Finance professional grows his TFSA to a million dollars with a handful of stocks

Asheef Lalani, a 48-year-old Toronto resident, opened a tax-free savings account when the registered accounts were introduced in 2009 and has made the maximum contribution every year since – a total of $102,000. It’s now worth a million dollars.

Mr. Lalani went to university, became a chartered accountant and landed a job in 2002 as an equity analyst covering software and media stocks for an investment bank. While at the bank, he earned the chartered financial analyst designation.

He was promoted to other positions and ended up at the proprietary trading desk, where he traded the bank’s capital. But in 2012, the U.S. government brought in the Volcker Rule barring banks from trading their proprietary capital – thus rendering Mr. Lalani’s job redundant.

He chose not to accept another position in the bank and instead took the buyout package. Along with his savings, it would allow him to take early retirement – not with the goal of travelling or golfing more but to set up Berczy Park Capital and focus on investing his own capital.

He sold the high-yield bond mutual fund in his TFSA – even though the fund had performed well after the 2008-2009 recession – and began building a portfolio of equities. Five years ago, he trimmed down to his best ideas, leaving a handful of stocks. As Warren Buffett says: “Diversification may preserve wealth, but concentration builds wealth.”

The risk level is higher, but Mr. Lalani has other assets to fall back on, such as registered retirement savings plans and non-registered accounts. Moreover, he says, his lifestyle is simple enough that it will not be affected even if half his capital were lost. If worse comes to worst, he can return to work in the financial industry.

In recent years, three stocks have done the heavy lifting in bringing his TFSA to the million-dollar threshold: Mako Mining Corp. MKO-X, Sailfish Royalty Corp. FISH-X and Fairfax Financial Holdings Ltd. FFH-T.

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Mako operates gold mines in Arizona and Nicaragua and has a development project in Guyana. Mr. Lalani first bought the stock in 2019 when the share price was hovering just above a dollar (it’s now at $4.84). Sailfish earns royalties from Mako’s gold mine in Nicaragua and owns a royalty on a Nevada development project.

Both companies are controlled by U.S. asset manager Wexford Capital, which took Diamondback Energy Inc. from a startup in 2007 to one of the biggest oil producers in the United States. Mr. Lalani joined the Sailfish board as an independent director in early 2023.

Fairfax is a Toronto-based property and casualty insurance firm with international operations. Approximately 94 per cent of its premiums (i.e., the combined ratio) has gone to pay for insurance claims and company operations in recent years. The remaining 6 per cent has gone into the float, where the premiums are held until they are paid out and, in the interim, invested to generate gains and income.

Mr. Lalani first purchased Fairfax shares in 2021 but didn’t buy any in his TFSA until 2023. There has been an appreciation in their price, totalling more than 150 per cent in his TFSA (and more than 400 per cent in his other accounts). He has since acquired additional shares, to the point that Fairfax now accounts for 63 per cent of his TFSA’s value.

The runup in Fairfax’s stock is linked to a sharp uptick in the growth of its book value, a key metric for valuing insurance companies. It climbed from US$478 per share in 2020 to more than US$1,080 per share on March 31, 2025, reports Berczy Park Capital’s Substack. The compound annual growth rate of more than 20 per cent over the past four years has been among the highest in the industry.

Fairfax has benefited from the higher interest rates of the postpandemic era, thanks to its large bond holdings (in which the majority of its float is invested). Its bond portfolio had an average duration of just over a year when rates began climbing in 2022, so it rolled quickly into higher yields and avoided major capital losses (bond prices move inversely to yields). Most peers were wrong-footed with durations of four or more years put in place to boost yields when rates were low. Now that rates are elevated, the duration of Fairfax’s bond portfolio has been extended to lock in a steady stream of income that reduces variability in its earnings.

By acquiring insurers, such as Allied World in 2017, Fairfax bolstered its underwriting operations to bring in more premiums for its float. The shares issued to make acquisitions diluted equity and depressed the share price, but Fairfax initiated a share buyback program in 2018 and retired almost 30 per cent of its shares by early 2025. This supported the stock by reducing supply and increasing book value per share.

The buoyant stock market has delivered favourable returns on Fairfax’s equity portfolio. The company refrained from placing hedges on its stock holdings to the same extent it did during the first half of the 2010s. Also, the property and casualty insurance industry cycled after 2020 into a “hard market,” meaning premiums went higher; Fairfax was one of the better-positioned insurers in this environment.

As its fundamentals showed improvement from 2020 onward, investors got interested in the company. Price-to-book value was as low as 0.6 times prior to 2020; now, it is at 1.5 times. Fairfax’s higher stock price thus also reflects a better valuation.

Mr. Lalani intends to hold on to his top three companies for the long term. Mako and Sailfish are approaching events that could spur further stock appreciation. For example, Sailfish expects a ruling in August on an application for a mining permit for a project underlying its Nevada royalty.

As for Fairfax, he expects growth in book value will continue to provide a tailwind. So will expansion in valuation multiples; they are still below those for peers with less impressive fundamentals. Valuation should also move higher given that Fairfax will likely be admitted into the S&P/TSX 60 Index, perhaps as soon as the June update.

Fairfax is “following in the footsteps of Warren Buffett’s Berkshire Hathaway,” wrote Mr. Lalani in an April 30, 2024, guest column appearing in The Globe and Mail. Both are headed by longstanding and seasoned senior executives who control insurance operations with combined ratios that generate a substantial float – effectively an interest-free loan – for investing in stocks and bonds. As Berkshire Hathaway illustrates, this can be a winning business model. Given that Fairfax is now roughly the same size Berkshire Hathaway was in 1995, Mr. Lalani believes there is ample runway for the Canadian company in the years ahead.

What an expert says

We asked Matt Ardrey, CFP, R.F.P. FMA, CIM, portfolio manager and senior financial planner at TriDelta Private Wealth, for his thoughts on Mr. Lalani’s TFSA.

Normally when I look at a portfolio and there are three stocks that total $1-million-plus, I would immediately suggest that the investor diversify. As noted, concentration is a great way to build wealth, but it is also true that it is a great way to lose wealth. To further the concentration risk of these three stocks, two of the three companies are intertwined with one another. This could magnify the gains, or losses, of these stocks.

Mr. Lalani, however, is not your average investor. He is a CFA and a former securities professional. This would suggest that he has done his own due diligence and deep dives on these companies and, more importantly, understands the risk he is taking in this part of his portfolio.

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He also states that if these investments do not perform as anticipated, he has other assets in his registered and non-registered accounts to fall back on. Or he could even return to work.

Mr. Lalani is an insider by being on the board of Sailfish. This would grant him above-average knowledge of this company and likely also of Mako. This again would help him make informed investment decisions about these companies to which he is intimately connected. He may also have stock holding requirements that restrict his ability to diversify.

Based on this, it is evident from these comments that Mr. Lalani has thought about and understood the risk of these investments and feels he will be able to financially and emotionally deal with any negative volatility. He is also in a position, due to his education and experience, to make an informed assessment of his own ability to take risk.

Larry MacDonald is a freelance business journalist and author. His latest book, The Shopify Story, was published in the fall of 2024.