ICUMD

I'll add that this is a very thinly traded company. Not a lot of awareness and interest presently. Stock price is fairly meaningless in this sense. Lots of investors are tired of waiting for share price appreciation or are skeptical. These are the traded shares that are determining stock price - at depressed levels. Conversely, this allows Prem to be highly opportunistic at current levels. Don't forget he bought back substantially during the Dutch auction at $14.90. Despite excellent progress in the company, it's share price today is $12-13, where he continues to buy.

Don't think Prem is purposely managing the Fairfax India investment in that sense. I think he's really just doing what any value investor in his shoes would be doing- buying back shares since he sees it as undervalued. For example, BIAL is valued privately based on Fairfax's internal valuation model. Prospective shareholders of Fairfax India may choose to agree or disagree with that book value and price the shares accordingly. Over 60% of it's holdings are private I believe. This makes valuation is somewhat arbitrary. So maybe the market thinks book value overvalues the company hence the discount?

FIH itself is currently a concentrated play on BIAL. (This may change if they go elephant hunting for IDBI) BIAL has a lot going for it with COVID behind: Demographics - accessing 30-50 million passengers per yr is a tremendous opportunity for monetization. Growing wealth effect FDI bringing tech to Bangalore like Foxconn Favorable regulated rates of return on aero and non regulated in non aero activities Land monetization etc. The buildout of T2 shows how quickly they are progressing and management prowess. Land development is also moving at a good clip. India is at least 20 yrs behind China, but favorable developments so far geopolitically and demographically. Tech companies will be transformative in India. I still think of FIH as a venture capital/ closed end fund planting seeds of investment in India. BIAL I think is starting to bloom. Just not yet fully appreciated.

In the hopefully near term, it's an arbitrage opportunity for when BIAL goes public through a listing of Anchorage. In the longer term, it's a demographic growth play. Regardless, the value is there if you have the patience. Management is solid. Lots of quality holdings. Discount more than covers the fees. A deep pocketed investor could mark this thing to book in short order. It's not a hype stock by any stretch. More like 'watching paint dry' I'd say.

They are definitely following through with accreting value through share buybacks and buying another 10% BIAL. Either they have got it wrong or the market is severely underpricing this thing. I'm guessing the latter. A job well done by management. Anchorage IPO will unlock value.

Interesting. I wonder how such a trade happens on a thinly traded equity without causing share price to increase. Maybe a pre arranged deal?

Aviation in India BBC News - Air India, IndiGo: New record as 456,000 Indians take flights in a day https://www.bbc.co.uk/news/world-asia-india-65334390

China's aspiration is to dominate economically and technologically. Going to war over Taiwan would compromise both goals and it has in Russia. Literally, it would set them back decades. I highly doubt they would risk such a setback. Rhetoric, posturing and political chess games will continue.

Indeed. Racial segregation is a waste of energy and resources. Countries that encourage diversity prosper most, like USA and Canada where many a Fortune 500 is run by a visible minority. China is lacking in this regard. India, well racism there is a whole different story.

One of the most unfortunate events in my opinion was the partition of India into India and Pakistan in 1947. A division of territory based on religious faith: Hindu or Muslim. Muslim separatists 'won' their own territory in gaining Pakistan in 1947. Orthodox Hindu's feel India is theirs.

I attended the Fairfax India meeting online. Not a lot has changed from last year. Airport is doing very well and expanding at a brisk rate. They reinterated how it remains undervalued in their opinion. Bottleneck is lack of aircraft, not fliers. It seemed that they are hoping Air India will make it their base. Plan is for 90 million PPA by 2030. They have 350M in cash awaiting new opportunities. They refrained from commenting on IDBI since it's under discussion. Large acquisitions would require partnerships for additional capital rather than stock sale due to depressed stock price. Interestingly, they mentioned that if they were going for an outsized purchase, they could possibly partner with Fairfax, amongst others. Some people inquired about the depressed stock price. They basically said that it's a value play at these levels. Some creative ideas in the audience about how to potentially incr stock price. All other holdings are doing well except ncml.

Not disagreeing with you. Any shareholder of any company can be wiped out. Having said that, I'd argue a JPM or BAC failure wiping out shareholders and uninsured deposits, would cause severe financial unrest and undermine central banks and government. Pensions, trusts and corporations would fail also. There is therefore a vested interest to avoid/bailout/backstop such situations. I think this is exceedingly unlikely in USA and Canada. But for those that are worried about this possibility, crypto, gold and hard assets may be attractive alternatives.

Bank quality depends on their ability to manage risk through diversification and liquidity. Large banks and systemically important banks technically are backed by central banks and governments, so they are socialized in this way. Hence bailouts and deposit insurances. Further, they can have varied, highly profitable businesses spanning insurances, lending, credit cards and wealth management. I continue to hold a weighted portfolio in CDN banks, which form an oligopoly. In my estimation, the risk of a CDN bank failure is exceedingly low due to their diversified revenue base and recourse loan books. It is arguably a better business than insurance ala Fairfax/Berkshire alone, when done correctly. Long term CDN bank returns incl of dividends range in 8 - 14%.

CDN banks 36% Oil - SU 3.5% Utilities - FTS 23% Rail - CNR/CP 8.5% Asset Management - BN/BAM 3.5% Fairfax India - 15% Tech - Apple, Google, Broadcom - 8%

@dealraker Can't think of a company doesn't have a 20% drop from time to time. Tech are far worse - they get wiped out. CDN banks have an exceptional track record.

@Viking a highly astute and gutsy move! To be buying only one tech stock as it goes down to a 100% position. Apple of course is an exceptional company and your analysis on point. For unlucky or average folks, results can differ. When I was younger, I used to take that kind of risk. Nortel went to 0. I was a high school coop student ultimately loosing 20k. Many of the engineers I knew there lost their retirement savings. While the concentration results can be life altering, my approach today is more modest sticking with a core of banks, rail and utilities. Always found it interesting that Gates had diversified his holdings away from Microsoft and was one of the largest holders of CNR. WB also a rail fan. Rail is a fantastic example of long term compounding with low risk.

Black Swan events are the reason I prefer diversification over concentration. Even within a diversified portfolio, I kick myself when one of these events hits a heavy position that I become loathe to average down on.

Update on Construction of BIAL Aerocity: https://www.newindianexpress.com/states/karnataka/2022/aug/08/phase-1-of-bengaluru-airport-city-to-open-by-2025-2485210.html

TD bank

Definitely @Viking has some exceptional analytical skills. My original large concentrated position was in Fairfax India, currently still down about 25% in over 5yrs. Wow. Whoever coined the phrase, Don't time the market??? Ha. Fortunately, I've managed to dilute the position to less than 10% of my portfolio size, mainly through several good quality CDN companies, esp BMO, which I levered into in the 2020 downturn. I now hold about 12-15 companies in my core. Focus is increasing dividend cash flow. I now add to deep corrections in the core. I continue to repay tax deductible margin debt and maintain a positive carry. Diversification has helped balance my portfolio. Investible available cash and cash flow to me are important components.

My understanding: BIAL is the operator of the airport based on 30 year lease (which can be renewed for another 30 yrs). It does not really own either the land nor the airport. The value of the land is tied to the 'non aero' cash flow it is able to generate, of which it will keep 100%. Of course there are serious development costs. This cash flow could be tremendous over the coming years if they execute wisely.

I agree 100%. Reading between the lines, I am not convinced they have been getting their 16% promised rate of return on aero revenue via UDF reset. The value of the airport is intrinsically tied to this promise. They would be overstating the value of the airport if it's an impaired asset, and charging performance fees on its impaired value.

Some good points. Judging from the very low daily trading volumes, discount to book value may be simply due to lack of interest. NCIB is probably the biggest net buyer of shares and only at highly discounted times. SIB is probably the best opportunity to get close to BV anytime soon. Of course, they may have acquisitions in lieu of SIB in mind also.

Unfortunately, of the things I read, less than 1% is useful knowledge. Of that, the actionable 1% requires many more hours of contemplation.

'Vegitables and casseroles are very strong' Definitely nothing to worry about. LoL Seriously, what an embarassment for India. From the homeland of people like Watsa, Nadella and Pichai. This fool is the 'chosen one' to build India's infrastructure future? A strong F in convincing the world that corruption is not an issue when doing business in India. OTOH The best outcome here is that he has to sell assets at reasonable valuation to raise cash. This will help quickly diversify the investor pool. Possibly attracting global infra asset managers.