Fairfax Financial Holdings Limited is a Toronto-based holding company founded back in 1985 by Prem Watsa, who is often referred to as “Warren Buffett of Canada”. He graduated with an MBA from the Richard Ivey School of Business at the University of Western Ontario. The company is engaged through its subsidiaries in property and casualty insurance and investment management. Prem Wasta has been successfully running his firm since launching, and recently the company disclosed its 2018 Annual Letter, a copy of which you can download below.
The company reported net income of $376 million, and a decrease of 1.5% of its book value (adjusted for the $10 per share dividend paid) to $432 per share. Fairfax Financial Holdings Limited also disclosed that its book value per share has compounded at 18.7% annually since its launching.
“We would have had an excellent year in 2018 but a collapse in stock prices in the fourth quarter, which was reflected immediately through mark to market accounting, resulted in our producing net income of only $376 million(1). Our book value per share decreased by 1.5% (adjusted for the $10 per share dividend paid) to $432 per share because of unrealized foreign exchange losses of $236 million. Since we began in 1985, our book value per share has compounded at 18.7% annually while our common stock price has compounded at 17.1% annually. Our growth in book value has stalled recently but we have our foot on the accelerator!” – wrote Prem Watsa among other things in the letter.
You can download a copy of Fairfax Financial Holdings’ 2018 annual letter below: