Fairfax Financial (FFH.TO)

Fantastic business and management. It is pretty volatile, but we see a nice long term trend. Management has a better vision around the world than most of us do.

Technically the stock is in an upward trend. It had some short-term breakouts in the last few weeks, which is encouraging. It also had formed a triangle pattern, and just broke above that pattern, an encouraging sign. Continue to Hold and even buy more.

He admires Prem Watsa and the company he has built. Extremely well-run, but it is an insurance business, particularly in property and casualty. A highly, highly variable business. Sometimes the combined ratios are in your favour and you make a lot of money, and sometimes the premium intake doesn’t cover the expenses. This company has always relied on its investment acumen. People taking a longer term point of view stands a better chance of making money, but shouldn’t expect a smooth ride given the nature of the businesses that it is in. This doesn’t look like an unreasonable place to position yourself, but you have to be willing to be a long-term player.

An insurance company where they have a lot of insurance funds they manage, and 90% of them are in fixed income by legislation. With the rest of it, they can make equity investments. This is an easy way for somebody to have a hedge, you buy some gold or you have some of this company.

Prem Watsa is one of the most interesting personalities in Canadian Finance. Believes Prem is betting very strongly that the NA markets are going to collapse. He is not crazy about companies that are prepared to bet a substantial amount of the company on something that he views as inherently unpredictable.

Views this as a listed hedge fund that seems to have a perpetually bearish view in the markets, and that has an insurance company that they run on the side. If you have negative view on Canadian markets, and you want to have a Long position, then this is a good one to hold.

(Market Call Minute.) You never know what Prem Watsa is going to be doing, he either makes $500 a share in profit or zero.

This has Prem Watsa, which is what you are investing in. He has the ability to navigate markets. Central Banks are fighting deflation and he knows it. This is one that you will have to be slightly patient with. His technical target is $765. Dividend yield of 2.09%.

This has always been a very defensive investment, because Prem Watsa is a very conservative investor. He created an enormous amount of wealth for shareholders over the long-term. Has followed the model of Warren Buffett, which is owning an insurance company and using the proceeds to float to buy other companies. He has done a wonderful job. Doesn’t think you can go too far wrong owning and buying this company.

The core of their business is insurance, but as everyone knows, Prem Watsa is a very active investor. He would regard him as an active Bear. Because of that, they have a lot of derivatives on their books, and benefits when the market declines. Because of this, the company becomes negatively correlated with the index. As other insurance companies go down, this one tends to rise. It scores quite poorly on valuation. Has a Short on this. 2.2% yield.

(Market Call Minute.) This is a long term play and a proven investor.

(Market Call Minute) Step back and see how the next couple of quarters go.

(Market Call Minute.) Led by Prem Watsa, who is bearish and has had some bets against the market. If the market has a downturn, those bets will turn out well.

They had a lot of dogs of insurance companies that they acquired, but they have all turned around and are firing on all cylinders now. It is a great hedge to any portfolio.

Likes this a lot. Has a lot of respect for management. The company has been cashed up to take advantage of the economic problems coming. Thinks it will be one of the safe haven Longs over the next 18-24 months.