News Summary

• Prem Watsa's team saw the Great Financial Crisis coming — and had the conviction to see their bet through to a US$4-billion windfall.
• The big trade Fairfax had going was a short on financial companies with exposure to the growing bubble in mortgage securities.
• The investment was born of caution, to defend against a hit to Fairfax’s capital.
• If it paid off, it would also lead to a massive windfall, call it a huge insurance policy with potential dividends.