Warren Buffett of Canada Just Doubled Down on Gold Miners Prem Watsa has spent decades avoiding gold. He built Fairfax Financial on cheap insurance stocks and bruised-but-recoverable businesses, not shiny metal. That changed this year, and in a big way. Fairfax's second-quarter 13F filing shows the fund grew its stake in Orla Mining by 83%, from 31.8 million shares to 58.4 million shares. That stake alone is now worth $568 million. It gets bigger. Fairfax also built a brand-new $427 million position in Eldorado Gold. That stock wasn't even in the portfolio last quarter. Add those two together and gold miners now make up roughly 38% of Fairfax's entire $2.64 billion U.S. equity book. Two gold stocks. More than a third of the portfolio. That's not a hedge anymore. Watsa earned the nickname "Warren Buffett of Canada" the old-fashioned way, buying unloved companies and insurance float for three decades. Gold has never been part of that story. Until now, his biggest headline bets have tilted toward distressed industrials and beaten-down consumer names like Kraft Heinz and Under Armour. Mining stocks require him to bet on a commodity price, not a business he can analyze line by line. That's a real shift in how he's thinking about risk. Gold has had a strong run this year, climbing as fears about government debt and currency stability have pushed more investors toward hard assets. Watsa isn't alone in that trade. Several well-known value investors have been quietly adding gold exposure in 2026 as a hedge against exactly those worries. But going from zero to nearly 40% of the book in two gold miners is a far more aggressive stance than a simple hedge. Fairfax runs Watsa's insurance float, the premium money collected before claims come due. He's long used that float to fund concentrated stock bets most fund managers wouldn't touch. His track record is full of contrarian calls that looked reckless at the time. He shorted subprime mortgage debt before the 2008 crisis and made billions when nobody else saw it coming. He's also had plenty of misses. Fairfax held onto BlackBerry for 16 years before finally selling at a steep loss last year, a position Watsa himself later called a mistake. That mix of occasional brilliance and stubborn losers is part of what makes Fairfax worth watching. Watsa doesn't chase consensus, for better or worse. The rest of the Q2 portfolio still looks familiar. Kraft Heinz, CVS Health and Under Armour remain core holdings, the kind of unglamorous, cash-generating businesses Fairfax has always favored. Gold miners are the outlier here, not the new norm. That contrast is exactly why the move stands out. What It Means for YouWhen a value investor who built his career on patience and skepticism makes this big a bet on gold, it's worth paying attention to the reasoning, not just the trade. Watsa isn't betting the price of gold goes up next week. He's betting miners are cheap relative to a metal he thinks stays in demand for years. That's a long-term concentration call, not a short-term trade, and it carries real risk if gold prices stall. Treat it as one data point from one investor, not a signal to chase gold yourself. |
