I don't think this "hidden value" is unique to Fairfax and they are actually one of the most active in realizing / marking up these types of things. I agree with you that Fairfax recycles assets which recognizes value in the portfolio but the way you wrote it suggests this is an active decision to get recognition for value creation. Fairfax seems to collaborate with their jockey to make sell at a great price. One of the highest risk moments for an organization is change in management. Deciding to sell with management makes a ton of sense to avoid losses but also because their partner gets rich and leaves on the best terms potentially ready to business again. I think Berkshire is a different situation. I’m sure there are marks that could be taken up but there must also be marks that can be taken down. Otherwise, wouldn’t BRK have a higher ROE? Maybe all the businesses are reinvesting like Amazon but I don’t think that’s the case. With FFH, they only started taking significant stakes in companies what 15 years ago? The duds take losses immediately reducing book value even if they ultimately recover. They are likely to own winners for a long time. We have only recently started to see these realizations which makes sense given how much time has passed. The accounting defers all of the gains and juices all of the returns. We don’t see the multiple expansion until it’s sold. In a best case scenario where ROE is 20%+ /yr, this becomes a reliable source of ROE. I think understanding the accounting and what that means for forward returns is at the crux of understanding how much of an opportunity Fairfax is at these prices. The sell off this week was created by an analyst that is a reflection of his clients and therefore well respected. Clients decided to ignore the equity portfolio a long time ago because it wasn’t predictable but enjoyed it as it translated to book value during the heard market and rising interest rates period. As Viking has pointed out the FV/CV is big and growing. Fairfax is generating an incredible amount of capital from its investments and is reinvesting it north of 15% with high certainty either at the portfolio company level, at the insurance portfolio level or at the holding company level. I use a 90% confidence interval which is entirely based on my assessment of probable outcomes. Since most people don’t think probabilistically its judgement based and it’s possible to be wrong which makes most investors uncomfortable.But of course, that’s what makes a market. The BMO analyst, by ignoring the equity portfolio and the power of compounding has made a market where the odds seem out of hand. Even BMO’s price target tells us that return expectations are incredibly high. This analyst uses 9.5x EPS and 1.45x BV. That’s a 10.5% earnings yield. That’s a very high return expectation over the long term on conservative estimates. It’s hard for me to imagine a world where he’s right in the way that he expects but we’ll just have to find out. Edited January 23 by SafetyinNumbers
SafetyinNumbers Posted January 23 Posted January 23 2 hours ago, RichardGibbons said: I'm pretty lazy, so I largely don't think about the hidden value. My typical method of keeping up to date on Fairfax is to let you and others on this thread do all the work. (Thanks!) I like diversification, so I'm only likely to trade Fairfax if it becomes wildly over- or undervalued. Today, at ~$150/share, it's still an amount that's within my error range when calculating the value of Fairfax. As such, at this point, it's not a number that would likely impact my buy/sell decision because right now I only care about extremes. If I thought we were at a valuation where I might want to trade Fairfax, I'd spend some time thinking about the hidden value estimate to see if it changes my opinion (though I think it's unlikely it would change a decision in the next 5 years because it's just not big enough.) Do you think about what returns are on incremental capital?
Haryana Posted January 24 Posted January 24 (edited) 4 hours ago, Viking said: A question for board members... How do you think about the significant (and growing) amount of "hidden value" that is residing in Fairfax's equity portfolio/balance sheet. Is there a "right way" to think about it? (academic and/or practical) For people on the board who have owned Berkshire Hathaway long term, my guess is this has been something you have had to grapple with. How did you do it? For Fairfax, some of the "hidden value" is pretty easy to calculate (excess of FV over CV for the publicly traded holdings like Eurobank). Some of it is less precise (like BIAL). I find it a fascinating topic. It is a fact - it is not theoretical. It is a big number: My guess is ~$4.5 billion = $155/diluted share, after tax It is growing by ~+$1 billion per year As we learned the past 2 days, some analysts ignore it completely in their analysis of the company. My guess is "hidden value" at Fairfax is going to continue to increase in size in the coming years. The equity portfolio is growing rapidly. A large and growing part of it is private holdings (with limited disclosures). As a result, how investors think about "hidden value" will be an increasingly important part of their analysis. Thanks in advance! There may be a positive (or negative) hidden value that is understated in the book value. However, the share of profit from that value is nevertheless included in the main income. Therefore, a valuation based on estimate of normalized earnings includes 'hidden value'. Edited January 24 by Haryana
SafetyinNumbers Posted January 24 Posted January 24 1 hour ago, Haryana said: There may be a positive (or negative) hidden value that is understated in the book value. However, the share of profit from that value is nevertheless included in the main income. Therefore, a valuation based on estimate of normalized earnings includes 'hidden value'. So what’s a fair valuation?
RichardGibbons Posted January 24 Posted January 24 4 hours ago, SafetyinNumbers said: Do you think about what returns are on incremental capital? Yes, this is is something I think about, but I feel like I don't have a very good grasp on it for most businesses. I'm not very good at thinking about it deeply, and am mostly vibing--doing some sort of hand-waving composite involving historical ROI, moat, and gut feel for how hard I think it would be to reinvest the capital. (Note: I'm not saying this is a good process. It's atrocious, really.) I think Fairfax should have OK returns on incremental capital these days because they are still small enough and do tend to be smartly opportunistic. I think Berkshire's returns on incremental capital won't be great. They're smartly opportunistic, but too big for that strategy to have really high returns because viable opportunities are too infrequent. 1
Thrifty3000 Posted January 24 Posted January 24 9 hours ago, Viking said: A question for board members... How do you think about the significant (and growing) amount of "hidden value" that is residing in Fairfax's equity portfolio/balance sheet. Is there a "right way" to think about it? (academic and/or practical) For people on the board who have owned Berkshire Hathaway long term, my guess is this has been something you have had to grapple with. How did you do it? For Fairfax, some of the "hidden value" is pretty easy to calculate (excess of FV over CV for the publicly traded holdings like Eurobank). Some of it is less precise (like BIAL). I find it a fascinating topic. It is a fact - it is not theoretical. It is a big number: My guess is ~$4.5 billion = $155/diluted share, after tax It is growing by ~+$1 billion per year As we learned the past 2 days, some analysts ignore it completely in their analysis of the company. My guess is "hidden value" at Fairfax is going to continue to increase in size in the coming years. The equity portfolio is growing rapidly. A large and growing part of it is private holdings (with limited disclosures). As a result, how investors think about "hidden value" will be an increasingly important part of their analysis. Thanks in advance! I’d love to have a decent estimate of normalized look through earnings on the portfolio. I recall we were able to round up the look throughs for about half the portfolio a few years ago.
steph Posted January 24 Posted January 24 I look at it as a conservative +/- 10% earnings yield through the cycle at this point. They should be able to grow this at 10-15% a year by growing organically, buybacks, smart reinvestments,… . And then you have on top of this some hidden value and hopefully some nice surprises once in a while. Book value is less important as it used to be. Investing is about probabilities and limiting downside risk. FFH is still one of the best opportunities out there in my humble opinion.
SafetyinNumbers Posted January 24 Posted January 24 3 hours ago, steph said: Book value is less important as it used to be I think book value is as important as ever but it needs to be used in conjunction with ROE to come up with a P/B that reflects intrinsic value.
SafetyinNumbers Posted January 24 Posted January 24 9 hours ago, RichardGibbons said: I think Fairfax should have OK returns on incremental capital these days because they are still small enough and do tend to be smartly opportunistic. What do you consider OK returns? They are using capital to buyback stock and buy in minority interests on the insurance companies. These likely have returns north of 15%. Is that OK or is that good?
dartmonkey Posted January 24 Posted January 24 44 minutes ago, SafetyinNumbers said: 4 hours ago, steph said: Book value is less important as it used to be I think book value is as important as ever but it needs to be used in conjunction with ROE to come up with a P/B that reflects intrinsic value. If you are at 1.4x book and you are getting 15% ROE (both of these numbers are on the conservative side for Fairfax), then you are really getting an earnings yield 15%/1.4=11% for every dollar invested, which is just another (perhaps better) way of saying you have a stock with a P/E of 1/11%=9. IOW if you need the ROE to make sense of the P/B (which I agree you do), then you are really hankering after P/E, not P/B. And it’s a bit hard to see why we should care about P/B if we have P/E. Do you agree with this line of thinking?
SafetyinNumbers Posted January 24 Posted January 24 11 minutes ago, dartmonkey said: If you are at 1.4x book and you are getting 15% ROE (both of these numbers are on the conservative side for Fairfax), then you are really getting an earnings yield 15%/1.4=11% for every dollar invested, which is just another (perhaps better) way of saying you have a stock with a P/E of 1/11%=9. IOW if you need the ROE to make sense of the P/B (which I agree you do), then you are really hankering after P/E, not P/B. And it’s a bit hard to see why we should care about P/B if we have P/E. Do you agree with this line of thinking? As the great George Costanza once said: “It’s all pipes!” i.e. it’s all connected. i use three ways to triangulate intrinsic value. P/E, P/B and float + BVPS.
TwoCitiesCapital Posted January 24 Posted January 24 (edited) 2 hours ago, SafetyinNumbers said: I think book value is as important as ever but it needs to be used in conjunction with ROE to come up with a P/B that reflects intrinsic value. +1 I actually think book value tells the story better now that it used to Before you had insurance subs carried well below economic value, hidden value in things like Pet Insurance and run-off, Digit which was a small/invisible speculative bet, interest rates at 0% overstating the bond/float value, etc etc etc. Long equities offset by deflation swaps, equity index shorts, and unknown individual name shorts. Lots of obfuscation requiring adjustments in both directions. But through selling portions of their insurance subs to their partners they got to mark those values up, Digit is no longer a small piece of the pie, value was unlocked from subsidiaries in Pet Insurance and run-off, look-through to public equities for much of the recent value creation, and interest rates finally provide a value to float. And none of that has to be adjusted for unknown shorts/gross exposures at the index level. We can simply take the earnings as they are. Edited January 24 by TwoCitiesCapital
RichardGibbons Posted January 24 Posted January 24 4 hours ago, SafetyinNumbers said: What do you consider OK returns? They are using capital to buyback stock and buy in minority interests on the insurance companies. These likely have returns north of 15%. Is that OK or is that good? FWIW, I didn't spend a lot of time ensuring that I used the most precise comparative. However, to answer your question, I'd say that in general, "OK" would be roughly as good as the average S&P company is, if you exclude companies that are obviously suppar. On top of that, I'd weight the assessment based on the confidence that I could have in my evaluation of the assessment. 15% would be good for the this sort of company. However, if you look at the probability weighting of the expected returns, I think the errors are much more likely to be on the downside than the upside. Like, I would be more surprised if Fairfax's returns on investment were 35% than -5% in 2027. I think this because I think surprises in insurance are much more likely to be negative than positive. On top of that, Fairfax has a high variance investment strategy for an insurance business. I know that people on the board are generally writing off Fairfax's seven years of famine as an aberration resulting from shorting that will never come back. But I don't have the same confidence in that as everyone else. It was a costly error, and I think generally the historical behaviour of people is a better way to assess likely future behaviour than what people will claim in that particular moment. And, if they are changing their behaviour to avoid a catastrophe, then how do I know that they're not also losing some of the potential big upside bets they could make, such as the credit default swaps 2009. Essentiallly, with Fairfax, it feels to me like the snowglobe has likely been shaken up, but we don't know where the snow will settle. If they end up with 15%+ returns in 5 years, then I think those returns will be good. Based on my best probabilistic guess right now of the chance of it happening, then it's OK.
Fist of Fury Posted January 24 Posted January 24 MTY Food Group rumour: According to Radio Tandil, the investment firm Serruya Private Equity, of Markham, Ontario, is currently in advanced negotiations to acquire MTY for about $52 per share, while Receipts Unlimited, which belongs to the Toronto-based financial conglomerate Fairfax, has reportedly submitted a competing offer of more than $53 per share. Source: La Presse, Montréal
anshulp Posted January 24 Posted January 24 54 minutes ago, Fist of Fury said: MTY Food Group rumour: According to Radio Tandil, the investment firm Serruya Private Equity, of Markham, Ontario, is currently in advanced negotiations to acquire MTY for about $52 per share, while Receipts Unlimited, which belongs to the Toronto-based financial conglomerate Fairfax, has reportedly submitted a competing offer of more than $53 per share. Source: La Presse, Montréal So that would be 1.1B cad equity value and $2.3B EV . Est 259m in Ebitda would put the deal at 8.89 EV/EBITDA or 13.3 EV/EBIT. They have a lot of debt with Interest costing them 60m a year right now, so not sure if Fairfax would be able to increase the debt load a lot .
Viking Posted January 24 Posted January 24 Fairfax’s Business Model My next couple of posts are going to focus on Fairfax’s business model. Why? My thesis is most investors (and analysts) do not understand Fairfax’s business model. (I still have lots to learn.) Part of the reason is complexity – it is not a traditional P/C insurance company (despite some analysts’ best attempts to pretend otherwise). The other is it has changed in important ways over the past 40 years. To get us started, let’s explore how it has changed and where Fairfax is in their journey today. Where is my analysis off base? I look forward to hearing the feedback from other board members. Has Fairfax’s Business Model Changed Over the Years? Yes—dramatically. While Fairfax’s core philosophy has remained consistent for four decades, the expression of that philosophy has evolved meaningfully. The company has repeatedly adapted its insurance operations, investment framework, and capital allocation approach in response to hard-earned lessons, changing market conditions, and a steadily growing capital base. What follows is a clear, phase-by-phase overview of that evolution. Phase 1 (1985–2000): Scale Insurance + Value Investing Insurance: Scale and Learn Aggressive growth through acquisitions Primary objective: grow float and achieve scale Investments: Make Money with Investments Traditional Ben Graham-style value investing Investments were expected to be the primary profit driver Summary: This was Fairfax’s foundation-building phase. The focus was on rapid growth, learning the insurance business, and leveraging float through value investing. Scale came first; refinement would come later. Phase 2 (2001–2010): Digest Insurance + Value Investing Insurance: Digest and Learn Painful Lessons Worked through significant reserving problems Shifted from expansion to stabilization and repair Investments: (Still) Make Money—Spectacularly So Continued value-oriented investment approach Extraordinary success with CDS and equity hedges during the 2008 financial crisis Summary: This period was defined by humility on the insurance side and brilliance on the investment side. Fairfax learned—painfully—that insurance quality mattered far more than previously appreciated. At the same time, the success of CDS and hedges planted the seeds for a later big mistake. Phase 3 (2011–2020): Improve Insurance + Play Extreme Defense Insurance: Steady Quality Improvement + Acquisition-Driven Growth in a Soft Market Andy Barnard appointed to lead insurance operations in 2011 Underwriting profit becomes the central focus Quality improvement began with existing operations In a soft market, growth pursued primarily via acquisitions – with quality as a priority: Allied World, Brit, International, Zenith Global footprint expanded Strategic pivot in India (sale of ICICI Lombard; seeding of startup Digit) Investments: A Lost Decade Heavy use of equity hedges and shorts proved costly Equity investment framework deteriorated: Result was too many “chronically leaking boats” across the portfolio Summary: This period was defined by brilliance on the insurance side and humility on the investment side – the opposite of the prior period. While insurance quality steadily improved, defensive investment positioning overwhelmed results and masked the progress being made inside the insurance operations. Key inflection points: Equity hedge exited 2016 Final short position closed in 2020 Equity investment framework refined around 2018 Phase 4 (2021–Present): The Insurance-Float Compounding Machine This is where the transformation becomes unmistakable. Insurance: A High-Quality Business, Rapid Growth in a Hard Market Continued underwriting discipline under Andy Barnard and Brian Young Shift from acquisition-driven growth to organic growth, exploiting a hard market Insurance earnings are now larger, more consistent, and higher quality than ever Investments: A High Quality Business Delivering Exceptional Results Clear shift to high-quality equities: strong management teams, solid balance sheets, and sustained profitability Chronic underperformers addressed decisively: sold, merged, taken private, or wound down Equity holdings performing exceptionally well Eurobank stands out as a flagship success Capital Allocation: Best-in-Class Execution Fixed income: avoided the historic 2022 bond bear market (by being very short duration) Asset sales: pet insurance, Resolute Forest Products, Stelco, Orla Fairfax total return swap: opportunistic and unconventional Share buybacks: ~24% reduction in shares outstanding over eight years, executed at very low prices Summary: This period has been defined by brilliance on both the insurance and investing sides of the business. Capital allocation has been exceptional. All parts of the business model are working together (complementary/synergistically). As a result, earnings have been transformed – much larger, higher quality and more resilient across cycles. So—Is Fairfax’s Business Model Different Today? At its core: no. In practice: very much so. The foundational model remains: Insurance float Decentralized operating companies Centralized capital allocation But its modern expression reflects decades of learning. The Bigger Lesson – Resilience and Strength Fairfax made meaningful missteps over the years: Early on, with insurance quality and reserving Later, with equity hedges and short positions Yet despite those mistakes, Fairfax compounded its share price at approximately 19% annually over 40 years (US$, dividends reinvested). That is an exceptional record—and a powerful testament to the underlying strength of the business model. Today, for the first time in the company’s history: Insurance and investments are both high-quality businesses Capital allocation is operating at a best-in-class level This is a version of Fairfax we have never seen before—and it is the best version we have ever seen. Fairfax has become a true compounding machine.
Maverick47 Posted January 24 Posted January 24 1 hour ago, Viking said: Today, for the first time in the company’s history: Insurance and investments are both high-quality businesses Capital allocation is operating at a best-in-class level This is a version of Fairfax we have never seen before—and it is the best version we have ever seen. Fairfax has become a true compounding machine. Exactly true. And thanks to the BMO analyst report I had the opportunity to put my latest Fairfax dividends to work in my own personal attempt to improve my personal capital allocation and increase my ownership of the company.
Haryana Posted January 25 Posted January 25 On 1/23/2026 at 6:25 PM, SafetyinNumbers said: So what’s a fair valuation? Just using earnings and growth similar to academic way of discounting future cashflow. Everyone should make their own estimate of future normalized earnings and apply their own valuation multiple with an eye on the risk. We are we stuck up on using book value?
UK Posted January 25 Posted January 25 9 hours ago, Maverick47 said: Exactly true. And thanks to the BMO analyst report I had the opportunity to put my latest Fairfax dividends to work in my own personal attempt to improve my personal capital allocation and increase my ownership of the company. +1. Thanks Viking! Also everyone keep talking about the dividends, I wonder, do IBKR users are the ones who get them last:)?
SafetyinNumbers Posted January 25 Posted January 25 6 hours ago, Haryana said: Just using earnings and growth similar to academic way of discounting future cashflow. Everyone should make their own estimate of future normalized earnings and apply their own valuation multiple with an eye on the risk. We are we stuck up on using book value? Because it’s a balance sheet based financial and the earnings streams are variable.
Buffett_Groupie Posted January 25 Posted January 25 19 hours ago, Viking said: Fairfax’s Business Model My next couple of posts are going to focus on Fairfax’s business model. Why? My thesis is most investors (and analysts) do not understand Fairfax’s business model. (I still have lots to learn.) Part of the reason is complexity – it is not a traditional P/C insurance company (despite some analysts’ best attempts to pretend otherwise). The other is it has changed in important ways over the past 40 years. To get us started, let’s explore how it has changed and where Fairfax is in their journey today. Where is my analysis off base? I look forward to hearing the feedback from other board members. Has Fairfax’s Business Model Changed Over the Years? Yes—dramatically. While Fairfax’s core philosophy has remained consistent for four decades, the expression of that philosophy has evolved meaningfully. The company has repeatedly adapted its insurance operations, investment framework, and capital allocation approach in response to hard-earned lessons, changing market conditions, and a steadily growing capital base. What follows is a clear, phase-by-phase overview of that evolution. Phase 1 (1985–2000): Scale Insurance + Value Investing Insurance: Scale and Learn Aggressive growth through acquisitions Primary objective: grow float and achieve scale Investments: Make Money with Investments Traditional Ben Graham-style value investing Investments were expected to be the primary profit driver Summary: This was Fairfax’s foundation-building phase. The focus was on rapid growth, learning the insurance business, and leveraging float through value investing. Scale came first; refinement would come later. Phase 2 (2001–2010): Digest Insurance + Value Investing Insurance: Digest and Learn Painful Lessons Worked through significant reserving problems Shifted from expansion to stabilization and repair Investments: (Still) Make Money—Spectacularly So Continued value-oriented investment approach Extraordinary success with CDS and equity hedges during the 2008 financial crisis Summary: This period was defined by humility on the insurance side and brilliance on the investment side. Fairfax learned—painfully—that insurance quality mattered far more than previously appreciated. At the same time, the success of CDS and hedges planted the seeds for a later big mistake. Phase 3 (2011–2020): Improve Insurance + Play Extreme Defense Insurance: Steady Quality Improvement + Acquisition-Driven Growth in a Soft Market Andy Barnard appointed to lead insurance operations in 2011 Underwriting profit becomes the central focus Quality improvement began with existing operations In a soft market, growth pursued primarily via acquisitions – with quality as a priority: Allied World, Brit, International, Zenith Global footprint expanded Strategic pivot in India (sale of ICICI Lombard; seeding of startup Digit) Investments: A Lost Decade Heavy use of equity hedges and shorts proved costly Equity investment framework deteriorated: Result was too many “chronically leaking boats” across the portfolio Summary: This period was defined by brilliance on the insurance side and humility on the investment side – the opposite of the prior period. While insurance quality steadily improved, defensive investment positioning overwhelmed results and masked the progress being made inside the insurance operations. Key inflection points: Equity hedge exited 2016 Final short position closed in 2020 Equity investment framework refined around 2018 Phase 4 (2021–Present): The Insurance-Float Compounding Machine This is where the transformation becomes unmistakable. Insurance: A High-Quality Business, Rapid Growth in a Hard Market Continued underwriting discipline under Andy Barnard and Brian Young Shift from acquisition-driven growth to organic growth, exploiting a hard market Insurance earnings are now larger, more consistent, and higher quality than ever Investments: A High Quality Business Delivering Exceptional Results Clear shift to high-quality equities: strong management teams, solid balance sheets, and sustained profitability Chronic underperformers addressed decisively: sold, merged, taken private, or wound down Equity holdings performing exceptionally well Eurobank stands out as a flagship success Capital Allocation: Best-in-Class Execution Fixed income: avoided the historic 2022 bond bear market (by being very short duration) Asset sales: pet insurance, Resolute Forest Products, Stelco, Orla Fairfax total return swap: opportunistic and unconventional Share buybacks: ~24% reduction in shares outstanding over eight years, executed at very low prices Summary: This period has been defined by brilliance on both the insurance and investing sides of the business. Capital allocation has been exceptional. All parts of the business model are working together (complementary/synergistically). As a result, earnings have been transformed – much larger, higher quality and more resilient across cycles. So—Is Fairfax’s Business Model Different Today? At its core: no. In practice: very much so. The foundational model remains: Insurance float Decentralized operating companies Centralized capital allocation But its modern expression reflects decades of learning. The Bigger Lesson – Resilience and Strength Fairfax made meaningful missteps over the years: Early on, with insurance quality and reserving Later, with equity hedges and short positions Yet despite those mistakes, Fairfax compounded its share price at approximately 19% annually over 40 years (US$, dividends reinvested). That is an exceptional record—and a powerful testament to the underlying strength of the business model. Today, for the first time in the company’s history: Insurance and investments are both high-quality businesses Capital allocation is operating at a best-in-class level This is a version of Fairfax we have never seen before—and it is the best version we have ever seen. Fairfax has become a true compounding machine. 3 streams of income just like Berkshire Hathaway: 1) insurance and reinsurance 2) investment 3) non-insurance
dartmonkey Posted January 25 Posted January 25 13 hours ago, UK said: +1. Thanks Viking! Also everyone keep talking about the dividends, I wonder, do IBKR users are the ones who get them last:)? I got mine on Thursday from Interactive Brokers Canada, just in time for the sale. (I bought another 2% but far from the bottom price, $2310 I think.)
yesman182 Posted January 25 Posted January 25 Sorry if this is behind a WSJ paywall. https://www.wsj.com/business/david-sokol-berkshire-hathaway-a2f92bf2?st=YygBpz&reflink=article_copyURL_share Odd that they describe him as “low profile”. More evidence how low profile Fairfax is in the US. Seems like the title could have been “ One time Buffett successor makes billions for Canadian Warren Buffett” or something else catchy.
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