If you are not familiar with the Warren Buffet in Canada, it's time to meet you. Prem Watsa has run Fairfax Financial Holdings Ltd. (TSX: FFH) for more than 25 years. During this time, the value of the company's book has risen by approximately 20% annually, a return that combines with Berkshire Hathaway Inc. by Warren Buffet. A great component of this long-term performance has been its ability to adapt to the first principles of thinking, a methodology recently made famous by CEO Tesla Inc, Elon Musk. About 2,000 years ago, Aristotle introduced the idea of the first principles, defining them as "the first base of which one thing is known". Basically, you do not think about the world through …
If you are not familiar with the Warren Buffet in Canada, it's time to meet you. Prem Watsa has worked Fairfax Financial Holdings Ltd. (TSX: FFH) for more than 25 years. During this time, the value of the company's book has increased approximately 20% annually, a profitability that coincides with that of Warren Buffet Berkshire Hathaway Inc.
A great component of this overcoming in the long term has been its ability to follow the first principles of thought, a methodology recently known for Tesla Inc CEO of Elon Musk. About 2,000 years ago, Aristotle introduced the idea of the first principles, defining them as "the first base of which one thing is known". Basically, one does not think about the world through the perspectives of others; Think about the world as it really is.
Prem Watsa is an expert in the first principles that he thinks
While the first principles may seem like a simple approach, it is very difficult to run in real time. When markets are increasing, even the most qualified investors have burned up making bets exactly at the wrong time.
Famous, Warren Buffet bought shares of ConocoPhillips Stock at the worst possible time in more than 30 years. "Without asking Charlie [Munger] or any other person, I bought a large amount of ConocoPhillips values when oil and gas prices were close to their maximum, "Buffet wrote in its 2008 letter to shareholders." I have not anticipated in any way the dramatic drop in energy prices that occurred during the last half of the year. "It lost billions of this bet, although at that time, the market goes Think it was a smart decision.
In the long run, however, Warren Buffet has been able to avoid moving with the crowd, often choosing out-of-favor investments in defeated industries. Prem Watsa has shown the same ability and, in some cases, has shown superior insight.
Since the year 2006, the stock of Fairfax has exceeded the TSX in more than 300%. How Avoiding risky bets when market optimism is higher. For example, when global markets were in crisis in 2008 and 2009, with some stock markets falling by 40% or more, the Fairfax stock really got positive returns for both of us years.
Fairfax can be your safe harbor in the storm
Often, investors believe that the excess of performance comes during bull years, but avoiding capital loss when the markets are in a free fall provides a huge advantage. This has always been Prem Watsa's specialty, which is interesting as the stock market in Fairfax has been behind in recent years in the midst of a bull market for several years.
Since the end of 2014, Fairfax's actions are roughly flat, a rare occurrence. But in recent years, Fairfax has achieved promising positions. The most notable has been released Fairfax India Holdings Corp. (TSX: FIH.U) i Fairfax Africa Holdings Corp. (FAH.U). These vehicles, of which Fairfax Financial owns large stakes, are unique ways to benefit from long-term opportunities both in India and in Africa, both regions that have been difficult for investors to obtain the exposure.
Prem Watsa has a wide network of entrepreneurs and partners in these two regions and uses them to offer attractive offers. Many of these offers are private, which means that very few foreign investors can participate. For example, Prem Watsa chose to start Fairfax Africa after realizing that Fairfax Financial received a growing number of attractive investment opportunities across the continent. Creating a dedicated vehicle allows the company to make centrally focused and informed decisions.
Fairfax Financial is the best of both worlds
An investment in Fairfax Financial gives both Prem Watsa's investment vision and the only opportunities for growth in Africa and India. With markets becoming increasingly weak, it is difficult to find this combination of protection against loss and long-term growth. And since June, shares are down more than 20%, new investors get a rare opportunity to buy at a reduced price.
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Crazy The collaborator Ryan Vanzo has no position in any of the aforementioned stocks. Fairfax Financial is a recommendation of Canada stock adviser.