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Here’s Why Fairfax Financial Holdings Limited (FRFHF) Outperformed in Q3

Alphyn Capital Management, an investment management firm, released its third-quarter 2023 investor letter. The same can be downloaded here. The Master Account of the fund returned -1.1% net in the third quarter compared to -3.3% for the S&P500 Index. As of September 30, 2023, the top ten holdings accounted for approximately 71% of the portfolio, and approximately 8.6% of the portfolio was held in cash. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Alphyn Capital Management highlighted stocks like Fairfax Financial Holdings Limited (OTC:FRFHF) in the third quarter 2023 investor letter. Headquartered in Toronto, Canada, Fairfax Financial Holdings Limited (OTC:FRFHF) provides property and casualty insurance, and reinsurance, and investment management. On November 24, 2023, Fairfax Financial Holdings Limited (OTC:FRFHF) stock closed at $912.05 per share. One-month return of Fairfax Financial Holdings Limited (OTC:FRFHF) was 10.05%, and its shares gained 58.18% of their value over the last 52 weeks. Fairfax Financial Holdings Limited (OTC:FRFHF) has a market capitalization of $22.272 billion.

Alphyn Capital Management made the following comment about Fairfax Financial Holdings Limited (OTC:FRFHF) in its Q3 2023 investor letter:

"Fairfax Financial Holdings Limited (OTC:FRFHF) serves as an apt illustration. Throughout our almost 5-year holding period, our investment in Fairfax has compounded at approximately 17% per annum, closely matching its impressive 25-year record of book value growth. However, it did not grow over a straight line. Fairfax’s share price largely stagnated for nearly five years of ownership, impacted by short-term issues, including macroeconomic uncertainties, underperforming investments, and challenges with operating companies arising from the pandemic. Yet, over the last year, the shares rallied as the market began to recognize its robust insurance business and the benefits of a favorable insurance market, and the company’s patient, long-term capital allocation began to bear fruit.

Had I lost patience and sold the shares at any point, we would have given up these returns and maybe shown a loss.

It is natural to wonder if I could time my position entry better and miss the long sideways or negative periods. Unfortunately, I’ve found no reliable method of doing this. Despite numerous discussions with fellow investors and researching various market timing techniques—like moving averages and oscillators, interpreting short-term news, or trying to outsmart the market on next earnings “beats or misses” I haven’t found a reliable, practical approach. Most attempts to time investments may offer smoother journeys, but often at the cost of overall performance. At best, it’s a trade-off; at worst, it hampers overall returns..." (Click here to read the full text)

A retail customer signing the paperwork of a credit insurance plan, with the help of an expert broker.

Fairfax Financial Holdings Limited (OTC:FRFHF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.