Prem Watsa

Prem Watsa

Fairfax Financial Holdings
Last update 2019-08-14 34 Stocks (2 new)
Value $1.77 Bil Turnover 1 %
Top Holdings: SSW(42.80%) BB(19.71%) KW(15.48%) RFP(12.43%) CTL(1.57%)
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Prem Watsa Profile

Prem Watsa was born on Aug. 5, 1950. His parents were originally from the small Christian community in the southern city of Mangalore. He studied at the Indian Institute of Technology, with a major in chemical engineering. On Sept. 11, 1972, Watsa arrived in London, Ontario, with $8 in his pocket and a $600 draft toward the first year's tuition. He attended the MBA program at what later became the Ivey Business School at the University of Western Ontario. He took his first job Confederation Life in 1974. John Watson, the director of research, handed him the book, "Security Analysis." 1985: He met Francis Chou, then worked 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. He 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. Fairfax made a series of acquisitions, and assets reached billions. Fairfax was listed on the NYSE in 2002. It was attacked by hedge fund shorts including Jim Chanos and Whitney Tilson. The stock price went down 40% to $57 Canadian dollars. 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." Fairfax filed a lawsuit against the short-sellers 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 Prem asked, "What's the best idea we've got?" Francis Chou, who is 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. Watsa removed hedges in 2009. Ninety percent of his portfolio was hedged as of September 2011.

Prem Watsa Investing Philosophy

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Performance of Fairfax Per Share Book Value

Year Return % S&P500 % Excess Gain %
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