I simply purchased Fairfax Monetary Holdings (TSX:FFH), and I did it for one purpose: I desire a enterprise that may become profitable in good markets, unhealthy markets, and boring markets. Nonetheless, while you see different individuals piling right into a inventory, decelerate for a minute. Verify what drawback it solves, what may break the story, and what worth you pay right this moment. An amazing firm can flip into a foul purchase if expectations get foolish, or if a single headline can change the numbers in a single day.
About FFH
Fairfax sits at a candy spot that Canadians usually overlook. It runs property and casualty insurance coverage and reinsurance operations all over the world, after which it invests the float with a long-term mindset. That combo can really feel like a mini monetary engine that retains refuelling itself. When underwriting stays disciplined, premiums and reserves create investable capital. When investing works, e-book worth can climb, and confidence can comply with.
The market has seen. FFH not too long ago traded round $2,200 per share, after starting from about $1,836 to $2,700 during the last 52 weeks. That unfold tells you two issues directly: you may get a deal when concern spikes, and you may get whipsawed when sentiment flips. I truly like that volatility, because it creates entry factors, however it additionally calls for endurance. If you happen to want a clean trip, this one will take a look at you.
I additionally like how the enterprise can play defence in 2026. Insurance coverage stays important, even when customers tighten budgets, and better yields can raise curiosity earnings on the funding portfolio. Fairfax additionally carries a fame for deep worth investing beneath Prem Watsa, which might add torque when markets rebound. The flip aspect reveals up quick, too. Disaster losses can soar, and funding outcomes can swing onerous quarter to quarter.
Earnings help
The most recent quarter confirmed why I lean in. Within the third quarter (Q3) of 2025, Fairfax reported web earnings of US$1.16 billion, or US$52.04 per diluted share, up from US$1.04 billion, or US$42.62, a 12 months earlier. Guide worth per fundamental share hit US$1,203.65 at Sept. 30, 2025, up 15.1% from year-end 2024 after adjusting for the US$15 dividend paid earlier in 2025. These numbers inform me it nonetheless compounds.
Underwriting did actual work, too. Fairfax posted a consolidated mixed ratio of 92% and an underwriting revenue of US$540.3 million on an undiscounted foundation in Q3 2025. Stronger core underwriting and better curiosity and dividend earnings pushed adjusted working earnings from its property and casualty insurance coverage and reinsurance operations to US$1,343.2 million. Fairfax additionally logged web beneficial properties on investments of US$426.2 million, and it warned that beneficial properties can bounce round from quarter to quarter.
Wanting forward
Now the outlook and valuation begin to matter greater than the bragging rights. Fairfax agreed to promote its 80% curiosity in Eurolife’s life insurance coverage operations to Eurobank for about US$940 million and to purchase a forty five% stake in Eurobank’s Cyprus-based property and casualty insurer for about US$68 million. This retains the give attention to property and casualty whereas nonetheless driving on Eurolife’s success via its possession stake in Eurobank.
Moreover, FFH now trades at simply 8 occasions earnings at writing, with a market cap of about $49 billion and a ahead dividend of 0.93%. That appears modest, so I deal with the dividend as a bonus, not the purpose. Watch disaster losses, reserve growth, and fairness market swings. At roughly $2,200, it trades at about 1.35 occasions its reported e-book worth per share. I can dwell with that if underwriting stays tight and funding earnings retains flowing.
Backside line
So, why may you need shares, too? Fairfax can act like a gentle compounding machine when self-discipline holds, and it could reward you for considering in years, not weeks. If you happen to can deal with occasional drawdowns and if you need publicity to each insurance coverage income and long-term investing in a single title, it deserves a spot in your shortlist. Simply be sure to can dwell with the volatility earlier than you copy anybody’s purchase button.