Fairfax Financial Holdings Limited FFH.TO

The business

Fairfax writes property and casualty insurance and reinsurance globally through Odyssey, Northbridge, Allied World, Crum & Forster, Zenith and Brit, then invests the float. That is the entire model, and it has been the entire model since Watsa bought the shell in 1985. Premiums come in, claims go out over years, and in between the float, roughly $35B of it, funds an investment portfolio Watsa runs like a concentrated value book: index shorts in the 2010s, bank stakes, Greek and Indian equities, Digit in India, the BlackBerry stub. The moat is float at insurance-priced cost combined with permission to invest it unconventionally, and the cost of that permission is the volatility the reader sees in the numbers below.