PREM WATSA
Chairman of Fairfax Financial, the "Warren Buffett of Canada"
They call him the Warren Buffett of Canada, which he earned by turning Fairfax Financial from a $30 million startup into a $25 billion insurance empire — and by making one of the greatest financial crisis trades in history. His credit default swaps paid out $2 billion during the 2008 meltdown while everyone else was catching falling knives. He's also the guy who bet big on BlackBerry. Twice. Nobody's perfect.
Net Worth
$1.8 Billion
Nationality
Canadian (born Indian)
Time Horizon
Long-Term
Risk Appetite
6 / 10
CAREER & BACKGROUND
Founded Fairfax Financial Holdings in 1985 with $30 million in premiums. Grew Fairfax to over $25 billion in assets.
Made $2 billion on credit default swaps during the 2008 financial crisis. Invested heavily in India through Fairfax India Holdings.
Took a massive position in BlackBerry starting around 2012. Compounded Fairfax's book value at roughly 18% annually for the first 25 years.
COMPANIES & ROLES
Fairfax Financial Holdings (founder, chairman & CEO), Fairfax India Holdings (chairman)
INVESTING STYLE & PHILOSOPHY
Value investing through an insurance float model — basically the Berkshire playbook adapted for Canada. He uses Fairfax's insurance premiums to invest in undervalued companies, mostly in sectors others have abandoned.
He's more willing to make macro hedges than Buffett — his 2008 CDS trade proved that. He loves beaten-down companies in beaten-down countries, which is why he's poured billions into India and Greece.
THE PLAYBOOK
Risk Approach
Aggressive contrarian with a safety net. The insurance float gives him permanent capital, so he can stomach drawdowns that would force other investors to sell.
He's willing to bet against consensus — the 2008 short was a $340 million premium bet that most people thought was insane until it paid off 6-to-1.
Money Habits
Modest lifestyle for a billionaire. Still lives in Toronto, drives a regular car, shows up to the Fairfax office every day.
Gives away significant amounts to education and healthcare in India.
BIGGEST WIN
The 2008 financial crisis trade. Watsa spent $340 million on credit default swaps against US subprime mortgages starting in 2006.
When the financial system imploded, those swaps paid out over $2 billion. Same trade that made John Paulson famous, but Watsa got in earlier.
BIGGEST MISTAKE
BlackBerry. Watsa bet huge on the Canadian smartphone maker's turnaround starting around 2012, eventually owning about 10% of the company.
The stock went from $15 to under $7, and Watsa held through years of pain.
FINANCIAL PHILOSOPHY
Watsa lives by the Ben Graham principle: price is what you pay, value is what you get. But he adds a macro overlay that Graham never used — he's willing to make big directional bets on the economy when he believes the crowd is wrong.
FAMILY & PERSONAL LIFE
Married to Nalini Watsa. Three children.
Son Ben Watsa is involved in Fairfax's operations.
EDUCATION
Born in Hyderabad, India. MBA from the Ivey Business School at Western University in London, Ontario.
Came to Canada in 1972 with very little money.
BOOKS & RESOURCES
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QUOTES (6)
Be fearful when others are greedy, and be greedy when others are fearful. But put real money behind it, not just bumper stickers.
We bought credit default swaps when everybody thought we were crazy. The $340 million premium was the best insurance policy we ever wrote.
India is where China was twenty years ago. The opportunity is generational, and we intend to be there for every decade of it.
Price is what you pay, value is what you get. I learned that from Ben Graham. I proved it with $2 billion in 2008.
The insurance float is not just capital. It's patient capital. And patience is the most undervalued asset in finance.
I came to Canada from India with almost nothing. This country gave me everything. The least I can do is invest in the world that shaped me.
NETFIGO SCORE
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