giofranchi

By the way, I guess your numbers are backed by the assumption that 20 years from now FIH will be selling at NAV, right? Well… something that has grown NAV at 12% for 20 years?! Using a discount rate of 9%, it would be worth 1.72xNAV; using a discount rate of 10%, it would be worth 1.43xNAV. Gio

No, I was not. Instead, I ask you: have you seen the numbers posted by IKYA? Gio

Well, that clearly depends on the rate of growth we are expecting for the next several years. Take a look at IKYA’s rate of growth in attachment. Do you think FIH could be able to find just one business per year for the next 5 years, which could grow like IKYA? (or almost?) If the answer is yes, I think 2 x NAV could still turn out to be a worthwhile investment! ;) Cheers, Gio

Not exactly… What about Thomas Cook? What about IKYA? What about ICICI? Etc.? ;) Cheers, Gio

Discipline is not buying above IV... What does that have to do with not buying above NAV?! ;) Cheers, Gio

Well, you surely will get the chance to buy it later closer to NAV, or even below NAV… of course, what nobody can be sure about is how much that NAV would be by then… ;) Cheers, Gio

Yesterday I bought more: 12% of my firm's stock market investments portfolio. Gio

What I like most about FIH is its great optionality, because I guess a very large percentage of its capital is still parked in cash (USD). And also the fact India is a place quite insulated from what’s happening to the rest of the world: they have a low level of overall indebtedness, and are experiencing inflation… The exact opposite to what we are seeing in practically all developed economies! This facts, and of course the ability of Watsa & Company to buy great growth at reasonable prices, are the reasons I am quite interested to see what FIH could achieve in the medium and long term. ;) Gio

Well, this only proves what I am saying all along: go for a great entrepreneur + a great business + a fair price! Your second list of Buffett's investments imo perfectly fits the description! ;) Cheers, Gio

https://fundooprofessor.wordpress.com:443/2015/03/20/why-you-shouldnt-invest-in-a-business-that-even-a-fool-can-run/ Gio

I have just put 8% of my firm’s stock market investments portfolio in FIH. Maybe I have paid a bit more than many people on this board are used to and like… But we all know the kind of growth Watsa & Company are purchasing in India and at which prices. Not to act on such an opportunity imo would have been a serious mistake of omission! ;) Furthermore, I have left plenty of room to average down: at the right price I would gladly double the percentage of my firm’s portfolio invested in FIH. Cheers, Gio

It surely could be a great short term trade. But for the long term… I just don’t see how this is ending well… Italy’s debt is unsustainable. And there is no real evidence its load is decreasing… On the contrary, it is still increasing. QE and the following low interests are means to buy some (very welcomed!) time. But then more substance must follow, if we truly are to reverse course, and start decreasing our debt load. Unfortunately, I don’t know what that lucky event (or series of events) could be, and certainly I am not seeing it happen right now! This being said, the Italian stock market has already enjoyed a wonderful run this year: if I am not wrong, it is up almost +30%! If you still can find deeply undervalued situations, they could work very fine… at least for some time! ;) Gio

Yes, I have found on the prospectus Equity per share was $10 USD, but I was not sure if the $billion raised is still parked in cash or already invested… in part at least. Though I guess, if they had made an acquisition, they would also have published a press release, right? Why are prospectuses always so incredibly long?!... I will try to read this one anyway! ;) Thank you! :) Gio

Is the NAV $10 USD per share? Thank you! :) Gio

http://www.viewfromtheblueridge.com/2015/03/12/nowhere-to-run/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+viewfromtheblueridge%2FJkgK+%28The+View+from+the+Blue+Ridge%29 Gio

But both currencies were backed by gold until 1971, and since then (it seems to me) we have had a slow loosening of monetary policy. Confidence is a funny thing: it's there until it's not. I don’t know exactly why we are talking about this… but here I agree with Packer: I don’t see any plausible substitute for the USD in the foreseeable future. Gio

I was simply trying to answer Packer’s question about how much time we still have to wait before calling the deflation thesis utterly wrong… I was not saying what Watsa can or cannot do… Gio

Imo extremely low interests rates are engineered by central banks on behalf of governments around the world, simply because they cannot afford to pay higher interests on their debts. Period. And this might go on until prices stay very low or else go down. Higher interests rates will exacerbate the debt problem, therefore rendering the final outcome even more unpredictable and dangerous. Watsa has always said that in Japan the printing of a lot of money stopped deflation for 5 years after their stock market and real estate bubble burst… The US probably has printed even more money than Japan did! So I guess we still have to wait at least two or three years… And of course the next serious market correction! If financial assets start to go south, that would be very deflationary imo! After that, if we still have no deflation, I would simply let those CPI contracts expire. I don’t understand how the fact Sweden is the only example available means it should be relevant… But probably it is only me! :) Gio

Packer, I don’t understand: in my mind low interest rates are a symptom of the market forecasting deflation to come… I also don’t understand why you keep pointing at Sweden in the 30s’: Sweden back then was a minuscule economy which simply was successful in exporting deflation… It probably had been allowed to do so given its very small size… But what does an economy of just a few million people have to do with the situation of the US, Europe, China, and Japan today, which are trying to deleverage simultaneously? Gio

Ahahah!! You are right!! Bread and pasta and gelato in Italy are truly delicious! And I love them very much! And the great majority of people actually cannot stop form eating them! But you know what I am realizing more and more as time passes? I have still to find something my will cannot control. I don’t know why for me it is so easy, while most other people seem to have such an hard time controlling themselves… But the fact still remains: when I set myself on doing something, I just do it… when I set myself on quitting something, I just quit it… Boring?… Maybe!… It has its advantages too. ;) Gio

Another thing twacowfca, have you read [amazonsearch]Should We Eat Meat?[/amazonsearch] by Vaclav Smil? If so, what do you think about it? The whole Smil's body of work has been greatly praised by Bill Gates. :) Gio

Wow! Thank you very much, twacowfca!... That study on the effect of resveratrol in mice is alarming indeed!... Guess I have to quit supplements (with the exception of vitamin D!). And thank you for the recommendation of Blue Zones by Dan Beutner, I am ordering it on Amazon right now! :) Cheers, Gio

twacowfca, let me know if I have understood what you are saying well: are you against the consumption of meat? If so, any kind of meat? Red and white alike? Furthermore, I would like to know what you think about supplements: I regularly take resveratrol, omega 3 fatty acid, probiotics, and vitamin D. Should I stop? Finally, what’s your view on fasting? Thanks, Gio

No one seems to point out how much a stock market crash would be defletionary at this point... When monetary policies have influenced the economy so much, it will be a stock market crash that causes a recession, not the other way around... Gio

Thank you twacowfca! My experience is that, since I have stoped eating pasta, bread, and desserts, I can shape my body much more easily and effectively, and I can run faster and longer than ever before! ;) Gio