Fairfax Financial: Playing Defense

In a recent edition of Value Investor Insight, Whitney Tilson and Glenn Tongue reiterated their thesis from last August that Fairfax Financial (FFH) is one of the best ways to play the subprime train wreck.

Few firms were as well-positioned to benefit from the credit crisis as Canadian insurer Fairfax Financial. Primarily due to its giant credit-default-swap [CDS] portfolio on companies exposed to the subprime debacle, Fairfax has feasted on others’ misfortune: earnings are up sharply and the shares have risen 40% since we touted them last summer (VII, August 31, 2007).