Lauren Templeton Valuex Brk 2026

TITLE: Lauren Templeton VALUEx BRK 2026 CHANNEL: Guy Spier DATE: 2026-06-22 ---TRANSCRIPT--- [music]

A director of uh Fairfax, I’m looking forward to hearing what do you you have to say. It’s It’s You carry a a heavy last name. I don’t know what it’s like to do that. Maybe you can open with that, actually. So, thank you for being here. [applause] Thank you all. It’s a pleasure to be here with you today. I’m going to start by thanking Guy for organizing this event and his excellent team that works with him. It’s because of you all that we’ve we’ve gotten together and learn learn from each other over the years, which has been a great gift for everybody in the room. Um so, I’m so pleased to be here with you today. I will start by saying that I do have big shoes to fill. My great uncle was Sir John Templeton. That always makes me nervous. I’m not Sir John. So, go ahead and lower your expectations a little bit. But, I am going to take you on a a little bit of some time travel today. And sometimes in life, life does give you a second chance. And I’m going to offer a second chance to you all today. So, I’m going to talk about Fairfax Financial. And I’m going to frame this conversation entirely through a lens that resonates or should resonate with everybody in the room. What Berkshire Hathaway looked like 30 years ago before size became its greatest constraint. So, Fairfax was built on a similar blueprint. Insurance float as permanent capital, value investing on the asset side, founder control, and a decentralized structure that trusts managers and essentially leaves them alone. The DNA is nearly identical. The key difference is scale. Berkshire is over a trillion dollars at over a trillion dollars simply cannot make a move that meaningfully changes outcomes for shareholders. Fairfax at roughly $40 billion in market cap still can. And importantly, the flywheel is now clearly spinning. Since 2017, Fairfax has delivered an 18.6% compound annual growth rate with float growing at 18% a 74.9 billion investment portfolio and a greater than $5 billion annual operating income rate. Now, let’s look at what Fairfax has actually delivered. Since inception in 1985, book value per share has compounded at 18.7% annually against its stated target of 15% over the long term. Share price in USD has compounded at 19.5% versus 11.5% for the S&P 500. And Fairfax, if it were ranked among US listed companies, would be ranked seventh out of US listed companies since 1985, putting it in the top 1% ahead of Berkshire, which ranks 49th. Now, this chart illustrates visually what four decades of consistent compounding looks like. As you will see, the line is not smooth. There are difficult years, but the direction and slope are unmistakable. Compounding at this rate for this long is extraordinarily rare. And I would note I went on the board in

[laughter] To appreciate how elite this track record is, this slide puts into context of every US listed company since 1985. Fairfax sits at the top 1%. And that’s not a function of one great decade. It reflects consistent execution across four decades. Behind these numbers is a structure and culture that makes them repeatable. Like Berkshire, Fairfax operates through a highly decentralized model. Subsidiaries run are run by empowered managers with long tenures and deep ownership cultures. This is not a bureaucracy optimizing for the next quarter. It is a collection of businesses built to compound. The most recent chapter is particularly important. Since 2017, Fairfax has found its stride. Resolving the legacy hedging positions that weighed on returns from 2010 to 2016, repositioning the investment portfolio, and delivering a 18.6 compounded annual growth rate over 8 years. This is not a story I’m telling you today about potential. The transformation has already happened. And here is where Fairfax stands after a full year in 2025. Gross premiums written of 33.3 billion, a 93% combined ratio producing 1.8 billion dollars of underwriting profit. Consistent even through a catastrophe year. And I will note in these numbers there’s 1.2 billion dollars of catastrophe catastrophe losses embedded in those numbers. It’s amazing what the portfolio could absorb. The total investment portfolio of 74.9 billion generated a 9 9.3% return in

7.7% since inception. Float has reached 40.8 billion dollars growing at 18% since inception. Net earnings were 4.8 billion and book value per share grew at 20.5% in 2025 alone. And management has been explicit about their forward earning target earnings targets. Over 5 billion in annual operating income with 2.5 billion from interest and dividends alone. 1.5 billion from underwriting profit. And a billion from non-insurance income. That translates to approximately 150 dollars per share in potential earnings before any investment gains. And these are not aspirational numbers. They are anchored in the portfolio and float already on the balance sheet. Now, this is the slide that I find most compelling and one that I wanted to share with you since you are a room full of Berkshire Hathaway shareholders as I. And it’s lining up Fairfax’s metrics today against the year Berkshire reached the same milestone. Sorry about that. And that makes this opportunity incredibly vivid. Fairfax’s shareholders equity of 26 billion, Berkshire was there in 1997. Float of 40.8 billion, Berkshire crossed that in 2002. An investment portfolio of 74.9 billion, Berkshire hit that mark in 2002. Gross premiums written of 33.3 billion, Berkshire hit that in 2012. And a market cap of 40 billion, Berkshire hit that in 1996. So, why this moment? There are four reasons. First, Fairfax is still in the sweet spot of compounding. We’re small enough to move, large enough to matter, with share count already reduced from 27.8 million in 2017 to 20.9 million today. Fairfax opportunistically and consistently re- buys back shares. Second, the earnings power is locked in. $40 billion of float at a 5% yield generates over 2.5 billion in interest and dividends annually, before a dollar of underwriting prop- underwriting profit. And third, hidden value continues to be surfaced from the portfolio. Digit Insurance cost $101 million. It is worth 2 billion today. Eurobank has compounded at 15% annually. The Poseidon and Seaspan partial sale generated nearly 865 million in pre-tax gains above book this year alone. And fourth, culture and alignment. Prem Watsa’s family holds a control a controlling stake. The average holding company executive tenure exceeds 20 years. This is a business that is built to last. So, Warren Buffett has said, “Time is the friend of the wonderful company.” Fairfax appears to be exactly that. So, thank you and I hope that you have enjoyed your step back in time. Hopefully, this gives you a second opportunity to find an investment as compelling as Berkshire Hathaway was 30 years ago. I’ve told Guy that we released earnings today. The conference call was this morning. So, if you’re learning more if you were want to learn more about Fairfax, I suggest you listen to the recording of the earnings call. Because of that, I’m not going to take any detailed questions on Fairfax. As a director, I have to be careful what I say the same day of. Um I’m happy to close with my favorite story about Warren Buffett if we have a second.

Well, we have one question. So, at least one question. So, if you want to ask a another question, say it now and you’ll close with a Warren Buffett story. So, go ahead. Great. I give you not anybody, but Shmuel Goldberg. [applause] Thank you, Guy. Um Lauren, it’s great to see you again. Um missed you at Value X. Um the question I had is, okay, so now that we place ourselves in like let’s say Berkshire 30 years ago, how do you think about um allocation within a portfolio? I know you might not be able to answer directly, but um if you do have a lot of conviction in a stock in general, how do you at Templeton and Phillips think about allocating to something like this? Well, we have a large position of Fairfax in the portfolio and we’ve held it for many years. I think of adding Fairfax, you know, really initially it would have been more about downside protection, but over the years it has generated great returns for us and has been you know, one of our major holdings and will continue to be. My favorite story about Warren Buffett, if you want to know. do one more question. Okay. This is a quick one. It’s a little bit surface question. I think you’re also on the board of another solar company if I’m correct. Yeah. Could you talk a little bit about that or is that not allowed? That’s a different type of company. So, he’s referencing Canadian Solar. It’s listed on the Nasdaq. I am on the board of Canadian Solar. Canadian Solar is a solar manufac- Well, we have different parts of the business. It’s solar manufacturing and energy development projects and we also have an energy storage division. So, a few years ago we did a secondary listing on the Shanghai exchange for the manufacturing assets, mostly in China, and the development side of the business is called Recurrent Energy. That is a completely different business than insurance. So, it’s um you know, it’s a volatile business because it’s it’s largely dependent on government policy and you have to adjust very quickly when the rules change is what I would say. So, it’s a different business. But, that’s Canadian Solar in a nutshell. More volatile, um, for sure. Uh, property casualty insurance is very different than solar business. But my favorite story about Warren Buffett. So, um, you know, many of you know that my dad introduced me to investments. He put me to story bed with stories about the magic of compounding. I was fed a diet of BLTs growing up, Buffett, Lynch, and Templetons. All of these guys were my heroes. My dad is a true value investor. He dresses out of Walmart. He, um, you know, Costco would be an expensive purchase for him. He just showed up for his meeting with his, uh, estate attorney with all of his documents in a Walmart plastic bag that had been recycled. He is the classic value investor, okay? He’s done well, uh, and and he dresses like the classic value investor is what I would say. [laughter] But one year, this is about 20 years ago, I asked my dad, “What, you know, your birthday’s coming up. What can I get you for your birthday?” And like every dad, he says, “Don’t spend a penny on me. Don’t spend any money on me. You spend too much money. Not a penny.” So, I had to go home and think, “What can I get my dad that really matters, that costs nothing?” So, I decided to write Warren Buffett and said, “My father’s birthday’s coming up. Would you mind just calling him and wishing him a happy birthday?” So, as I got onto Bloomberg and Debbie, his assistant’s email, was on Bloomberg. So, I emailed Debbie. And literally forgot about sending this letter because Warren Buffett’s not going to do that. I mean, there’s no way. And I completely forgot. Well, my dad’s birthday rolls around and guess who calls? Warren Buffett. My dad’s at home with the flu. He answers the phone and hangs up on Warren Buffett. I I a message from Debbie that says, I tried to call your father. There was an issue. I’ll try to call back later. So, I don’t even get the message until Warren Buffett had called back. And the second time dad picks up the phone and Warren Buffett identifies himself, wishes my father a happy birthday, and my dad thought he was joking. He thought it was his brother. So, after they went through all of that and they talked for about 10 minutes, the phone call ended and Warren wrote back and said, you know, I talked to your dad. And I replied with, well, thank you so much. I’m so surprised you did that. Please let me know the charity of your choice and I’d love to make a donation in your name. And his reply was very sweet. It was, please do not do that. That would cheapen what I did. Your dad was a perfectly lovely person and I enjoyed spending 10 minutes with him on his birthday. And I think that’s just a great story because I hopefully what you’ve all learned from Guy and from Warren Buffett and your experience here at Berkshire Hathaway. And I would also add the experience at Fairfax because the same type of people attend the event at Fairfax. Is that this group is a incredibly humble and kind group. And it has meant a lot for me to be a part of it over the years, for my daughter to be a part of it I even though I had to drag her in here. Um it’s a privilege and I’ve enjoyed getting to know you all and a special thanks to Guy. Thank you. [applause] Um But now you can [applause and music]