Fairfax 2026

[Intelligent_Investor]

The bottom line is if a 20% decline in stocks materially changes your QOL, you shouldn't own stocks. Otherwise, you should be okay with just holding the stock (or buying more). Selling shouldn't be considered unless the facts change around the company's prospects. Should be something that takes about 30 seconds of mental energy before you move on.

[Maverick47]

1 minute ago, Intelligent_Investor said:

The answer is buy more lol, you are overcomplicating this and getting emotional about returns. As Charlie Munger said, if you aren't able to handle your stock investments declining by 50% once every few decades you shouldn't own stocks. I'd assume most of us are wealthy enough to not be on the streets with a 20% down year...

Agreed.

 Is the company still in solid shape?  Is it maintaining or, better yet, increasing in intrinsic value?  Is management trustworthy?  Are their interests aligned with mine as a long term shareholder?  
 

Is the company soundly financed?  Is it buying back its own shares, or buying in minority shares of associates, and is it otherwise taking actions to work for me as an individual shareholder?

 

Does Bret Horn of Morningstar acknowledge its continued strong operating results and investment performance yet still call it a poor underwriter whose investment results are likely to be hit or miss,  listing it as overvalued?  
 

If I can answer myself in the affirmative to these questions, then I don’t worry myself about short term market price weakness.  I remind myself and my spouse and other interested family members that the only accurate prediction one (even such a one as Bret Horn) can make about the market price of a security in the short term is that “it will fluctuate” and that if it is currently moving in either a direction or magnitude I would not otherwise expect based on my assessment of its intrinsic value, it is because “in the short run the stock market is a voting machine” but that “over the long run it is a weighing machine.”

[dealraker]

1 hour ago, bearprowler6 said:

Happy Birthday in advance. My home is worth about the same. It seems many on this board are very uncomfortable with discussing these very valid issues. Whether Fairfax is in an uptrend or a downtrend I believe we all need to address what to do with our holdings on a regular basis. We owe that to ourselves, to our families and ultimately to our heirs. If Fairfax, is in one of its extended sideways periods (I don't know whether it is or not) then it is very reasonable to ask yourself the question whether the funds should be deployed elsewhere to benefit those that rely on us.

I give credit to thinking unlike my own particularly to someone like Sanjeev who has skills that I do not...although I have successfully experimented with his suggestions in my retirement account LOL.

 

Over decades it worked like this for me.  Parents died when I was young so I watched the old guys, particularly the guys in my investment club.  So many of them lived healthily until their mid 80's.  None, that's zero, of them "sold out" or "cashed in" to "make it" out of this world.  They all were businessmen but they all made most of their wealth by owning stocks over decades.  They all died with many millions.

 

Contrast that the the come-and-go whippersnappers who had shorter term visitations being members of our investment club.  This bunch was high strung, the in-and-outers who knew more than the rest of us, timing was their game and "concern"  for the times was their focus.

 

Lots of wealth, and I mean a LOT OF WEALTH, was handed down from the old "hold" guys.  Never knew any of the come-and-go members whose children or wives...or whoever was part of their family...ever in any way projected any wealth accumulation.  

 

My wife's parents were quite philanthropic to her during her father's lifetime.  He tried to control the family with his money, but he quickly realized with me that wasn't gunna fly.  When he died?  The SOB who attempted to control with his gifts- and of course suggestion on how we lived and voted-  had "invested" in short term CD's and annuities...and he had a pension.  What did he leave his wife?  What passes down to my wife and on down from him?  About $400k and a house.

 

If you want to build wealth you better be in business...that's called stocks.

[Castanza]

20 minutes ago, bearprowler6 said:

And those who had to sell (deaths, divorce, funding business needs etc) Berkshire during 1999-2000 never benefited from the recovery.

 

What's your point? You're asking the board to make a personal finance decision for you. The question you pose in short is not only asking people to forecast the future share price, but also asking whether you should hold, buy, or sell. That's a personal question based on personal finances. As someone else mentioned up chain, all equities are subject to this. If you want some steady reliable income stream then move funds to t-bills etc. Are you investing (looking at the Intrinsic value of said company vs the share price and hoping for price discovery) or are you simply looking at the share price? Just being blunt, but you're sort of letting the tail wag the dog with this framework. End of day I don't think it's valuable to hold any equity unless you're consistently looking out  5+ years (voting machine vs weighing machine). You can't apply the logic of bonds (duration and expected return) to equities. 

 

 

[longlake95]

Remember, we are here for a lumpy 15%+, not a smooth 12%. 

[Wanderer]

The general question that's worth to be discussed on this forum is, how do deal with a "tension" between the intrinsic value and the stock price.

 

To take an example we all know, Fairfax India is worth much more than it is traded for. If you just look on the financials, you should "go all in", build a huge position. But, as everybody is aware of, the big question is, WHEN will this intrinsic value be reflected in a market price you'll want take to cash out of the investment?

 

I personally am very hesitant to put a lot of money into something like Fairfax India, because I know, they'll be cash restrained for a long time. They don't take the low stock price as an invitation to buy more, because they'd have to cash out of investments they also consider to be undervalued.

 

Fairfax, the mother company, is a different animal though. They produce cash continously and are known for being opportunistic. They use all kinds of means to increase the value per share, including buybacks. Just look at what they did in the last years.

 

That's why I'm very confident, that the "drop for no reason" will either be irrelevant or beneficial in the long run.

 

It you feel uncomfortable about the stock price falling off from an all time high, you should reconsider your weighting or how often you discuss your performance with your husband or wife. I personally never talk about the size of our portfolio with anyone, including my wife, so I don't have any pressure to "perform".

Edited June 4 by Wanderer
typo

[bearprowler6]

1 hour ago, longlake95 said:

Remember, we are here for a lumpy 15%+, not a smooth 12%. 

I love you guys that blindly quote this stuff. Life is far more nuanced. At some point you will learn.

[Castanza]

4 minutes ago, bearprowler6 said:

I love you guys that blindly quote this stuff. Life is far more nuanced. At some point you will learn.

How about you tell us what we should be doing. You’re unhappy with the answer of Hold, and buy more so that leaves sell. How about you justify why we should all sell FFH because of the second coming of “seven lean years”. 
 

 

[bearprowler6]

1 hour ago, Castanza said:

 

What's your point? You're asking the board to make a personal finance decision for you. The question you pose in short is not only asking people to forecast the future share price, but also asking whether you should hold, buy, or sell. That's a personal question based on personal finances. As someone else mentioned up chain, all equities are subject to this. If you want some steady reliable income stream then move funds to t-bills etc. Are you investing (looking at the Intrinsic value of said company vs the share price and hoping for price discovery) or are you simply looking at the share price? Just being blunt, but you're sort of letting the tail wag the dog with this framework. End of day I don't think it's valuable to hold any equity unless you're consistently looking out  5+ years (voting machine vs weighing machine). You can't apply the logic of bonds (duration and expected return) to equities. 

 

 

Many current investors into Fairfax have bought in in the last 4-5 tears and have only known the good times. This years' unexpected price decline, which no one predicted, has caused a few long time posters on here to raise a few good and very valid questions. These tended to be older individuals who now who a very large amount of Fairfax stock both in dollar amount and percentage terms. In discussing this years performance with their spouses, which is the right thing to do in my view, they struggled to really explain why it happened which is a difficult situation. I then posed the question, if the recovery take more than 5 years what are they thinking about doing now? This question seems to really upset a number of you here. I suggest you should be reflecting on this question  far more than you are rather spouting out  the usual talking points about intrinsic value because at some point it will be a very valid question for you and your family and based on what you wrote you will fail them miserably.

 

 

[SharperDingaan]

Ever the heretic ..... 

 

There is little doubt that over the long term (10+ years), FFH is a very desirable place to be; most so when you are forced to step back at age 71 (RRIF) for the rest of your days. But lumpy returns are part of it, along with NOT systematically swing trading the opportunities. Passive management.

 

Then there's the run up until 71 ... aggressive active management, to build sizeable positions, cheap, in the future up and comers . The what FFH was doing 30 years ago; so not surprising that FFH is also often invested in many of the same names. The big difference is the allocation of harvested proceeds; FFH for estate purposes, dividend payers for cash flow.

 

When you go passive, the reliability of that long term CAGR matters; a double in 6 years means > 12%, before dividends. When you go active, it's the size of the share count at 71;  multiples of 5 digit quantities requires skill/luck/expertise.

 

Then there's the lottery; always a possibility, never expected, but Lenny .... should it ever pay out! We're just a little more radical around the range of tickets 

 

SD

 

 

 

 

 

 

[Buckeye]

It seems to me that @bearprowler6 is asking why the weighing machine and the voting machine aren’t lining up.  Most of the responses indicate that investors in FFH believe that the weighing machine is working just fine and the weight is continuing to climb! Now, as to why the voting machine isn’t working right now? Well…who the hell knows…and who cares…that’s the whole point of the voting machine. It can be very wrong at times.  
 

I say just keep what you have, and go enjoy your other hobbies. Chances are that you’ll be happy to did nothing in the next 1-3-5 years. 

[73 Reds]

30 minutes ago, bearprowler6 said:

Many current investors into Fairfax have bought in in the last 4-5 tears and have only known the good times. This years' unexpected price decline, which no one predicted, has caused a few long time posters on here to raise a few good and very valid questions. These tended to be older individuals who now who a very large amount of Fairfax stock both in dollar amount and percentage terms. In discussing this years performance with their spouses, which is the right thing to do in my view, they struggled to really explain why it happened which is a difficult situation. I then posed the question, if the recovery take more than 5 years what are they thinking about doing now? This question seems to really upset a number of you here. I suggest you should be reflecting on this question  far more than you are rather spouting out  the usual talking points about intrinsic value because at some point it will be a very valid question for you and your family and based on what you wrote you will fail them miserably.

 

 

@bearprowler6 the only poster who seems to be upset at the prospect of a lengthy recovery for Fairfax Financial is you.  Personally, I've owned 5 stocks for more than 30 years each.  They've all gone through extended periods of under-performance.  Fairfax is my sixth major holding but I only began buying it during Covid (I own some smaller equity positions in a retirement account but those are all relatively insignificant).  Until you raised this issue here, I've never given a single thought as to what I would do if any of these stocks again under-perform for an extended period, i.e., 5 years.  The answer is simple and requires little thought at all - it all depends on the reason for any under-performance and whether, and to what extent paying a [rather enormous] capital gains tax bill is worth selling any of these stocks.  If the original investment thesis remains in tact, the decision is easy.  If or when a company starts to falter, the decision becomes more difficult.  Fairfax Financial is a long way from starting to falter so for me there is no issue here even to consider.

[Castanza]

16 minutes ago, Buckeye said:

It seems to me that @bearprowler6 is asking why the weighing machine and the voting machine aren’t lining up.  Most of the responses indicate that investors in FFH believe that the weighing machine is working just fine and the weight is continuing to climb! Now, as to why the voting machine isn’t working right now? Well…who the hell knows…and who cares…that’s the whole point of the voting machine. It can be very wrong at times.  
 

I say just keep what you have, and go enjoy your other hobbies. Chances are that you’ll be happy to did nothing in the next 1-3-5 years. 

Exactly, he sounds like an angry old man shaking his fist at the sky because price discovery at this specific point in time does not match his expectations. The question makes no sense to me. One much of the market has dumped and there are many companies not priced correctly. Two, past performance is not indicative of future performance. FFH is a different company. Seems this guy wants to gatekeep as if we all have to cut our teeth the same way he did. I’d wager we see a few more 20% down years in FFH so again idk what he’s talking about. 

[bearprowler6]

8 minutes ago, Castanza said:

Exactly, he sounds like an angry old man shaking his fist at the sky because price discovery at this specific point in time does not match his expectations. The question makes no sense to me. One much of the market has dumped and there are many companies not priced correctly. Two, past performance is not indicative of future performance. FFH is a different company. Seems this guy wants to gatekeep as if we all have to cut our teeth the same way he did. I’d wager we see a few more 20% down years in FFH so again idk what he’s talking about. 

Old...I'm am 66...so certainly getting there. Angry...not at all! If the question makes no sense to you then you need to think a little harder. Are you capable of doing that? Brave talk that you don't care if the share price stays down for 5+ years given we are 6 months in. Blindly believing Fairfax will work out is foolish and the sign of someone with not a lot of money or investment acuman.

[gfp]

bearprowler, is there something about how the business is being run or performing that leads you to believe it may do poorly for 5+ years or are you just taking your cue from the year-to-date stock price performance and an example of 7 lean years from quite a while ago?

 

What about the earnings power, capital position, etc - of the company - has you worried?

[Milu]

1 hour ago, bearprowler6 said:

Many current investors into Fairfax have bought in in the last 4-5 tears and have only known the good times. This years' unexpected price decline, which no one predicted, has caused a few long time posters on here to raise a few good and very valid questions. These tended to be older individuals who now who a very large amount of Fairfax stock both in dollar amount and percentage terms. In discussing this years performance with their spouses, which is the right thing to do in my view, they struggled to really explain why it happened which is a difficult situation. I then posed the question, if the recovery take more than 5 years what are they thinking about doing now? This question seems to really upset a number of you here. I suggest you should be reflecting on this question  far more than you are rather spouting out  the usual talking points about intrinsic value because at some point it will be a very valid question for you and your family and based on what you wrote you will fail them miserably.

 

 

Tracking and caring about calendar year performance is the first issue I see. And focusing on the performance of a single 10% holding is the second issue. Better off to focus on trailing 3-5 years compounding and to just look at the overall portfolio. The short term volatility of the market and individual stocks over a 5 month period (year to date 2026) is mostly meaningless and should be to you and your wife regardless of what age you are.

Edited June 4 by Milu

[Castanza]

24 minutes ago, bearprowler6 said:

Blindly believing Fairfax will work out is foolish and the sign of someone with not a lot of money or investment acuman.

 

I must have missed the post where you shared why the business will not perform well for the next 5+ years....

 

As I said, angry old man....Are you not happy with your return since 2021 and continue to complain about a lack of PR?!? 

 

 

 

Edited June 4 by Castanza

[bearprowler6]

8 minutes ago, Castanza said:

 

I must have missed the post where you shared why the business will not perform well for the next 5+ years....

 

As I said, angry old man....Are you not happy with your return since 2021 and continue to complain about a lack of PR?!? 

 

I'm have owned Fairfax continually since November 1999. My average cost base is $211.80 CAD. I am well aware of what I have written over the years on board generally in response to over the top fanboy posts by those blindly following and believing. You seem to fall in that category so I am glad to do my part to point you in the right direction.

 

 

[Castanza]

6 minutes ago, bearprowler6 said:

 

Right direction of what exactly?

[SafetyinNumbers]

2 hours ago, Wanderer said:

personally am very hesitant to put a lot of money into something like Fairfax India, because I know, they'll be cash restrained for a long time. They don't take the low stock price as an invitation to buy more, because they'd have to cash out of investments they also consider to be undervalued.

What do you consider a long time? 

[LC]

IMO pushback is very important. So we should all be very grateful to @bearprowler6 as he may be the most important poster in this thread.

 

My opinion: There could very well be 5-7 lean years ahead of us. The future is uncertain and we cannot control the share price, outside of buybacks which are a competing use of capital. 

 

More important is how will the various businesses perform over the next 5-7 years. This is a bit more visible. I think there is some more stability in the fixed income portfolio and in the insurance businesses, versus the equity portfolio. The equity portfolio I think is where Prem et al are the most volatile. I don't agree with all their investments, but I think they have learned some lessons over the past 10 years and I am more comfortable there than during the years of index shorting.

[SafetyinNumbers]

22 minutes ago, Castanza said:

 

I must have missed the post where you shared why the business will not perform well for the next 5+ years....

 

As I said, angry old man....Are you not happy with your return since 2021 and continue to complain about a lack of PR?!? 

 

 

 

I think he’s doing analog investing which I see from a lot of investors. The stock has previously gone up a lot and in the past it has often moved sideways so why not again. This approach does not consider any of the fundamentals which is why he has ignored every question about the fundamentals. 

[SafetyinNumbers]

2 minutes ago, LC said:

IMO pushback is very important. So we should all be very grateful to @bearprowler6 as he may be the most important poster in this thread.

 

My opinion: There could very well be 5-7 lean years ahead of us. The future is uncertain and we cannot control the share price, outside of buybacks which are a competing use of capital. 

 

More important is how will the various businesses perform over the next 5-7 years. This is a bit more visible. I think there is some more stability in the fixed income portfolio and in the insurance businesses, versus the equity portfolio. The equity portfolio I think is where Prem et al are the most volatile. I don't agree with all their investments, but I think they have learned some lessons over the past 10 years and I am more comfortable there than during the years of index shorting.

How low do you think the multiple can go? During the previous lean periods the book value didn’t grow much. What assumptions do you need such that book value doesn’t grow much for the next 7 years. 

[bearprowler6]

29 minutes ago, gfp said:

bearprowler, is there something about how the business is being run or performing that leads you to believe it may do poorly for 5+ years or are you just taking your cue from the year-to-date stock price performance and an example of 7 lean years from quite a while ago?

 

What about the earnings power, capital position, etc - of the company - has you worried?

I appreciate this question. I do believe that Fairfax is in a better position today than probably at any time in its history however more work needs to be done. The core team is aging and although a good bench has been developing behind them we do not know how they will perform when the core team is no longer there. I mentioned earlier that I believe the soft market is behind much of Fairfax's weak share price this year. This issue is largely out of their control. Yes they can position their book to not take on foolish risks in a soft pricing environment however that will not insulate the company entirely from market conditions. The TRS on their own shares is also troublesome. Many posters on here were pounding the table almost begging them to reduce this holding worried about exactly what has taken place. Its a self fulfilling accelerating downward spiral when the share price starts to drop. Many of their legacy  investments have been cleaned up but others are still on their books. I view Fairfax as having a weak sell discipline when it comes to cutting their losses. I hope that changes going forward. And Fairfax India.. its the airport... the rest is irrelevant and should be disposed of. This issue was discussed a few months back so no need to rehash here. Governance issues also persist with Prem's kids on the Board? Are  these the best available candidates? I would also like debt levels to come down. Hard to do in a soft market and with having to buy back the minority positions of several of their insurance holdings (e.g., Allied World). I could go on however this should give you a sense of my concerns. There is a reason the market is unwilling to reward Fairfax with  high price to book multiple and it has nothing to do with the market not knowing about the company or not understanding its business model. 

[gfp]

4 minutes ago, bearprowler6 said:

I appreciate this question. I do believe that Fairfax is in a better position today than probably at any time in its history however more work needs to be done. The core team is aging and although a good bench has been developing behind them we do not know how they will perform when the core team is no longer there. I mentioned earlier that I believe the soft market is behind much of Fairfax's weak share price this year. This issue is largely out of their control. Yes they can position their book to not take on foolish risks in a soft pricing environment however that will not insulate the company entirely from market conditions. The TRS on their own shares is also troublesome. Many posters on here were pounding the table almost begging them to reduce this holding worried about exactly what has taken place. Its a self fulfilling accelerating downward spiral when the share price starts to drop. Many of their legacy  investments have been cleaned up but others are still on their books. I view Fairfax as having a weak sell discipline when it comes to cutting their losses. I hope that changes going forward. And Fairfax India.. its the airport... the rest is irrelevant and should be disposed of. This issue was discussed a few months back so no need to rehash here. Governance issues also persist with Prem's kids on the Board? Are  these the best available candidates? I would also like debt levels to come down. Hard to do in a soft market and with having to buy back the minority positions of several of their insurance holdings (e.g., Allied World). I could go on however this should give you a sense of my concerns. There is a reason the market is unwilling to reward Fairfax with  high price to book multiple and it has nothing to do with the market not knowing about the company or not understanding its business model. 

 

Good stuff - thanks for replying.