TORONTO Aug 1 Fairfax Financial Holdings Ltd
, the Canadian property and casualty insurer run by
investment guru Prem Watsa, on Thursday reported a
second-quarter loss due to losses on its bond portfolio.
The Toronto-based company posted a net loss of $157.8
million, or $8.55 a share, for the quarter ended June 30. That
compared with a year-before profit of $93.7 million, or $3.79 a
The company took a $495.8 million net loss on its bond
investments, as fixed-income prices dropped sharply during the
quarter. This was partially offset by a $70.5 million gain on
All told, the net loss from investments was $415.7 million,
compared with a year-before gain of $71.5 million. Underwriting
profit during the quarter was $83.9 million.
Fairfax Chief Executive Officer Watsa hedged the company's
stock portfolio in 2010, convinced that global equity markets
had further to fall.
"We are maintaining our defensive equity hedges due to our
concerns about the financial markets and the economic outlook,"
Watsa said in a statement.
Since taking over the company in 1985, Watsa has built a
reputation as a shrewd investor by moves such as betting against
the U.S. housing market in the last decade and reaping huge
profits when the market collapsed.
In June, Fairfax said it would raise its stake in Greek real
estate firm Eurobank Properties to 42 percent from 19