I just bought Fairfax Financial Holdings (TSX:FFH), and I did it for one reason: I want a business that can make money in good markets, bad markets, and boring markets. Still, when you see other people piling into a stock, slow down for a minute. Check what problem it solves, what could break the story, and what price you pay today. A great company can turn into a bad buy if expectations get silly, or if a single headline can change the numbers overnight.
About FFH
Fairfax sits at a sweet spot that Canadians often overlook. It runs property and casualty insurance and reinsurance operations around the world, and then it invests the float with a long-term mindset. That combo can feel like a mini financial engine that keeps refuelling itself. When underwriting stays disciplined, premiums and reserves create investable capital. When investing works, book value can climb, and confidence can follow.
The market has noticed. FFH recently traded around $2,200 per share, after ranging from about $1,836 to $2,700 over the last 52 weeks. That spread tells you two things at once: you can get a deal when fear spikes, and you can get whipsawed when sentiment flips. I actually like that volatility, as it creates entry points, but it also demands patience. If you need a smooth ride, this one will test you.
I also like how the business can play defence in 2026. Insurance stays essential, even when consumers tighten budgets, and higher yields can lift interest income on the investment portfolio. Fairfax also carries a reputation for deep value investing under Prem Watsa, which can add torque when markets rebound. The flip side shows up fast, too. Catastrophe losses can jump, and investment results can swing hard quarter to quarter.
Earnings support
The latest quarter showed why I lean in. In the third quarter (Q3) of 2025, Fairfax reported net earnings of US$1.16 billion, or US$52.04 per diluted share, up from US$1.04 billion, or US$42.62, a year earlier. Book value per basic 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. Those numbers tell me it still compounds.
Underwriting did real work, too. Fairfax posted a consolidated combined ratio of 92% and an underwriting profit of US$540.3 million on an undiscounted basis in Q3 2025. Stronger core underwriting and higher interest and dividend income pushed adjusted operating income from its property and casualty insurance and reinsurance operations to US$1,343.2 million. Fairfax also logged net gains on investments of US$426.2 million, and it warned that gains can bounce around from quarter to quarter.
Looking ahead
Now the outlook and valuation start to matter more than the bragging rights. Fairfax agreed to sell its 80% interest in Eurolife’s life insurance operations to Eurobank for about US$940 million and to buy a 45% stake in Eurobank’s Cyprus-based property and casualty insurer for about US$68 million. This keeps the focus on property and casualty while still riding on Eurolife’s success through its ownership stake in Eurobank.
Furthermore, FFH now trades at just 8 times earnings at writing, with a market cap of about $49 billion and a forward dividend of 0.93%. That looks modest, so I treat the dividend as a bonus, not the point. Watch catastrophe losses, reserve development, and equity market swings. At roughly $2,200, it trades at about 1.35 times its reported book value per share. I can live with that if underwriting stays tight and investment income keeps flowing.
Bottom line
So, why might you want shares, too? Fairfax can act like a steady compounding machine when discipline holds, and it can reward you for thinking in years, not weeks. If you can handle occasional drawdowns and if you want exposure to both insurance profits and long-term investing in one name, it deserves a spot on your shortlist. Just make sure you can live with the volatility before you copy anyone’s buy button.
