Fairfax Financial (FFH.TO)

Prem Watsa has done a fine job compounding wealth over a long period.

He plans to hold for an extremely long time. P&C insurance is in a soft cycle right now; it'll just take (unfortunately) one bad event to regain a hard market. Completely brilliant capital allocation. Aggressively buying back stock. BB news is not material.

The chart is in a slight downtrend, kind of flattening out. You won't lose your shirt, but would buy other stocks.

High quality, management's done well over the years. At 8x forward PE, or 1.4x price to book, valuation is reasonable but no longer a discount. So stock's going sideways, investors have lost some interest. 200-day MA starting to tilt lower, price is above that but starting to go below. 

Much depends on how well it can execute on acquisitions. A lot of the easy $$ has already been made. He'd be on the sidelines for now.

Trend is sideways, and 200-day MA has started to roll over. Not a great technical structure. Market might think best part of the earnings cycle is behind it. Neither cheap nor expensive. Need to see some catalysts before it becomes attractive.

He came out of it a few months ago.

About 70-80% of a return on an equity comes from being in the right neighbourhood. Great business, but P&C has been under pressure (especially on policy pricing). Not the right time.

All of his Top Picks today have no momentum or key catalysts. Just excellent, well-run businesses that will add long-term value. Doesn't know how they'll look 1 year from now, but will certainly look good 3-5 years hence.

Today's a pretty good entry point. Compounded 19% a year since the IPO. Its insurance business has really improved (you have to be good at underwriting and at investing the money). Not a trade, you buy it for the long term. Everybody who works there owns shares, so what better incentive can you have? Yield is 0.89%.

A more stable franchise than in the past. Well managed, business as usual. No reason to sell, but not the most obvious buying opportunity either. New $$ should go to blue chips sitting at bigger discounts today.

Solid insurance-type name. Cheap valuation. Management knows what it's doing. Will continue to grow book value per share over time.

Q4 results last week were very good -- earnings stronger than expected, underwriting was fantastic, combined ratio was very strong. Big hit of catastrophe losses. You need to look at the long-term improvements the company's made, which he expects to continue.

Unlike most P&C companies, makes acquisitions the way BRK does. Big footprint in India, and looking to make a banking acquisition there (good chance of success, and this would add another trophy asset).

Unlike other insurers, FFH operates in the commercial space and trade at an attractive valuation.

They reported last week and beat the street by a mile. Prem Watsa is viewed at the Warren Buffet of Canada and FFH trades at a discount because of him. FFH is a lot more investment-focused than peers. Intact trades at 2.4x price-to-book vs. FFH 1.3x, a very big discount.

Watching closely. Results for 2025 are definitely making her more interested. At 1.8x book not really deep value, but not unreasonable for such a quality compounder. Potential upside of 26%, but has not hit analysts' targets once in last 5 years. Expects decent return, but unlikely to be the best in the sector.

Reported best year in history. Firing on all cylinders. Taking more in than paying out, and can invest the rest. Lumpy earnings, harder to predict.

In the space, she owns SLF instead.

Has done so well because it's been on the right side of the interest rate trade, plus underwriting operations have improved. Not a screaming buy today -- easy money has been made over the last 2 years. You're now paying a fair price for a fair asset, still attractive.

He'd much rather buy IFC on the dips.