SafetyinNumbers Posted March 1 Posted March 1 1 minute ago, Txvestor said: Exiting EXCO is another option. With oil prices looming like they'll be up for a little while, it might present them a chance to do that as well. I'm sure they are exploring many options. Exco is pretty gassy and I assume they like the exposure. Not sure why they would sell it. Same goes for SCR and GFR which are oily. OXY seems like the most likely candidate to sell. I continue to think there is plenty of excess cash at the insurance subsidiaries to do IDBI and not have to sell anything.
Viking Posted March 2 Posted March 2 Fairfax’s Resource Holdings - An Underappreciated Engine Inside the Investment Portfolio - Part 1 Fairfax has had an extraordinary five-year run. Why? Because it has executed at a high level across its two core business engines: P/C insurance Investment management Layered on top of that is strategic, disciplined and opportunistic capital allocation. Much of what is driving value creation today is happening “under the hood” — and is not widely understood. Fairfax is frequently analyzed as a traditional P/C insurer. It isn’t. This article focuses on one of the most misunderstood components of Fairfax’s investment engine: its resource holdings. The Investment Portfolio: Context Matters Fairfax’s total investment portfolio is approximately $76 billion: Fixed Income: ~$50B Equities: ~$26B Within the $26B equity portfolio sits a concentrated, high-conviction sleeve: Fairfax’s Resource Holdings 11 identifiable positions ~$3.9B market value (Dec 31, 2025) ~15% of total equity portfolio The holdings span: Oil & gas Gold & copper mining Metals and materials This is not incidental exposure. It is meaningful capital deployed with intent. Why Own Resource Stocks? 1. As Investments Fairfax is a value investor – broadly defined. Its mandate is not stylistic purity. It goes where value exists, not where consensus is comfortable. When assets are mispriced and capital is scarce, Fairfax steps in. Resource equities have periodically offered exactly that setup. 2. As a Strategic Hedge Real Return Risk in a Bond-Heavy Portfolio Fairfax holds ~$50B in fixed income securities. Even when held to maturity: Higher inflation erodes real purchasing power. Nominal coupons lose real value. For a large bond portfolio, the primary threat is unexpected inflation, not expected inflation. Commodities historically respond positively to: Rising inflation Supply constraints Geopolitical fragmentation In inflationary or resource-constrained environments, resource producers can function as a natural hedge. This is particularly relevant in a world transitioning from: Globalization Disinflation Ultra-low rates …to something structurally different. Owning resource equities is not just offense (generating returns). It is also defense (balance sheet protection). This dual function is widely underappreciated. Partnering With Proven Operators (“Betting on the Jockey”) Fairfax is not speculating blindly. It allocates capital alongside experienced operators with deep domain expertise and strong long-term track records. Key relationships include: Orla Mining and Foran Mining Pierre Lassonde – Co-founder of Franco-Nevada Strathcona Resources and Greenfire Resources Adam Waterous – Former Head of Global Investment Banking at Scotiabank Occidental Petroleum Backed heavily by Berkshire Hathaway (largest shareholder) Ensign Energy Services Murray Edwards – Founder and Chairman of Canadian Natural Resources Altius Minerals Brian Dalton – Founder & CEO Metlen Energy and Metals Evangelos Mytilineos – Founder & Chairman There is a pattern here: Fairfax partners with proven capital allocators and operators who understand their industries. This is deliberate capital allocation, not macro speculation. Jurisdictional Risk: A Quiet Structural Advantage The vast majority of production sits in North America. In a world of: Resource nationalism Regulatory unpredictability Political instability North American exposure provides structural risk mitigation. This appears intentional. (Smart.) The Critics Detractors often dismiss Fairfax’s resource exposure reflexively: “Resource stocks are terrible investments.” But many critics: Do not follow the specific companies Do not understand the operating partners Do not analyze the capital allocation history Do not evaluate actual performance Do not recognize the strategic hedge component They think Fairfax is being reckless. When the opposite is true. Opinions formed without facts rarely age well. The Facts: Performance Over the past ~14 months, Fairfax’s resource holdings have generated approximately: $1.85B in gains (~67% total return) Breakdown: 2025: $1.06B (~38%) 2026 YTD (to Feb 27): $788M (~23%) That is exceptional performance. Continue to Read Part 2
Viking Posted March 2 Posted March 2 Fairfax’s Resource Holdings - An Underappreciated Engine Inside the Investment Portfolio - Part2 Just the Beginning? Importantly, these exceptional returns do not necessarily represent late-cycle excess. There is a growing narrative that capital is rotating from asset-light, high-multiple businesses toward: Industrials Materials Energy On a recent episode of The Compound and Friends, Strategas Research’s Chris Verrone and Daniel Clifton discussed what they view as a potential regime shift. Daniel Clifton summarized it as a move away from: Post–Berlin Wall globalization Falling inflation and rates Unipolar stability …toward a multipolar, resource-constrained world. If that thesis is correct, Fairfax is already positioned. Broad-Based Success "In this business, if you're good, you're right six times out of ten. You're never going to be right nine times out of ten." Peter Lynch Nine of ten of Fairfax resource holdings are up over the past 14 months. Based on Peter Lynch's rule of thumb, the team at Fairfax is looking pretty good with its execution in recent years. Opportunistic Monetizations: Discipline on the Exit Fairfax has not simply held resource assets. It has monetized when valuations became compelling. 1. Resolute Forest Products (2022) In July 2022, Fairfax sold Resolute Forest Products to Paper Excellence for: $665.6M ($20.50/share) Context matters: March 2020 price: ~$1.20/share. Sale price (two years later): $20.50. What did Fairfax accomplish? Sold near peak lumber pricing Redeployed capital Removed a historically poor investment at a opportune time 2. Stelco (2024) Sold to Cleveland-Cliffs in Q4 2024. Purchase (2018): $193M Proceeds (2024): $639M Dividends received: $122M Total return: $568M CAGR: 25.5% over 6 years Disciplined entry. Disciplined exit. 3. Orla Mining (Partial Sale – 2025) On December 5, 2025, Fairfax sold 25M shares of Orla: Proceeds: $316M ($12.64/share) Cost: ~$98M (~$3.94/share) Return: ~$218M, or ~220% Importantly: Fairfax still owns 76.9M shares valued at ~$1.5B (Feb 27, 2026). This is active portfolio management — not passive holding. Strategic Implications Several conclusions emerge: Fairfax’s resource exposure is intentional, not incidental. It reflects macro awareness and valuation discipline. It is implemented alongside proven operators. Execution has been strong. Monetizations demonstrate capital allocation skill. Fairfax’s leadership has invested through: The 1970s inflation era The commodity cycles of the 1980s The globalization boom The post-2008 monetary regime That experience matters. The Bigger Picture Fairfax does not own resource companies to “play commodities.” It owns them to build long-term intrinsic value per share. The resource sleeve is one component of a broader investment engine designed to: Protect purchasing power Capture cyclical opportunity Compound capital opportunistically When evaluating Fairfax, focusing solely on underwriting cycles misses the full picture. The investment portfolio — particularly the resource sleeve — is an active, high-conviction engine of value creation. Ignore it at your own risk. Looking Into the Future The Compound and Friends with Josh Brown and Michael Batnick, with guests Daniel Clifton and Chris Verrone ofStrategas Research – February 27, 2026 https://youtu.be/MV76MRQndTg?si=t25iNq9lu36uZ2Tc Comments from Chris Verrone and Daniel Clifton, Strategas Research, on a recent episode of The Compound and Friends with Josh Brown and Michael Batnck (37 minute mark): Chris Verrone: “I think what's so remarkable about this… don't even try to tell me for a second that people are positioned for this.” Michael Batnick: “For what?” CV: For this revenge of the old economy or the average stuff. I mean, for 15 years, all you've had to do is own the big stuff. Josh Brown: “Asset light” CV: “Don't even pretend to tell me this is where the positioning is. Like I am so skeptical when I see the Bank of America Fund Manager survey that says, you know, everyone's, you know, most overweight RSP and underweight Q’s. There's just no way. MB: “No way.” CV: “I’ll never forget, this is 6, 7 or 8 years ago. We're doing our macro conference in New York. I'm doing a fireside chat with Byron Wien, late, great Byron Wien, mentor to Jason Treader, to myself, to Dan. I asked, Byron, tell me what you remember about 1982? 1982, as we know, was kind of the top in rates. Rates had started to fall. Equity had started to turn up. And he laughed at me in front of 400 people. And he said, Chris, I didn't know it was 1982 until it was 1985.” JB: “It’s so such a great, important point.” CV: “It's so easy in this business to look back with hindsight and say: look at the regime shift. It was so obvious. We're in a regime shift right now. I don't think people are positioned for it. Maybe in like the tactical sense - the tactical book has it on. JB: “I've been talking about this regime shift as being a new paradigm that has nothing to do with what we're all accustomed to. We live in this world where it's small versus large, value versus growth, tech versus non tech, or defensive versus cyclical. And I think that this trumps all of those paradigms, and it comes down to AI immunity versus not.” CV: “Dan, isn't this the market that the Trump administration wants? Right? They want this revenge of the old stocks.” Daniel Clifton: “…at the risk of giving a narrative here, I think we're shifting out of the post Berlin Wall environment. Berlin Wall went down. The world globalized. Inflation comes down. Interest rates come down. That's why you wanted to own asset light companies. High PE’s. Less geopolitical volatility. That's all reversing now.” DC: “We're moving from a unipolar world to a multipolar world, and that means that there's going to be demand for resources. And that's why you want to be in this kind of sector - a long-term shift of being in industrials and materials. Because you want to be able to have access to this in a scarce world. I think we're at the very early stages of this process happening.”
hardcorevalue Posted March 2 Author Posted March 2 2026 and FFH is still very cheap. I've never held a stock IN SIZE this long, over 5 years now! Like others my only fear is the 3x book value scenario. We need reassurance that they will never list on the NYSE again. Thankfully, I don't think that's in the cards.
SafetyinNumbers Posted March 2 Posted March 2 1 minute ago, hardcorevalue said: 2026 and FFH is still very cheap. I've never held a stock IN SIZE this long, over 5 years now! Like others my only fear is the 3x book value scenario. We need reassurance that they will never list on the NYSE again. Thankfully, I don't think that's in the cards. I think it happens during the next hard market. It could take years. Meanwhile we’ll have to get by with 15-25% returns more in line w/BVPS growth plus potential multiple expansion to the most Fairfax will pay for stock. So far that’s about 1.5x BV. That number should inch up over time as forward ROE goes up the more we buy back.
SafetyinNumbers Posted March 2 Posted March 2 1 hour ago, Viking said: ~$3.9B market value (Dec 31, 2025) $3.5b of this is mark to market. How big is that bucket for the whole portfolio?
Maverick47 Posted March 2 Posted March 2 32 minutes ago, hardcorevalue said: 2026 and FFH is still very cheap. I've never held a stock IN SIZE this long, over 5 years now! Like others my only fear is the 3x book value scenario. We need reassurance that they will never list on the NYSE again. Thankfully, I don't think that's in the cards. As Mae West once said: ”Too much of a good thing can be wonderful.”
Hektor Posted March 2 Posted March 2 I hope FFH sells off on the Middle East situation. After all, they are a global insurance operation
Viking Posted March 2 Posted March 2 3 hours ago, SafetyinNumbers said: $3.5b of this is mark to market. How big is that bucket for the whole portfolio? @SafetyinNumbers, the split between mark to market and associate/consolidated is roughly about 50/50 (so about $13B each). But this split includes FFH-TRS - and values it at notional - in the mark to market bucket. This split also uses Fairfax’s classification methodology - and I think they put stuff like BDT and Shaw Kwei in the mark to market bucket when it is functionally more like a private holding (I think).
UK Posted March 2 Posted March 2 4 hours ago, hardcorevalue said: Like others my only fear is the 3x book value scenario. I will confess, this is definitelly not my fear at all
Viking Posted March 2 Posted March 2 8 hours ago, Txvestor said: Exiting EXCO is another option. With oil prices looming like they'll be up for a little while, it might present them a chance to do that as well. I'm sure they are exploring many options. @Txvestor, my spidey senses are tingling with EXCO for 2026. It appears they might have some pretty aggressive growth plans in place and they like to hedge - so we could see very strong earnings this year. I also think they might be a good take-out candidate. Especially if nat gas prices trend higher. Either way Fairfax wins.
petec Posted March 2 Posted March 2 I just remembered that there would be a new 2026 thread for Fairfax and tried reading through it. I gave up halfway. This remains my largest investor and nothing terrifies me more than the fact that there are already 32 pages on the 2026 thread!
[email protected] Posted March 2 Posted March 2 23 hours ago, Crip1 said: This really is interesting to think about. The team at Fairfax has far more visibility into their holdings than any of us do, but I for one hate the idea of selling Eurobank any more than they already have to in order to retain their 33% ownership. Poseidon seems like a more obvious choice from my perspective but that depends largely on how much they can get versus how much they feel it's intrinsically worth. If this does come together, the one thing I would bet on in terms of financing is virtually all of us will say "Hmmm, I didn't even think of that" regarding one or more aspects of it. That's a big aspect of why I have such an outsized position in Fairfax, I'm effectively paying them make capital allocation decisions way smarter than I could ever do myself. -Crip I don’t want them to sell a penny of Eurobank with the free trade deal now in place with India. Greece will likely be the first port of call for all lot of trade given its shorter shipping route and the massive money being spent by EU to upgrade Greece’s logistics inland. Add in the acquisition of the new bank in India, if they get it, and they would be positioned to capitalize on a massive trade corridor from both ends and insure it.
giulio Posted March 3 Posted March 3 I am halfway through this and find the discussion interesting and relevant to ffh (now and in the future). Not the usual Gayner interview, the questions are more specific and tackle all the insurance aspects many of us discuss on here. Best, G
Txvestor Posted March 3 Posted March 3 9 hours ago, giulio said: I am halfway through this and find the discussion interesting and relevant to ffh (now and in the future). Not the usual Gayner interview, the questions are more specific and tackle all the insurance aspects many of us discuss on here. Best, G The most interesting part of this podcast for me was right at around the 1hr mark when Gaynor essentially endorsed what @Viking has touted about a significant founder led control benefit to other companies, you almost wonder if he was speaking about Fairfax financial or Berkshire when he said that. But it was pretty honest of him to bring it up.
Hamburg Investor Posted March 3 Posted March 3 On 3/2/2026 at 3:10 AM, SafetyinNumbers said: Meanwhile we’ll have to get by with 15-25% returns more in line w/BVPS growth Life can be really tough sometimes!
John Hjorth Posted March 3 Posted March 3 9 minutes ago, Hamburg Investor said: Life can be really tough sometimes! -And unforgiving, unjust & unfair, and, and ... !
SafetyinNumbers Posted March 4 Posted March 4 4 hours ago, Txvestor said: The most interesting part of this podcast for me was right at around the 1hr mark when Gaynor essentially endorsed what @Viking has touted about a significant founder led control benefit to other companies, you almost wonder if he was speaking about Fairfax financial or Berkshire when he said that. But it was pretty honest of him to bring it up. I thought Markel’s 10% hurdle rate was interesting in contrast with Fairfax’s 15%. The podcast also made me think that Prem might have inspired Steve Markel to follow the Berkshire model as well given the timeline. They partnered on Fairfax first.
Txvestor Posted March 4 Posted March 4 3 hours ago, SafetyinNumbers said: I thought Markel’s 10% hurdle rate was interesting in contrast with Fairfax’s 15%. The podcast also made me think that Prem might have inspired Steve Markel to follow the Berkshire model as well given the timeline. They partnered on Fairfax first. To be fair that was a post tax 10%. When prem said 15% I don't think he meant post tax, although I feel like they can hit that. Whats also apparent is the size of Fairfax's float in comparison to that of MKL. 39B v 18B. And even though it's over 2x the size, its proportion to equity is similar. Normally as these holdco grow, the size of float as a proportion decreases. Not so far with Fairfax.
djokovic1 Posted March 4 Posted March 4 5 hours ago, Txvestor said: To be fair that was a post tax 10%. When prem said 15% I don't think he meant post tax, although I feel like they can hit that. Prem’s target is 15% compounding of BVPS so it is post tax.
SafetyinNumbers Posted March 4 Posted March 4 5 hours ago, Txvestor said: And even though it's over 2x the size, its proportion to equity is similar. Normally as these holdco grow, the size of float as a proportion decreases. Not so far with Fairfax. This is by design as Fairfax tries to maintain the 3:1 investments:equity leverage. Even the approach to financial leverage for controlled businesses shows a the difference in how each “sweats” the assets. Fairfax puts on leverage while Markel doesn’t or is less aggressive. The risk is not that high as more capital can always be injected if needed. It’s not like a non control position where the decisions on capital allocation are being made by others that may have differing incentives.
Txvestor Posted March 4 Posted March 4 4 hours ago, djokovic1 said: Prem’s target is 15% compounding of BVPS so it is post tax. Well, looking at it over 10yrs there has been a couple of points of divergence. Markel $561-->$1430(~10%PA) Fairfax $403-->$1260(~12%PA) However taken over 5yrs, Fairfax has done much better.
SafetyinNumbers Posted March 4 Posted March 4 21 minutes ago, Txvestor said: Well, looking at it over 10yrs there has been a couple of points of divergence. Markel $561-->$1430(~10%PA) Fairfax $403-->$1260(~12%PA) However taken over 5yrs, Fairfax has done much better. Interest rates do matter. At Fairfax, we get approximately the return on the equity portfolio (about the same size shareholder’s equity) + 2x current yield on the fixed income portfolio (2x shareholder’s equity) plus underwriting less holding company expenses including cost of holding company leverage.
Duke In Shadows Posted March 4 Posted March 4 Garbage In, Garbage Out Spent a few hours last week fixing the Fairfax Financial Wikipedia page. Here's why I think it actually matters. Wikipedia has become the de facto starting point for how companies are understood online....and increasingly, it's a primary upstream source for LLMs. In my own testing across ~8 AI tools, almost all of them were pulling directly or indirectly, when answering questions about Fairfax. One tool served me financial data that was five years out of date. Straight from Wikipedia. The page was a mess. Outdated financials, wrong subsidiary info, stale legacy content, and factual errors. including confusion with Markel Group. If I knew nothing about the company and relied on an AI summary, I'd walk away more confused than informed. What's worse is that this stuff doesn't stay on Wikipedia. I have found the same incorrect information repackaged on paid research platforms and data services. Traced most of it back to the same source. Yes, you can override it with better prompting or by feeding filings directly in. But most people don't. And they shouldn't have to. I couldn't fix everything, but I focused on correcting what was clearly wrong and adding some interesting/relevant details. https://en.wikipedia.org/wiki/Fairfax_Financial 1
Malmqky Posted March 4 Posted March 4 13 minutes ago, Duke In Shadows said: Garbage In, Garbage Out Spent a few hours last week fixing the Fairfax Financial Wikipedia page. Here's why I think it actually matters. Wikipedia has become the de facto starting point for how companies are understood online....and increasingly, it's a primary upstream source for LLMs. In my own testing across ~8 AI tools, almost all of them were pulling directly or indirectly, when answering questions about Fairfax. One tool served me financial data that was five years out of date. Straight from Wikipedia. The page was a mess. Outdated financials, wrong subsidiary info, stale legacy content, and factual errors. including confusion with Markel Group. If I knew nothing about the company and relied on an AI summary, I'd walk away more confused than informed. What's worse is that this stuff doesn't stay on Wikipedia. I have found the same incorrect information repackaged on paid research platforms and data services. Traced most of it back to the same source. Yes, you can override it with better prompting or by feeding filings directly in. But most people don't. And they shouldn't have to. I couldn't fix everything, but I focused on correcting what was clearly wrong and adding some interesting/relevant details. https://en.wikipedia.org/wiki/Fairfax_Financial Great work, never even considered something like this.
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