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Is Prem Watsa – Chairman of Fairfax Financial (FFH) – Really Canada’s Warren Buffett? 24 Years of Financial Data Give You the Answer

December 05, 2010 | About:
Geoff Gannon

Geoff Gannon

432 followers

About the author:

Geoff Gannon
Geoff Gannon


Rating: 4.3/5 (33 votes)

Comments

valuefan
Valuefan premium member - 4 years ago
Excellent article. Thanks !

AlbertaSunwapta
AlbertaSunwapta - 4 years ago
I'm a great fan of Prem Watsa, and I've owned both FFH and BRK on and off for close to two decades. BRK I've held, FFH I've periodically bought and sold.

Nonetheless, I'm afraid Geoff Gannon is over simplifying the comparison, as these are not comparable companies. It is essentially an apples to oranges comparison.

I'd like to see a few more tables and figures including starting 1986 book values (wasn't FFH just a wee bit smaller than BRK in '86?), benchmarking to the TSX since FFH is a Canadian company (and we know how well the Canadian market has performed over the past 10 years), combined ratios throughout this time series, and even the actual price performance since 1986 (because FFH's share price has managed to strike a lot of fear into a lot of shareholders).

Cowboy77
Cowboy77 - 4 years ago
Great job, Geoff! Well written.
schn1eck7
Schn1eck7 - 4 years ago
Great article- really like the comparisons & your thoughts on both companies. The 90% bet on management is very true, as was the 90% bet on management for Berkshire back in the 1970's. As Buffett himself said, those buying BH then were betting more on him than the mediocre businesses he owned at the time. It evolved into the best, but wasn't always that way. Who knows? Maybe Watsa will make more acquisitions like that recent one with Zenith. I'd like to see Watsa build up a mega-force similar to BH over next 20+ years, who knows where they'll end up though.

I also liked your take on Watsa growing through mediocre acquisitions- agree completely. Keep up the good work!
glavacem
Glavacem - 4 years ago
One heck of an article. Well written.
softdude2000
Softdude2000 - 4 years ago
As always, excellent article. Thank you. It is true Prem has great track record and he is not Warren. But it looks like he is moving in that direction in insurance business. He is willing to give up market share for proper pricing. Even Buffett in 60s is not Buffett of today! I have to read more about Prem.
forexnutca
Forexnutca premium member - 4 years ago
I think your witnessing a younger Buffet in Prem (more of a Graham style). After the acquisition of Zenith, he admitted that this was the most high quality insurer they acquired to date. You may see him evolve over time. Fairfax has a team atmosphere for their investing which includes Brian Bradstreet, Francis Chou (runs best Mutual fund in Canada), and others. Prem isn't the only hero in the company.

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