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There was no explicit mention of IDBI but it was alluded to that the decision would be post India election (early June). Generally I got the sense that activity will pick up across the board in India once the election is over. Also, I was the “someone else” who had the opportunity to sit on the panel with Viking at the dinner. I hope I made sense even if I wasn’t memorable!

The hard reality is that Israel f****d up badly when they struck the Iranian consulate in Damascus; senior officials rolled the dice, and almost pulled the US and UK into Gulf War III. There are a lot of bills to pay for last nights bail-out, and there will be consequences. The only reason we don't have Gulf War III this morning is because Iran also has very smart generals, who managed to launch a face-saving sovereign-on-sovereign strike that was designed to reliably fail. Now it's purely a personal matter between families; the perpetrators will be known, and its old world 'eye-for-an-eye'. One day ... they will be suddenly gone, the matter closed, and we will all be the safer for it. https://www.aljazeera.com/news/2024/4/4/why-does-israel-keep-launching-attacks-in-syria Lot of very smart people acted last night; we owe them all an enormous favour. SD

Wow much kudos to Israel….best I can tell from reports their missile defense systems pretty much bested these attacks . It’s embarrassing for Iran how little by way of damage they were able to inflict here…..and quite foolish in a way to reveal how weak they are relative to Israel’s military capability….hopefully this reality seeps through to the Iranian people so that they might constrain their leaders….it would be insane for that countries leadership to pursue a straight out conflict with Israel….but these sectarian regimes don’t live in anything approximating the real world…they hear god whispering in their ear.

Who in their right mind doesn't see that 100 today is not 100 in 50 years. The 100 year Austrian bond was the height of lunacy as if Austria will be a Sovern nation in 100 years anyway? People who lend, banks ect are playing a different game with different ideas. Buffett buys treasuries to earn a bit while waiting for something real to come by like a railroad. He doesn't do it to make 1-5% Lending money long term is tough to understand unless the rates far exceed the level of inflation. In the 70's a big mac was less than 50 cents, today its 10x that or more. Our paper/ digit money looses value every day and has for a long time. Gold was 154 in 1974 today its 2400. Gold is money, paper or digits is just for transactions. Does it matter what the transaction number is? 10-100-1000 its just a digit. Will my house cost 18 million Canadian in 50 years, maybe maybe not who cares as long as its roughly the same value as today. I bet it will, gas will be 12 bucks a L, gold 25k OZ. all just a number. What we should care about is life expectancy, number of people starving, happiness, wars, have the leaf's won the cup ect

Parsad, thanks for the notes on the AGM. I was there this year, nice to see/meet so many of the managers of FFH companies and managers of some of the larger investees. 2 things really jumped out at me this year. Firstly, more discussion on buying better businesses and letting compounding work its magic ( a la, BRK). Second, I think I heard Prem correctly, when he said they only need a 5% return on the investment portfolio to achieve their 15% growth in BV hurdle. The 30 year return has been 7.7%CAGR. It reinforces how they just need to keep hitting singles and doubles for this to be a REALLY good investment over time. A few home-runs will just be icing on the cake. The discussion on owning financials (and the 2.5x multiplier effect) in a growing economy was very interesting as well. Hard not to get excited about India for the next couple decades.

What stood out to me: Their expertise in India and how well the bial team is executing Buffett and Jain tried to set up an insurance operation in India and gave up. I am sure they tried to invest there and found out it was too difficult. This is of course from 2010, before Modi. I would say that Watsa has been highly successful instead and it does get enough credit for this. He saw the opportunity and positioned fairfax to succeed. Bial becoming a hub for airlines in the south of India is a great accomplishment Sokol made me jump from my chair: I was not expecting that kind of growth from Atlas "we don't forecast, we react and we are fast": great line and great example with the $1B issuance not being possible today The fact that FFH might be less dependent on investment gains going forward and their improved ability to absorb cat losses: I liked that whole segment. I don't think we are there already but it is a promising start especially if they tilt their investment strategy in that direction G

I have to say, we're 3.5 hours in and this AGM has been fantastic so far! One of the best ones I've seen...probably the most comparable to Berkshire AGM's. Prem was on it, looked great and you can see how deep the team is. If FFH has seen the light on their transformation...we may finally see the potential this company has! I've been a shareholder for 22 years...I'm more optimistic than ever! Cheers!

Watsco !!! lol

Depends on how short, but in general are a better inflation hedge than most other assets. The best immediate inflation hedge is oil. But oil is also exposed to idiosyncratic risks like cratering demand if the economy is also weakening (and politics!). So a basket that is heavily skewed to oil, some to gold, and some short-term fixed income should be a reasonably good hedge against inflation. Oil is immune to interest rates, but not immune to the economy. Gold/short term bonds are largely immune to the economy, but not real rates. As a basket, they should diversify the idiosyncratic risks of real rates, nominal rates, and the economy while hedging inflation. Future implications of deficit spending? More volatile inflation going forward.

Here are my notes on the 2024 FIH agm that just finished: Something worth keeping in mind -> in 2023 they bought back 2.9M shares, the share price was up 24%; yet, $14.9 is exactly the same price at which they completed a SIB back in 2021. A lot has happened in 3 years... slide 28 is a nice summary of the impact of fees on returns BIAL will see "explosive" growth in the next years huge number of aircraft ordered by indian airlines (1200?) number of operating airports expected to roughly 2x to. 250 (?) Air India established its 2nd HUB in BIAL -> increase in international flights (EU/US) + other flights from other parts of India Watsa said that there are lots of structure that you can set up to raise money for big opportunities; seemed very confident that money will not be a problem for FIH Sold NSE because valuation was too high and they saw downside risk given that NSE makes a lot of profit from options trading IIFL gold loans issues -> founder said there were minor "lapses", IIFL was used to set an example for others. He said they addressed all the issues raised by RBI and hope that RBI audit will confirm this (April 12th start) no fraud, no money laundering Lots of emphasis on the financial sector opportunity -> 7% real growth, 12% nominal, financials should grow at 1.5-2x the nominal = 18% I am not sure I got this correctly but Watsa said something like "we are targeting 20% rate of return, not 10-15%, need to offset some fx risk" Sanmar had a terrible year with PVC prices down 30-60% improved efficiency in Egypt focus on specialty PVC growth ahead -> China has similar population to India and uses 20M tonnes per year vs India's 4M tonnes per year Maxop and Jaynix -> "unlimited growth", their only constraint is capacity and they are expanding, huge demand Anchorage still stuck in regulatory approval, nothing will move before the election (I would expect nothing before 2025) Privatization opportunities will unlock after the election all in all, great enthusiasm as always. focused on integrity. Deepak Parekh (founder of HDFC) is their consultant for everything and this is a HUGE plus in my view. Curious if any of the guys who attended in person were able to gain other insights. G

https://east72.com.au/wp-content/uploads/2024/04/E72DT-Quarterly-Report-March-2024.pdf

Lmao this dude is a clown. Imagine shorting Microsoft or Amazon because its 18% overvalued based on what you think fair value should be. If I was an investor in his fund I'd be pulling capital right now because he obviously doesn't know how to manage money. Probably has a burner on r/WSB

This was excellent @Luca - thanks

I watched Dune 2 again. This time on IMAX. The theatre was packed. And i am sure they are mostly second or third viewings. speaking of which, this is funny.

Thank you for the kind way to respond on my words, @Luca & @Cod Liver Oil, I may here on CoBF appear sober or chill most days I post, but what's going on inside my head can't be really be described by representing my mental state most days as I'm sober or chill most of the time. Simply because I'm not, while I'm forcing myself to stay about fully invested all time long term. However I think I'm gradually getting better at it. It's about a large position in that Danish pharma every media is writing about, here now at above 20 per cent of total portfolio, which for me personally not is easy to sit on. So I already really have my mouth, hands and mind full with risk, that I try to relate to on a continuing basis. Also, It has become clear to me, that I likely possess a personal propensity to underestimate political risk related to foreign investments, based on my experiences in 2020 with Russian stock investments [Gazprom, Lukoil & Sberbank], however losses not cribling, but not forgotten. - And as always I may change my mind any day. ... - - - o 0 o - - - So, good luck with China! [sincerely meant!]

That is just wild! We should all start emailing him crazy conspiracy theories about what Prem is doing. I just heard that they're going to announce that they are short BTC at the annual meeting.

If you're looking at me, you misunderstand. I am not suggesting they ignore these. But the list I responded to had nothing about value, so it does not in any way guarantee good returns (and 10% is a good return). Plus FFH are value investors - why hope they will become something they are not? If you're looking for that, look elsewhere, would be my advice.

Lower interest rates must also be a factor in higher margins. And we haven't really seen the full impact of reversion of interest rates to more normal (if still quite low) levels because most companies were smart enough to pile on low cost long term debt during the pandemic before the rate hiking cycle began. Financial engineering has also been a factor in stock returns exceeding earnings returns as companies were able to borrow cheaply to fund stock buybacks and a shrinking share count supports higher prices and provides a constant bid for the underlying shares. And something else that has been helping margins is that companies have been able to use inflation as an excuse to increase prices by 50% from pre-pandemic levels and even though their input costs have now come down and they've been able to make cost savings by cutting staff numbers and limiting wage increases to well below the rate of inflation these haven't been passed on to consumers. A reflection of how concentrated most markets are these days. And of course there are composition changes. You'd expect S&P margins to be higher when tech has gone from 10-15% to 30-35% of the index and in this cycle there has also been a shift in investor preferences away from low margin value stocks and cyclicals and towards high margin if low growth consumer defensives.

@Luca I like all three investments. See below for comments. 1.) BDT has been an outstanding long term investment for Fairfax. “We continue to invest with Byron Trott through various BDT Capital Funds. Since 2009, we have invested $978 million, have received $979 million in distributions and still have investments with a year-end market value of $683 million. Byron and his team have generated fantastic long-term returns for Fairfax, and we very much look forward to our continued partnership.” 2.) ShawKwei looks like it has been a solid long term performer. The fact Fairfax is adding new capital suggests they like the prospects. “Since 2008 we have invested with founder Kyle Shaw and his private equity firm ShawKwei & Partners. ShawKwei takes significant stakes in middle-market industrial, manufacturing and service companies across Asia, partnering with management to improve their businesses. We have invested $536 million in two funds (with a commitment to invest an additional $64 million), have received cash distributions of $217 million and have a remaining value of $504 million at year-end. The returns to date are primarily from our investment in the 2010 vintage fund, which, though decreasing 8.8% in value in 2023, has generated a 12% compound annual return since 2010. The 2017 vintage fund, which has drawn about 84% of committed capital to date, increased 23.1% in value in 2023 but has a compound annual return of 3.5% since inception. We expect Kyle to make higher returns on monetization of his major assets.” 2.) Grivalia Properties gets an incomplete from me today. It is a bet on the jockey play. George Chryssikos has had the Midas touch for Fairfax in Greece - making them +$1 billion so far. I am inclined to give Fairfax the benefit of the doubt on this one - my guess is it works out ok. We should know much more in 2024 as more resorts come on line. “Grivalia Hospitality, under George Chryssikos, had a strong year of execution as two assets, including its largest, opened for business. The One & Only resort in Athens is a flagship in ultra-luxury hospitality and we are the proud owners. If you haven’t booked your summer vacation yet – you know what to do! 2024 will see one additional asset come into operation – which will take the operating portfolio to five. These include Amanzoe in Porto Heli, ON Residence in Thessaloniki, Avant Mar in Paros, One & Only and 91 Athens Riviera in Athens. Focus now turns to operational and service excellence for these resorts with Greece forecast to receive a record number of tourists in 2024. George has another five high end hotels in development over the next few years. George has an outstanding track record in real estate and as I said last year, he has already made us $1 billion! We expect George to repeat that accomplishment with Grivalia Hospitality over time! At year end we carried Grivalia at €513 million for our 85% stake.”

Don't agree with the view that 3-4% inflation as some kind of new normal is a nothing burger......if it's the new normal going forward you should probably get short the trillions of assets that are pricing in a return to sustainable low 2's inflation......if the Fed throws in the towel and just implicitly or explicitly says hey 3.x% is a pretty good inflation number if we can keep unemployment below 5%....you've got a tonne stuff out there which has to incorporate that inflation drag on the future returns demanded. One thing I do agree with @Gregmal on.....is that Powell has somewhat shown his cards.......he was pretending to be Volker....but he's really Alan Greenspan....cause with relatively limited forward visibility on his actual 2% target being achieved......he started hitching up his skirt and talking about rate cuts....and so he's going to use his dual employment mandate as a reason, at any sign of trouble, to start cutting I think.......and he might get away with it...in some respects the dual mandate has codified the Fed put...the progress on inflation has been impressive without a weakening in economic fundamentals to achieve it.........I fundamentally misjudged productivity....both underlying innovation productivity and the secret productivity gains that came post COVID from illegal & legal immigration ramping up again which have been the hidden secret of the domestic deflationary wins we've had....that and China's economic woes exporting large disinflationary forces to the rest of the world but the USA most strongly helping on the import side. Not sure if its enough to get us to two.....but getting to mid-3's with this little economic should be something to be thankful for. It's kind of upside down world.....turn on the TV.......and its the crisis at the southern border....Crisis? You mean the one that keeps sending industrious young people North who want to have families and are lining up to work on construction sites, clean drains, bus tables and generally work like three jobs in an economy/country thats sparsely populated, resource rich and fundamentally short labor while the rest of the world is facing demographic collapse & a kind of endemic laziness & lack of industriousness.....or maybe its Cold War 2.0 'crisis' with our enemy China?......the enemy that is exporting a tonne of goods disinflation to us now and accepting printed dollars in exchange for those very real goods they send....all from a sovereign fiscal authority that is printing 7% annual budget deficits in economic good times with a debt to gdp of 120%.....I mean lots of countries would love to a couple of crisis like that going on simultaneously.

I actually think, although haven’t thought too heavily, about how decent a hedge trade it would be to go long an obnoxious amount of like 20 year treasuries on margin. Right so buying puts is generally a sophisticated white collar guys way of throwing money in the garbage. Shorting as well is largely a fools game. But if I can borrow/margin at 6-7%, while getting paid 4.5%, what’s my upside and what’s my downside? The never relenting “inflation fanatics” who have seen inflation everywhere for much of the last decade or so still see it, and after nearly two years of monthly declines in the data we get an expected hiccup or two…no it doesn’t mean we re heading back to 5-10%…but it’s given us a neat setup as a few of the fringe participants start leaning on the very short term data because gee, if we can’t trade or gamble on every daily or weekly theme…whats the point? So really, if I go long a monstrous amount of the 20 year treasury, maybe I assume 10-15% upside risk if we run back to last years highs which were basically just a well timed Ackman pump? Plus the margin rate minus the interest so call it another 3? But if shit hits the skids….Fed drooling to cut. Could we hit 30-50% upside? Definitely think so. So a heads I’m hedging and not losing much and my longs soar on more good data, tails I have a hero trade on my hands at de minimus cost….

I think Fairfax will take FIH private. If they took their performance fee in shares, FIH would have to issue those shares increasing the float. FFH took cash to buy shares in the open market and reduce the available share count...I suspect they will continue to take cash going forward. At some point, they will offer to take FIH completely private. FFH is generally happier when they own the whole pizza, rather than a few slices. In the meantime, they will bring in outside investors including some of their friends to fund the purchase of IDBI. Let's see where this $1B goes that they just raised. I suspect they will inject it into FIH, increasing their percent ownership dramatically! Fairfax will be one of the largest foreign institutional investors in India in 20 years...outside of nation-state owned entities. Full disclosure: I own zero FIH. I just let FFH handle the investments in India. I don't have the time, expertise or access they do to know the Indian market nearly as well as they do. Cheers!

I take a more sobering view. I would argue 1-3 are closer to cash return businesses and only 4 can arguably be a reinvestment/growth story. I own tobacco and O&G - the thesis for both is similar: the market is pricing in a faster terminal decline than I am. But there is not really growth, and I would be a seller when they are valued closer to a market multiple. Gambling, I haven't done much research there so I'll reserve comment China - You have compelling valuations and potential for growth with China. I am dipping my toes here (partly based on your posts!). In a future where the current political risks are overblown, it looks like a good bet. I am betting a political status quo is more preferable to open, direct hostilities. But still, difficult to argue against other faster growing areas of the global economy that will probably continue to grow: Technology and healthcare are two that come to mind.

fine if were gonna hijack the thread into politics at least make it funny

Part of the benefit would presumably be not having to talk about the share price any more. It's now "out of sight, out of mind" so if it does go fully belly up, it's a non issue. If, by the grace of God, somehow it starts making money, it could be sold eventually not unlike the Pet Insurance business. Improbable, but not impossible. -Crip