As the Dow Jones Industrial Average fell 610 points (3.39%) after the Brexit announcement, Fairfax Financial (FFH) was up 1.64% in the U.S. market and 3.55% in the Canadian market. If the market continues its turbulence, I would expect more of the same from the company led by value investing guru Prem Watsa.
Although Watsa comes from the Benjamin Graham school of thought on value investing, he also prides himself on having his company excel through times of crisis such as the financial crisis of 2007-2009. Fairfax Financial is an $11.9 billion market cap insurance company headquartered in Toronto with operations throughout the world. Following the methods of Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.A, BRK.B), Watsa invests the company’s float in equities using value investing principles. For insurance companies, the float is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. What makes Fairfax Financial different is that Watsa will hedge against catastrophic events that he foresees. Continue Reading »