Fairfax 2026

[SafetyinNumbers]

1 hour ago, Txvestor said:

It's why for me personally while the stock stays at these levels. If they used every dollar of cash flows to keep buying back shares I would be a happy camper. I clearly don't know or can't see the upside in what they are doing with these equity acquisitions and although it wouldn't be a mortal blow to the company if they didn't work out, just like Equity hedges  and shorts did not, it sure would be at a tremendous opportunity cost. Let's say $3B was allocated here, unless it's worth well over $6B in 5yrs or so time. Buying back almost 10% of the company would have proven to be the best alternative. 

How do you define cash flow? Last year they spent a bit less than the dividends from the insurance subsidiaries on buybacks. I think that’s a good estimate for FCF. The insurance companies still need capital to grow and their portfolio turnover shouldn’t have much to do with buybacks except to the extent it creates excess capital. This year they are allowed to dividend up $4b. So far this year they are on pace for over $2b of buybacks. 

 

[Txvestor]

4 hours ago, SafetyinNumbers said:

How do you define cash flow? Last year they spent a bit less than the dividends from the insurance subsidiaries on buybacks. I think that’s a good estimate for FCF. The insurance companies still need capital to grow and their portfolio turnover shouldn’t have much to do with buybacks except to the extent it creates excess capital. This year they are allowed to dividend up $4b. So far this year they are on pace for over $2b of buybacks. 

 

Well it's quite unlikely they'd be growing much next few years with the soft market. If they grew 3%PA I'd be happy. There's a good chance it stays flat. Hence that won't take up much capital. It boils down to additional acquisitions versus paying a dividend back up to the parent for the share buybacks. 
 

Another possibility is they are holding that cash there in the subs, to facilitate the minority buyouts when appropriate and available. 

Edited 9 hours ago by Txvestor

[SafetyinNumbers]

8 hours ago, Txvestor said:

Well it's quite unlikely they'd be growing much next few years with the soft market. If they grew 3%PA I'd be happy. There's a good chance it stays flat. Hence that won't take up much capital. It boils down to additional acquisitions versus paying a dividend back up to the parent for the share buybacks. 
 

Another possibility is they are holding that cash there in the subs, to facilitate the minority buyouts when appropriate and available. 

International is growing faster and parts of casualty are still strong. They also plan to use less reinsurance so they might grow net premiums by 5% not 3%. That needs a billion plus in capital. They do need capital to buy Allied World but, Eurolife is supposed to close next quarter and they raised the $750m in 30 year debt so have plenty of liquidity to scoop those up. Again, I don’t think the decision is acquisitions vs dividends at the subsidiary level. The constraints at the holdco seem to be maintaining the investment:equity leverage and debt:equity leverage. 

Edited 51 minutes ago by SafetyinNumbers