No. of Recommendations: 3
Fairfax is down almost 15% since it traded around 1825 on April 21st, that’s almost 15%. Other insurance companies have also traded down during this period, like PGR, BRK, MKL and WRB have also declined, but none as severely as Fairfax.
The decline started a few days before earnings and accelerated since. The mark to market losses on the bond portfolio seems to have spooked the market, because the underwriting results and operating results were solid.
Insurance brokers have been hit even harder because of fears that AI will eliminate the need for middle men or drastically reduce their margins. These companies always sell at high PEs and are now trading well below their average valuations of the last 5-10 years.
Many tempting bargains, hard to evaluate which will work out best.
