Prem Watsa

Prem Watsa

Last Update: 2014-08-13

Number of Stocks: 42
Number of New Stocks: 4

Total Value: $1,462 Mil
Q/Q Turnover: 0%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Prem Watsa' s Profile & Performance

Profile

Prem Watsa was born on Aug. 5, 1950. His parents were originally from the small Christian community in southern city of Mangalore.

Studied at the Indian Institute of Technology, major in chemical engineering.

On Sept. 11, 1972, Prem Watsa arrived in London, Ontario, with $8 in his pocket and a $600 draft toward the first year's tuition.

Attend the MBA program at what later became the Ivey Business School at the Univesrity of Western Ontario.

Arrived at his first job Confederation Life in 1974. John Watson, the director of research handed him a book "Security Analysis". "

1985: met Francis Chou, then working as a telephone technician at Bell Canada. One day, Francis asked Prem almost casually, "Do you know how Warren Buffett made his money?" Prem thought he knew the answer, but Francis pointed to something he hadn't noticed: insurance float.

Met Steve Markel and set down the terms to buy Markel Financial for $5 million.

1986: Markel Financial was renamed Fairfax Financial. It means "fair, friendly acquisitions".

Book value per share grew from $1.52 in 1985 to $10.5 in 1989, which then grew to $38.89 in 1995.

Made series acquisitions, asset reaches billions.

Fairfax was listed on NYSE in 2002.

Attacked by hedge fund shorts including Jim Chanos, Whitney Tilson etc. Stock price down 40% to Cdn$57.

Regarding to shorts, Prem said, "Our one major worry, was that people would no longer deal with us. It never used to be that way, but now everybody looks at the stock price to get a sense in confidence in a company."

Filed lawsuit against shorts in 2006.

Buy CDS. "We bought our first (CDS) contract in 2003 and our last ones in December 2007. We just keep buying more and more, first five-year, then sever-year, because they were so cheap..." At one investment committee meeting where pre asked, "What's the best idea we've got?" Francis Chou, who's a pretty shy guy, piped up, "buy more credit default insurance." In the fall of 2008, Fairfax started to sell its CDS. The company made about $2 billion from those sales.

Removed its hedge in 2009.

90% hedged as September, 2011.

Prem Watsa Quotes:

"Being an immigrant, you develop qualities you never thought you had, you do things you never thought you'd do. You work harder, because you're at the bottom and the only way is up. I consider my kids less fortunate for not having had the immigrant experience."

"Warren Buffett attributes his success to Ben Graham's work, and in a smaller way, it is the same for me and hundreds of people who've made it as investors. You read that book and wither you get what it's saying in a smap or you never get it. For me it was so simple and made so much sense, I thought I had died and gone to heaven. It was my 'road to Damascus' moment."

This is by Tony Hamblin, Prem Watsa's partner in starting his investment firm: "It doesn't take a lot of money to start up an investment conselling company. The cost of entry is qualitative. You need to have a track record, contacts and credibility, and fortunately Prem and I had all three.

"Our long-term view has also meant that we have a commitment not to sell our core companies, no matter how attractive the price."

"Anything in the world is possible," as Ronald Regan used to say, "If you don't care who gets the credit."

Having shaken hands on an acquisition, we've never walked away from a commitment or gone back to change the deal.

"Work as hard as you can, as though everything depended on you"

Web Page:http://fairfax.ca/

Total Holding History

Performance of Fairfax Per Share Book Value

YearReturn (%)S&P500 (%)Excess Gain (%)
2013-7.831.55-39.3
20126.515.4-8.9
201102.08-2.1
3-Year Cumulative-1.8 (-0.6%/year)55 (15.7%/year)-56.8 (-16.3%/year)
2010515.06-10.1
20093526.468.5
5-Year Cumulative39.2 (6.8%/year)125.5 (17.7%/year)-86.3 (-10.9%/year)
200821-3758.0
200748.75.6143.1
20069.215.79-6.6
2005-184.91-22.9
2004-4.112-16.1
10-Year Cumulative115.1 (8%/year)104.1 (7.4%/year)11 (0.6%/year)
200329.128.70.4
200211.2-22.133.3
2001-12.2-11.9-0.3
20005-9.114.1
1999382117.0
15-Year Cumulative292.8 (9.5%/year)98.3 (4.7%/year)194.5 (4.8%/year)
19983028.61.4
19973633.42.6
1996632340.0
19952537.6-12.6
1994181.316.7
20-Year Cumulative1569.6 (15.1%/year)483.2 (9.2%/year)1086.4 (5.9%/year)
19934210.131.9
199217.6-6.6
19912430.5-6.5
199041-3.144.1
19892731.7-4.7
25-Year Cumulative5217 (17.2%/year)1050.7 (10.3%/year)4166.3 (6.9%/year)
19883116.614.4
1987485.142.9
198618018.6161.4

Top Ranked Articles

GuruFocus Interview with Fairfax CEO Prem Watsa
GuruFocus had an opportunity to speak with Prem Watsa, chairman and chief executive of Fairfax Financial Holdings, a $7.7 billion Toronto-based firm, where he has delivered a 5-year cumulative return of 176%, compared to 12.2% of the S&P 500. In 2008, when the market was spiraling to a loss of 37%, he achieved a 21% return for his clients. Read more...
Stock Ideas Shared Between Buffett and Watsa: Wells Fargo, Johnson & Johnson, Kraft Foods, U.S. Bancorp, General Electric, WalMart, Wesco Financial, USG Corp. Stock Ideas Shared Between Buffett and Watsa
Since the current management took over control in 1964, Berkshire Hathaway has seen its book value growing at an average rate of 20.3% per annum, or 434,057% accumulatively. The results? The individual in charge -- Warren Buffett -- has become the top third richest person in the world and many investors who stuck around long enough have made serious fortunes as well. Thanks to the power of compounding growth! Read more...
Time to Buy Research In Motion?
I know what people are thinking. It is the very thing that I thought about 6 months ago when I first ran into Research In Motion (RIMM). It was trading at about $18. I had the same mindset as everyone else it seems. Apple and Google are taking over the smart phone world. I figured it was a dead duck like everyone says. Read more...
Is Prem Watsa – Chairman of Fairfax Financial (FFH) – Really Canada’s Warren Buffett? 24 Years of Financial Data Give You the Answer
Charlie Munger’s Investing Genius with the Portfolio of Daily Journal
Few people know that Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway (BRK.A)(BRK.B), has also demonstrated his investing genius aiding in the management of the portfolio of The Daily Journal (DJCO). In the 10 years to 2012, he took the company’s portfolio value from $4.3 million to $76.7 million. The Daily Journal is a publishing company that owns newspapers and websites in California and Arizona, and the California Lawyer magazine, which provides news to California lawyers, profiles of judges, appellate decisions and legal affairs information to members of the bar free of charge. Read more...
» More Prem Watsa Articles

Commentaries and Stories

  • Currently 2.50/5

Rating: 2.5/5 (4 votes)

'Canada's Warren Buffett' Inspires Confidence in Investors Prem Watsa, Warren Buffett - 'Canada's Warren Buffett' Inspires Confidence In Investors
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Prem Watsa, Fairfax, Fairfax Financial, Warren Buffett


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An Interview With Fairfax Financial's Prem Watsa
Please briefly describe your family background. More...

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Rating: 4.8/5 (16 votes)

Fairfax Financial: Assurance in Insurance Prem Watsa - Fairfax Financial: Assurance In Insurance
Fairfax Financial (TSX:FFH) is a world-class insurance holding company that is a long-term compounding machine and worth significantly more than its current trading price. The security also provides significant protection against any downturn in the market, given the company’s positioning of its investment portfolio. The company’s quarter-end book value was $387 USD per share at June 30, 2014. There are approximately $45 per share in mark-to-market adjustments that can be added to this, resulting in an adjusted book value of $432 US per share. At its current quote ($445), one can purchase the company for 1.05x book value. The company is easily worth 1.3-1.4x book value, and that value will continue to increase. A more reasonable valuation is $600 per share. More...

Prem Watsa, Fairfax, Fairfax Financial, Insurance


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Rating: 4.0/5 (2 votes)

Prem Watsa's Top Five Holdings Prem Watsa - Prem Watsa's Top Five Holdings
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. More...

PREM WATSA, FAIRFAX, FAIRFAX FINANCIAL HOLDINGS, VALUE INVESTING


  • Currently 5.00/5

Rating: 5.0/5 (1 vote)

Prem Watsa Buys 4 New Stocks Prem Watsa - Prem Watsa Buys 4 New Stocks
Prem Watsa (Trades, Portfolio), founder of Canadian insurance conglomerate Fairfax Financial Holdings (TSX:FFH), has been fully hedged on his equity positions since about 2010, reducing his returns as the market increased. In Fairfax’s second quarter financial results, however, Watsa told investors the hedges had decreased, though they were prone to fluctuate: More...

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Rating: 5.0/5 (1 vote)

Prem Watsa Takes 3 New Small Holdings Prem Watsa - Prem Watsa Takes 3 New Small Holdings
Prem Watsa (Trades, Portfolio) is a cautious investor, whose vigilance has been heighted in recent years by what he perceives as a mix of factors indicating an economic storm up ahead. He has had extraordinary performance at his insurance conglomerate Fairfax Financial (TSX:FFH), compounding book value per share at 21.3% since inception. His return on his stock portfolio has lagged, however, as he hedges against potential future market instability. According to his 2013 annual letter, threats he sees to the market include: high U.S. total debt/GDP ratio with significant deleveraging remaining, weak economic growth in the Western world, inflation, QE’s lack of impact on the real economy, real estate bubble in China and low U.S. and junk bond yields. More...

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Prem Watsa 2014 Fairfax Annual Meeting Slides
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Rating: 4.8/5 (5 votes)

Prem Watsa, Wilbur Ross Invest Almost Half a Billion in Greece's Eurobank Prem Watsa,Wilbur Ross - Prem Watsa, Wilbur Ross Invest Almost Half A Billion In Greece's Eurobank
After a profitable investment in Bank of Ireland (IRE), Prem Watsa (Trades, Portfolio) and Wilbur Ross (Trades, Portfolio) have joined forces to lead a cash infusion into another of Europe’s stricken financial institutions, Eurobank Ergasias S.A. (FRA:EFGC)(ATH:EUROB). The two investors are coming to the bank’s aid as it raises money to meet new recapitalization requirements set by the Greek Parliament, effective March 30. More...

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Rating: 4.0/5 (4 votes)

Analysis of Guru Companies - Prem Watsa, Fairfax Financial Prem Watsa - Analysis Of Guru Companies - Prem Watsa, Fairfax Financial
Of the investing gurus we follow at GuruFocus.com, six have publicly traded companies that are directly affected by their investments. So far I discussed Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A)(BRK.B), Carl Icahn (Trades, Portfolio)’s Icahn Enterprises (IEP), and Ian Cumming (Trades, Portfolio)’s Leucadia National (LUK). The next stock I am discussing is More...

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Rating: 3.6/5 (9 votes)

Why BlackBerry Is Sweeter Than Apple Prem Watsa - Why BlackBerry Is Sweeter Than Apple
With software bugs, system breakdowns and tardy upgrades, BlackBerry (BBRY) had been rotten to the core for five long years due to managerial arrogance, incompetence and plain laziness. Once the sweet juice turned sour, it had burned too many stomachs and broken too many souls on Wall Street. The lingering bad taste is so widespread that people failed to see a new BlackBerry, sprouting out from their solid security roots, led by strong and proven leadership, charging into new growth areas with moats and recurring revenue, poised for long-term growth, while still in the first-inning of a historic turnaround. More...

BLACKBERRY, APPLE, GOOGLE


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Rating: 4.2/5 (6 votes)

Prem Watsa Is Fully Hedged Prem Watsa - Prem Watsa Is Fully Hedged
Prem Watsa (Trades, Portfolio) is often described as “Canada’s Warren Buffett (Trades, Portfolio).” He said in his letter to Fairfax Financial (TSX:FFH) shareholders released on March 7 that his common stock portfolio is fully hedged. He then highlighted some of his reasons for being bearish: More...

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Rating: 4.5/5 (4 votes)

Prem Watsa Cuts One of His ‘Most Successful Investments’ Prem Watsa - Prem Watsa Cuts One Of His ‘Most Successful Investments’
Prem Watsa (Trades, Portfolio), the Canadian investor who owns Fairfax Financial Holdings (TSX:FFH), back in 2011 formed a consortium with Wilbur Ross (Trades, Portfolio) and several other financiers to infuse cash into the struggling Bank of Ireland (IRE) – an investment which turned out to be one of his “most successful,” as he said in his recently released 2013 annual letter to shareholders. Like Warren Buffett (Trades, Portfolio) at Berkshire Hathaway (BRK.A)(BRK.B), Watsa invests the float of his insurance conglomerate. Also like Buffett, More...

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Prem Watsa Comments on Selling MEGA Brands
It is with some sadness that we say farewell to MEGA Brands (TSX:MB), a leading global toy company run by the Bertrand family in Montreal, Canada. It is a made-in-Quebec success story that we assisted through the tough recessionary years. The Bertrands approached us with the request to sell to Mattel and as we have said in the past, we support management and the founders. Our cost for our MEGA shares is Cdn$9.88 per share and the Mattel offer is at Cdn$17.75 per share. All in, including our loss on our original convertible debentures, our profit will be Cdn$17 million. More...

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Rating: 5.0/5 (1 vote)

Prem Watsa Comments on Bank of Ireland
It is amazing to witness the transformation that has taken place in Ireland. In 2011, when we made our investment in the Bank of Ireland (IRE) at 10 euro cents per share, 10-year Government of Ireland rates were 12%, housing prices had come down 40% and sentiment was bleak. Since then, 10-year Government of Ireland rates have dropped to 3.1%, house prices have bottomed out and have begun to rise, Ireland has access to the bond markets again and capital is flooding into Ireland! Under Richie Boucher's strong leadership, the Bank of Ireland continues to do well as it recently refinanced its government-owned A1.8 billion preferred by doing a A580 million equity issue at 26 euro cents per share and selling the rest into the marketplace. Also, it adid a A750 million unsecured five-year bond financing at 3.34%! The Irish Government has now had all its loans to the Bank of Ireland paid back and its 13.95% ownership of the common stock is in a sizeable profit position. We thank the Irish Government for its exceptional support of the Bank of Ireland and look forward to the Bank's continued progress under Richie's leadership. More...

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Prem Watsa Comments on Twitter
Interestingly, Twitter (TWTR) went public, just after BlackBerry announced its convertible debt issue, at $26 per share, giving it a market value of $18 billion. It had revenues of $665 million and losses of $645 million, and most investors could not get a single share unless they were very good clients of the major houses underwriting the issue. On that day, BlackBerry traded in excess of 100 million shares at $6 per share, giving it a market value of $3 billion. BlackBerry had revenues of approximately $8 billion with cash of $2.6 billion and no debt other than the new convertible debt to be issued. If you thought that Twitter was grossly overvalued at $26 per share, it promptly doubled and currently is selling at $55 per share, with a market value of $39 billion. More...

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Prem Watsa Comments on BlackBerry
No sooner had the ink dried (almost!) after I wrote to you in last year's Annual Report about BlackBerry (BBRY), than BlackBerry became a daily headline. The Board of Directors of BlackBerry decided to form a Special Committee to look at all options for the company. As we were the biggest shareholder in the company (almost 10%) and were potentially conflicted by my being on the Board, I decided to resign as a director so we could review all our options. On September 23, 2013, Fairfax made an offer to take BlackBerry private at $9 per share, subject to a six-week due diligence period. To do our due diligence, we hired a very experienced team led by Sanjay Jha, who ran Motorola, Sandeep Chennakeshu, who was President of Ericsson Mobile Platforms, and John Bucher, who was Chief Strategy Officer at Motorola Mobility. Briefly stated, their conclusions were simply: 1) the company had excellent assets, 2) the management teams had made many mistakes along the way, and 3) the company could not afford high cost LBO debt. For the first time in our history, our due diligence resulted in our not being able to complete an announced deal. After discussions with the Special Committee, led by its More...

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Seth Klarman Comments on Twitter
Twitter (TWTR), for example, surged from $26 to almost $45 on day one, and closed the year around $64. It was priced, after all, at only twenty times its projected 2015 revenue. One analyst suggests the profitless company might achieve $50 million of “adjusted” cash earnings this year, giving it a P/E of over 500. Some hedge and mutual funds are again investing in late-stage, pre-IPO financing rounds for hot Internet companies at valuations that only seem reasonable if the companies go public, soon, and at astronomical prices. More...

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Rating: 3.9/5 (7 votes)

Three Billionaires Adjust Portfolio Holdings – Buffett, Watsa and Loeb Warren Buffett,Prem Watsa,Daniel Loeb - Three Billionaires Adjust Portfolio Holdings – Buffett, Watsa And Loeb
The last week of February was rife with changes to some of the most interesting portfolio positions of prominent investors. Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A)(BRK.B) built his stake in DaVita HealthCare Partners (DVA) even higher, Fairfax Financial (TSX:FFH)’s Prem Watsa (Trades, Portfolio) filed down his massive ownership in BlackBerry Ltd. (BBRY) and Third Point’s Daniel Loeb (Trades, Portfolio) continued his advance on Sothebys (BID). More...

  • Currently 4.60/5

Rating: 4.6/5 (5 votes)

Bearish Canadian Investor Prem Watsa's 7 New Positions Prem Watsa - Bearish Canadian Investor Prem Watsa's 7 New Positions
Prem Watsa (Trades, Portfolio) runs FairFax Financial Holdings Ltd. (TSX:FFH), a financial conglomerate that also has a strong investing side, reminiscent of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A)(BRK.B). The investing branch “emphasizes a conservative value investment philosophy, seeking to invest assets on a total return basis, which includes realized and unrealized gains over the long-term,” per the website. More...

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User Comments

Mocheng
ReplyMocheng - 3 weeks ago
From his performance table, I see that he doesn't even outperform S&P 500. How can we call him the Warren Buffett (Trades, Portfolio) of Canada?
Pensaman
ReplyPensaman - 11 months ago
FF owns BBRY about 10.06% of outstanding shares
Communication Equipment BBRY
51,854,700 541,486 21.8%
Charles.wilton
ReplyCharles.wilton - 11 months ago
WHEN I CLICK BLACKBERRY IT DOESNT SHOW PREM WATSA AND WHEN I CLICK ON WATSA PORTFOLIO BLACBERRY IS ON THE SECOND PAGE AND THE HISTORY CLICK DOESNT WORK. ALSO THE FORMAT IS DIFFERENT AFTER FIRST PAGE?S

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