Prem Watsa (Trades, Portfolio) founded the Toronto-based Fairfax Financial Holdings Limited (TSX:FFH) in 1985, which is engaged in property and casualty insurance, as well as reinsurance and investment management. Watsa was born in India, originally trained as a chemical engineer but took a chance to move to London, Ontario, where his brother lived. There, Watsa earned an MBA at Western University and then worked for a decade in the investment department at a now defunct Canadian insurance company before forming Fairfax. Today, Fairfax manages about $1.46 billion in assets.
In GuruFocus’ 2011 interview with Watsa, the investor cited John Templeton, the renowned value-oriented contrarian investor, as his mentor. While Watsa tends to be neutral rather than investing long or short, he said the most valuable lesson he learned from Templeton was to be flexible. Since then, he has often been referred to as the “Canadian Warren Buffett (Trades, Portfolio).” While there are certainly similarities between the two — both made their fortunes in insurance and draw relatively modest salaries — Buffett tends to avoid risk and companies in trouble, unlike Watsa. The investor is known for a contrarian style and often invests in distressed stocks, most recently exemplified by his decision to take a large stake in Blackberry Ltd. (NASDAQ:BBRY), formerly known as Research in Motion. Continue Reading »