Fairfax 2026

[dealraker]

1 hour ago, Madpawn said:

Curious what this board thinks of allocation weight to Fairfax. The dilemma is that I'm already overweight (by quite a bit) Fairfax and Fairfax India - so without going to deep into the details, is investing a huge chunk of your portfolio into Fairfax as "safe" as BRK (I'm tempted to say arguably safer given it's relatively cheaper, but we've also seen Fairfax's past mistakes which have been a bigger drag than what BRK has experienced in its history) 

I've owned Fairfax since 1994 and I did add small amounts about 25 times in the period where we here on the COBF forums were obsessing over the valuation.  I do not think about Fairfax very often but when I do I always have the same thoughts, much like those I have given I inherited Berkshire in 1975.  Here goes:

 

When the price of Fairfax is consistently rising investors obsessively think long term and increasingly get both satisfied and comfortable holding the stock and even consider or act to increasing their holdings.

 

When the stock isn't rising or declines, and this can come both justified and not justified, investors obsess with short time horizons and also they get extremely valuation focused.  This valuation focus is generally either PE or price-to-book, but it goes micro focused.

 

My view, one I've shared previously, is that insurance is very much a skill business and the best managements simply are destined/guaranteed to outperform those with less skill.  I rank Fairfax very high or even at the top of the skill parade both underwriting and on the investment side.

 

The safest thing in my view isn't to buy the one Berk vs Fairfax selling at the best perceived value, the best thing is to figure out, maybe even model, how much fear and need to escape you'll experience in a price falling atmosphere and judge your level of holdings based on that.  The price falling can be both Mr. Market's manic-depressive mood or an event - internal or external - or a cycle or whatever.  But if you can profile yourself as well as you can value the business then you can extend your time horizon.  Simply put, I would not own more stock than I can stomach for a downtrend.

 

If you can extend your time horizon and manage yourself, your stomach turmoil, then you have a huge probability of doing well owning Fairfax.  

[Txvestor]

20 minutes ago, Crip1 said:

With 2-Year Treasuries currently at 4.35%, I think that sacrificing 0.35% of yield for the optionality of being able to redeploy at maturity makes sense, but I’m not in Brian B’s stratosphere in terms of bond investing. 

 

-Crip

Whatever average mix they have they've been generating 5% without reaching too much for duration. Thats from a mix of maturities, the Pacwest portfolio impact and other corporates. 
Thats a perfectly good outcome without too much duration risk in this volatile environment, if you ask me. Whatever they do they will be fairly measured so as not to take on too much risk and keep optionality open in case of a market dislocation. 
I think as long as they keep generating cash, from their 3-4 engines. Deploying it in this environment will continue to be a nice problem to have.