Fairfax 2026

[Crip1]

23 hours ago, cwericb said:

 

Had the exact conversation with my better half Saturday morning and she asked the exact same question. I also had no real answer other than to say these things tend to happen to Fairfax from time to time for no real reason. Kinda felt like a moron because I could not explain the situation, and yeah, there is the net worth roller coaster. I told her that I have every confidence that share price will get back on track, my only concern is when as I am not getting any younger. With Fairfax at around 50% of my portfolio I have not been adding, but I have no intention of selling either. There have been days that tend to make me reach for the Rolaids though.

 

By the way Crip, I'm the guy that stumbled onto this board 20 years ago and paid close attention to every one of your posts at the time because you always seemed to ask or answer ask the same questions that I had and you were one of the posters that influenced me jump into Fairfax. I thank you for that. There has been a lot of ups and downs with Fairfax over those 20 years but I'm still here.

 

Wow, that's was really kind of you to say, I really appreciate it. Back in those days, it was Cardboard and BSilly, as well as James East and others who I remember being the voices of reason. And, of course, you're welcome. No doubt I've received insanely more knowledge and wisdom than I ever gave, but if I helped, I'm happy to have done so.

Funny that you had a similar conversation, and funnier still that you had it on Saturday morning as I'm pretty sure that's when we had our conversation. 

 

-Crip

[bearprowler6]

1 hour ago, Crip1 said:

 

Wow, that's was really kind of you to say, I really appreciate it. Back in those days, it was Cardboard and BSilly, as well as James East and others who I remember being the voices of reason. And, of course, you're welcome. No doubt I've received insanely more knowledge and wisdom than I ever gave, but if I helped, I'm happy to have done so.

Funny that you had a similar conversation, and funnier still that you had it on Saturday morning as I'm pretty sure that's when we had our conversation. 

 

-Crip

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Prem always suggests that we think long term. Without a specific timeline or at least a range of times that statement has always struck me as meaningless.

 

Furthermore, Fairfax has been set up to outlast Prem. So decisions made today can really be made with a long term viewpoint in mind. This likely means that Fairfax's timeline does not align with the personal timelines of very many individual shareholders. As cwericb said...we are not getting any younger.

[SafetyinNumbers]

6 minutes ago, bearprowler6 said:

Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero.

How low do you think the multiple can go? What do you think the odds are? 

[SafetyinNumbers]

1 hour ago, Viking said:

One of Fairfax’s great strengths is they are very opportunistic. Their stock is - once again - wicked cheap. They know it. What to do? Back up the truck with buybacks. Time for another dutch auction? Or do they simply max out the NCIB. It is fun to speculate…

 

This quote from Buffett comes to mind: "Big opportunities come infrequently. When it rains gold, reach for a bucket, not a thimble."

 

I like how the spread to the 30 year keeps tightening. Two years ago they issued at ~190bp spread, last year ~165bp and this year was ~135bp. I think Allied World is the logical place for this money. Extending the option would have been more expensive and buying Allied World minority boosts the borrowing base, 

[value_hunter]

1 hour ago, bearprowler6 said:

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Prem always suggests that we think long term. Without a specific timeline or at least a range of times that statement has always struck me as meaningless.

 

Furthermore, Fairfax has been set up to outlast Prem. So decisions made today can really be made with a long term viewpoint in mind. This likely means that Fairfax's timeline does not align with the personal timelines of very many individual shareholders. As cwericb said...we are not getting any younger.

Hi bearprower6, I remember you sold most of your fairfax shares back in 2020. Do you still have any position now?

[Parsad]

1 hour ago, bearprowler6 said:

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Prem always suggests that we think long term. Without a specific timeline or at least a range of times that statement has always struck me as meaningless.

 

Furthermore, Fairfax has been set up to outlast Prem. So decisions made today can really be made with a long term viewpoint in mind. This likely means that Fairfax's timeline does not align with the personal timelines of very many individual shareholders. As cwericb said...we are not getting any younger.

 

Even during the Great Depression after the Crash of 1929...if you continued to average down, or sell stocks to buy even cheaper ones, you came out well ahead over time...even over the ensuing 2-3 years.

 

If you stood pat, the recovery took a lot longer.  If you sold, you crystallized your losses.  If you were leveraged and/or on margin...odds are you were broke.  But averaging down worked as markets slowly recovered.

 

So if you are worried about the next 5 years or so...make sure you have some cash and live at or below your means.  If the markets or FFH stays low for a period of time, average down to cheaper valuations in other stocks or even FFH as the P/E compresses further.  

 

Cheers!

[Txvestor]

3 hours ago, SafetyinNumbers said:

How low do you think the multiple can go? What do you think the odds are? 

 

3 hours ago, bearprowler6 said:

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Prem always suggests that we think long term. Without a specific timeline or at least a range of times that statement has always struck me as meaningless.

 

Furthermore, Fairfax has been set up to outlast Prem. So decisions made today can really be made with a long term viewpoint in mind. This likely means that Fairfax's timeline does not align with the personal timelines of very many individual shareholders. As cwericb said...we are not getting any younger.

I think that's an important contrast and a question each investor has to ask themselves. Prem isn't getting any younger, we aren't either. And as you can see with Fairfax India 11yrs apparently isn't long term in their eyes. Unless you traded in and out of that security at opportune times. From IPO to now your annual rate of return is a paltry mid single digits, barely beating 10yr treasuries. A lot of holders are looking at the discrepancy between IV and share price and wondering what long term means if 11yrs isn't long enough.

[adventurer]

4 hours ago, bearprowler6 said:

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Prem always suggests that we think long term. Without a specific timeline or at least a range of times that statement has always struck me as meaningless.

 

Furthermore, Fairfax has been set up to outlast Prem. So decisions made today can really be made with a long term viewpoint in mind. This likely means that Fairfax's timeline does not align with the personal timelines of very many individual shareholders. As cwericb said...we are not getting any younger.

If you consider it to be true that Fairfax did undergo a transformation between 2017-2020 (with all the positives coming with it, as laid out on this board) and if you believe in the mantra that prices follow earnings you will end up with a higher share price. The buybacks, if continued meaningfully as announced a few years back by Prem, accelerate the arithmetical process of increasing EPS.

To my mind the groundworks now are more in place for an increase in share price compared to all periods before (as described in "The Fairfax Way"). This of course does not include unexpected push backs such as CAT-events and so forth. 

Edited 13 hours ago by adventurer

[SafetyinNumbers]

2 hours ago, adventurer said:

This of course does not include unexpected push backs such as CAT-events and so forth.

I think a CAT event might get sold initially for investors wanting to avoid a short term drawdown but if it is big enough to matter it might harden the market. If the market gets hard then revenue growth accelerates and the multiple likely expands as the momentum chasers scoop up stock. It’s actually a positive catalyst for the stock price. Might be a temporary hit to book value but they have a lot of reserves. 

Edited 11 hours ago by SafetyinNumbers

[Crip1]

8 hours ago, bearprowler6 said:

Serious question... how long are you both prepared to wait for Fairfax's share price to "go back to where it was" and/or "rerate and go to where it should be". Are you absolutely sure we have not entered another 7 lean year period? For different reasons this time however I don't think the possibility of this is zero. Would both of your spouses be also willing to wait it out? 

 

Regarding how long I am willing to wait, I don't have a specific time frame. It's too limiting.

 

In terms whether or not I'm absolutely sure we have not entered into another seven lean year period, It's hard to be absolutely sure of anything. My focus is less on the stock price and more on what the company is actually doing. In the first quarter we had solid underwriting results and the monetization of an asset that was worth more then it's carrying value. The other investments did not perform terribly well, in line with the markets, but nothing I saw looked like a permanent loss of capital. From everything I can see, the company is worth more now than it was on January 1st. If that changes and the worth of the company declines, a reevaluation would need to take place on my part. 

 

In terms of my spouse, she has heard this from me before: "If you think it's best to buy or sell an investment, give me the reason why and we will talk about it openly and objectively." The only thing to add is that I guarantee you that I put a hell of a lot more pressure on myself to invest well than my wife does. 

 

-Crip

[bearprowler6]

6 hours ago, Parsad said:

 

Even during the Great Depression after the Crash of 1929...if you continued to average down, or sell stocks to buy even cheaper ones, you came out well ahead over time...even over the ensuing 2-3 years.

 

If you stood pat, the recovery took a lot longer.  If you sold, you crystallized your losses.  If you were leveraged and/or on margin...odds are you were broke.  But averaging down worked as markets slowly recovered.

 

So if you are worried about the next 5 years or so...make sure you have some cash and live at or below your means.  If the markets or FFH stays low for a period of time, average down to cheaper valuations in other stocks or even FFH as the P/E compresses further.  

 

Cheers!

Parsad,

 

I appreciate your reply however your comments do not address the question I asked or the issue at hand. So let me try again.

 

Two long time members of this board  (Crip1 and cwericb) both posted about the decline they have experienced in their overall portfolios this year which is largely due to their outsized positions in Fairfax and that company's almost 20% share price decline year to date. They both had to recently explain to their spouses what had happened and both struggled to come up with anything concrete. 

 

Maybe the decline in Fairfax's share price will be a short term issue and things will go back to where they were very soon. My question related to what they both would do and what would others in similar circumstances do if the share price decline lasts longer term...say another 7 year lean cycle. I highly doubt that the spouses of both of these guys will be as accepting of the long term perspective if the share price decline lasts 5 years or more. 

 

None of us are getting any younger. Personally I am 66 and have been fully retired since I was 54. I  hold about a 9% weighting in Fairfax in my overall family's portfolio. I am up over 13% ytd despite the almost 20% decline in Fairfax's share price so far this year. I have been a Fairfax shareholder since 1999. I can say for certain that I am not at all interested in waiting out another 7 year lean  period. Dollar price averaging into Fairfax's share price weakness is not something I am interested in doing. 

 

So I am sincerely asking Crip1, cwericb and anyone else how they are thinking about this issue? Perhaps doing nothing is the right move? Perhaps dollar cost averaging into Fairfax's share price weakness should be considered? But should selling out at this time also be considered---especially for those board members who are a little older and for whom Fairfax makes up a large portion of their portfolios?

 

 

 

[bearprowler6]

Just now, Crip1 said:

Regarding how long I am willing to wait, I don't have a specific time frame. It's too limiting.

 

In terms whether or not I'm absolutely sure we have not entered into another seven lean year period, It's hard to be absolutely sure of anything. My focus is less on the stock price and more on what the company is actually doing. In the first quarter we had solid underwriting results and the monetization of an asset that was worth more then it's carrying value. The other investments did not perform terribly well, in line with the markets, but nothing I saw looked like a permanent loss of capital. From everything I can see, the company is worth more now than it was on January 1st. If that changes and the worth of the company declines, a reevaluation would need to take place on my part. 

 

In terms of my spouse, she has heard this from me before: "If you think it's best to buy or sell an investment, give me the reason why and we will talk about it openly and objectively." The only thing to add is that I guarantee you that I put a hell of a lot more pressure on myself to invest well than my wife does. 

 

-Crip

Thank you for your open, sincere  and frank reply. These are not easy issues. After the last 4-5 years we are all feeling a little better about Fairfax and its share performance however those of us who who have been around this company for any length of time know how bad things can get. 

[73 Reds]

24 minutes ago, bearprowler6 said:

Parsad,

 

I appreciate your reply however your comments do not address the question I asked or the issue at hand. So let me try again.

 

Two long time members of this board  (Crip1 and cwericb) both posted about the decline they have experienced in their overall portfolios this year which is largely due to their outsized positions in Fairfax and that company's almost 20% share price decline year to date. They both had to recently explain to their spouses what had happened and both struggled to come up with anything concrete. 

 

Maybe the decline in Fairfax's share price will be a short term issue and things will go back to where they were very soon. My question related to what they both would do and what would others in similar circumstances do if the share price decline lasts longer term...say another 7 year lean cycle. I highly doubt that the spouses of both of these guys will be as accepting of the long term perspective if the share price decline lasts 5 years or more. 

 

None of us are getting any younger. Personally I am 66 and have been fully retired since I was 54. I  hold about a 9% weighting in Fairfax in my overall family's portfolio. I am up over 13% ytd despite the almost 20% decline in Fairfax's share price so far this year. I have been a Fairfax shareholder since 1999. I can say for certain that I am not at all interested in waiting out another 7 year lean  period. Dollar price averaging into Fairfax's share price weakness is not something I am interested in doing. 

 

So I am sincerely asking Crip1, cwericb and anyone else how they are thinking about this issue? Perhaps doing nothing is the right move? Perhaps dollar cost averaging into Fairfax's share price weakness should be considered? But should selling out at this time also be considered---especially for those board members who are a little older and for whom Fairfax makes up a large portion of their portfolios?

 

 

 

Such an odd question on a value investing board.  What we all hope for is the opportunity to buy dollars for 50 or 60 cents or even less.  No one has a crystal ball into the future but you have to trust that well managed, profitable businesses will be rewarded with appropriate prices.  Otherwise, don't invest in stocks.  As far as spouses are concerned, those are marital issues, not investing issues.

[Milu]

25 minutes ago, 73 Reds said:

Such an odd question on a value investing board.  What we all hope for is the opportunity to buy dollars for 50 or 60 cents or even less.  No one has a crystal ball into the future but you have to trust that well managed, profitable businesses will be rewarded with appropriate prices.  Otherwise, don't invest in stocks.  As far as spouses are concerned, those are marital issues, not investing issues.

Yes I would assume anybody who invests in stocks would understand that 20%, 30%, even 50% drawdowns in individual positions is par for the course. Hasn’t Berkshire dropped at least 50% on three occasions.

[bearprowler6]

20 minutes ago, 73 Reds said:

Such an odd question on a value investing board.  What we all hope for is the opportunity to buy dollars for 50 or 60 cents or even less.  No one has a crystal ball into the future but you have to trust that well managed, profitable businesses will be rewarded with appropriate prices.  Otherwise, don't invest in stocks.  As far as spouses are concerned, those are marital issues, not investing issues.

I completely disagree with your dismissive and condescending response. What I raised is exactly the  kind of issue that should be discussed on this board despite the fact that this is as you call it a "value investing board".  The solution to all problems is not as simple as you state---buy dollars for 50 or 60 cents and just wait. Real life gets in the way of this overly simplistic approach to investing. For those of us who have been around Fairfax for any length of time (in my case since 1999) we know what can go wrong and how long things take to correct. No one on here predicted the 20% drawdown in share price this year. All the projections were nothing but blue sky ahead. Reality is much different and depending on ones personal  circumstances different responses are needed. 

[Madpawn]

1 hour ago, bearprowler6 said:

Parsad,

 

I appreciate your reply however your comments do not address the question I asked or the issue at hand. So let me try again.

 

Two long time members of this board  (Crip1 and cwericb) both posted about the decline they have experienced in their overall portfolios this year which is largely due to their outsized positions in Fairfax and that company's almost 20% share price decline year to date. They both had to recently explain to their spouses what had happened and both struggled to come up with anything concrete. 

 

Maybe the decline in Fairfax's share price will be a short term issue and things will go back to where they were very soon. My question related to what they both would do and what would others in similar circumstances do if the share price decline lasts longer term...say another 7 year lean cycle. I highly doubt that the spouses of both of these guys will be as accepting of the long term perspective if the share price decline lasts 5 years or more. 

 

None of us are getting any younger. Personally I am 66 and have been fully retired since I was 54. I  hold about a 9% weighting in Fairfax in my overall family's portfolio. I am up over 13% ytd despite the almost 20% decline in Fairfax's share price so far this year. I have been a Fairfax shareholder since 1999. I can say for certain that I am not at all interested in waiting out another 7 year lean  period. Dollar price averaging into Fairfax's share price weakness is not something I am interested in doing. 

 

So I am sincerely asking Crip1, cwericb and anyone else how they are thinking about this issue? Perhaps doing nothing is the right move? Perhaps dollar cost averaging into Fairfax's share price weakness should be considered? But should selling out at this time also be considered---especially for those board members who are a little older and for whom Fairfax makes up a large portion of their portfolios?

 

 

 

As someone on the other end of the spectrum (age wise), I’m certainly hoping that Fairfax and my other investments stay flat over the next years if not decade or two so I can keep accumulating shares at a reasonable price, assuming the underlying business continues to perform. 
 

That said, if I knew time is against me and I’ve got a short runway left (for lack of better words), holding any type of stocks would be inherently risky no? It doesn’t matter if it’s Fairfax, Berkshire, the S&P; no one’s going to accurately predict the behaviour of these equities within a given time frame. Whilst you’re not interested in holding for a flat run over 7 years, I’m certain you’d be interested in holding it for a bull market of 6 years and sell right before the next drop down.

 

Perhaps I’m oversimplifying it, but wouldn’t it be simply a matter of risk allocation where given the timeframe, you’re better off with a larger weight in fixed income investments?

Edited 9 hours ago by Madpawn

[MMM20]

I don’t mean this disrespectfully, but bearprowler’s question is exactly the sort of thing we would expect to see at local bottoms. Another Dutch auction buyback incoming?

 

Edited 9 hours ago by MMM20

[bearprowler6]

1 minute ago, Milu said:

Yes I would assume anybody who invests in stocks would understand that 20%, 30%, even 50% drawdowns in individual positions is par for the course. Hasn’t Berkshire dropped at least 50% on three occasions.

Its not a question of not understanding that stocks can drop 20%, 30% or more. The question I posed is now that such an unexpected drop has occurred in what is likely an oversized position in many portfolios held by members on this board what should/will they do next? The response to this question will vary greatly by personal circumstances  including age, marital status, overall net worth , cash flow needs etc. Someone 30, with a great job and having bought into Fairfax 6 years ago at the covid  bottom should arguably respond differently than someone who is 70+, retired, married and for sake of argument in failing health.

[73 Reds]

4 minutes ago, bearprowler6 said:

I completely disagree with your dismissive and condescending response. What I raised is exactly the  kind of issue that should be discussed on this board despite the fact that this is as you call it a "value investing board".  The solution to all problems is not as simple as you state---buy dollars for 50 or 60 cents and just wait. Real life gets in the way of this overly simplistic approach to investing. For those of us who have been around Fairfax for any length of time (in my case since 1999) we know what can go wrong and how long things take to correct. No one on here predicted the 20% drawdown in share price this year. All the projections were nothing but blue sky ahead. Reality is much different and depending on ones personal  circumstances different responses are needed. 

Sorry you took it that way - it was not intended.  But if stocks of fine companies never fall significantly in price, what would we all be doing with our money?  IMO pricing of Fairfax Financial for most of the 2010s was well deserved.  Those issues seem to have been resolved.  Today's prices are a great opportunity for those who have never before owned Fairfax and for some of us who already own and understand the company.  What's not to like?

[MMM20]

6 minutes ago, bearprowler6 said:

Its not a question of not understanding that stocks can drop 20%, 30% or more. The question I posed is now that such an unexpected drop has occurred in what is likely an oversized position in many portfolios held by members on this board what should/will they do next? The response to this question will vary greatly by personal circumstances  including age, marital status, overall net worth , cash flow needs etc. Someone 30, with a great job and having bought into Fairfax 6 years ago at the covid  bottom should arguably respond differently than someone who is 70+, retired, married and for sake of argument in failing health.

I personally get concerned when everything I own is working at the same time. If you have a sufficiently diversified portfolio, you should expect things to work at different times. The experienced investors here with big positions presumably know this and have the conviction, temperament, and structure to see it through.

 

Edited 9 hours ago by MMM20

[bearprowler6]

4 minutes ago, MMM20 said:

I don’t mean this disrespectfully, but bearprowler’s question is exactly the sort of thing we see at local bottoms. Another Dutch auction buyback incoming?

I accept that this is a possibility and a large repurchase of share at this point would seem timely. I am not calling a bottom. I am simply asking a very reasonable question that seems to hit a nerve with a number of posters here. I have held Fairfax since 1999. I have lived thru all of the events surrounding this company over the last 27 years of which there have been many. My average cost on the shares is just above $200 CAD. At 66 I am simply pondering whether any other approaches to buy and hold for the long term should be contemplated. Crip1 and cwericb seemed to be doing the same.

[bearprowler6]

4 minutes ago, MMM20 said:

I personally get concerned when everything I own is working at the same time. If you have a sufficiently diversified portfolio, you should expect things to work at different times. The experienced investors here with big positions presumably know this and have the conviction, temperament, and structure to see it through.

 

Fair point. Personally my overall portfolio is structured very well with my ytd return being in excess of 13% despite my almost 9% weighting in Fairfax. 

[gfp]

20 minutes ago, bearprowler6 said:

Fair point. Personally my overall portfolio is structured very well with my ytd return being in excess of 13% despite my almost 9% weighting in Fairfax. 

 

Its probably best to look critically at the stuff at new highs making you feel like a genius than stress about Fairfax at a low earnings multiple and low premium / no premium to book value.

 

A 9% weighting after all these years is nothing to lose sleep over.  But if that's big for you, sell down to your comfort level or your spouse's comfort level and the company and I will provide you liquidity.

Edited 8 hours ago by gfp

[73 Reds]

4 minutes ago, gfp said:

 

Its probably best to look critically at the stuff at new highs making you feel like a genius than stress about Fairfax at a low earnings multiple and low premium / no premium to book value.

 

A 9% weighting after all these years is nothing to loose sleep over.  But if that's big for you, sell down to your comfort level or your spouse's comfort level and the company and I will provide you liquidity.

Yeah, on the bright side as the stock price decreases, so does the weighting.  

[Milu]

26 minutes ago, bearprowler6 said:

Its not a question of not understanding that stocks can drop 20%, 30% or more. The question I posed is now that such an unexpected drop has occurred in what is likely an oversized position in many portfolios held by members on this board what should/will they do next? The response to this question will vary greatly by personal circumstances  including age, marital status, overall net worth , cash flow needs etc. Someone 30, with a great job and having bought into Fairfax 6 years ago at the covid  bottom should arguably respond differently than someone who is 70+, retired, married and for sake of argument in failing health.

That’s fair enough. And yes everybody’s personal situation is difference. Perhaps you just need to reduce the weighting you have in the stock by a few percentage points. I would disagree on the description of unexpected drop. I have about 10 stocks in my portfolio and in each year I would fully expect that they could drop 20% or more no matter how bright the outlook is for each of them.