Fairfax 2026

[SafetyinNumbers]

1 hour ago, Milu said:

Thanks, yes UA may work out and agreed that as long as the big investments are showing good returns I don't mind a few small ones doing badly. My other question for you seeing as you have obvioulsy done a lot of research on the company. Is there any good metric to use to assess the valuation of FFH relative it it's peers and it's history. And how do things look now based on that. I know price to book is often used for these types of firms, Berkshire typically being known to be good value at 1.2 or lower, although Buffett gradually put less emphasis on this. Is Price to Book a similarly useful though not perfect way to assess Fairfax?

I use three methods to triangulate intrinsic value for Fairfax. 
 

1. 15x earnings which is a fair market multiple for above average ROE which is north of US$3000 on trailing EPS. 

2. 2.5x BV which is reasonable for a business with a history of compounding BVPS in the high teens for 40 years. This is also north of US$3000 on current book value.

3. Float + book value which is what I call the Buffett method. The idea here is that float for a high quality insurance company is always growing and thus represents an asset to equity holders and not a liability. For Fairfax, in particular, I think they are very conservative with reserving. Excess reserves are just liabilities waiting to be converted into equity. That also gives a value north of US$3000/sh. 
 

My view is that there is plenty of margin of safety when buying at a > 40% discount to these measures.  

[cwericb]

6 hours ago, Milu said:

I hear this but then I see them taking a big position in Under Armour, which makes no sense to me. Maybe there is some logic but this is a beat up distressed apparel company. I also remember when they went big into Blackberry/RIM after it was clear that apple and the smartphone had destroyed the business, it seemed like a very confusing investment decision to me at the time (not hindsight bias) and it played out in expected fashion. And then deciding to be perpetually hedged or short during one of the biggest bull runs in history. Perhaps the sign of how good this business is is how it has still managed to generate such good stock and book value returns despite plenty of large capital allocation errors, not necessarily because of great decisions.

 

I have started to read some of @Viking posts though and he does make a very good case for the company if they have indeed rectified these prior capital allocation approaches although seeing this Under Armour talk has made me question things.

 

Re Underamour, consider the following

 

1. Fairfax owns Peak Achievement Athletics Inc..

 

2. Peak Achievement owns Bauer Hockey, "the world's leading manufacturer of ice hockey equipment, and other athletic brands".

 

3. Bauer Apparel seems to be quite popular, at least in my neck of the woods where I have noted several friends wearing jackets with prominent Bauer logos.

 

4 As it seems that Fairfax has been quite active in the sports apparel space, they likely have plans of integrating Under Armour with Bauer. 

 

5. Fairfax has also been accumulating shares in another Canadian company, Lululemon.,

 

6. Bauer has a has a "Lululemon Apparel Collection" advertised on their website.

 

 So. There seems to be a pattern forming here. 

 

As I have said before many times, Fairfax knows so much more then we shareholders know about these businesses and their own future plans, that we need to trust that management knows what it is doing. If one doesn't, one should probably be investing elsewhere.

Edited January 30 by cwericb

[Hoodlum]

1 hour ago, Viking said:

@Milu, UA is (still) a small investment. What I focus on is results. Here is how Fairfax’s 10 largest public holdings performed in 2025. Results for the past 5 years have been very good. At high level, they are watering their flowers and pulling their weeds. As a result, i give management some leeway - they have earned it in my books. 
 

Importantly, they are going to make some mistakes (this is not to say I think UA is a mistake - I have no idea as I don’t follow the company/industry). 
 

 

 

 

As of Wednesday, Fairfax owned 65M share of UA with a market cap of $400M.  This would slip in as our 9th largest holding now.

https://www.streetinsider.com/SEC+Filings/Form+4+Under+Armour%2C+Inc.+For%3A+Jan+27+Filed+by%3A+FAIRFAX+FINANCIAL+HOLDINGS+LTD+CAN/25918112.html

 

 

Edited January 30 by Hoodlum

[dartmonkey]

19 minutes ago, Milu said:

Thanks, yes UA may work out and agreed that as long as the big investments are showing good returns I don't mind a few small ones doing badly. My other question for you seeing as you have obvioulsy done a lot of research on the company. Is there any good metric to use to assess the valuation of FFH relative it it's peers and it's history. And how do things look now based on that. I know price to book is often used for these types of firms, Berkshire typically being known to be good value at 1.2 or lower, although Buffett gradually put less emphasis on this. Is Price to Book a similarly useful though not perfect way to assess Fairfax?

The big difference between Berkshire and Fairfax is that Fairfax has way more float, in relation to its equity. At the end of 2024, Berkshire had:

-$171b in float and

-$649b in equity,

so they can invest $0.26 of insurance premium float alongside every $1 of equity.

 

In Fairfax,s case, they had:

-$35.4b in float, and

-$28.3b in equity,

so they can invest $1.25 of insurance premium float alongside every $1 of equity.

 

Berkshire trades at 1.47x book, Fairfax at 1.42x, about the same. But Fairfax has a much higher return on its book (ROE), in large part because of the huge extra boost they get from having about 5x as much float as Berkshire, compared to their equity. So Berkshire has an ROE of 10%, and Fairfax has an ROE of 17%.

 

Berkshire has some advantages: it is far less levered, far less exposed to a really bad insurance year, and it indisputably has a set of businesses (BNSF, BH Energy, stock portfolio) that is less risky than Fairfax's. But to my mind, the company with a 17% ROE is still worth a higher multiple of equity than the safer one with an ROE of 10%.

[villainx]

Fairfax the clothing company?

[yesman182]

47 minutes ago, cwericb said:

Bauer Apparel seems to be quite popular, at least in my neck of the woods where I have noted several friends wearing jackets with prominent Bauer logos.

I would be curious to know where you live. I would say in the US hockey is a rich persons sport. I live in Wisconsin, it’s plenty cold here but public parks don’t really make many hockey rinks anymore, so the only people who play the sport are people who can pay for renting ice time. Is that story the same in Canada? Lots of rich people around me seem to like getting their kids into hockey, not really sure why but it’s very trendy in my area. I am not a hockey guy, so in no way am I an expert. 

[gfp]

Where I grew up in Illinois (near where cubsfan lives), you took a couple shovels and plowed an ice hockey rink onto a frozen pond.

 

But also our high school had boys and girls hockey teams and there was an indoor rink available for that.  I only played "pond hockey"

[dartmonkey]

2 minutes ago, yesman182 said:

I would say in the US hockey is a rich persons sport. I live in Wisconsin, it’s plenty cold here but public parks don’t really make many hockey rinks anymore, so the only people who play the sport are people who can pay for renting ice time. Is that story the same in Canada?

 

Yes. In Eastern Canada where 2/3 of the population lives (i.e. Ontario, Quebec and the maritime provinces), or add coastal BC to get to 3/4 of the population, it is just not cold enough to rely on outdoor hockey rinks, even though there are a lot of them (about 5000). Many of them only function for 4-8 weeks a year, mostly for recreational skating, with a little shinny hockey, but organized hockey leagues almost never use them. So in most of Canada, hockey is a sport that is conducted in one of our 2,500 arenas, i.e. indoor skating rinks, sometimes year-round, sometimes skipping the hot summer months. 

 

And yes, the equipment is expensive too (which is a good thing for Peak). As is the rental of ice time, and all the coaching, officiating, travel expenses for games, etc. etc - the median cost was $1900 in 2023. Despite all this, it remains a popular sport, with over 600,000 kids registered in leagues, a modest decline for boys (because of the expense, maybe, or the violence, or I think more probably because so many other sports are now available), but with more girls playing who have slowed the decline and now represent about a fifth of all players.

[gfp]

Do they still have "play it again sports" ??  That's where we always got all our nasty old used hockey gear.  Someone's nasty old skates... ew

 

my parents were cheap!

[roundball100]

7 minutes ago, gfp said:

Do they still have "play it again sports" ??  That's where we always got all our nasty old used hockey gear.  Someone's nasty old skates... ew

 

my parents were cheap!

In southern Ontario, we do still have Play It Again Sports.

[roundball100]

9 minutes ago, gfp said:

my parents were cheap!

Have you thanked them for planting the seeds that have made you a good value investor?

[Viking]

1 hour ago, Hoodlum said:

 

As of Wednesday, Fairfax owned 65M share of UA with a market cap of $400M.  This would slip in as our 9th largest holding now.

https://www.streetinsider.com/SEC+Filings/Form+4+Under+Armour%2C+Inc.+For%3A+Jan+27+Filed+by%3A+FAIRFAX+FINANCIAL+HOLDINGS+LTD+CAN/25918112.html

 

 

 

@Hoodlum Thanks for the update. 

[Parsad]

21 minutes ago, gfp said:

Do they still have "play it again sports" ??  That's where we always got all our nasty old used hockey gear.  Someone's nasty old skates... ew

 

my parents were cheap!

 

Unfortunately, the ones in British Columbia are gone.  Big, brand name retail here now dominate...including Fairfax's Sporting Life.  Although there is one independent store appropriately called The Hockey Shop.  Massive...has anything and everything for hockey.  Most players get their stuff from there now.  Cheers!

[Viking]

57 minutes ago, dartmonkey said:

The big difference between Berkshire and Fairfax is that Fairfax has way more float, in relation to its equity. At the end of 2024, Berkshire had:

-$171b in float and

-$649b in equity,

so they can invest $0.26 of insurance premium float alongside every $1 of equity.

 

In Fairfax,s case, they had:

-$35.4b in float, and

-$28.3b in equity,

so they can invest $1.25 of insurance premium float alongside every $1 of equity.

 

Berkshire trades at 1.47x book, Fairfax at 1.42x, about the same. But Fairfax has a much higher return on its book (ROE), in large part because of the huge extra boost they get from having about 5x as much float as Berkshire, compared to their equity. So Berkshire has an ROE of 10%, and Fairfax has an ROE of 17%.

 

Berkshire has some advantages: it is far less levered, far less exposed to a really bad insurance year, and it indisputably has a set of businesses (BNSF, BH Energy, stock portfolio) that is less risky than Fairfax's. But to my mind, the company with a 17% ROE is still worth a higher multiple of equity than the safer one with an ROE of 10%.

 

In my post I stated that Fairfax is not a P/C insurance company. I also don't think BRK of today is a good comparison. I don't think Fairfax intends to become a full on conglomerate, which is what BRK is today. The difference between BRK goes well beyond float:

• Size
• Reinvestment opportunity
• How they do capital allocation
• Sell strategy
• Buyback strategy
• International (India/Greece)
• Ownership (Prem will never sell; Buffett's holdings will be sold over time)
• Etc, etc

I think BRK of 1980/1990 is closer to Fairfax today... but the also has its limitations. (Importantly, no one is as good as Buffett was back then.) 

[dartmonkey]

10 minutes ago, Viking said:

In my post I stated that Fairfax is not a P/C insurance company.

This may be your belief but Fairfax begs to differ:

 

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. 

 

Anyways, I was responding to milu's question about whether price to book was as useful for looking at Fairfax as it is for looking at Berkshire. I agree there are a lot of differences between the 2, primarily the fact that Fairfax really is mostly an insurer, with huge leverage from float, whereas Berkshire has become more of a conglomerate with huge wholly and partially owned equity investments. And there are many other differences, size being one, of course (Berkshire has a market cap 30x as big, and so is much more constrained in its investment opportunities), the international nature of Fairfax whereas Berkshire's activities are 90+% in the USA, and many more.

 

My major point is that Fairfax gets a much larger contribution from insurance float than Berkshire does, and this should be reflected in a higher P/B, in my opinion. Do you agree?

[SafetyinNumbers]

2 hours ago, cwericb said:

 

Re Underamour, consider the following

 

1. Fairfax owns Peak Achievement Athletics Inc..

 

2. Peak Achievement owns Bauer Hockey, "the world's leading manufacturer of ice hockey equipment, and other athletic brands".

 

3. Bauer Apparel seems to be quite popular, at least in my neck of the woods where I have noted several friends wearing jackets with prominent Bauer logos.

 

4 As it seems that Fairfax has been quite active in the sports apparel space, they likely have plans of integrating Under Armour with Bauer. 

 

5. Fairfax has also been accumulating shares in another Canadian company, Lululemon.,

 

6. Bauer has a has a "Lululemon Apparel Collection" advertised on their website.

 

 So. There seems to be a pattern forming here. 

 

As I have said before many times, Fairfax knows so much more then we shareholders know about these businesses and their own future plans, that we need to trust that management knows what it is doing. If one doesn't, one should probably be investing elsewhere.

As @Parsad mentioned, they also own Sporting Life. Maybe they can see UA sell through in Canada turning. 

[Viking]

24 minutes ago, dartmonkey said:

This may be your belief but Fairfax begs to differ:

 

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. 

 

Anyways, I was responding to milu's question about whether price to book was as useful for looking at Fairfax as it is for looking at Berkshire. I agree there are a lot of differences between the 2, primarily the fact that Fairfax really is mostly an insurer, with huge leverage from float, whereas Berkshire has become more of a conglomerate with huge wholly and partially owned equity investments. And there are many other differences, size being one, of course (Berkshire has a market cap 30x as big, and so is much more constrained in its investment opportunities), the international nature of Fairfax whereas Berkshire's activities are 90+% in the USA, and many more.

 

My major point is that Fairfax gets a much larger contribution from insurance float than Berkshire does, and this should be reflected in a higher P/B, in my opinion. Do you agree?

 

Good point. "Fairfax is not a P/C insurance company" is not technically correct. I like to exaggerate sometimes when trying to make a point...

 

My view is Fairfax will earn higher returns (and ROE) than BRK moving forward. As a result, yes, one would think this would be reflected in a higher P/BV multiple. But to be honest, I do not follow BRK all that closely - so I am not sure what is going on under the hood at the company. 

[Munger_Disciple]

1 hour ago, dartmonkey said:

My major point is that Fairfax gets a much larger contribution from insurance float than Berkshire does, and this should be reflected in a higher P/B, in my opinion. Do you agree?

 

I don't think Fairfax deserves a higher P/B than Berkshire. Berkshire is a lot safer & lot less leveraged both operationally (writes a lot less premium volume relative to insurance group net worth and has a multitude of diversified non-insurance earnings) and financially (fortress balance sheet with a huge portfolio of marketable securities & T-bills). 

 

So Fairfax should trade at a higher "risk-premium" than Berkshire. In other words, investors demand a higher return to hold Fairfax relative to Berkshire.

Edited January 30 by Munger_Disciple

[jbwent63]

3 hours ago, Hoodlum said:

 

As of Wednesday, Fairfax owned 65M share of UA with a market cap of $400M.  This would slip in as our 9th largest holding now.

https://www.streetinsider.com/SEC+Filings/Form+4+Under+Armour%2C+Inc.+For%3A+Jan+27+Filed+by%3A+FAIRFAX+FINANCIAL+HOLDINGS+LTD+CAN/25918112.html

 

 

I've done some math, and I don't expect to be perfect as not all the purchases are disclosed in SEC filings, but to the best of my ability (and estimations) FFH has purchased 65,000,000 Class A and C common shares of UA (about 15.33% of all classes of common shares) at a total cost of about $339.2 million, or an average blended cost of $5.218. Shall we assume that we have now landed on a round number that the purchases have built the desired position, or do we think there will be more shares acquired? Value of shares at today's close is $401.1 million ($6.17 per share using the UAA quoted price).

[Duke In Shadows]

1 hour ago, Munger_Disciple said:

 

I don't think Fairfax deserves a higher P/B than Berkshire. Berkshire is a lot safer & lot less leveraged both operationally (writes a lot less premium volume relative to insurance group net worth and has a multitude of diversified non-insurance earnings) and financially (fortress balance sheet with a huge portfolio of marketable securities & T-bills). 

 

So Fairfax should trade at a higher "risk-premium" than Berkshire. In other words, investors demand a higher return to hold Fairfax relative to Berkshire.

The argument is flawed because it assumes that being riskier automatically means the stock should trade cheaper. That’s only true if both companies earn the same return on their money. If FFH can grow its book value faster than BRK (as it has), investors will be willing to pay a similar or even higher P/B despite the extra risk.

[Viking]

1 hour ago, Munger_Disciple said:

 

I don't think Fairfax deserves a higher P/B than Berkshire. Berkshire is a lot safer & lot less leveraged both operationally (writes a lot less premium volume relative to insurance group net worth and has a multitude of diversified non-insurance earnings) and financially (fortress balance sheet with a huge portfolio of marketable securities & T-bills). 

 

So Fairfax should trade at a higher "risk-premium" than Berkshire. In other words, investors demand a higher return to hold Fairfax relative to Berkshire.

 

@Munger_Disciple, what ROE do you think BRK and FFH will each deliver over the next 5 years (on average)? (I think this estimate goes hand in hand with P/B estimates.)

[Munger_Disciple]

47 minutes ago, Viking said:

 

@Munger_Disciple, what ROE do you think BRK and FFH will each deliver over the next 5 years (on average)? (I think this estimate goes hand in hand with P/B estimates.)

 

I don't know; too many unknown & unknowable factors can drive the average ROE over the next 5 years. Interest rates, whether there are cat/super cat losses, whether there is a dislocation in the markets (which can open up opportunities) etc. 

What I can say for sure is that I am happy to own both. I consider Berkshire the ultimate "sleep well at night" stock. And I expect Fairfax to be riskier but one that can potentially (as opposed to guaranteed) compound book at a higher rate than Berkshire (by a couple of percentage points, am delighted if it is more). Size is the limiting factor for Berkshire but then Greg can buyback a lot of stock and/or put the cash pile to work if there is a huge dislocation in the economy/markets. 

Edited January 30 by Munger_Disciple

[Hsmpanl]

6 hours ago, SafetyinNumbers said:

I use three methods to triangulate intrinsic value for Fairfax. 
 

1. 15x earnings which is a fair market multiple for above average ROE which is north of US$3000 on trailing EPS. 

2. 2.5x BV which is reasonable for a business with a history of compounding BVPS in the high teens for 40 years. This is also north of US$3000 on current book value.

3. Float + book value which is what I call the Buffett method. The idea here is that float for a high quality insurance company is always growing and thus represents an asset to equity holders and not a liability. For Fairfax, in particular, I think they are very conservative with reserving. Excess reserves are just liabilities waiting to be converted into equity. That also gives a value north of US$3000/sh. 
 

My view is that there is plenty of margin of safety when buying at a > 40% discount to these measures.  

Has Fairfax ever traded at or anywhere close to these multiples in its 40 year history? Not arguing that intrinsic value could be in that range, just the conclusion should be to continually buy Fairfax, and Fairfax should be plowing every dollar into buybacks if it has traded at that kind of discount for decades.

[Marco Van Basten]

AGT Food and Ingredients files preliminary prospectus for IPO

[Hoodlum]

20 minutes ago, Marco Van Basten said:

AGT Food and Ingredients files preliminary prospectus for IPO

I wasn’t expecting this now.  I guess they have been able to work around the tariffs, and the lifting of China’s Tariffs in Canada along with likely the same for India in March should bode well for the future. 

https://www.newswire.ca/news-releases/agt-food-and-ingredients-inc-files-preliminary-prospectus-for-initial-public-offering-of-common-shares-843361023.html

 

Edited January 31 by Hoodlum