In general, no one knows better than insiders of a company about the status of their business, especially those at top like CEO, CFO or board members. When they buy with their own money in a big way, there is usually only one explanation that they think their company's stock is in great valuation and cheap. So it is highly advisable to follow the insiders when it happens. Here is one great example.
Watsa is the CEO of a Canadian company, Fairfax Financial (OTC: FRFHF). He is widely considered as the Canadian Buffett. Three years ago in Jul 2022, he made an announcement:
At our [annual general meeting] and on our first quarter earnings release call, I said that our shares are "ridiculously cheap."
That statement reflected my recognition that in the 35 years since Fairfax began, I have never seen Fairfax shares sell at a bigger discount to their intrinsic value than they have recently.
I have now backed up my strong words by purchasing close to US$150 million of Fairfax shares in the market over the last few days, as I believe that this will be an excellent long-term investment.
Watsa's average purchase price was $308 per share. That turned out to be a steal of a deal, and the man has made a boatload of money. Since he bought at $308 a little more than three years ago, Fairfax shares have steadily increased and are now trading at well over $850.
Watsa's $150 million investment in 2020 is now worth over $400 million.
That means he's made over $250 million on this trade alone!
Don't miss this kind of opportunity when it is presented itself!!
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