Fairfax 2026

[Txvestor]

15 hours ago, Hamburg Investor said:

Really like this chart! Thank you! @investmd! 

 

Many of us might have been aware, that FFH is much more into insurance, than BRK was; still it’s a great and insughtful perspective.

 

Actually my personal take from the chart is…

1. FFH lower valued by Mr. Market. Brk was valued higher at same equity than FFH is valued today (1996 vs. 1997)

2. FFH with (much)  higher float leverage.
FFH has (probably much) higher float leverage than BRK had through float (1996 /1997 vs. 2002). Risk free returns might have been higher 1996/1997; still compared to the market, that lever helps FFH with outperforming the market more than BRK could. And maybe even helps driving FFHs roe higher than BRKs.

3. FFH 1 1/2 decades ahead regarding premiums

FFH has (probably manyfold) that much premiums compared to BRK (1996 vs. 2012 - FFH is 16 years ahead. That’s a lot!). Assuming FFHs overall insurance business is more profitable (in absolute terms) over time, FFH has a stronger roe driver ahead compared to BRK. I haven’t done the math, but watching FFHs insurance business letting the average American insurance business behind by around 3 to 4 percentage points per year on average since 2011 (compared to lagging it by the same amount until 2011; so that‘s an improvement of 6 to 8 percentage points against the market after 2011 to before 2011), that gives a lot of confidence to me for FFHs future!

Of course I could be mislead. E. g. BRKs premiums and float could have standed at 99% of FFHs from 1996 to 2002/2012. But I don’t think so. Haven’t looked at the numbers, so I could be off here. But my gut feeling is, that the direction could be very roughly right. There is more leverage built into FFH today than it was in BRK. And the market loved BRK more, than it loves FFH today. (And FFH is smaller and my guess is will stay smaller. As the biggest reason for staying smaller is buybacks, that helps returns all the more).

 

Of course higher leverage means higher risk at least in theory and maybe in practice. So everyone has to do his own due diligence. As always.

That valuation difference along with a willingness to buyback shares with surplus capital is a significant advantage for long term shareholders. I don't think I've found a team that gives itself a more 360 optionality for capital allocation than this management team. And the fact that they're buying back shares at a robust clip gives me confidence that they're buying are easily stepping over their ROE hurdle with those purchases. And that's a more than adequate return over the long term for me. Especially where I can defer tax payment of LT capital gains. 

[Parsad]

1 minute ago, Parsad said:

 

Jim Pattison...hands down would be perfect!  But he's nearly Buffett's age.  

 

Francis Chou!  Can't think of anyone better, more honest, knows the company better than almost anyone other than Prem, understands the culture, has never sold a share and is an insurance and investment genius!  He also has everyone's respect and gives even more respect back!  If Prem is listening, Francis should be sitting on the Fairfax board...110%!!! 

 

Cheers!

 

You guys should push for Francis to be added to the board.  If I push for it, Francis' humility will not let him. 

 

If Prem asks him, Francis will never say "no" to him!   

 

And to paraphrase Jack Nicholson from "A Few Good Men"..."You want Francis on that board...you need Francis on that board...he uses words like honor, code, loyalty."

 

Cheers!

[Parsad]

16 minutes ago, MMM20 said:

Fine, name your favorite Canadian entrepreneur then. Maybe he’s not quite the Canadian bill gates. I hope you get my point. It’s not like I said Ryan Reynolds or Gretzky.
 

My point is that they could probably do well to do more to upgrade the board these days at this scale and as they transition to the next generation of leadership.

 

 

Also, I don't have anything against Tobe Lutke...I just think an insurance company should have an insurance expert on the board if Prem isn't there.  Great investment managers are readily available...but great insurance and investment managers are much tougher to find.  While Jim Pattison isn't necessarily either, he's an outlier that simply understands business and is self taught in "value" investing.  Ethically and culturally, he's completely in alignment with how Fairfax behaves...but it is highly unlikely he would sit on Fairfax's board.  But Francis is about as perfect as it gets for Fairfax!  Cheers!

[tnathan]

22 hours ago, gfp said:

Does anybody else think it is completely inappropriate for a member of the board of directors to give a straight up stock pitch presentation?  Why is she trying to convince people to invest in Fairfax?  Never seen it before and I hope I never see it again.

yes

[tnathan]

9 hours ago, MMM20 said:

Maybe it’s worth revisiting the conversation about whether it’s time for Fairfax to upgrade its governance including the board. I don’t mean to single out Lauren Templeton, but can’t we go get some more truly independent and high level business people at this point in FFH’s development? I would think some of these folks own the stock already, and for Canadians it would be as prestigious as BRK’s board. Like why not go get Tobi Lutke or someone at that level?

 

Agree here as well. I don't actually think she's qualified point blank

[Munger_Disciple]

10 hours ago, MMM20 said:

Maybe it’s worth revisiting the conversation about whether it’s time for Fairfax to upgrade its governance including the board. I don’t mean to single out Lauren Templeton, but can’t we go get some more truly independent and high level business people at this point in FFH’s development? 

 

 

Yes!

[Maverick47]

I’d love to see Francis on the board, but isn’t there a difficulty with him owning an insurance company (Stonetrust) through his family office investment firm?  I have seen retired executives serve on boards of former competitors, but not while they still work for or control a competing company in the same industry.

[Gamecock-YT]

4 hours ago, Parsad said:

How is Lauren Templeton any different than Wally Weitz on Berkshire's Board? 

 

Wally isn't there because of his last name.

Edited May 11 by Gamecock-YT

[Parsad]

1 hour ago, Gamecock-YT said:

 

Wally isn't there because of his last name.

 

Neither is Lauren Templeton.  She's been involved with Fairfax for over a decade.  You guys are just noting all of this now.  She started on her own...didn't get any money from her grand-uncle.  She's run her own fund since 2001.  There are a hell of a lot of people on this message board that got their start managing "family money"...she didn't!  Cheers!

[Parsad]

3 hours ago, tnathan said:

Agree here as well. I don't actually think she's qualified point blank

 

Based on what?  Opinion or fact?  Cheers!

[Parsad]

2 hours ago, Maverick47 said:

I’d love to see Francis on the board, but isn’t there a difficulty with him owning an insurance company (Stonetrust) through his family office investment firm?  I have seen retired executives serve on boards of former competitors, but not while they still work for or control a competing company in the same industry.

 

Hmmm...Interlocking directorates are allowed in some cases.  I mean, they would have to see if that is an issue here, but they may be able to work something out.  Cheers!

[Hamburg Investor]

5 hours ago, Txvestor said:

That valuation difference along with a willingness to buyback shares with surplus capital is a significant advantage for long term shareholders. I don't think I've found a team that gives itself a more 360 optionality for capital allocation than this management team. And the fact that they're buying back shares at a robust clip gives me confidence that they're buying are easily stepping over their ROE hurdle with those purchases. And that's a more than adequate return over the long term for me. Especially where I can defer tax payment of LT capital gains. 

+1

 

Optionality is a big driver for FFH.

 

BRK and MKL come to mind when comparing your argument about optionality to FFH.
 

What sets all three apart from other insurers is their willingness to invest in equity on a large scale - first, in individual stocks, and second, in entire companies. To my knowledge, there are no other insurance companies that have done this on a similarly large scale. So all three „win“ from that more in optionality.

 

 

But regarding optionality there’s more to FFH.

 

FFH gives itself even more optionality than BRK and MKL:
- Large-scale buybacks
- TRS
- Large-scale foreign investments in equity (BRK’s investments in Japan point in the same direction; but in my opinion, that isn’t on a large scale—Buffett operates primarily domestically)
- Foreign investments in the insurance market
- Macro bets (deflation, housing derivatives)
- Systematic large-scale acquisition of company stakes with co-investors on board (Buffett has done this as well - but again, not systematically or on a similarly significant scale, at least not relative to total investments). 

 

The difference between FFH and BRK/MKl is, that FFH does all this systematically at big scale. You‘ll find the others partly doing the same; but not at that scale and not that iterative. 

 

In my view, this all adds up to a major advantage for FFH over the other two. The weighted performance of all these additional options also points to an expanded Circle of Competence for Prem (though I remain cautious about derivatives overall; but they are just one segment). If one weighs the investments in global companies (Ireland, Greece, India), global insurance company acquisitions, derivatives, buybacks, etc., I generally view these as drivers of overall success. 

[djokovic1]

8 hours ago, Parsad said:

You guys should push for Francis to be added to the board.  If I push for it, Francis' humility will not let him. 

 

If Prem asks him, Francis will never say "no" to him!   

 

And to paraphrase Jack Nicholson from "A Few Good Men"..."You want Francis on that board...you need Francis on that board...he uses words like honor, code, loyalty."

 

Cheers!

 

100% I agree Francis would be a great addition to the board! Loved his presentation shared by @mananainvesting It reminded me a bit of watching Li Liu present. 

I wonder why it hasn't happened yet? Seems like it would be a win win (as long as Francis has the time).

 

 

[gfp]

Yeah I wasn’t at all saying that Lauren wasn’t qualified to be on the board and makes a good board member. I was saying a member of the board of directors shouldn’t be pitching the stock as a Berkshire from an earlier date.  We do those comparisons here but we are not board members. Prem would NEVER do that. 
 

There’s no comparison to Wally Weitz because of where BRK is today but if you saw a Berkshire board member pitching it as “Home Depot but 30 years ago” at an investor conference there would be some eye rolls…

 

Davis going on a podcast interview talking about the board’s responsibility to maintain the culture after Warren or dividend policy when excess cash overwhelms is not remotely similar to Ackman or Lauren putting together “the next Berkshire Hathaway” slides as a pitch for a stock they own a ton of. 

 

I think if it was any other company you fan-boys would see it

Edited May 11 by gfp

[Viking]

What were the key take-aways from Fairfax's Q1 earnings report? One KTA was they continue to be very aggressive buying back their stock and reducing the number of shares outstanding. Let's explore this more.

 

Share Buybacks – Theory (Warren Buffett) – A Real World Example (Fairfax)

 

The Big Picture

 

Over the long term, three factors drive stock returns: 

• Earnings
• Valuation multiple
• Shares outstanding 

The first two get most of the attention. The third — shares outstanding — is often overlooked, even though it can be a powerful driver of per-share value creation.

 

Capital Allocation Matters

 

Capital allocation is management’s most important job, and share buybacks are one of the most effective tools available. When executed properly — at attractive prices and over long periods of time — buybacks can create enormous value for shareholders.

 

Among all capital allocation options, buybacks offer one of the highest levels of certainty. High certainty generally means lower risk.

 

As Warren Buffett wrote in Berkshire Hathaway’s 1984 Annual Report:

 

 

“When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases.” Warren Buffett – Berkshire Hathaway 1984AR

 

 

Shareholder Friendly Management

 

It is counterintuitive, but for long-term shareholders a low stock price can actually be a gift — if the company is aggressively repurchasing shares. This is especially true when the discount persists for years.

 

Buffett highlighted two major benefits.

 

1. Higher Per-Share Intrinsic Value

 

This is straightforward arithmetic. When a company repurchases undervalued shares, the ownership stake of remaining shareholders increases. Intrinsic value per share rises immediately.

 

2. A Signal of Shareholder-Friendly Management

 

This second benefit is more subtle — and often underappreciated.

 

When management consistently repurchases stock below intrinsic value, it signals disciplined, shareholder-oriented capital allocation rather than empire building. Over time, investors reward this behavior with a higher valuation multiple.

 

Buffett explained it this way in Berkshire Hathaway’s 1984 Annual Report:

 

 

“The companies in which we have our largest investments have all engaged in significant stock repurchases at times when wide discrepancies existed between price and value. As shareholders, we find this encouraging and rewarding for two important reasons - one that is obvious, and one that is subtle and not always understood. The obvious point involves basic arithmetic: major repurchases at prices well below per-share intrinsic business value immediately increase, in a highly significant way, that value. When companies purchase their own stock, they often find it easy to get $2 of present value for $1. Corporate acquisition programs almost never do as well and, in a discouragingly large number of cases, fail to get anything close to $1 of value for each $1 expended.

 

“The other benefit of repurchases is less subject to precise measurement but can be fully as important over time. By making repurchases when a company’s market value is well below its business value, management clearly demonstrates that it is given to actions that enhance the wealth of shareholders, rather than to actions that expand management’s domain but that do nothing for (or even harm) shareholders. Seeing this, shareholders and potential shareholders increase their estimates of future returns from the business. 

 

“This upward revision, in turn, produces market prices more in line with intrinsic business value. These prices are entirely rational. Investors should pay more for a business that is lodged in the hands of a manager with demonstrated pro-shareholder leanings than for one in the hands of a self-interested manager marching to a different drummer...”  

 

Warren Buffett – Berkshire Hathaway 1984AR

 

 

Fairfax’s Buyback Philosophy

 

Prem Watsa laid out Fairfax’s long-term buyback strategy in the company’s 2018 Annual Report:

 

 

“…we are focused on buying back our shares over the next ten years as and when we get the opportunity to do so at attractive prices. Henry Singleton from Teledyne was our hero as he reduced shares outstanding from approximately 88 million to 12 million over about 15 years.” Prem Watsa – Fairfax 2018AR

 

 

Fairfax approaches buybacks exactly like a value investor:

• Buy shares when they are cheap
• “Back up the truck” when they are really cheap

What Has Fairfax Actually Done?

 

2015–2017: Aggressive Expansion of P/C Insurance

 

Fairfax issued shares to fund the rapid expansion of its international P/C insurance operations.

• Effective shares outstanding increased by 6.57 million shares
• Average issuance price: approximately $462 per share
• Effective shares outstanding peaked at 27.75 million in 2017

2018–2026: Aggressive Buybacks

 

Beginning in 2018, Fairfax pivoted to large-scale share repurchases and has bought back stock every year since.

 

Over the past 8.25 years:

• Effective shares outstanding declined by 7.13 million shares
• Total reduction: 25.7%
• Average repurchase price: approximately $785 per share
• Effective shares outstanding (March 31, 2026): 20.62 million

Fairfax spent approximately $5.6 billion repurchasing stock during this period — its single largest investment. As a result, the share count has fallen to levels last seen in 2010.

 

 

Did Fairfax Get Good Value?

 

Absolutely.

 

Current metrics:

• Book value per share: $1,250 (March 31, 2025)
• Share price: $1,625 (May 4, 2026)
• Intrinsic value is well above book value

Fairfax reduced its share count by 25.7% at an average repurchase price of approximately $785 per share — a substantial discount to book value. Importantly, the company repurchased shares aggressively while simultaneously expanding its core insurance business.

 

Net Premiums Written (NPW)

• 2017: $10.0 billion ($353 per share)
• 2025: $26.3 billion ($1,261 per share)

Growth from 2017 to 2025:

• Total NPW growth: 163%
• Per-share NPW growth: 257%

Fairfax walked and chewed gum at the same time. Buybacks materially amplified per-share growth. 

 

This is elite capital allocation.

 

Is Fairfax Done Buying Back Shares?

 

Current valuation: 

• Share price: approximately $1,628 (May 4, 2026)
• Book value: approximately $1,250 (March 31, 2026)
• P/BV: approximately 1.30
• ROE: averaging in the high teens in recent years

Despite Fairfax’s strong operating performance, the stock still appears very cheap.

 

Importantly, book value excludes a meaningful amount of hidden value that has accumulated over the past five years. One obvious example is the excess of fair value over carrying value of non-insurance associate and consolidated holdings:

• Excess of FV over CV: $3.9 billion (at March 31, 2026)
• Per share: approximately $189 before tax

And this is only one source of hidden value on Fairfax’s balance sheet.

 

As a result, Fairfax is cheaper than it appears based solely on book value.

 

I also expect the stock to remain undervalued for some time. Fairfax is still underfollowed, misunderstood, and largely ignored by many investors and analysts. Most still do not fully appreciate how much the company’s business model and earnings power have changed over the past five years. Or how well the company is executing.

 

That likely changes over time.

 

Fairfax has now delivered outstanding results for five consecutive years. If it continues compounding capital at above-average rates over the next five years, it will build a full decade-long track record. That will resonate much more strongly with investors and likely lead to a more appropriate valuation.

 

In the meantime, a persistently undervalued stock is a tremendous advantage for long-term shareholders. It allows Fairfax to continue repurchasing shares at attractive prices.

 

That is an excellent setup for long-term owners.

 

Bottom Line

 

Over the past 8.25 years, Fairfax Financial Holdings has executed a textbook, Henry Singleton-style — Buffett-approved — buyback strategy:

• Repurchased aggressively when deeply undervalued
• Created enormous per-share value
• Continued growing the core insurance business at the same time

This is what exceptional capital allocation looks like.

 

It is also a clear signal that Fairfax is being managed with a strong shareholder orientation.

 

One More Thing: Fairfax’s Total Return Swaps

 

Fairfax also holds total return swaps (TRS) on its own stock. The position was established in late 2020/early 2021 at an average cost of approximately $373 per share. The initial position was 1.96 million shares and currently stands at 1.76 million shares. (The position was reduced by approximately 200,000 shares in Q4 2024 when Fairfax purchased and retired shares from the counterparty.)

 

Over the past 5.33 years, the TRS-FFH position has increased in value by roughly $2.4 billion before carrying costs. It has become one of the most successful investments Fairfax has ever made.

Some investors view the TRS position as a form of synthetic buyback.

 

Including the impact of the TRS position:

• Effective shares retired (8.25 years): 32.0%
• Average price: approximately $704 per share

Yes — that is absurdly good capital allocation.

 

 

Edited May 11 by Viking

[Intelligent_Investor]

 

3 hours ago, gfp said:

Yeah I wasn’t at all saying that Lauren wasn’t qualified to be on the board and makes a good board member. I was saying a member of the board of directors shouldn’t be pitching the stock as a Berkshire from an earlier date.  We do those comparisons here but we are not board members. Prem would NEVER do that. 
 

There’s no comparison to Wally Weitz because of where BRK is today but if you saw a Berkshire board member pitching it as “Home Depot but 30 years ago” at an investor conference there would be some eye rolls…

 

Davis going on a podcast interview talking about the board’s responsibility to maintain the culture after Warren or dividend policy when excess cash overwhelms is not remotely similar to Ackman or Lauren putting together “the next Berkshire Hathaway” slides as a pitch for a stock they own a ton of. 

 

I think if it was any other company you fan-boys would see it

Yeah,I think if this happened with a Berkshire board member, Warren would've asked them to resign the next day. He has no tolerance for even the appearance of impropriety

[TwoCitiesCapital]

I want a board that owns the stock. 

 

I don't mind a board that promotes the stock as long as what they're saying isn't over-the-top promotional or questionable in validity. 

 

Some might argue calling it the next Berkshire is overly promotional. But I think it's been called that for the 10+ years I've been involved with the name, has a very similar business model, and a very similar historical performance, so to me it seems it's more telling it like it is/was than being overly promotional. I have no issues with it. 

 

[LC]

IMO it's a little unprofessional, but then again it's 2026 and professionalism is valued less and less every day so what the heck do I know

[SafetyinNumbers]

4 hours ago, Intelligent_Investor said:

 

Yeah,I think if this happened with a Berkshire board member, Warren would've asked them to resign the next day. He has no tolerance for even the appearance of impropriety

I don’t see any impropriety and my guess is Buffett wouldn’t see it here either. Meanwhile, he was cool with the Alleghany CEO and CFO buying stock after he asked to meet with them. 

[Parsad]

9 hours ago, gfp said:

Yeah I wasn’t at all saying that Lauren wasn’t qualified to be on the board and makes a good board member. I was saying a member of the board of directors shouldn’t be pitching the stock as a Berkshire from an earlier date.  We do those comparisons here but we are not board members. Prem would NEVER do that. 
 

There’s no comparison to Wally Weitz because of where BRK is today but if you saw a Berkshire board member pitching it as “Home Depot but 30 years ago” at an investor conference there would be some eye rolls…

 

Davis going on a podcast interview talking about the board’s responsibility to maintain the culture after Warren or dividend policy when excess cash overwhelms is not remotely similar to Ackman or Lauren putting together “the next Berkshire Hathaway” slides as a pitch for a stock they own a ton of. 

 

I think if it was any other company you fan-boys would see it

 

I think if there was anything inappropriate in Lauren's presentation, it was the comparison to FFH being possibly like Berkshire 30 years ago.  Pitching FFH itself is no different than Buffett touting a stock Berkshire owns that is cheap or telling shareholders to buy Berkshire stock the day he dies.  But suggesting that Fairfax may be like BRK 30 years ago is presumptuous and on the borderline.  Otherwise I'm neither critical about Lauren pitching FFH, nor her being a board member.  Cheers!

[gfp]

47 minutes ago, Parsad said:

I think if there was anything inappropriate in Lauren's presentation, it was the comparison to FFH being possibly like Berkshire 30 years ago.

 

47 minutes ago, Parsad said:

But suggesting that Fairfax may be like BRK 30 years ago is presumptuous and on the borderline.

 

So my entire point.  

[Eldad]

6 hours ago, TwoCitiesCapital said:

I want a board that owns the stock. 

 

I don't mind a board that promotes the stock as long as what they're saying isn't over-the-top promotional or questionable in validity. 

 

Some might argue calling it the next Berkshire is overly promotional. But I think it's been called that for the 10+ years I've been involved with the name, has a very similar business model, and a very similar historical performance, so to me it seems it's more telling it like it is/was than being overly promotional. I have no issues with it. 

 

Agree. 
 

I saw Davis on a podcast recently and he was very careful in this respect and wouldn’t promote. Only said he thinks BRK has an ingrained anti WallSt culture and hopes to invest in extremely long lived assets like Standard Oil. And pointed out that Standard Oil (Exxons) CEO stock vests 10 years after their retirement to this day (how cool is that!)

[Parsad]

55 minutes ago, gfp said:

 

 

So my entire point.  

 

No, not your entire point.  I didn't have a problem with her pitching FFH.  Just the comparison to Berkshire.  Cheers!

[Parsad]

12 minutes ago, Eldad said:

Agree. 
 

I saw Davis on a podcast recently and he was very careful in this respect and wouldn’t promote. Only said he thinks BRK has an ingrained anti WallSt culture and hopes to invest in extremely long lived assets like Standard Oil. And pointed out that Standard Oil (Exxons) CEO stock vests 10 years after their retirement to this day (how cool is that!)

 

It's still promotion of the company via its culture.  The only thing that could prevent any sort of conflict of interest is for directors and executives not to do any sort of media or interviews.  And if you think about it...why do they and why should they?  I'm not sure they should really!  Nor should companies be allowed to pay analysts to put out favorable reports through their retail channels.  Cheers!

[yesman182]

3 hours ago, Parsad said:

 

It's still promotion of the company via its culture.  The only thing that could prevent any sort of conflict of interest is for directors and executives not to do any sort of media or interviews.  And if you think about it...why do they and why should they?  I'm not sure they should really!  Nor should companies be allowed to pay analysts to put out favorable reports through their retail channels.  Cheers!

Should board members be allowed to write books? So Buffett can’t go on CNBC anymore? No more letters? Prem shouldn’t talk to the author of the Fairfax way? Seem a little nutty to me.