Prem Watsa is often referred to as “Canada’s Warren Buffett”.

Fairfax $FFH $FRFHF has an incredible track record since their inception in 1985.

I love Prem’s annual letters & compiled some good moments.

Save this thread and read below ⬇️ 1985 letter - Prem’s first annual letter.

Sets the tone for the many following decades.

“Our investment philosophy is based on the value approach as laid out by Ben Graham and practiced by his famous disciple, Warren Buffett. “

Fairfax $FFH is one of North America’s best kept secrets.

It’s been one of the best performing stocks since its IPO in 1985.

And it’s STILL SUPER CHEAP!

Read this thread to understand why we call it Canada’s Berkshire! $BRK.B 🧵⬇️ Fairfax’ Guiding Principles.

Prem Watsa (founder) credits his investing strategy to Ben Graham’s teachings on Value Investing. He’s such a fan, he named his son Ben!

He was an early fan of Warren Buffett as well and attended his Omaha meetings as far back as the 80s!

Bull Thesis on Brookfield Corporation $BN, based on Bill Ackman’s recent comments (summarized by Grok)

🔸 Dominant Asset Management: BN's 73% ownership in Brookfield Asset Management $BAM , one of the world's top alternative asset managers, forms the backbone of BN's value proposition, with BAM's expertise in high-growth sectors like infrastructure, renewable energy, and AI.

🔸 High-Quality Revenue Streams: BAM generates stable, high-margin fee revenues from managing $540 billion in capital, with projections to scale to $1 trillion AUM by 2028, driving significant earnings growth.

🔸 Megatrend Alignment: BN is strategically positioned to capitalize on global trends like decarbonization, digitization, and de-globalization, making it a key player in future economic shifts.

🔸 Carried Interest Potential: BN has a substantial claim on BAM's carried interest, expected to increase dramatically from $450 million to $2.5 billion annually, providing a significant boost to BN's cash flows.

🔸 Growth in Wealth Solutions: The rapidly expanding wealth and retirement solutions business, managing $115 billion, is set to double its earnings, leveraging BN's asset management capabilities for high-margin returns.

🔸 Diverse Cash Flows: Beyond BAM, BN benefits from dividends and cash flows from other subsidiaries, real estate, and insurance float capital, ensuring a diversified and growing income stream.

🔸 Undervalued by Market: BN currently trades at a low multiple of earnings, suggesting a significant upside as its diverse cash flow streams are realized and better understood by the market.

🔸 Future Cash Flow Explosion: With cash flows expected to exceed $10 billion by 2028, BN has the potential for substantial capital allocation back into the business or shareholder returns through buybacks.

🔸 Conservative Valuation: Even with conservative valuation multiples, BN's sum-of-the-parts analysis indicates the stock could more than double, especially when compared to peers like KKR and Apollo.

🔸 Market Inefficiency: Lack of S&P 500 inclusion currently undervalues BN, but with plans to relocate BAM to the US, this could unlock significant value through index fund investments.

🔸 Management's Strategic Moves: BN's management is actively working to close valuation gaps by improving visibility, coverage, and investor awareness, suggesting confidence in the company's intrinsic value.

🔸 Historical Performance: BN has already seen a 40% increase in stock price since Ackman’s investment position was built, yet it remains undervalued, pointing to strong future returns.

🔸 Defensive and Growth Characteristics: BN combines stable, asset-backed income with growth in alternative investments, offering both safety and growth potential in one investment.

🔸 Institutional Overlook: There's an opportunity for institutional investors to realize the value disconnect, further amplified by BN's steps to increase its profile and market recognition.

🔸 Long-term Investment Horizon: With a clear path to earnings and cash flow growth, BN represents a compelling long-term investment in a conglomerate with multiple high-growth levers. This was the clip:

“And then the corporation, which I'll refer to as both Brookfield and/or BN, I'll use those phrases kind of interchangeably. It's really -- it's the parent entity that sits atop of kind of a broader ecosystem of various publicly traded affiliates. When you think of Brookfield, the parent BN, it generates cash flows from controlling ownership it has in a handful of these interrelated subsidiaries in various cash flow -- contractual cash flow streams. But starting with the most principal asset that they own, which we believe comprises the vast majority of BN's value, it comes from their 73% ownership they maintain in their publicly traded asset manager, called Brookfield Asset Management known as BAM.
So BAM is one of the world's preeminent alternative asset managers. And they derive a significant portion of their value from asset-light recurring management fee streams on $540 billion of long-duration internal and external capital that they manage. And BAM's success stems from deep investment expertise and a best-in-class track record in the areas of infrastructure, power, renewable energy, real estate, and credit. They actually -- they own Oaktree as well.
And taking a step back, when you think about BAM and the Megatrends that are both propelling both BAM and BN, the parent, it's an investment focus that they have around three key themes which include decarbonization, digitization, and de-globalization and increasingly Brookfield, they find themselves at the center of accelerating investments in clean energy and transition, critical infrastructure and most recently artificial intelligence.
Also, Bill mentioned earlier some of the optimism we have around the new administration, I think that many of these verticals are poised to see accelerated investment in growth over the coming years. And again, Brookfield is very well positioned to benefit from that we believe.
Focusing on BAM specifically, they generate fee revenue, which is this very high margin revenue stream and what they call fee earnings, which is the term that all the asset managers use. And we think BAM's fee earnings will nearly double through 2028 as they rapidly scale their fee-paying AUM to approximately $1 trillion, driving higher revenues which with strong operating leverage, will drive significant earnings growth.
And notably, when we think of BAM, I'd say it has all the attributes of what we say is kind of a classic Pershing Square investment. It's simple, predictable, high quality, and a rapidly growing capital-light business. And simply put, it's Brookfield's crown jewel. Now intelligently, Brookfield spun out a 25% minority interest in BAM at the end of 2022.
And that's why it's publicly traded today and has its own kind of listed security. And the purpose here was to highlight the value that they saw in that business. Now the market has agreed with them. And so in recognition of all of the above, the market is currently valuing BAM at 33 times earnings, which is a $66 billion asset at BN's 73% proportionate ownership worth roughly $41 a share in value to BN.
Now, beyond BAM, putting that aside for a second, as I mentioned, they own controlling interest in various affiliated entities and cash flow streams including, one, a preferred claim on BAM's carried interest, which I'll talk about in a minute, two, they receive dividends from $18 billion of equity ownership, BN maintains in a number of their publicly listed affiliate companies.
These are tickers like BIP and BEP. They're actually fairly analogous to PSH in that they're externally managed kind of perpetual capital vehicles and provide a very -- they're more kind of yielding securities and so BN gets this dividend stream from them, three, they have cash flows from $11 billion that BN has invested in BAM's long-term funds which creates alignment of interest between BN and the limited partners in BAM's funds.”,

KITS is the best small cap company you’ve never heard of.

In just a few years, they scaled from $0 to $150M+ in annual revenue run rate.

In this mega thread, I’ll explain why I recently made this one of my LARGEST holdings! 🧵 ⬇️

$KITS WHAT IS KITS?

In their own words: KITS is a rapidly growing, digital eyecare platform providing eyewear for eyes everywhere.

Based in British Columbia, they offer a huge selection of contact lenses and glasses at very cheap prices!

How do they do it?

They built a cutting-edge optical lab in Western Canada, and essentially removed all the intermediaries (that’s where the crazy glasses costs usually come from). They’re now able to manufacture at scale, for extremely low costs, and they pass on those savings straight to customers.

Today was Brookfield Day.

Here’s what you need to know about Q3 2024 earnings for Brookfield Corporation!

(🧵👇🏽)

$BN $BAM Before analyzing earnings, we need to understand what IS Brookfield exactly?

I did a short recap video - highly recommend watching before diving into the rest. Find it right here 👇🏽

https://twitter.com/newcomerinvest/status/1850612764869538177

Should you BUY Alimentation Couche-Tard? $ATD

In this megathread I’ll explain why it’s one of my top holdings! 🧵⬇️ HISTORY

Alimentation Couche-Tard, a global convenience store business, was founded by Alain Bouchard in 1980, and he led the company as its CEO all up until 2014. (He’s now still involved)

Starting with one convenience store, he steadily grew by acquiring more and more stores, improving their operations, rinse and repeat.

Bruce Flatt has run Brookfield for 22 years.

He build it into a world class business with $1 Trillion in AUM.

Every quarter, he shares a letter with his insights. I’ve compiled some of my favourite moments below: 🧵👇🏽

(Bookmark & come back later. Worth it!)

$BN $BAM On share buybacks. Q2 2024.

“For the ability to get $800M in liquidity, the selling shareholders turner over $1.68 Billion of Value to the remaining shareholders. […] That is a lot of Value added for not a lot of work.”

$BN $BAM

Should you invest in Canadian National Railway? $CNR / $CNI

In this thread I’ll explain why it’s one of my favourite investments of all time!

🧵⬇️ 𝐓𝐇𝐄 𝐁𝐀𝐒𝐈𝐂𝐒:

CN Rail is among Canada’s largest companies; at the time of writing, our country’s 9th biggest. 🇨🇦

🔹 Market cap: ~ $98B (CAD)
🔹 Dividend yield: 2.16%
🔹 2024 dividend increase: 7%
🔹 CN shares are worth $156 today, having appreciated over 7,000% since the late 90s.

Brookfield owns & manages a LOT of assets!

Struggling to keep track? (Me too!)

Made a thread with some I find interesting! 👇🏽

RT if you find this useful!

$BN $BAM X-ELIO: A Spanish-based, global developer of renewable energy infrastructure.

Exposure via Brookfield Renewables $BEP!