Fairfax 2026

[RichardGibbons]

42 minutes ago, Txvestor said:

But based on the last TRS experience. Would there be a counterparty this time?

 

I think a counterparty can hedge for a guaranteed profit (as long as Fairfax remains solvent)? Because of that, I think the answer is almost certainly "yes".

[Maverick47]

1 hour ago, Txvestor said:

But based on the last TRS experience. Would there be a counterparty this time?

I wonder the same thing about the possibility of issuing shares well above book value, and then buying them back at less of a premium to book value later, as Singleton did many times with Teledyne.

 

I would never quarrel with the wisdom of such a transaction from the perspective of one who intends to hold Fairfax shares for the long term, but from the standpoint of the “other parties” to these sorts of transactions, the idea of “Fool me once, shame on you, fool me twice, shame on me” comes to mind.  
 

I’m still struggling with understanding the motivation of the counterparties to the current TRS.  Is it as simple as finding financial institutions that wanted fixed or floating income instruments and the Fairfax side of the swap promised them a risk margin above the sort of interest rates they would otherwise be able to obtain at the time the swap was entered into?

 

So they used the funds they wanted to invest in fixed income, and used them to buy Fairfax common stock instead, entering into the TRS agreement with Fairfax for them?

 

 

[djokovic1]

2 hours ago, Maverick47 said:

I’m still struggling with understanding the motivation of the counterparties to the current TRS

The bank is essentially renting out leveraged economic exposure to FFH shares to Fairfax. It earns the floating rate on the notional (its “spread” above its own cost of funds is its profit), while being neutral on the share price because it hedges by holding the physical shares. The bank takes on counterparty credit risk against Fairfax (mitigated by collateral) and liquidity/execution risk in managing the hedge, but has no directional view on FFH’s stock price.

[djokovic1]

On 7/9/2026 at 2:58 PM, SafetyinNumbers said:

It’s still supply and demand

Can you use that framework to estimate what Fairfax’s multiple will be in five years?