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?    

[Xerxes]

12 hours ago, bearprowler6 said:

I am 66 and have been fully retired since I was 54. Because of our investment success my wife was able to fully retire one year earlier at 53. My Fairfax position sizing is right for me at about 8-9% of my overall portfolio even after this drawdown.  I have been a long time shareholder )since Nov/99) with an average cost base of $211.80 CAD. Screaming for 2 times book? Today they were suggesting 4 times book is in sight? Ridiculous.

I decide to take on all the hard core value investors on this board today because I know that numerous new investors into Fairfax  (bought in in the last 3-5 years) have only seen upside but us longer term shareholders know the dark side. A few brave souls supported what I was trying to accomplish today and one or two even suggested I was onto something because they had let their Fairfax portfolio sizing grow too large and are now after the 20% sell off are regretting not addressing this sooner. 

Hi @bearprowler6

 

I don’t know if you are willing to share; I recall at some point years ago you said you hold Alibaba. Do you still hold it ?

 

is there another position that you hold as long as Fairfax in your portfolio, with coffeecan characteristics. 
 

thank you and welcome back 

[dealraker]

16 minutes ago, 73 Reds said:

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?    

When AJ Gallagher was near $350 a share it represented 42% of my net worth as to publicly traded securities.  It now is going for $210.

 

I can sit here as I type and try my best to be upset about this, but honestly it doesn't seem to gain traction.  The business of AJ Gallagher?  Performing pretty much as I expected.  

 

My best guess given 50 years experience?  That the real threat is to some other entity I own the stock of...I'm just not smart enough to know what that situation is.

[SharperDingaan]

Keep in mind that a great many of the FFH equity investments are underpriced simply because of the US situation. Great companies, but few willing to pay full price, creating buying opportunities.

 

It is quite obvious that Canada is going into an extended period of massive infrastructure expansion. FFH will have a seat at the table, they have a lot of capital, and the people in the seat are amongst the best there are. Given that FFH shares are liquid, there are few better vehicles.

 

It really comes down to investment approach. A self directed RRIF jammed with FFH is probably going to do a lot better than an annuity, but is not for everyone.

 

SD

[73 Reds]

16 minutes ago, dealraker said:

When AJ Gallagher was near $350 a share it represented 42% of my net worth as to publicly traded securities.  It now is going for $210.

 

I can sit here as I type and try my best to be upset about this, but honestly it doesn't seem to gain traction.  The business of AJ Gallagher?  Performing pretty much as I expected.  

 

My best guess given 50 years experience?  That the real threat is to some other entity I own the stock of...I'm just not smart enough to know what that situation is.

Even on a Board like this some people forget that stocks are partnership interests in businesses and not pieces of paper with ticker symbols attached.  The beauty is there is a perpetual offer to buy your interest and you have an ongoing opportunity to add to your ownership interest.  If you don't like a business for any reason don't own it.  If you like a business price is irrelevant other than the opportunities provided.   

[bearprowler6]

52 minutes ago, Xerxes said:

Hi @bearprowler6

 

I don’t know if you are willing to share; I recall at some point years ago you said you hold Alibaba. Do you still hold it ?

 

is there another position that you hold as long as Fairfax in your portfolio, with coffeecan characteristics. 
 

thank you and welcome back 

I have never held Alibaba...not sure where that rumour got started? 

 

I have held Power Corporation (POW) and TD Bank (TD) for longer than I have held Fairfax but only longer by a couple of years. Other longer term holdings albeit not as long as these first 3 are: Brookfield Renewable Partners (BEP.UN), Brookfield Infrastructure Partners (BIP.UN) as well as Enbridge (ENB) and TC Energy (TRP).

[bearprowler6]

1 hour ago, 73 Reds said:

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?    

I don't need to come out of retirement but why don't you keep focused and keep your head down and some day you to may achieve the level of success that I did. BTW...Morningstar is a fine organization and you would have no chance of getting employed by them. 

[73 Reds]

2 minutes ago, bearprowler6 said:

I don't need to come out of retirement but why don't you keep focused and keep your head down and some day you to may achieve the level of success that I did. BTW...Morningstar is a fine organization and you would have no chance of getting employed by them. 

Curious, why do you presume to know anything at all about me?  Quite strange for someone who worked in the investment business.  Only one of us is worried about a 9% holding and what a spouse might think (and its not me).  

[bearprowler6]

2 minutes ago, 73 Reds said:

Curious, why do you presume to know anything at all about me?  Quite strange for someone who worked in the investment business.  Only one of us is worried about a 9% holding and what a spouse might think (and its not me).  

Your an easy read 73 Reds. Guys like you are a dime a dozen. Think they know everything and not open to alternative viewpoints or pushback. Very fragile egos! 

As for my wife... I care very much what she thinks. You should try it with yours sometime if you even have one.

[73 Reds]

1 minute ago, bearprowler6 said:

Your an easy read 73 Reds. Guys like you are a dime a dozen. Think they know everything and not open to alternative viewpoints or pushback. Very fragile egos! 

As for my wife... I care very much what she thinks. You should try it with yours sometime if you even have one.

Well, you'll have to stand in line of resident shrinks here on this Board.  But feel free to keep offering up advice that's worth what we all pay for it.  You're right about one thing - wives are worth caring about.  Maybe yours could offer you some investment advice.

[longlake95]

Okay folks, let's play nice. There's a lot bear shit flying around. Healthy dialog is good but this is coming off the rails. 

[bearprowler6]

Just now, longlake95 said:

Okay folks, let's play nice. There's a lot bear shit flying around. Healthy dialog is good but this is coming off the rails. 

I will never start it but I will also never back down either. If he stops so will I. I apologize to you and others on here for getting involved with this issue in this way. 

[73 Reds]

Just now, bearprowler6 said:

I will never start it but I will also never back down either. If he stops so will I. I apologize to you and others on here for getting involved with this issue in this way. 

You started it.  Apology accepted.  

[bearprowler6]

5 minutes ago, 73 Reds said:

You started it.  Apology accepted.  

Not the personal attacks! That was on you! 

 

I started yesterday by putting out a viewpoint on the recent drawdown in Fairfax's shares. Conventional value investing viewpoint...no... but that was the point. Doing so seemed to really upset you and a few others on here. Like I said yesterday it is easy to be brave and say you are a long term investor when you are 5 months into a sell off. Talk to me in 5+ years if the situation remains unchanged and I am confident you will be singing a different tune.

I am signing off from here for now. Will no longer post on this issue or any others for the next long while. Nothing has changed about this board with rare exception and you ain't the exception. Take care everyone. 

[73 Reds]

Just now, bearprowler6 said:

Not the personal attacks! That was on you! 

 

I started yesterday by putting out a viewpoint on the recent drawdown in Fairfax's shares. Conventional value investing viewpoint...no... but that was the point. Doing so seemed to really upset you and a few others on here. Like I said yesterday it is easy to be brave and say you are a long term investor when you are 5 months into a sell off. Talk to me in 5+ years if the situation remains unchanged and I am confident you will be singing a different tune.

I am signing off from here for now. Will no longer post on this issue or any others for the next long while. Nothing has changed about this board with rare exception and you ain't the exception. Take care everyone. 

No one was upset.  Folks here were trying to offer you advice.   Truly sorry you took it the wrong way. 

[Parsad]

16 minutes ago, 73 Reds said:

Well, you'll have to stand in line of resident shrinks here on this Board.  But feel free to keep offering up advice that's worth what we all pay for it.  You're right about one thing - wives are worth caring about.  Maybe yours could offer you some investment advice.

 

Reds, do you notice a pattern here?  You seem to be a primary instigator to these targeted posts.  I've avoided responding to anything you post in the last week, as I don't want to get into a back and forth.  But again, here with Bearprowler, nothing to do with politics, etc, but you are taking shots at his wife. 

 

Time to look in the mirror and ask yourself "maybe I should think twice before posting something that takes a shot at someone's spouse" or similar.  Bearprowler apologized when he didn't have to, and your response was not to apologize as well, but accuse him of starting it.  Thank you for being the bigger man Bearprowler!  Cheers!