No. of Recommendations: 9
FFH was listed in the US Stock market about 10 years ago. But I can't find it now. I owned it about 16 years ago and sold it all close to $300. Look at its current price in Toronto at $1260 Canadian dollar, and about $300 (CD) 16 years ago, its about 4 times appreciation, less than BRK's performance. What's the reason of owning FFH rather than BRK?
Well I think you will find that Fairfax outperformed Berkshire during that period despite a long stretch during that period that Fairfax describes as their "seven lean years" were they woefully underperformed for a number of reasons (loss-making equity hedging and poor equity investment selections being the main ones). Fairfax pays a dividend and it is important to include those in your comparison. But it is close enough to a tie that it doesn't matter.
There is certainly nothing wrong with an all-Berkshire portfolio.
Berkshire is already valued at $865 Billion and Fairfax is much smaller (despite their market cap doubling [and share count falling] in the last 3 years). It is much easier for Fairfax to do a deal that moves the needle so to speak (recent pet insurance sale to JAB is a good example of a deal that was material to Fairfax and would have been buried in a footnote at BRK). Fairfax is running their insurance businesses well and has a lot of international growth in the insurance biz.
Fairfax is a very good investor in fixed income, not so much in equities. If Fairfax lost Brian Bradstreet, their star bond investor, I would probably reduce my concentration in the shares.
As you mentioned, Fairfax dropped their NYSE listing many years ago and trades in Toronto. There is also a US over the counter unsponsored thing with the ticker symbol FRFHF. There is also a side investment vehicle for direct exposure to their non-insurance investments in India that holds some very attractive assets but carries a hedge-fund like incentive fee structure (FIH in Toronto, FFXDF over the counter).
I own both FFH and FIH and have done well in both so far. At this moment the India assets are probably the more undervalued of the two but that type of structure is not for everyone.
