Fairfax 2026

[Txvestor]

3 hours ago, 73 Reds said:

Sure, we would expect Fairfax's equity investments to outperform the S&P 500.  Still do.  All of us here share the same expectation (otherwise, the index is easy to buy and hold).  But that doesn't really address the question.  We often like to compare Fairfax to Berkshire; Buffett didn't shy away from investments just because they were popular or widely held, some of which have made for excellent long term holdings.  Just don't see why some obvious (even to me) great companies from the last 20 or 30 years never crossed their radar screens.  

I don't know about you, but I am not invested in Fairfax because I have some great conviction that they will beat the index. In fact purely based on their equity investments over the last 17 years that I have been observing the company I would have to say my confidence is pretty measured in this regard. 50/50 at best. 
My reason for being invested is that I believe in the integrity of its leadership and love the way the company is structured. I believe the quality of their Insurance side is now underrated, I like the leverage that a float of that size gives them, I think their bond team is stellar, and I like their international exposure. As long as they don't completely suck on the equity side, we should do reasonably well. 
As you saw in one of the earlier posts by Viking about the lost decade, they still managed annual returns of 4% despite crappy equity investing and low interest rates. If that's the extent of the downside scenario, sign me up. 

Edited 20 hours ago by Txvestor

[Viking]

3 hours ago, Txvestor said:

A good review of arguably the period I felt most pessimistic ever about Fairfax.
All while markets were ripping higher year after year. 
Perhaps it felt slightly outside of your time window, I don't recollect the exact dates but another peach was Sandridge energy which was built into an almost 60M share 10% position. I believe Prem even brought the since disgraced Tom Ward to one of the AGMs. Soon after he was fired by the board and eventually the company declared bankruptcy in 2016. 
 

 

One of the things that used to frustrate me about Prem was how generously he praised some of the CEOs running Fairfax's investments. He has always been loyal and people-focused, but the praise sometimes felt disconnected from the results being delivered by some.

 

Today, it feels different. Prem has toned it down, and the calibre of the people running Fairfax's equities is noticeably higher. More importantly, the results are there to support the praise.

 

In many ways, it reflects Fairfax's evolution since 2018: better businesses, better management teams, and better outcomes for shareholders.

Edited 17 hours ago by Viking

[petec]

20 hours ago, Crip1 said:

 

Thank you for the Leucadia reference...it's been forever since I even thought about the company, much less saw something in writing about them.

 

-Crip

 

Same! Happy memories.

[villainx]

22 hours ago, rogermunibond said:

Looking through the deal press release, seems like this is much more of a retail, distribution business.  101 store locations plus an importer business in addition to the wine and liqueur brands.

 

Sounds like you are saying data centers?

 

 

[rogermunibond]

@villainx More like retailer

[Viking]

New Fairfax: Moving Up the Quality Ladder (2018–Present)

 

Here is the final article (#4) in my short history on some of Fairfax's investments.

 

 

"Time is the friend of the wonderful company." — Warren Buffett

 

 

Something changed at Fairfax around 2018.

 

Trying to identify an exact date is a fool's errand. The transformation was gradual and remains ongoing today. But looking back, it is clear that Fairfax began refining its investment approach and upgrading the quality of the businesses it owned.

 

The company did not abandon value investing. It evolved.

 

What Changed?

 

Three themes increasingly shaped Fairfax's investment decisions:

• Strong management teams.
• Strong balance sheets.
• Profitable businesses.

Rather than trying to fix troubled companies, Fairfax increasingly partnered with capable operators who could create value on their own.

 

The goal was no longer simply to buy cheap assets. The goal was to buy better businesses.

 

This shift can be seen in many of Fairfax's major investments since 2018, including Stelco, Seaspan, Bangalore International Airport, Metlen and Orla Mining.

 

At the same time, Fairfax began addressing mistakes from the previous decade. Underperforming investments were sold, restructured, recapitalized or merged with stronger partners. Capital was increasingly recycled from weaker opportunities into stronger ones.

 

The quality of the portfolio steadily improved.

 

Repairing the Past, Building the Future

 

The benefits did not appear overnight.

 

For several years, Fairfax was doing two jobs simultaneously.

 

First, it was repairing the past. Weak investments needed to be sold, restructured or repositioned. These actions often produced short-term losses and disappointing reported results.

 

Second, it was building the future. Successful investments rarely create immediate value. Management must execute. Earnings must grow. Intrinsic value must compound. In many cases, the largest gains emerge years after the original investment is made.

 

As a result, the costs of repairing the portfolio partially obscured the value being created by newer investments.

 

Today, that dynamic has largely reversed.

 

Many of the major portfolio repairs have been completed. At the same time, a number of investments made since 2018 have matured and become meaningful contributors to value creation.

 

Early Results

 

The results can be seen across both new investments and legacy holdings.

 

Stelco

 

Fairfax invested approximately $193 million in Stelco in 2018.

 

When the investment was sold in 2024, total value creation was approximately $544 million, including dividends, share-price appreciation and the value of shares received from Cleveland-Cliffs.

 

The compound annual return was approximately 25%.

 

Seaspan / Atlas / Poseidon

 

Seaspan has become one of Fairfax's most successful investments.

 

In 2026, Fairfax sold approximately half of its position in Poseidon at a substantial premium to carrying value, generating proceeds of roughly $1.9 billion and a pre-tax gain of $837 million.

 

Even after the sale, Fairfax continues to own a significant interest in the business.

 

The Hidden Gems

 

Not all of Fairfax's success came from new investments.

 

The company already owned several hidden gems within its portfolio. In some cases, Fairfax increased its ownership, strengthened the business and simply gave management time to execute.

 

The best example is Eurobank.

 

At the end of 2020, Fairfax's stake had a market value of approximately $900 million.

 

By mid-2026, the investment had created roughly $6 billion of value through share-price appreciation, dividends and shares sold. The compound annual return has been 45%.

 

This is an important distinction. Fairfax did not simply build a better portfolio. It also unlocked value from businesses it already owned.

 

A More Powerful Business Model

 

There is another important development that receives less attention.

 

Fairfax has always centralized capital allocation while decentralizing operations. Since 2018, the company appears to have renewed its focus on improving the performance of the businesses it owns.

 

The objective is not to run subsidiaries from head office. It is to partner with capable management teams, strengthen operations and increase earnings and cash generation.

 

This creates a powerful feedback loop.

 

Better businesses generate more cash. Fairfax can then redeploy that capital into the most attractive opportunities across the organization. Those investments generate additional earnings and cash flow, which can then be reinvested again.

 

The company's earlier investments often consumed capital.

 

Increasingly, its newer investments generate capital.

 

That is a profound difference.

 

In many respects, Fairfax today resembles a younger Berkshire Hathaway. Operations are decentralized. Capital allocation is centralized. Cash generated by one business can be redeployed into opportunities offering the highest returns elsewhere in the organization.

 

The result is a stronger and more durable compounding engine.

 

Why It Matters

 

Understanding this history provides important context for evaluating Fairfax today.

 

For much of the past decade, management's attention was divided between repairing weaker investments and building a stronger portfolio. Today, many of those legacy issues have been addressed.

 

At the same time, the collection of businesses assembled and strengthened since 2018 is beginning to demonstrate its earning power through higher dividends, stronger operating results, increased earnings from associates and investment gains.

 

Fairfax spent much of the past seven years moving up the quality ladder.

 

What has emerged is a stronger collection of businesses, a more disciplined investment approach and a more powerful capital allocation engine.

 

The portfolio repair phase is largely behind it.

 

The compounding phase is increasingly in front of it.

Edited 5 hours ago by Viking

[Viking]

Here is an introduction to the chapter...

 

Chapter 14: The Evolution of Fairfax's Investments

 

Introduction

 

Learning about a company's history can be a valuable exercise for investors. It provides context, helps explain management decisions, reveals how corporate cultures are shaped, and highlights lessons learned along the way.

 

One of the defining characteristics of Fairfax over the past forty years has been its willingness to learn and adapt. The company has enjoyed remarkable successes. It has also made significant mistakes. What is most striking is not that both occurred—it is how Fairfax responded.

 

Fairfax has one of the more colourful histories in modern investing. That history can be both a blessing and a curse. It offers important lessons, but it can also obscure the company that exists today.

 

This chapter attempts to bridge that gap.

 

The first article examines Fairfax's highly successful credit default swap strategy from 2005 to 2009—its version of The Big Short. The second reviews the costly equity hedge and short positions that followed, a decade-long mistake that weighed heavily on shareholder returns. The third analyzes Fairfax's equity investments from 2014 to 2017, a period marked by too many chronically leaking boats. The final article explores the emergence of New Fairfax beginning around 2018, as the company shifted toward higher-quality businesses, stronger management teams, and a more powerful compounding model.

 

Together, these articles tell a story: 

 

Success → Mistake → Learning → Transformation

 

More importantly, they explain how Fairfax became the company it is today.

 

History is not the investment thesis. What matters most is where a company stands today—its management team, business fundamentals, capital allocation and future prospects. But understanding how Fairfax evolved provides important context for evaluating the business it has become and where it may be headed.

 

In many ways, the transformation of Fairfax over the past decade is one of the most important parts of the Fairfax investment story.

 

Edited 5 hours ago by Viking

[Txvestor]

1 hour ago, Viking said:

New Fairfax: Moving Up the Quality Ladder (2018–Present)

 

Here is the final article (#4) in my short history on some of Fairfax's investments.

 

 

"Time is the friend of the wonderful company." — Warren Buffett

 

 

Something changed at Fairfax around 2018.

 

Trying to identify an exact date is a fool's errand. The transformation was gradual and remains ongoing today. But looking back, it is clear that Fairfax began refining its investment approach and upgrading the quality of the businesses it owned.

 

The company did not abandon value investing. It evolved.

 

What Changed?

 

Three themes increasingly shaped Fairfax's investment decisions:

• Strong management teams.
• Strong balance sheets.
• Profitable businesses.

Rather than trying to fix troubled companies, Fairfax increasingly partnered with capable operators who could create value on their own.

 

The goal was no longer simply to buy cheap assets. The goal was to buy better businesses.

 

This shift can be seen in many of Fairfax's major investments since 2018, including Stelco, Seaspan, Bangalore International Airport, Metlen and Orla Mining.

 

At the same time, Fairfax began addressing mistakes from the previous decade. Underperforming investments were sold, restructured, recapitalized or merged with stronger partners. Capital was increasingly recycled from weaker opportunities into stronger ones.

 

The quality of the portfolio steadily improved.

 

Repairing the Past, Building the Future

 

The benefits did not appear overnight.

 

For several years, Fairfax was doing two jobs simultaneously.

 

First, it was repairing the past. Weak investments needed to be sold, restructured or repositioned. These actions often produced short-term losses and disappointing reported results.

 

Second, it was building the future. Successful investments rarely create immediate value. Management must execute. Earnings must grow. Intrinsic value must compound. In many cases, the largest gains emerge years after the original investment is made.

 

As a result, the costs of repairing the portfolio partially obscured the value being created by newer investments.

 

Today, that dynamic has largely reversed.

 

Many of the major portfolio repairs have been completed. At the same time, a number of investments made since 2018 have matured and become meaningful contributors to value creation.

 

Early Results

 

The results can be seen across both new investments and legacy holdings.

 

Stelco

 

Fairfax invested approximately $193 million in Stelco in 2018.

 

When the investment was sold in 2024, total value creation was approximately $544 million, including dividends, share-price appreciation and the value of shares received from Cleveland-Cliffs.

 

The compound annual return was approximately 25%.

 

Seaspan / Atlas / Poseidon

 

Seaspan has become one of Fairfax's most successful investments.

 

In 2026, Fairfax sold approximately half of its position in Poseidon at a substantial premium to carrying value, generating proceeds of roughly $1.9 billion and a pre-tax gain of $837 million.

 

Even after the sale, Fairfax continues to own a significant interest in the business.

 

The Hidden Gems

 

Not all of Fairfax's success came from new investments.

 

The company already owned several hidden gems within its portfolio. In some cases, Fairfax increased its ownership, strengthened the business and simply gave management time to execute.

 

The best example is Eurobank.

 

At the end of 2020, Fairfax's stake had a market value of approximately $900 million.

 

By mid-2026, the investment had created roughly $6 billion of value through share-price appreciation, dividends and shares sold. The compound annual return has been 45%.

 

This is an important distinction. Fairfax did not simply build a better portfolio. It also unlocked value from businesses it already owned.

 

A More Powerful Business Model

 

There is another important development that receives less attention.

 

Fairfax has always centralized capital allocation while decentralizing operations. Since 2018, the company appears to have renewed its focus on improving the performance of the businesses it owns.

 

The objective is not to run subsidiaries from head office. It is to partner with capable management teams, strengthen operations and increase earnings and cash generation.

 

This creates a powerful feedback loop.

 

Better businesses generate more cash. Fairfax can then redeploy that capital into the most attractive opportunities across the organization. Those investments generate additional earnings and cash flow, which can then be reinvested again.

 

The company's earlier investments often consumed capital.

 

Increasingly, its newer investments generate capital.

 

That is a profound difference.

 

In many respects, Fairfax today resembles a younger Berkshire Hathaway. Operations are decentralized. Capital allocation is centralized. Cash generated by one business can be redeployed into opportunities offering the highest returns elsewhere in the organization.

 

The result is a stronger and more durable compounding engine.

 

Why It Matters

 

Understanding this history provides important context for evaluating Fairfax today.

 

For much of the past decade, management's attention was divided between repairing weaker investments and building a stronger portfolio. Today, many of those legacy issues have been addressed.

 

At the same time, the collection of businesses assembled and strengthened since 2018 is beginning to demonstrate its earning power through higher dividends, stronger operating results, increased earnings from associates and investment gains.

 

Fairfax spent much of the past seven years moving up the quality ladder.

 

What has emerged is a stronger collection of businesses, a more disciplined investment approach and a more powerful capital allocation engine.

 

The portfolio repair phase is largely behind it.

 

The compounding phase is increasingly in front of it.

While I appreciate the positivity. It's important to ask if something truly changed in their investment approach or it was a certain element called luck. The reason I mention this is, a lot of these industries ie steel, shipping, mining and so on are very cyclical. And until they sell and book those gains nothing is a surety. While the early signals are good, that's a point is worth stating. You are right in that they spent a lot of time and effort selling, fixing, restructuring and correcting prior poor capital allocation decisions.
Lastly some of the equity investments they are making recently such as KW, Andrew Peller, Sleep country, Underarmour etc. cannot realistically be described as wide moat businesses. Each of us can decide what we think about them, and the most one can hope for is business synergies and better capital efficiency. 

Again, I like you don't profess to know exactly what their rationale is on these investments, but I think it maybe too early to say they have had some sort of revelation and have had a definitive change. Only time will tell. They are still cigar butt puffers at heart. 

They wasted a ton of shareholder capital during the lost decade. As we saw in one of your prior posts the difference could have been between 4% PA and double digit returns based on just their business model. Over 8-10yrs that's a more than 100% delta. 

Now their insurance subs underwriting, sizable float and higher interest rates are giving them a nice stream of capital, and some of their equity investments have turned out well. I think that's as much as I am prepared to say. I appreciate your optimism but wanted to push back a little on this one. 

Edited 4 hours ago by Txvestor

[Viking]

27 minutes ago, Txvestor said:

While I appreciate the positivity. It's important to ask if something truly changed in their investment approach or it was a certain element called luck. The reason I mention this is, a lot of these industries ie steel, shipping, mining and so on are very cyclical. And until they sell and book those gains nothing is a surety. While the early signals are good, that's a point is worth stating. You are right in that they spent a lot of time and effort selling, fixing, restructuring and correcting prior poor capital allocation decisions.
Lastly some of the equity investments they are making recently such as KW, Andrew Peller, Sleep country, Underarmour etc. cannot realistically be described as wide moat businesses. Each of us can decide what we think about them, and the most one can hope for is business synergies and better capital efficiency. 

Again, I like you don't profess to know exactly what their rationale is on these investments, but I think it maybe too early to say they have had some sort of revelation and have had a definitive change. Only time will tell. They are still cigar butt puffers at heart. 

They wasted a ton of shareholder capital during the lost decade. As we saw in one of your prior posts the difference could have been between 4% PA and double digit returns based on just their business model. Over 8-10yrs that's a more than 100% delta. 

Now their insurance subs underwriting, sizable float and higher interest rates are giving them a nice stream of capital, and some of their equity investments have turned out well. I think that's as much as I am prepared to say. I appreciate your optimism but wanted to push back a little on this one. 

 

@Txvestor, I get a lot of pushback on my 'New Fairfax' thesis. They went from being a sub par hitter for many years. And then out of nowhere they have become the best hitter for years. Yes, that could be ascribed to luck. But the timeframe is too long and the number of transactions is too large. My view is they became a much better hitter because they changed their approach.

 

Also, when I look at each investment (I like to get into the weeds)... I see a very consistent theme playing out. 

 

I think the 'optimize operations' theme is not widely understood or appreciated. This is right out of the Singleton playbook (and Buffett's... he likely lifted it from Singleton). Fairfax's holdings were a mess pre-2018 (in terms of being well run companies). Fast forward to today.. the exact opposite.

Edited 3 hours ago by Viking

[MarioP]

If Peller has a great plan to develop real estate but miss the capital then I begin to see a similarity in some of the last acquisitions. Find a good leader with a great project searching for capital which FFH can provide. Strathcona, Sleep with is expansion in US, Poseidon seems to have that common caracteristic.