Fairfax Financial: Anatomy of a Hatchet Job

I was deeply disappointed by the May 25^th <st1:state w:st="on"><st1:place w:st="on">New York</st1:place></st1:state> Times article on Fairfax Financial (NYSE: FFH) by the Pulitzer Prize-winning business columnist, Gretchen Morgenson, Gauging the Big Bets of a Hot Hand.  We usually enjoy her work, but this story on <st1:city w:st="on"><st1:place w:st="on">Fairfax</st1:place></st1:city> is certainly an anomaly: it’s a smear and a hatchet job, filled with innuendo, inaccuracies, and misleading statements.

As one of our largest positions, we know <st1:city w:st="on"><st1:place w:st="on">Fairfax</st1:place></st1:city> well and, having once been short the stock, we’re very familiar with the short thesis, which we (obviously) believe is now outdated and wrong.  We welcome contrary points of view and, in fact, when we disclosed that we were long the stock last August in a Value Investor Insight article (the stock’s up 22% since then), we heard from some investors who were short the stock and had insightful conversations with them.