Prem Watsa
Prem Watsa
Fairfax Financial Holdings
Last update 2018-08-14 33 Stocks (6 new)
Value $1.25 Bil Turnover 3 %
Top Holdings: BB (36.15%) RFP (25.25%) KW (22.61%) IBM (2.98%) CTL (2.93%)
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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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Prem Watsa Total Holding History ($B)

Historical Allocation of Stock, Bonds, Cash

Performance of Fairfax Per Share Book Value

YearReturn %S&P500 %Excess Gain %
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Commentaries and Stories
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HP’s Innovative Strategy Could Catalyze Its Stock Price
The company’s business model appears to be improving rapidly
0 Votes
60 Views    Robert Stephens, CFA    2018-10-05 15:09
Prem Watsa's BlackBerry Investment
The guru investor should begin to wind down this loser
0 Votes
452 Views    Jonathan Poland    2018-10-03 20:51
A ‘New’ Way to Follow Top Gurus
We have introduced a new method to add gurus to the user-defined list
0 Votes
360 Views    James Li    2018-09-21 20:08
5 Low-P/E Ratio Stocks in Prem Watsa's Portfolio
The investor in undervalued situations has several new ones
2 Votes
808 Views    Holly LaFon    2018-09-19 21:53
Warren Buffett’s GuruFocus Page Gets New Revamped Look
We have launched a new version of our guru pages
0 Votes
383 Views    James Li    2018-09-13 20:12
Is Resolute Forest Products a Buy?
Prem Watsa and Francis Chou have sizeable positions in this stock
1 Votes
136 Views    Jonathan Poland    2018-09-12 20:00
Prem Watsa Axes Berkshire Hathaway, Buys 6
Watsa took renewed interest in stock market after eliminating hedges
0 Votes
673 Views    Holly LaFon    2018-08-15 22:28
Some Thoughts on the Folly of 'Buy and Forget' Investing
The method is a lazy way to invest and is not suitable for many portfolios
1 Votes
98 Views    Rupert Hargreaves    2018-07-30 19:13
Prem Watsa’s Top 5 Positions Ahead of 2nd Half
Guru’s top holdings include BlackBerry and Resolute Forest Products
2 Votes
605 Views    James Li    2018-07-06 21:32
Prem Watsa Discusses Seaspan, Market Valuations in May Bloomberg Interview
Fairfax investor in wide-ranging conversation
1 Votes
174 Views    Holly LaFon    2018-07-06 21:22

Top Ranked Articles
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Some Thoughts on the Fairfax Equity Hedges
Lessons learned from a look back at Prem Watsa's old shareholder letters
12 Votes
1073 Views    The Science of Hitting    2018-03-13 22:30
Highlights from Prem Watsa Shareholder Letter
7 Votes
1058 Views    GuruFocus    2013-03-19 14:34
Nuggets from Prem Watsa
Investing insights from an investing guru
7 Votes
1767 Views    Robert Abbott    2017-04-21 14:39
‘Concerned’ Prem Watsa Holds On to Hedges Even as Stock Losses Climb
Watsa sees problems around the world and price-value disconnect on many stocks
5 Votes
2602 Views    Holly LaFon    2016-08-03 22:09
Prem Watsa Ends Period of Shorting Market With $1.2 Billion Loss
After five years of fully hedging, Watsa reverses outlook due to Trump election
4 Votes
1511 Views    Holly LaFon    2017-02-17 21:42
Warren Buffett and Prem Watsa Have Dramatic Week With United and BlackBerry
Sharp moves in two of their important holdings occur
4 Votes
1921 Views    Holly LaFon    2017-04-12 20:32
BlackBerry’s Shares Spring on Partnership With Microsoft
Prem Watsa-backed company sees some life
4 Votes
428 Views    Holly LaFon    2018-03-20 21:43
Prem Watsa Comments on Twitter
2 Votes
559 Views    Holly LaFon    2014-03-11 18:34