Luca

Just hoping this will balance out eventually:

It wont be solved in the next year but if we look back at our discussion here in a decade, i am quite sure it will look much better. 1. People complain about low wages, expensive tutoring, high living costs. 2. People complain about policies that regulate expensive tutoring companies, low wages by JD (forced increase by government), increase in competitive market to prevent monopolies destroying growth. China never does it right according to the west. Also look at the US, the social isolation, the mental health epidemic, huge student debts and what not. Its just not the full picture and macro orientated. If you believe the government will ruin the country then yeah, sell all china stocks. I dont think their track record shows that though. Regarding US control of employees (https://www.truthdig.com/articles/noam-chomsky-america-has-built-a-global-dystopia/ All of this goes, is moving on to controlling people at work. So by now, there’s the beginning–actually it began in Sweden, but it’s now expanded here–of placing chips in working people with an inducement. If you agree to have a chip inserted then you get, you know, free access to the coffee machine, and you can do all these interesting things, so people do it. But it also controls your actions. Like if you’re in an Amazon warehouse, they already have systems–which is backbreaking work–they’ve worked out the quickest routes between this spot and that spot. And if you’re one of these people racing to try to keep up with a schedule, and you deviate from the route, you get a discredit immediately. You get an instant warning if you take off a little time to say hello to a friend, you get a warning. UPS is using it to control truck drivers. So if you back up when you shouldn’t have, you get a warning. If you stop for a cup of coffee when that wasn’t on your schedule, you get a warning. They’ve, in fact, they claim they’ve increased efficiency; these people internalize all this, and you race to keep to the commands, and they can claim they can now have more deliveries with fewer drivers, and so on. Lots of these things are also happening in China, they are not innocent. The bias against them though is so massive. USA has really good PR, its crumbling though if you actually visit New York. Not looking as good as the pictures. They did a really good job making China look like the devil so i give them that. All these articles with Xi Jinping looking like Hitler in Financial Times, New York Post, any other western big newspaper. U.S. multinationals dominate the world. If they had moved to independent development, we’d see exactly what we’re seeing with China today. It’s moving toward independent development; U.S. is trying to prevent it. The policies, shared bipartisan policies, are to try to prevent Chinese [independent] development. So if China, for example–you know, the mantra is “China’s stealing our jobs.” Is China stealing our jobs? They don’t have a gun to the head of Tim Cook, saying invest here. The U.S. multinationals are losing our jobs. But we don’t want China to develop as an economy. That’s why the bipartisan programs are to prevent China from doing the things that make the economy successful–like industrial policy, to have a state industrial policy. We see that that’s successful; we want them to stop it. Kind of interesting, because that’s–economists and others, if they believe a word they’re saying, ought to be cheering. According to their theories, if the state intervenes in the economy, it’s going to harm the economy. But everyone knows the opposite is true. In fact, we ourselves have a massive state industrial policy. That’s why you have things like computers and the internet and so on, it’s mainly public funding. But we don’t want China to have that, because they’ll be successful, they’ll be out of our control; that we don’t want. That’s what the kind of concern was in the fifties. So I think the imperial model has been very successful. It’s led to a situation in which it’s primarily designed for the benefit of U.S. capital, which has succeeded beyond belief. In some way all of those agendas are good for the big western multinationals but if this continues there will be more decoupling as far as it is possible. The US is already doing it themselves, banning Nvidia GPUs soon. Will only take time when there will be problems with Apple. Will be interesting to see who sides with whom, Chinas economy is strong but not as strong as the US yet.

To me this seems to be just macro noise, we like to point out the flaws and problems with chinas system, but problems with the US are not likely to be discussed. And if they are discussed its foreign propaganda. Talking about chinas structural issures as if the US has none. Talking about china making enemies and the US none? What about crime rates in the US? Extreme gatekeeping for education, gatekeeping to leave an inefficient market system where people live paycheck to paycheck, are more and more burned out, more and more on psychiatric drugs. Corrupt political leadership, sleepy leadership. What about the people leaving the US for Europe? The biggest problem are the birthrates, and I am confident that if a country can bring them up, it's china. They also won't light their economy on fire by getting back to a completely state planned economy and I also dont think that Xi is will fail as a leader.

The US also didnt hate the congo, but the leadership didnt do what they wanted so they had to kill him and remove him.

Wouldnt have been the first time: https://www.theguardian.com/global-development/poverty-matters/2011/jan/17/patrice-lumumba-50th-anniversary-assassination When the atrocities related to brutal economic exploitation in Leopold's Congo Free State resulted in millions of fatalities, the US joined other world powers to force Belgium to take over the country as a regular colony. And it was during the colonial period that the US acquired a strategic stake in the enormous natural wealth of the Congo, following its use of the uranium from Congolese mines to manufacture the first atomic weapons, the Hiroshima and Nagasaki bombs. With the outbreak of the cold war, it was inevitable that the US and its western allies would not be prepared to let Africans have effective control over strategic raw materials, lest these fall in the hands of their enemies in the Soviet camp. It is in this regard that Patrice Lumumba's determination to achieve genuine independence and to have full control over Congo's resources in order to utilise them to improve the living conditions of our people was perceived as a threat to western interests. To fight him, the US and Belgium used all the tools and resources at their disposal, including the United Nations secretariat, under Dag Hammarskjöld and Ralph Bunche, to buy the support of Lumumba's Congolese rivals , and hired killers. Trying to prevent Independence of the Kongo, the country with the richest mineral depot of africa... You cant even make this shit up...

And if the aristocrats that control the economy get lazy and decadent. Nothing good will follow: (Roman Empire) Official cruelty, supporting extortion and corruption, may also have become more commonplace.[54] While the scale, complexity, and violence of government were unmatched,[55] the emperors lost control over their whole realm insofar as that control came increasingly to be wielded by anyone who paid for it.[56] Meanwhile, the richest senatorial families, immune from most taxation, engrossed more and more of the available wealth and income[57][58] while also becoming divorced from any tradition of military excellence. One scholar identifies a great increase in the purchasing power of gold, two and a half fold from 274 to the later fourth century. This may be an index of growing economic inequality between a gold-rich elite and a cash-poor peasantry.[59] Moral crisis "Formerly, says Ammianus, Rome was saved by her austerity, by solidarity between rich and poor, by contempt for death; now she is undone by her luxury and greed (6 Amm. xxxi. 5. 14 and). Innumerable are the statements of Church Fathers that stigmatize the immorality of both the nobles and the poor. Salvianus backs up Ammianus by affirming that greed (avaritia) is a vice common to nearly all Romans".[62]

Quoting from one of the great tencent write ups posted by a while back @Spekulatius This is the approach of the CCP. Leaders are groomed, sometimes from late teens, to climb the ladder within the party. Looking through their resumes, these are well-educated technocrats from China’s elite families, much like the way a CEO might climb the ranks from engineer to executive. These top families within China own or exert control over most all companies and strategic assets. The executive leadership of most companies are tightly interwoven with the CCP. Importantly, this is not a trend “to-come”. This is how business has been run for the last decade. http://www.chinadaily.com.cn/china/cpc/centralcommittee/index7.html All of them with University degrees, multiple with MBAs, Doctor of economics, Enginnering degrees etc. Cant be that stupid... Why i think China will prosper better with their societies< The fundamental difference between “socialism with Chinese characteristics” and Western-style democratic capitalism lies in the origins of their worldviews: Confucianism, Daoism, Buddhism and Judeo-Christianity

Talking about these problems. https://www.politico.com/news/2023/05/02/leonard-leo-federalist-society-00094761 Leonard Leo, who helped to choose judicial nominees for former President Donald Trump, obtained a historic $1.6 billion gift for his conservative legal network via an introduction through the Federalist Society, whose tax status forbids political activism. Leo’s dual roles have served to attract one key backer — Trump. As a presidential candidate in 2016, Trump promised that his nominees would “all [be] picked by the Federalist Society.” Yet, according to a person with direct knowledge of the situation, the list of Supreme Court nominees that Trump drew from in creating a conservative supermajority was devised by Leo alone. Neither the organization’s top brass nor its board directors had any official role in crafting it. Judges for life, handpicked by someone receiving lots of money.

From that point of view, the skepticism against the US and the tight control of authoritarian governments on their countries gets more understandable.

Recently our Minister President of Bavaria met with De Santis, obviously the most popular german parties are also more or less controlled by elite capital, to a less degree than the US though. The left party completely collapsed as is the case in the US, right wing parties on the rise (AFD, alternative for germany, bought and paid for>https://www.spiegel.de/politik/deutschland/afd-unterstuetzung-die-spur-zu-milliardaer-august-von-finck-a-1240069.html)

China knows this, in order to become economically stronger than the US, opening up their country to western ,,democracies,, would just lead to disadvantages and US control, like it is the case with Japan, Germany, Britain etc.

Just to add it here too, just posted it in the india thread. https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B# Clearly, when one holds constant net interest-group alignments and the preferences of affluent Americans, it makes very little difference what the general public thinks. The probability of policy change is nearly the same (around 0.3) whether a tiny minority or a large majority of average citizens favor a proposed policy change (refer to the top panel of figure 1). Furthermore, the preferences of economic elites (as measured by our proxy, the preferences of “affluent” citizens) have far more independent impact upon policy change than the preferences of average citizens do. To be sure, this does not mean that ordinary citizens always lose out; they fairly often get the policies they favor, but only because those policies happen also to be preferred by the economically-elite citizens who wield the actual influence. What do our findings say about democracy in America? They certainly constitute troubling news for advocates of “populistic” democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens. In the United States, our findings indicate, the majority does not rule—at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.

China, Russia etc know very well that if they would implement a democracy, US capital and intelligence would just come into the country and try to install leadership that does what the US wants. Thats why the US hates China, not because they are hurting people in concentration camps but because they can not be controlled. So whenever i hear the hate on authoritarian leadership, i often cringe because we have exactly that as well in western nations, just hidden. Its already bought and paid for.

@Spekulatius Do you think the US is a democracy too? I feel like we are getting blinded by this word. I remember this study by Princeton> https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B# Clearly, when one holds constant net interest-group alignments and the preferences of affluent Americans, it makes very little difference what the general public thinks. The probability of policy change is nearly the same (around 0.3) whether a tiny minority or a large majority of average citizens favor a proposed policy change (refer to the top panel of figure 1). Furthermore, the preferences of economic elites (as measured by our proxy, the preferences of “affluent” citizens) have far more independent impact upon policy change than the preferences of average citizens do. To be sure, this does not mean that ordinary citizens always lose out; they fairly often get the policies they favor, but only because those policies happen also to be preferred by the economically-elite citizens who wield the actual influence. What do our findings say about democracy in America? They certainly constitute troubling news for advocates of “populistic” democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens. In the United States, our findings indicate, the majority does not rule—at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.

Yes agreed I think in FIHs case the discount should even be more narrow since they also own private companies unavailable to us. Pershing Square Holdings can just be cloned and bought directly. I guess over time with good performance the market will take notice. If not also fine. Does anybody know how the tax rules for this vehicle are? Do they pay taxes when their stakes issue dividends? How is that situation in India?

Well said

What i meant is that if Fairfax India keeps compounding nicely, i think the book value will get back to something around 1x book from the current 0.7x book. So we wont only capture the book value gains after fees but also the closure of the discount. I hope my logic is understandable. So for me, buying this for way less than book gives possible extra returns, if India and Fairfax India gets in favor after outperforming in a decade or so.

Assuming India as a country lifts off and the picks in Fairfax India continue to compound well over the next decade, the discount should close, we get the closure to 1x Book and the Book Value return. Fees will eat up returns of the closure to book value so one could say at current valuation and closure in year 10, we are getting the pure returns by Fairfax India for free. Looks like a pretty nice bet.

Fairfax-India-AGM-2023 (1).pdf For some reason i have trouble finding this on the internet again so i will post it here just in case they removed the presentation. In case somebody didnt have a look, its a nice overview of FIH.

Opened a position in Fairfax India!

Yeah saw that, fascinating...

+1

Yep, i think nobody really knows at the moment. Waiting for official statements by russian government.

Questionable how this new regime would position themselves, could become even worse. It will definitely shake things up good or bad.

Incredible development, wouldnt be surprised if many soldiers who are tired of the war join these movements. Anything can happen really but this war takes one hell of a turn right now. @sleepydragon Yeah, China is watching and so much is going wrong for russia, taiwan looking more and more unattractive...