Fairfax 2026

[TwoCitiesCapital]

5 hours ago, Maverick47 said:

I’ve really only invested on my own for the last decade or two, and the broker I use in the States really limits my ability to look outside to companies traded on other countries’ stock exchanges, unless their shares can be purchased over the counter such as with Fairfax.  
 

So for me, Buffett and Prem have been my back door into shares of companies traded on foreign exchanges.  Eurobank was one small exception for a while…I was able to pick up some shares over the counter until that avenue was closed for me….

 

So I can only imagine what it must have been like to see companies selling for low single digit PE ratios.  I had a few good buys on some good companies right after the 2008 Financial Crisis that I picked up a bit under 10 PE’s , some of which would have exceeded 10 baggers if I’d held onto them until today, but when a number of them doubled or tripled over a few years, I bailed out and redeployed elsewhere.  
 

Not sure if I’ll see a 25 bagger in the time I have left, but given Fairfax’s prospects, I should see it or more on at least a few of my Fairfax shares that I purchased years ago, which are 5 baggers currently.  Could conceivably get there in the next ten years or so with a little help from a multiple expansion!

 

It doesn't always turn out so rosy. Eurobank was a 90+% loss for me after following Fairfax into it. 

 

It was only the double down and adds during COVID that ultimately made it worthwhile and a decent investment afterwards. 

[Maverick47]

1 hour ago, TwoCitiesCapital said:

It doesn't always turn out so rosy. Eurobank was a 90+% loss for me after following Fairfax into it. 

 

It was only the double down and adds during COVID that ultimately made it worthwhile and a decent investment afterwards. 

Yikes…I’ve only been really aware of them the last few years, and forgot about how painful it must have been for Fairfax and other shareholders to see what they thought was a reasonably priced 30 euro stock just get hammered and see new shareholders join and dilute their ownership at a MUCH lower price.

 

Right around the time of the Great Financial Crisis, I was participating in a short term stock market game with a few other fellow employees as we tried to learn about investing.  Everyone started with $1 million of fictional money and could buy on margin, sell short, etc.  The game would end in something like six months.  I started out investing in a couple of large companies, including Berkshire, then comparing my results with competitors, realized I wouldn’t have a chance of winning.  The leader, by far, had borrowed another million on margin, and then used it to short some small bank stocks that looked to be exposed to losing in the Crisis.  I just rode his coat tails to a second place finish doing the same thing. However, the software was flawed, and never enforced either an interest cost on our borrowing, or issued any margin calls.  Both of us were allowed to run negative balances in the multi million dollar range without selling our positions out, and they recovered enough by the end of the game to allow us both to finish 1st and 2nd.

 

But it was a good lesson to learn about myself (with fictional money) that I could easily fall into the trap of being a short term speculator, and lose everything if I were to let myself take on leverage and then use it to make risky short bets.  
 

So when I finally began investing some of my own retirement funds, I specifically chose not to have the ability to borrow on margin or short stocks, as I didn’t think I’d be able to control my speculative urges if I were to allow myself either of these options….

 

 

[Txvestor]

2 hours ago, TwoCitiesCapital said:

 

It doesn't always turn out so rosy. Eurobank was a 90+% loss for me after following Fairfax into it. 

 

It was only the double down and adds during COVID that ultimately made it worthwhile and a decent investment afterwards. 

100%. All holders during that time learned that the hard way. I put in a small position about 2%, and lost most of it. The dilution and additional capital was just something I could not stomach, even as I saw Prem pour more hundreds of millions into it. Someone said balls of steel and that's for sure. 
Needless to say my Eurobank position ended up being a decent tax loss write off later on, and I realized none of these things are guaranteed. The real money was made on that next capital raise. 

There's a chance some of even Fairfax's current investments are zeros eventually. However over time if you have a good method, the winners more than make up if you can hold onto them long enough. That last part is also no easy task. Buying Fairfax at $500 and seeing it trade $260 was also not easy. The thing that gives me more confidence now is that their model is truly very well put together and more balanced, their equity portfolio is reasonably diversified so that no one thing(including god forbid eurobank) will sink them, and their insurance operations are solid and diversified, and they have a healthy respect for leverage and how they invest their float. I think they also have good management with sufficient bandwidth to serve as a sounding board for the associates and consolidated holdings. And their own approach in this area is sound. Even so, I won't put more than 25-30% in it. I've even thought about what I'd do if it grows to be 50% position, I currently think I'd likely let it run. 
Having said all that, even now, you need to be psychologically prepared for a 50% drawdown at any given point in time. as Charlie Munger reminded us, that's even happened a few times in the storied history of Berkshire Hathaway. Leverage is a killer and a stressor in those situations. I remind myself of that whenever I get bullish.
 

Edited Sunday at 06:47 PM by Txvestor

[backtothebeach]

WRB reported last night, combined ratio is 90%. Stock is flat today after some volatility.
https://seekingalpha.com/pr/20588598-w-r-berkley-corporation-reports-second-quarter-2026-results

[Intelligent_Investor]

With the stock continuing to drop, I have a feeling we are going to get a massive quarter in regards to buybacks

[Whensthepaintdry?]

It seems at this point Fairfax and this board are the only buyers. Sadly for the stock price, most people on this board may already have close to full positions. 
 

[adventurer]

I just try to add as best as I can. Even if it’s just pieces of a stock. 

[Viking]

1 hour ago, Whensthepaintdry? said:

It seems at this point Fairfax and this board are the only buyers. Sadly for the stock price, most people on this board may already have close to full positions. 

 

When Fairfax makes a really big investment, do you want them to buy high or buy low? I much prefer they buy low. And the lower the better. Fairfax's low share price of the past year has been a massive gift for long term shareholders. We should be celebrating our good fortune.

 

Volatility in the stock market is a wonderful thing. It provides opportunity. Fairfax's stock is crazy cheap. And Fairfax is feasting. 

Edited yesterday at 06:41 PM by Viking

[Whensthepaintdry?]

I don’t mind. I’ve been adding every paycheck. I’m just surprised the opportunity still exists, but then when I listen to pitches like the recent TIP podcast I can understand why it does. 

[Txvestor]

59 minutes ago, Whensthepaintdry? said:

I don’t mind. I’ve been adding every paycheck. I’m just surprised the opportunity still exists, but then when I listen to pitches like the recent TIP podcast I can understand why it does. 

It's been that way for 20yrs. And for a period during that time(not recently) it was also deserved. What is a little surprising is that after the last 5yrs of results, insurance operations, investment performance and interest rates reset, that's still the case. Sometimes these imbalances do take a while to correct. 
I was just comparing Fairfax with WR Berkeley across a range of metrics last night and my conclusion was that it was about 1/2 to 60% as cheap. Thats insane as it was on average as good as or better on qualitative measures as well. I think the reasons have to do with what Viking and other board members keep saying. They're not splashy or promotional, they're listed in Canada, they're not on the radar of a lot of N.A. institutional investors, their books are more complex than the average insurer as are their investments. They under report their BV if anything. 
 

However, they also have a lot of consistent and long term investors perhaps as much as 60-65% by some estimates. And they keep chipping away at the balance of weak hands with their share buybacks. Yes we are surprised that the luxury of undervaluation is lasting this long, but the longer the merrier if you believe in their long term success. This gap will eventually close as remaining holders demand higher prices for their shares. They have stable and almost predictable streams of cash coming in over the next 3yrs at a minimum. I think most of us feel a major cat. year is about a break even. Outside of that, share buybacks will likely continue at these valuations. The only reason this might be a little frustrating is if someone is nearing a need for cash, a wedding, a house purchase etc and have to liquidate some holdings out of necessity. 
 

Finally if that day does come where shares are no longer selling materially below IV, a couple of things happen. They will have other excellent uses of cash, like buying minority shares in subs, New private equity deals via KW, non insurance acquisitions, debt paydowns, Indian infrastructure, and so on. Lastly if the shares were ever trading significantly above IV, I believe they would consider acquisitions using shares also. I also like how they make acquisitions with debt to reduce the overall cost and keep the holding company as a backbone to support them while reducing leverage. 
 

Overall it's a good set up and the business model is the engine that is driving this train. 
 

Edited yesterday at 07:55 PM by Txvestor

[SafetyinNumbers]

17 minutes ago, Txvestor said:

Finally if that day does come where shares are. I longer selling materially below IV, a couple of things happen. They will have other excellent uses of cash, like buying minority shares in subs, New private equity deals via KW, non insurance acquisitions, debt paydowns, Indian infrastructure, and so on. Lastly if the shares were ever trading significantly above IV, I believe they would consider acquisitions using shares also. I also like how they make acquisitions with debt to reduce the overall cost and keep the holding company as a backbone to support them while reducing leverage. 

I think it will take a hard market not to sell materially below intrinsic value. Under the current market structure I think the multiple range will oscillate lower during soft markets making higher lows vs the last cycle and higher highs under subsequent hard markets. I used to think they would issue shares again if the stock is near intrinsic value and they might if the right opportunity came along but I also think they want to reduce the share count enough that employees and the family have enough votes after Prem’s super voting shares are reduced to single voting to block any hostile bids.

[Viking]

28 minutes ago, Txvestor said:

It's been that way for 20yrs. And for a period during that time(not recently) it was also deserved. What is a little surprising is that after the last 5yrs of results, insurance operations, investment performance and interest rates reset, that's still the case. Sometimes these imbalances do take a while to correct. 
I was just comparing Fairfax with WR Berkeley across a range of metrics last night and my conclusion was that it was about 1/2 to 60% as cheap. Thats insane as it was on average as good as or better on qualitative measures as well. I think the reasons have to do with what Viking and other board members keep saying. They're not splashy or promotional, they're listed in Canada, they're not on the radar of a lot of N.A. institutional investors, their books are more complex than the average insurer as are their investments. They under report their BV if anything. 
 

However, they also have a lot of consistent and long term investors perhaps as much as 60-65% by some estimates. And they keep chipping away at the balance of weak hands with their share buybacks. Yes we are surprised that the luxury of undervaluation is lasting this long, but the longer the merrier if you believe in their long term success. This gap will eventually close as remaining holders demand higher prices for their shares. They have stable and almost predictable streams of cash coming in over the next 3yrs at a minimum. I think most of us feel a major cat. year is about a break even. Outside of that, share buybacks will likely continue at these valuations. The only reason this might be a little frustrating is if someone is nearing a need for cash, a wedding, a house purchase etc and have to liquidate some holdings out of necessity. 
 

Finally if that day does come where shares are no longer selling materially below IV, a couple of things happen. They will have other excellent uses of cash, like buying minority shares in subs, New private equity deals via KW, non insurance acquisitions, debt paydowns, Indian infrastructure, and so on. Lastly if the shares were ever trading significantly above IV, I believe they would consider acquisitions using shares also. I also like how they make acquisitions with debt to reduce the overall cost and keep the holding company as a backbone to support them while reducing leverage. 
 

Overall it's a good set up and the business model is the engine that is driving this train. 
 

+1

[djokovic1]

Like most others here I am also surprised at the relatively low valuation Fairfax trades at compared to its fundamental performance. Mr. Market can be funny, unpredictable and most importantly wrong for long periods. That's what makes investing hard but also interestingly also what makes it easy, ie these opportunities exist not for a week or a month but can exist for a year+. Based on my experience it has started to happen more often recently and for longer durations as a lot of value investors complain (Terry Smith is a recent example, David Einhorn a less recent example), maybe because of increase of passive and short termism from quant funds. In my opinion, the only solution is you invest in companies that have great capital allocation, i.e if the share price is depressed and Mr. Market does not give the credit due they use their cash flow to take advantage of the dislocation through buybacks as Fairfax does. You get EPS compounding regarding of what Mr. Market or the multiple does. 

The question I get most when I talk about Fairfax is why does it trade at 8x earnings - something must be wrong with it. Investors try to explain and rationalise Mr. Markets moods. As opposed to a first principle analysis of what a business trading with 15-20% sustainable earnings power (and 15-20% ROE) over the next 5 years should trade at.

Edited 22 hours ago by djokovic1

[Ulti]

https://www.theinvestorspodcast.com/episodes/fairfax-financial-ffo-to-the-berkshire-of-the-north-tip/
 

 

[Txvestor]

1 hour ago, djokovic1 said:

Like most others here I am also surprised at the relatively low valuation Fairfax trades at compared to its fundamental performance. Mr. Market can be funny, unpredictable and most importantly wrong for long periods. That's what makes investing hard but also interestingly also what makes it easy, ie these opportunities exist not for a week or a month but can exist for a year+. Based on my experience it has started to happen more often recently and for longer durations as a lot of value investors complain (Terry Smith is a recent example, David Einhorn a less recent example), maybe because of increase of passive and short termism from quant funds. In my opinion, the only solution is you invest in companies that have great capital allocation, i.e if the share price is depressed and Mr. Market does not give the credit due they use their cash flow to take advantage of the dislocation through buybacks as Fairfax does. You get EPS compounding regarding of what Mr. Market or the multiple does. 

The question I get most when I talk about Fairfax is why does it trade at 8x earnings - something must be wrong with it. Investors try to explain and rationalise Mr. Markets moods. As opposed to a first principle analysis of what a business trading with 15-20% sustainable earnings power (and 15-20% ROE) over the next 5 years should trade at.

Indeed fundamentals do matter in the long term but anything can happen in the near term.

Take the last 12 months for example.
At 2025 Q2 end, Fairfax had $25.77b of shareholder equity, and shares traded at $1807. We will know about end of Q2 2026 shortly, but it's likely atleast a $1B higher. 
In addition they likely reduced share count by around 1.8M in the year ending Q2 2026. Underwriting has been strong and in the range of 92-93% CR, and net written premiums have continued to grow in the collective albeit much more modestly.
Interest rates(proxy 10yr tbill) are another 0.3% higher. And their net excess of market value over carrying value went from $2.4B-->$4.2B. 
Additionally they have added to their wholly owned subsidiaries eg Kennedy Wilson, MW Eats, while Andrew Peller and Sleep number(via Sleep country) are in the works and perhaps IDBI is coming soon. Lastly they paid around $350M in dividends. 
They earned and allocated over $210 in eps during this time and probably accrued easily another $70-80 in value in ownership stakes that they held over this time. 
The S&P has gone roughly 6200->7500 during this time. 

None of these seem to be negatives to me! 
And yet the stock closed at $1624 today, over 10% lower than end Q2 2025. 
By my estimates BV per share is about $150 higher, and  IV is about 20% higher over 12mths, even as the share price is 10% lower. 
No wonder they keep buying. Let's keep this streak alive. One more year like this please.
 

Edited 20 hours ago by Txvestor

[SafetyinNumbers]

53 minutes ago, Ulti said:

https://www.theinvestorspodcast.com/episodes/fairfax-financial-ffo-to-the-berkshire-of-the-north-tip/
 

 

It’s nice they got the ticker wrong and made the same mistake @djokovic1pointed out in their intrinsic value analysis.

 

2 hours ago, djokovic1 said:

he question I get most when I talk about Fairfax is why does it trade at 8x earnings - something must be wrong with it. Investors try to explain and rationalise Mr. Markets moods. As opposed to a first principle analysis of what a business trading with 15-20% sustainable earnings power (and 15-20% ROE) over the next 5 years should trade at

There is no attempt to figure out what the business is worth. Instead there is an inherent assumption that markets are efficient so (recent) historical valuation is reflective of fair valuation. That’s the risk management tool when valuation really doesn’t matter in the decision. CIBC did the same thing in their initiation report. The move in interest rates alone was worth 8 ROE points. Surely that deserves a higher multiple. 
 

[dartmonkey]

2 hours ago, djokovic1 said:

The question I get most when I talk about Fairfax is why does it trade at 8x earnings - something must be wrong with it. Investors try to explain and rationalise Mr. Markets moods. As opposed to a first principle analysis of what a business trading with 15-20% sustainable earnings power (and 15-20% ROE) over the next 5 years should trade at.

This is where Benjamin Graham’s great aphorism is very relevant: « The market is your servant, not your master. »

[Crip1]

1 hour ago, Txvestor said:

Indeed fundamentals do matter in the long term but anything can happen in the near term.

Take the last 12 months for example.
At 2025 Q2 end, Fairfax had $25.77b of shareholder equity, and shares traded at $1807. We will know about end of Q2 2026 shortly, but it's likely atleast a $1B higher. 
In addition they likely reduced share count by around 1.8M in the year ending Q2 2026. Underwriting has been strong and in the range of 92-93% CR, and net written premiums have continued to grow in the collective albeit much more modestly.
Interest rates(proxy 10yr tbill) are another 0.3% higher. And their net excess of market value over carrying value went from $2.4B-->$4.2B. 
Additionally they have added to their wholly owned subsidiaries eg Kennedy Wilson, MW Eats, while Andrew Peller and Sleep number(via Sleep country) are in the works and perhaps IDBI is coming soon. Lastly they paid around $350M in dividends. 
They earned and allocated over $210 in eps during this time and probably accrued easily another $70-80 in value in ownership stakes that they held over this time. 
The S&P has gone roughly 6200->7500 during this time. 

None of these seem to be negatives to me! 
And yet the stock closed at $1624 today, over 10% lower than end Q2 2025. 
By my estimates BV per share is about $150 higher, and  IV is about 20% higher over 12mths, even as the share price is 10% lower. 
No wonder they keep buying. Let's keep this streak alive. One more year like this please.
 

+1

 

-Crip

 

[villainx]

15 hours ago, SafetyinNumbers said:

16 hours ago, Ulti said:

https://www.theinvestorspodcast.com/episodes/fairfax-financial-ffo-to-the-berkshire-of-the-north-tip/
 

 

It’s nice they got the ticker wrong and made the same mistake @djokovic1pointed out in their intrinsic value analysis.

 

Granted it's not super in depth.  How bad (or good) do you think the pod is?  

 

I think generally, for most of the pod about Fairfax, this forum really explains or amplifies a lot.  I wonder how much or little other listeners get without the discussions here.

[Whensthepaintdry?]

I noticed a few points that didn’t sound right. Since I listened quickly, I might have missed something. It mentioned that ROE was higher for mkl, and metlen has a PE of 0.2, which he then doubled down on, claiming he checked it twice. There was also a discussion about catastrophes wiping out the business or similar events being a huge negative. It felt like it was AI generated to me.  

[Maverick47]

28 minutes ago, villainx said:

 

Granted it's not super in depth.  How bad (or good) do you think the pod is?  

 

I think generally, for most of the pod about Fairfax, this forum really explains or amplifies a lot.  I wonder how much or little other listeners get without the discussions here.

The digression on Hamblin Watsa felt like some wasted time to me.  Would have been helpful if they managed a lot of outside money and also charged massive fees to Fairfax, but as a wholly owned subsidiary these days, I don’t think there’s an issue.

 

Puzzled why they chose to mention it as a potential candidate to add to their portfolio if it dropped to $1500 or so, while they had no problem adding Berkshire to their portfolio.  
 

The digression about how amazing a value Metlen is, was wasted.  They recognized the PE seemed too low, but apparently didn’t take the step of comparing market value to recent 12 months earnings which would have shown them that the reported PE was off by a factor of 100.  They could have discussed Eurobank or Poseidon, both of which are more material in terms of holding size.

I think they mentioned uncertainty about potential cat losses, which indicates they may not fully understand the extent to which underwriting has improved, and prudent risk management driven deeply into the culture.

They just aren’t seeing what many of us here are, which is the value of a long track record of compounding value, and the likelihood of continuing more of the same for the next decade.

 

[villainx]

 

8 minutes ago, Maverick47 said:

The digression on Hamblin Watsa felt like some wasted time to me.  

 

... 

 

The digression about how amazing a value Metlen is, was wasted.  

 

 

The more I think about what I was listening to, it's both frustrating and annoying.  

 

Poor research and poor curiosity and real lack of knowledge on the pod's part, especially with their outward facade of expertise or due diligence.  

 

 

 

[giulio]

Having to do 1 post/video a week means DD is going to be shallow...especially if you are not discussing with experts (on the subject/company)...true for every substack or podcast out there.

Will Thorndike does the 50x podcast which is of the highest quality possible: 2 companies researched in 5 years, maybe 10 episodes?

[Viking]

1 hour ago, Maverick47 said:

The digression on Hamblin Watsa felt like some wasted time to me.  Would have been helpful if they managed a lot of outside money and also charged massive fees to Fairfax, but as a wholly owned subsidiary these days, I don’t think there’s an issue.

 

Puzzled why they chose to mention it as a potential candidate to add to their portfolio if it dropped to $1500 or so, while they had no problem adding Berkshire to their portfolio.  
 

The digression about how amazing a value Metlen is, was wasted.  They recognized the PE seemed too low, but apparently didn’t take the step of comparing market value to recent 12 months earnings which would have shown them that the reported PE was off by a factor of 100.  They could have discussed Eurobank or Poseidon, both of which are more material in terms of holding size.

I think they mentioned uncertainty about potential cat losses, which indicates they may not fully understand the extent to which underwriting has improved, and prudent risk management driven deeply into the culture.

They just aren’t seeing what many of us here are, which is the value of a long track record of compounding value, and the likelihood of continuing more of the same for the next decade.

The million $ question is why is it so hard for (apparently sophisticated) investors to understand and value Fairfax? Some analysts appear to have the same challenge.

Edited 1 hour ago by Viking

[SafetyinNumbers]

3 minutes ago, Viking said:

The million $ question is why is it so hard for (apparently sophisticated) investors to understand and value Fairfax? Some analysts appear to have the same challenge.

Large institutional capital is either passive or has to beat the market in the short term. These days that means owning momentum. For a long time owning quality was good enough and that’s what most active investors own and screen for. Fairfax doesn’t pass their screens. I think it’s that simple.