Fairfax 2026

[mananainvesting]

I appreciate this forum, both the bears and the bulls. How I think about Fairfax:


•    Fairfax seems like a fun place to work, people are happy (long tenure), partners are happy (long term partnerships) and my guess customer are happy too. Usually, such places are where amazing things happen! 
 

•    I don’t have the scar tissue like some of the other holders from Fairfax, but I do have scars from other holdings. The lessons are similar. 
 

•    The management has been clear, they prefer lumpy higher earnings than flat lower earnings and they measure this over the long run. So I think shareholders/potential shareholders must stomach short term fluctuations to get better long term returns. 
 

•    The issues of the lost decade has management addressed it? Did they learn from it?
Yes, Prem has mentioned this. 
2018 Annual Report:
“After much thought and discussion, it became clear to me that shorting is dangerous, very short term in nature and anathema to long term value investing. As I mentioned to you in last year’s annual report, shorting has cost us, cumulatively, net of our gains on common stock, approximately $2 billion! This will not be repeated! In the future, we may use options with a potential finite loss to hedge our equity exposure, but we will never again indulge anew in shorting with uncapped exposure. Your Chairman continues to learn – slowly!!”
 

•    I see them leaning towards investing along side proven/capable operators/investors like Adam Waterous, Pierre Lassonde, David Sokol, Dan Myerson. Likely one of the reasons why their investing performance has improved recently. 
Also they seem to change management/operators if things aren’t working out Ex: Dexterra Group.
 

•    Prem has mentioned they will make use of opportunities to buyback stock if at attractive price. They said that sometime around 2018, we know most of the cash went into growing premiums during the hard market. They seem to be walking the talk! 
My hurdle rate is ~10-15%, and I believe at these prices Fairfax will meet that. 

[Maverick47]

1 hour ago, mananainvesting said:

I see them leaning towards investing along side proven/capable operators/investors like Adam Waterous, Pierre Lassonde, David Sokol, Dan Myerson. Likely one of the reasons why their investing performance has improved recently. 
Also they seem to change management/operators if things aren’t working out Ex: Dexterra Group.

In looking at UA holders, the largest number of shares at over 32% is owned by BDT Capital…isn’t that Byron D Trott’s vehicle, and if so, then maybe that helps explain the Fairfax investment in the shares as well?

[Parsad]

10 hours ago, dealraker said:

I spent years long ago preparing my wife for investing vs fear/greed "getting out" and "not going down" thinking.  I'm quite proud of her.   She has over 150 stocks and has never sold a single one...and won't let me sell a single one under any circumstances.  She has a slew of stock symbols that she doesn't even know what co's they represent.  Her return has been about 11-12% and that's unbelievable in the long term

 

Angela looks at her account a few times a year typically, but some years she doesn't look at the balance ever...not once the entire year.  Angela reads about 80 books a year and runs book festivals, that's her focus.

 

Now THAT holding period for her is investing!  

 

Smart man...smart woman...smart couple!  That's the way to do it.  Investing shouldn't be your hobby or your wife's.  Life has too many other interesting things to do.  But it can be the vehicle to all those other interesting things...and that's the right perspective and strategy. 

 

Who gives a fuck if Fairfax was at 1.5 times book value or it's at 1.2 times book value.  If you are holding too much to let you sleep at night, reduce the position size, not second guess the investment that has done so well and will continue to do relatively well. 

 

It's ass backward thinking...psychologically I can't handle the volatility, so what do you guys think is going to happen going forward?  How the hell would any of us know, other than it will be worth significantly more over time...could be the short term, could be the mid-term, and almost certainly long-term!  But no one has a clue what it will do in the near term.

 

Cheers!

[Parsad]

5 hours ago, bearprowler6 said:

Worth? More than it is currently trading at now however I do not believe we will ever get to the actual worth or IV of the company unless Prem decides to liquidate. Which is not going to happen. Also,  I am concerned that this drawdown will last longer than most expect. 

 

Barring a deep recession or depression, Fairfax will be at $3,000 CAD before Christmas 2026.  Cheers!

[villainx]

13 hours ago, bearprowler6 said:

Many current investors into Fairfax have bought in in the last 4-5 tears and have only known the good times.

 

Hahahaha, was the past 4-5 years all good times?  

 

My Fairfax position is from the past 4 years - with continuing adds in the past 2 years, definitely hasn't feel like it was one good times after another.  Or there was okay times for accumulating.  

 

 

[longlake95]

13 hours ago, bearprowler6 said:

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

Not a blind quote. I'm aware of the nuances of life & investing, but still much to learn - ask my wife. The quote was mentioned because its simple and powerful. Would you rather a smooth 12%?

[SafetyinNumbers]

6 hours ago, Buffett_Groupie said:

@SafetyinNumbersPlease explain how an investment can be positioned well for both "an increase or decrease in rates", it's like saying both the casino and the gamblers are making money on each transaction, right?

Because they are fairly short duration and are mostly in sovereign debt. They do pretty well if the yield curve steepens and can extend duration. They can take advantage if rates are down but credit spreads widen. If the whole yield curve moves up they get hit short term but less than peers and this might harden the insurance market. They can extend duration and lock in high returns. It’s not a binary outcome with odds skewed towards lower rates as it’s often characterized. The outcome is variable and path dependent with shrewd capital allocators taking advantage along the way.

[SafetyinNumbers]

4 hours ago, Parsad said:

But no one has a clue what it will do in the near term.

 

4 hours ago, Parsad said:

Barring a deep recession or depression, Fairfax will be at $3,000 CAD before Christmas 2026.  Cheers!

Fun to have these comments within minutes of each other.

 

 I’m not sure the multiple can go up that much without a hard market but we’re all just guessing. 

[dealraker]

I guess I found where this discussion briefly has gone to be annoying, particularly given the sophistication of so many here.  Waves of interest come and go as to what's the latest obsession, and Prem Watsa and Fairfax can be one of those in focus from time to time.  As Buffett recently said, "This is nothing."  The stock price of Fairfax has barely moved anywhere excessive or important, or meaningfully anywhere.  Investors are obsessed with AI, a stock like Fairfax is a big zero to all but a tiny-tiny-tiny few.

 

I can't imagine the "concern" when, and it surely will, the stock moves yet again with gusto one direction or another- a certainty in time.  Did you actually lose money/permanent capital loss style when it "fell" in price recently or is it more accurate to say "you've lost your mind" to be hyper-focused on an over time non-event?

[73 Reds]

31 minutes ago, dealraker said:

I guess I found where this discussion briefly has gone to be annoying, particularly given the sophistication of so many here.  Waves of interest come and go as to what's the latest obsession, and Prem Watsa and Fairfax can be one of those in focus from time to time.  As Buffett recently said, "This is nothing."  The stock price of Fairfax has barely moved anywhere excessive or important, or meaningfully anywhere.  Investors are obsessed with AI, a stock like Fairfax is a big zero to all but a tiny-tiny-tiny few.

 

I can't imagine the "concern" when, and it surely will, the stock moves yet again with gusto one direction or another- a certainty in time.  Did you actually lose money/permanent capital loss style when it "fell" in price recently or is it more accurate to say "you've lost your mind" to be hyper-focused on an over time non-event?

The irony is that this discussion was instigated by a retired senior investment professional.  Maybe he should come out of retirement and go to work at Morningstar?