A Tale of Two Companies
When performance for Fairfax Financial Holdings (OTCPK:OTCPK:FRFHF) is viewed from its formation, its 20%+ return on book value is enormously impressive and has made anyone investing at its birth in 1985 quite wealthy.
Those results, though, have been inconsistent over time. Between 1985 and 1998 Fairfax compounded book value at more than 40% per year, but since then, annual growth has fallen to a rate of only 9%.
Fairfax Financial Holdings growth in book value per share (orange) and year-end price to book ratios ((blue)). The growth in