What are you buying today?

[Valuebo]

Whilst I'm sure there is a good fundamental case to be made for buying FFH here, I'm also wondering how much some of you are impacted by recency bias on price action in this stock. Everyone and their mom buying more FFH after it drops a tiny bit, whilst it has been far cheaper only a few months ago, let alone a year ago.

 

I'm guilty of doing the same often and trying to avoid falling in the pitfall too much. Having seen the price "up there" in the past helps mentally, despite it sometimes (often?) being indicative of headwinds for the company for the time being. I should learn to view new ATHs as bullish more than 52-week lows. Idk, just ramblings.

[Hsmpanl]

1 hour ago, Valuebo said:

Whilst I'm sure there is a good fundamental case to be made for buying FFH here, I'm also wondering how much some of you are impacted by recency bias on price action in this stock. Everyone and their mom buying more FFH after it drops a tiny bit, whilst it has been far cheaper only a few months ago, let alone a year ago.

 

I'm guilty of doing the same often and trying to avoid falling in the pitfall too much. Having seen the price "up there" in the past helps mentally, despite it sometimes (often?) being indicative of headwinds for the company for the time being. I should learn to view new ATHs as bullish more than 52-week lows. Idk, just ramblings.

I hear you, but I think we are all aware of FFH performance and how things have continued to improve for the company. I still view it more as offered at a very reasonable multiple to adjusted book value, continuing buybacks and positive results for the company rather than “down 10% from recent ATHs”. If the insurance market is markedly weaker than im underwriting maybe I’m overpaying, but book value is growing rapidly and I see no signs of the compounding value accretion story changing in a material way. Assume the others see the same thing.

[hardcorevalue]

[73 Reds]

13 hours ago, Viking said:

I did the same. I explain my thinking below.
 

I manage my Fairfax investment in two ways:

• Core position
• Flex position

The core position is the (relatively) new part for me. I have held a large core position in Fairfax since late October/early November 2020. At a little over 5 years, this is the longest time period I have ever owned a core position in Fairfax. (It is the longest period of time I have owned a core position in any stock.)

 

Flexing my position size is something I have done with Fairfax on and off for +20 years. I sometimes buy more of the stock when it sells off/gets cheaper. And then I lighten up when the stock moves higher. With my flex position in Fairfax I am looking for a small gain (the exact amount will vary each time and will depend on the set-up). 
 

Normally, I find I get 2 or 3 nice opportunities each year to flex my position in Fairfax. Times when the stock sells off - where I like the short term risk/reward set up. 
 

Why did I ‘flex’ my position higher today?

• Stock closed today at $1,660/share. Three days ago it closed at $1,790/share. Decline was 7.3%.
• It looks to me like the stock has sold off over the past week for reasons that have nothing to do with Fairfax. (I.E. all financials are selling off.)
• Fairfax’s fundamentals continue to improve - I really like the sale of Fairfax’s 80% stake in Eurolife’s life insurance business for $944.7 million (expected to close in Q1-2026). 
• Strong earnings - I expect Fairfax to deliver very good Q3 earnings report. My guess is BV will be comfortably over $1,200/share. This puts the P/BV at about 1.38
• Hidden value - Excess of FV over CV for associate and consolidated holdings is likely $100/share (after tax). That puts ‘adjusted’ P/BV at about 1.28 ($1,660/$1,300)
• Hidden value part 2 - Of course, we know intrinsic value is much higher than ‘adjusted’ BV of $1,300. Let’s be conservative and add another $100/share (Eurolife sale will crystallize a nice investment gain in Q1-2026…). This puts Fairfax’s value (measured conservatively) at $1,400/share. This puts the. P/FV at 1.19   Today. 
• Fairfax thinks its stock price is cheap - Fairfax was an aggressive buyer of its shares in Q2, paying about $1,700/share. 
• Seasonality - As @SafetyinNumbers has pointed out many time before, Fairfax’s share price tends to underperform during hurricane season (which runs until about the end of October). A headwind will end soon.
• All cashed up - As I said earlier, I expect Fairfax to deliver strong Q3 earnings - they will be all cashed up in early November. What will they do? Well, being all cashed up, with shares trading below $1,700 and with hurricane season behind them… why not buy back a bunch of stock to year end? 
• Added motivation - Fairfax still owns 1.76 million shares of FFH-TRS. Every $100 increase in Fairfax’s share price delivers an investment gain of $176 million to Fairfax. This makes buying back stock when it is undervalued (like it is today) an even better decision. 

A near term risk to my ‘flex’ trade: it appears the hard market in P/C insurance is coming to an end. Lots of P/C insurance companies will report in the next 2 weeks. It they disappoint in the top line (revenue) we could see a big sell off in P/C insurance stocks. 
 

Important: I flex my positions in stocks I am happy holding for the long term (with the increased position size). There is always a good chance the stock could get much cheaper from here (especially in the short term). 
 

Anyways, I do not post this as investment advice. My logic could turn out to be completely wrong. Please consult your investment advisor before making any investment decisions. My post above is intended to be for information/entertainment purposes  

For me the current share price is nowhere near as compelling as all the previous times I purchased the stock, the latest of which was after the MW report was issued.  Another 10% down gets my attention.

[hardcorevalue]

Markets in general aren't as cheap as they were back then. S&P at 31x. 

[Cod Liver Oil]

I may make Exor a decent size. Elkann is programmed correctly even though he presents lily white. 
The Ferrari transition to the EV era could actually work out. He understands his mission to upgrade the portfolio from industrial era assets to health and tech. His seat on the Meta board, which is a commitment he certainly doesn't need, gives him a seat at the American tech table.  I don’t think he will squander the current liquidity. Let’s see his next moves with the Economist, Philips and the legacy car business.

Edited October 20, 2025 by Cod Liver Oil

[Spekulatius]

On 10/18/2025 at 7:30 AM, hardcorevalue said:

Graph is cherry  picked. Some large reinsurers like RNR (trades at 1.2x book and PE ~7x) are missing. They are similar to Fairfax as they both have a large reinsurance business.

[Jaygo]

adding to my Canadian gas names, I should say averaging down.

[Junior R]

2 hours ago, Jaygo said:

adding to my Canadian gas names, I should say averaging down.

which ones

[Jaygo]

2 hours ago, Junior R said:

which ones

I treat it like a basket, the adds were ARC resources, Tourmaline, Pembina Pipe, Pine cliff and a half gasser whitecap in that order of size. 

 

I dont know when but one day these will pay off. Building the position now in anticipation of a opportunity to unload once they are loved again. Maybe 5 years or less, maybe more lol. An interesting thing about commodities co's is that when companies can eke out a small profit when the underlying is basically dead you know eventually you will have an environment where they get good price and the stocks will become favored again. Then you can move on to the next hated trade. 

[thowed]

FFH

[Saluki]

Picked up a couple shares of FFH in my retirement account. Sold a few $80 CROX puts expiring on 10/31. With a $4 premium, my breakeven on those is $76, even if I get assigned 

[treasurehunt]

Nibbled on some FRFHF. I now own more Fairfax shares than I ever have.

[gfp]

32 minutes ago, Saluki said:

Picked up a couple shares of FFH in my retirement account. Sold a few $80 CROX puts expiring on 10/31. With a $4 premium, my breakeven on those is $76, even if I get assigned 

 

That's a pretty good deal alright

[This2ShallPass]

On 10/17/2025 at 7:53 PM, SafetyinNumbers said:

On top of all of the positives that Viking listed, I expect reserve releases over the next few years will help the combined ratio beat expectations. This started last year and my theory is that releases will ramp as premium growth 4 years ago was a lot faster than it is now.

Great point, I never thought about the premium growth rate difference. In a soft market, Fairfax reserve releases would have a much more meaningful effect on CR.

 

Curious on adding to Fairfax now. It's only down ~7-8% from ATH, why does that make a better buy (if you want to buy shouldn't you have done it at $1750 or $1800 regardless)?

 

[villainx]

1 hour ago, This2ShallPass said:

why does that make a better buy (if you want to buy shouldn't you have done it at $1750 or $1800 regardless)?

 

Probably for some, it's a big position already that they still think is undervalued, and at (random metric) it's more of a bargain.  I added some, but also leaving some dry powder too.

 

Edit:  But Fairfax - for various reasons (some very well documented by posters here) - gets big swings, so it's not uncommon for it to get back to steep discount territories.

 

Edited October 21, 2025 by villainx

[SafetyinNumbers]

12 hours ago, This2ShallPass said:

Great point, I never thought about the premium growth rate difference. In a soft market, Fairfax reserve releases would have a much more meaningful effect on CR.

 

Curious on adding to Fairfax now. It's only down ~7-8% from ATH, why does that make a better buy (if you want to buy shouldn't you have done it at $1750 or $1800 regardless)?

 

Seemingly through hurricane season. Next 3 quarters reported through May include the shareholder letter, AGM and is seasonally very strong. We also found out about the Eurolife gain and more about buyback activity which suggests a floor on valuation (or at least more buybacks if we dip lower).

[Saluki]

17 hours ago, gfp said:

 

That's a pretty good deal alright

 

Thanks. I probably shouldn't do mental accounting like this, but one way I think about it is that if sell a couple of puts for a dollar or two on something like this that has expirations very often, then it keeps lowering the cost for when I do get assigned. 

 

So if it's $85, and I sell out of the money puts for $1 every week or so, then if I get away with it 15x before I'm assigned at $85, then my effective price is $70. And I can keep selling and keep lowering my effective cost. 

 

If the price keeps dropping, to say $80, If I hold it for 30 days, then I can sell the $85 shares, and get a lower basis without invoking the wash sale trade rules. But I'd only do it for something I want to own more off. (I wish Nintendo had options!)

 

I did a video on this particular trade on my Underdog Investing Youtube channel today. But I also have done the treade for other volatile ones that I'd like to build a position in like Paypal, CPNG and IBKR.  It doesn't work some like JOE that just trades sideways without big moves, since the premium for the puts is not great unless you go really far out in time. 

[gfp]

4 minutes ago, Saluki said:

 

Thanks. I probably shouldn't do mental accounting like this, but one way I think about it is that if sell a couple of puts for a dollar or two on something like this that has expirations very often, then it keeps lowering the cost for when I do get assigned. 

 

So if it's $85, and I sell out of the money puts for $1 every week or so, then if I get away with it 15x before I'm assigned at $85, then my effective price is $70. And I can keep selling and keep lowering my effective cost. 

 

If the price keeps dropping, to say $80, If I hold it for 30 days, then I can sell the $85 shares, and get a lower basis without invoking the wash sale trade rules. But I'd only do it for something I want to own more off. (I wish Nintendo had options!)

 

I did a video on this particular trade on my Underdog Investing Youtube channel today. But I also have done the treade for other volatile ones that I'd like to build a position in like Paypal, CPNG and IBKR.  It doesn't work some like JOE that just trades sideways without big moves, since the premium for the puts is not great unless you go really far out in time. 

Those options expire the day after the earnings announcement so I guess that’s why the premiums were so plump 

[Junior R]

added more ffh

[MungerWunger]

nibbled on some CSU shares @ 3680 CAD

[Eldad]

1 hour ago, MungerWunger said:

nibbled on some CSU shares @ 3680 CAD

I did as well. 

[longlake95]

FFH 

[MungerWunger]

1 hour ago, Eldad said:

I did as well. 

and probably another +5 from lawrence 

[thowed]

FFH, CSU, TVK - my star Canadian trio.