nwoodman Posted April 29 Posted April 29 1 hour ago, Redskin212 said: I think Kleven is already doing the job with Brian's oversight. My impression from the annual meeting and specifically the Shareholder's dinner the night before is that Brian in slowly phasing out of the day-to-day grind with an eye to retiring. Brian spoke for basically an hour at the dinner - I think that was intentional on Prem's and Fairfax part. Also, the first time Kleven's name has appeared on the Annual Meeting slide Viking previously posted - not a coincidence. During the question period, Brian on a number of occasions tried to get Kleven involved in the discussion. For Kleven's part he answered the questions well - very concise, but I believe he was being respectful of his mentor Brian and not trying to steal any of his limelight. After the question period ended, I went up and met Kleven and talked for about 15 minutes - he is very sharp and thinks like Brian does. The next day, I was telling a friend of mine who is a director of FFH, that I was very impressed with Kleven and he look like an excellent successor to Brian. My friend mention that at a recent Board meeting, Kleven blew the board members away with his presentation and knowledge. Brian is the GOAT - no question! And it looks like the GOAT has been mentoring a great successor for about a decade. Just a friendly reminder that you may want to reacquaint yourself with the T&Cs of attending that dinner
Hsmpanl Posted April 29 Posted April 29 25 minutes ago, nwoodman said: Just a friendly reminder that you may want to reacquaint yourself with the T&Cs of attending that dinner I personally greatly appreciate the insight. Pretty freaking cool that people on here have close personal relationships and direct interactions with people running the show. 1
djokovic1 Posted April 29 Posted April 29 Just read through the Markel transcript who had a mediocre Q1 (Poor performing equity portfolio- BRK, Brookfield and some one offs so I don’t think any read through to FFH) Interestingly Tom Gayner towards the end was extolling how Markel has bought back 10% of shares out in 5 years which he with examples of other public insurers was showcasing that Markel is in the top tier wrt buybacks. But he flippantly got the Fairfax numbers very wrong and seemingly glossed over it. a) Fairfax has bought ~20% of shares out in last 5 years which is more than double all the examples he cited but he conveniently doesn’t mention that b) Tom also makes a surface level comment that it will take Fairfax another 5 years to buy 10% of shares out. Well they bought back 1% of shares out in 1 month! (March). If premium growth is flat, contrary to Tom’s remarks I think Fairfax can buy 10% of shares out in 1-2 years (not 5). If a public company CEO is commenting on other companies capital allocation they should atleast be roughly right, not an order of magnitude off.
Parsad Posted April 29 Posted April 29 14 hours ago, nwoodman said: Just a friendly reminder that you may want to reacquaint yourself with the T&Cs of attending that dinner Redskin's good! He worked for Fairfax at one point...he's been a shareholder for over 25 years...been to around 20 of those 25 meetings, and happily retired for the last 10 years on his Fairfax shares! He's not repeating anything Prem would frown upon...since he knows Prem as well! Cheers!
Parsad Posted April 29 Posted April 29 24 minutes ago, djokovic1 said: Just read through the Markel transcript who had a mediocre Q1 (Poor performing equity portfolio- BRK, Brookfield and some one offs so I don’t think any read through to FFH) Interestingly Tom Gayner towards the end was extolling how Markel has bought back 10% of shares out in 5 years which he with examples of other public insurers was showcasing that Markel is in the top tier wrt buybacks. But he flippantly got the Fairfax numbers very wrong and seemingly glossed over it. a) Fairfax has bought ~20% of shares out in last 5 years which is more than double all the examples he cited but he conveniently doesn’t mention that b) Tom also makes a surface level comment that it will take Fairfax another 5 years to buy 10% of shares out. Well they bought back 1% of shares out in 1 month! (March). If premium growth is flat, contrary to Tom’s remarks I think Fairfax can buy 10% of shares out in 1-2 years (not 5). If a public company CEO is commenting on other companies capital allocation they should atleast be roughly right, not an order of magnitude off. I'm not sure why anyone is pitting Markel against Fairfax or vice versa. They are best of friends! Sure they compete in insurance, but Fairfax would not exist today without Markel. They also saved our ass (FFH) when we needed money 20 years ago. Markel is an exceptionally well-run insurance company...I've followed them and owned some shares for nearly 25 years...almost as long as I've held Fairfax and just shorter than Berkshire. The three of them are stalwart, long-term core holdings for any portfolio when bought at the right price. So Gayner made a mistake...big whoop! It has zero effect on Fairfax, Prem, the shareholders or our share value. Don't throw the baby out with the bathwater! Cheers!
djokovic1 Posted April 29 Posted April 29 Of course it has zero effect on Fairfax. But that analysis is lazy at best. I’m exaggerating a bit, but if that’s the level of investment due diligence….
Hoodlum Posted April 29 Posted April 29 (edited) 3 minutes ago, djokovic1 said: Of course it has zero effect on Fairfax. But that analysis is lazy at best. I’m exaggerating a bit, but if that’s the level of investment due diligence…. Maybe that is Tom's style? But I would agree with you that it is not something I look for from someone leading a company and my thinking would be the same even if the comparison was with Chubb and happened to be equally incorrect. Edited April 29 by Hoodlum
Crip1 Posted April 29 Posted April 29 3 hours ago, djokovic1 said: Just read through the Markel transcript who had a mediocre Q1 (Poor performing equity portfolio- BRK, Brookfield and some one offs so I don’t think any read through to FFH) Interestingly Tom Gayner towards the end was extolling how Markel has bought back 10% of shares out in 5 years which he with examples of other public insurers was showcasing that Markel is in the top tier wrt buybacks. But he flippantly got the Fairfax numbers very wrong and seemingly glossed over it. a) Fairfax has bought ~20% of shares out in last 5 years which is more than double all the examples he cited but he conveniently doesn’t mention that b) Tom also makes a surface level comment that it will take Fairfax another 5 years to buy 10% of shares out. Well they bought back 1% of shares out in 1 month! (March). If premium growth is flat, contrary to Tom’s remarks I think Fairfax can buy 10% of shares out in 1-2 years (not 5). If a public company CEO is commenting on other companies capital allocation they should atleast be roughly right, not an order of magnitude off. Markel is getting hammered today. One has to think that the Fairfax numbers tomorrow will look similar. There is a part of me that wants to sell part of my holdings (it's my #1 by a country mile) with the idea of buying back over the next couple of days at a 3-5% discount. Ultimately, I'm not going to do that because unforeseeable things happen in the short term, but it would not surprise me in the slightest if we saw a significant decline Friday-Monday. -Crip
Hoodlum Posted April 29 Posted April 29 1 minute ago, Crip1 said: Markel is getting hammered today. One has to think that the Fairfax numbers tomorrow will look similar. There is a part of me that wants to sell part of my holdings (it's my #1 by a country mile) with the idea of buying back over the next couple of days at a 3-5% discount. Ultimately, I'm not going to do that because unforeseeable things happen in the short term, but it would not surprise me in the slightest if we saw a significant decline Friday-Monday. -Crip I won't bother timing that, but I will have some cash ready for Friday. It will be interesting to see If Fairfax sold more of their long bonds in Q1. Yields continue to go up today with the 2 year reaching 4.16% briefly for the first time in over a year.
Whensthepaintdry? Posted April 29 Posted April 29 I really don’t understand how mkl sells off this bad on this earnings report especially when you would consider the holders of these types of companies to be more informed. I added to both companies today. Maybe I just don’t know any better.
Parsad Posted April 29 Posted April 29 20 minutes ago, Whensthepaintdry? said: I really don’t understand how mkl sells off this bad on this earnings report especially when you would consider the holders of these types of companies to be more informed. I added to both companies today. Maybe I just don’t know any better. That would make two of us! I added quite a bit to MKL today and will continue to add if it goes down further. This may be a once in a decade opportunity with MKL. Cheers!
mananainvesting Posted April 29 Posted April 29 I asked ChatGPT to map book value per share of both MKL and FFH.TO against insurance cycles over the years, and this is what it got back with. I haven't double checked the numbers, but looking at this I am getting more comfortable that both $MKL and $FFH.TO should be able to grow book value ~10% even during soft cycles. Likely even higher for $FFH.TO. Anyone knows if the hard and soft insurance cycle timeline is accurate?
Viking Posted April 29 Posted April 29 (edited) Fairfax Q1 Earnings Preview (Guess) - Small edit My very rough guess is earnings will come in around $28/share when Fairfax reports Q1 results. Fairfax paid a US$15/share dividend in Q1. As a result, this would put book value at March 31, 2026, at about $1,270/share. Note, I am not doing this exercise to come up with a high conviction specific number (I know it will be wrong) for EPS or BVPS. Rather, I do it to help prepare me for Fairfax’s earnings release. Below is the logic I used to come up with my forecast (the thought process is what matters). What are other board members thinking? Please share your thoughts. Note: My annual estimates for 2026 and 2027 in thechart below were put together in February. I will likely update these estimates mid year. Details Underwriting profit: Net premiums of $6.91B x CR 94% = underwriting profit of $415M Questions: What is impact of war in middle east, especially GIG? Is it a near term risk and medium term opportunity? Interest income Q1-2026 of $640M Run rate in Q4 2025 was $646 Question: Did Fairfax take advantage of the increase in interest rates in March to increase average duration of their fixed income portfolio? Share of profit of associates Q1-2026 $150M ($225M-$75M hit from Sanmar) Tailwinds: Waterous Energy Fund III (Greenfire) was -$60M in Q1 2025. EXCO? Significant capex in 2026. Headwind: Sale of Sanmar by Fairfax India in March (not sure on timing here... Q1 or Q2). Markdown on sale ~$75M? (FV at Dec 31 of $101.6M - proceeds of $27M) The bigger picture: Sanmar is an example of Fairfax India dealing with a chronically underperforming equity holding. Good to see. This is one of the ways Fairfax has been optimizing their equity portfolio in recent years. Poseidon: When it closes in Q2, the sale of 50% of Poseidon will result in an annual hit of ~$150 million ($12.5M per month). The proceeds from the sale will be reinvested by Fairfax - which will benefit the company in some way. I’ll update my models for the Poseidon sale when I know what they are going to do with the proceeds. I know what to take down. I need to know what to take up. Consolidated companies Q1 2026 $75M My annual number is $450M. There appears to be some seasonality to the business, with Q1 being the slowest quarter of the year for the different businesses. Q1 2025 was -$41M Loss was driven by Boat Rocker impairment charge of $108.6M (as part of its reverse take-over by Blue Ant Media. Example of Fairfax (finally) dealing with a chronically underperforming holding. Investment gains (losses) Equities Q1-2026 Loss of ~$100M Estimated impact of mark to market equity holdings in my tracker will be $0. Digit's stock price was down about 8% in Q1. The excess of FV over CV was $3.1B at Dec 31, 2025. This will be down in Q1. Below is a summary of the big movers in the equity portfolio in the quarter. Bonds Interest rates were higher across the curve in Q1. The increase in interest rates will have two offsetting impacts on Fairfax. This will result in a decline in the value of the bond portfolio. My estimate is -$300M. This puts estimate for investment gains (losses) at -$400M in Q1. IRFS 17 Higher interest rates will increase the discount rate Fairfax uses to value its insurance liabilities (future cash flows). This will decrease the value of the insurance liabilities. My estimate is $+350M. How will the two net out? If Fairfax matched the average duration of its bonds and insurance liabilities, the impact of higher (or lower) interest rates would largely net out. But the average duration of Fairfax’s fixed income portfolio (< 2.5 years?) is lower than the average duration of its insurance liabilities (~4 years?). The net result is assets fall less than liabilities, which results in a benefit to earnings and an increase in book value. Please note, I am still learning about this topic. So take my summary above with a heavy dose of scepticism. (Actual results will likely be quite different.) Investment Gains - Q2 2026 Q2 is shaping up to be a big quarter for investment gains for Fairfax: Sale of Eurolife’s life insurance business: estimated gain $350M Sale of ~50% of Poseidon: estimated gain $860M Total is $1.1B, or ~$50/share (pre-tax) Interest expense Q1 2026 $220M Q4 2025 run rate was $211M New issuance in Q1 2026 was $475M (~4.8%) $23M in annual interest expense. Corporate expense Q1 2026 $120M FY2025 was $481M Estimate for 2026 is $490 Tax rate Estimate is 23% Minority interest Estimate is 10% Share count Fairfax was very aggressive buying back stock in Q1 (~+300,000?). Estimate of shares outstanding at March 31, 2026: Diluted shares outstanding at 22.3M (from 22.6M) Effective shares outstanding at 20.65M (from 20.86M) Edited April 29 by Viking
Hoodlum Posted April 29 Posted April 29 Fairfax announced early redemption of their $450M notes due in December. I guess this is what the $400M Notes offering was planned for. Nice work extending these notes for another 10 years while lowering the interest rate by 0.30%. I just realized that the new $400M and $250M in Notes were issues at the end of February, when the yields bottomed out. We will soon see if the bond team also took advantage of the lower yields that week by reducing further some of Fairfax's remaining long treasuries. https://www.fairfax.ca/press-releases/fairfax-announces-early-redemption-of-senior-notes-due-december-16-2026-2026-04-29/
Parsad Posted April 29 Posted April 29 2 hours ago, Viking said: Fairfax Q1 Earnings Preview (Guess) My very rough guess is earnings will come in around $30/share when Fairfax reports Q1 results. Fairfax paid a US$15/share dividend in Q1. As a result, this would put book value at March 31, 2026, at about $1,275/share. Note, I am not doing this exercise to come up with a high conviction specific number (I know it will be wrong) for EPS or BVPS. Rather, I do it to help prepare me for Fairfax’s earnings release. Below is the logic I used to come up with my forecast. What are other board members thinking? Please share your thoughts. Details Underwriting profit: Net premiums of $6.91B x CR 94% = underwriting profit of $415M Questions: What is impact of war in middle east, especially GIG? Is it a near term risk and medium term opportunity? Interest income Q1-2026 of $640M Run rate in Q4 2025 was $646 Question: Did Fairfax take advantage of the increase in interest rates in March to increase average duration of their fixed income portfolio? Share of profit of associates Q1-2026 $150M ($225M-$75M hit from Sanmar) Tailwinds: Waterous Energy Fund III (Greenfire) was -$60M in Q1 2025. EXCO? Significant capex in 2026. Headwind: Sale of Sanmar by Fairfax India in March (not sure on timing here... Q1 or Q2). Markdown on sale ~$75M? (FV at Dec 31 of $101.6M - proceeds of $27M) The bigger picture: Sanmar an example of Fairfax India dealing with a chronically underperforming equity holding. Good to see. Poseidon: When it closes, the sale of 50% of Poseidon will result in an annual hit of ~$150 million ($12.5M per month). The proceeds from the sale will be reinvested by Fairfax - which will benefit the company in some way. I’ll update my models for the Poseidon sale when I know what they are going to do with the proceeds. I know what to take down. I need to know what to take up. Consolidated companies Q1 2026 $75M My annual number is $450M. There appears to be some seasonality to the business, with Q1 being the slowest quarter of the year for the different businesses. Q1 2025 was -$41M Loss was driven by Boat Rocker impairment charge of $108.6M (as part of its reverse take-over by Blue Ant Media. Example of Fairfax (finally) dealing with a chronically underperforming holding. Investment gains (losses) Equities Estimated impact of mark to market holdings will be $0. The excess of FV over CV was $3.1B at Dec 31, 2025. This will down in Q1. Below is a summary of the big movers in the equity portfolio in the quarter. Bonds Interest rates were higher across the curve in Q1. The increase in interest rates will have two offsetting impacts on Fairfax. This will result in a decline in the value of the bond portfolio. My estimate is -$300M. IRFS 17 Higher interest rates will increase the discount rate Fairfax uses to value its insurance liabilities (future cash flows). This will decrease the value of the insurance liabilities. My estimate is $+350M. How will the two net out? If Fairfax matched the average duration of its bonds and insurance liabilities, the impact of higher (or lower) interest rates would largely net out. But the average duration of Fairfax’s fixed income portfolio (< 2.5 years?) is lower than the average duration of its insurance liabilities (~4 years?). The net result is assets fall less than liabilities, which results in a benefit to earnings and an increase in book value. Please note, I am still learning about this topic. So take my summary above with a heavy dose of scepticism. (Actual results will likely be quite different.) Investment Gains - Q2 2026 Q2 is shaping up to be a big quarter for investment gains for Fairfax: Sale of Eurolife’s life insurance business: estimated gain $350M Sale of ~50% of Poseidon: estimated gain $860M Total is $1.1B, or ~$50/share (pre-tax) Interest expense Q1 2026 $220M Q4 2025 run rate was $211M New issuance in Q1 2026 was $475M (~4.8%) $23M in annual interest expense. Corporate expense Q1 2026 $120M FY2025 was $481M Estimate for 2026 is $490 Tax rate Estimate is 22% Minority interest Estimate is 10% Share count Fairfax was very aggressive buying back stock in Q1 (~+300,000?). Estimate of shares outstanding at March 31, 2026: Diluted shares outstanding at 22.3M (from 22.6M) Effective shares outstanding at 20.65M (from 20.86M) All looks pretty good Viking! I think you might be pretty close to nailing it on the head this quarter. Cheers!
thedanmancan Posted April 30 Posted April 30 (edited) On 4/23/2026 at 11:48 AM, thedanmancan said: Hi! I created a spreadsheet (thanks Claude!) that gets "live" data from Google Finance to track the daily fluctuations in Fairfax's public securities book vs the last reported 13F/10-Q. Feel free to access it and let me know what you think! Have given "comment" rights to everyone https://docs.google.com/spreadsheets/d/1wg2oKy6VsgrQuaRrSpSoJCpsvpgnpipyvG4qm-TnuRg/edit?gid=490300723#gid=490300723 Thanks for the comments to-date, I've updated the spreadsheet at this link and included some historical data. The sheet should automatically update daily after market close as well. https://docs.google.com/spreadsheets/d/12Dr-mHjdJ68XDXc141YJq5PN_qIcgVZ-FS5XvT5N7FU/edit?usp=sharing Happy using and more comments welcome! Edited April 30 by thedanmancan
hardcorevalue Posted April 30 Author Posted April 30 Yes I'm definitely in the camp that FFH ends down strongly Friday. I feel it in my bones. I honestly can't remember many quarters were the stock ever moved strongly higher!
adventurer Posted April 30 Posted April 30 (edited) Are they allowed to get active on the buyback side after announcing Q1 results the same day or the day after? Because they would obviously take advantage of price action caused by their results they published themselves. Edited April 30 by adventurer
Hoodlum Posted April 30 Posted April 30 3 hours ago, adventurer said: Are they allowed to get active on the buyback side after announcing Q1 results the same day or the day after? Because they would obviously take advantage of price action caused by their results they published themselves. I believe the blackout period ends on Tuesday next week.
dartmonkey Posted April 30 Posted April 30 17 hours ago, Crip1 said: Markel is getting hammered today. One has to think that the Fairfax numbers tomorrow will look similar. There is a part of me that wants to sell part of my holdings (it's my #1 by a country mile) with the idea of buying back over the next couple of days at a 3-5% discount. Ultimately, I'm not going to do that because unforeseeable things happen in the short term, but it would not surprise me in the slightest if we saw a significant decline Friday-Monday. I think the correct approach is to be agnostic about how the market will react to what may be an optically bad earnings report. As an example, just remember how we expected that inclusion in the S&P TSX 60 would drive FFH's share price out of the range of buybacks - it has done nothing of the sort. In retrospect, the market was probably already expecting the news of the inclusion, sooner or later, and it was probably already priced in. Now we are expecting share price declines in Fairfax's public holdings, slightly lower interest income, and the beginnings of a soft inisurance market, and that is probably all true, but that is probably why the share price has been stagnant. If the Q1 report is just a little less awful than we are expecting, the share price might actually rise. I'm not going to second guess the market... I'm confident this investment will do very well in the next few years, but I have no idea about the next few days.
This2ShallPass Posted April 30 Posted April 30 On 4/23/2026 at 3:16 PM, Hamburg Investor said: Do I get it right, ... that today the equity investments are up 10.3% since YE, ... while market value of FFH is down 5.2%, ... which means, the implied market value for the rest of FFH is valued -13.4% (so market value of FFH minus all equity investments, adjusted for buybacks) On 4/23/2026 at 3:38 PM, thedanmancan said: Yes that is correct. And this is also before dealing with the effects of the Poseidon sale ie the reduction in value is even greater taking that into account Thank you for this analysis. Fairfax has dropped 10% YTD. I decided to open a trading position today that's 30% of my core FF position. You can't telegraph earnings any better, but Fairfax stock will do what it does
Hoodlum Posted April 30 Posted April 30 It looks like Fairfax has extended duration to 3 years. The company's fixed income portfolio has an average term to maturity of 3 years and continues to be conservatively positioned with 76% of the fixed income portfolio invested in U.S. treasury and other government bonds, 13% in high quality corporate bonds, primarily short-dated, and 11% in first mortgage loans.
Redskin212 Posted April 30 Posted April 30 Fairfax Financial Holdings Limited: Financial Results for the First Quarter Earnings are $31/share - Viking pretty much nailed it!
Crip1 Posted April 30 Posted April 30 1 minute ago, Redskin212 said: Fairfax Financial Holdings Limited: Financial Results for the First Quarter Earnings are $31/share - Viking pretty much nailed it! That's pretty impressive, @Viking. -Crip
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