ICUMD

I like this balanced viewpoint on China. Ultimately, I don't think Autocratic societies will thrive in today's digital age over the longer run since people ultimately value freedom and stability. Seeing your friends in other countries enjoying a comfortable life while you work 996, will become a more difficult sell to your people as prosperity grows.

Viking, don't disagree with your logic. OTOH, it seems that there is a lot of political and manipulative factors at play here. Sometimes logic and price don't follow simple supply and demand rules. But, I am a logical person. So I have a significant holding in Suncor.

China has been at 'Battle' with USA for 20-30 years on many fronts: economically, technologically and now with governance. USA has just wisened up to this challenge. Pelosi's visit is a political test of boundaries and reaction. Just like Russia is testing NATO resolve in the Ukraine. Give an authoritarian Muppet leader an inch and they will take Manhattan.

Not sure about that. As a superpower, there is an inherent responsibility to take care of all people. Not that USA has done a great job in this regard, but it is a very culturally diverse country with many visible minorities in positions of power- business and politics. OTOH, I'm highly skeptical that China's government will protect the interests of the non Chinese. Racial diversity in government and high level business is missing. I think there is a problem with the China model.

Thanks for sharing this. No doubt China has made tremendous advances through its authoritarian government. Global and esp US economic interests have essentially promoted China to this power. Hard to blame Xi for looking out for Chinese interests. Hopefully the world realizes that humanitarianism and cultural / territorial respect ultimately need to be prioritized above economic gain. In other words: be careful who you do business with and who you think your friends are.

I'm intrigued by the fact that so many Chinese people are engaging in 'Mortgage Boycotts' This seems like a behavioral change of non obedience that could threaten the banking system if it becomes contagious. I had been under the impression that Chinese people feared the government and were essentially bound by their rules. Maybe times are a changing...

Actually, you'd be in my neck of the woods. Literally. Moved to Northern Ontario 10 yrs ago from Toronto. My 'cottage' is now a condo in downtown TO. My home is on Lake Superior. 15 min to the US border and 1hr flight from downtown Toronto. Can't beat the lifestyle here IMO. No traffic. Low cost of living = more disposable (or investible) income. I was actually laughing reading a recent Macleans article on the headaches of the ultra rich in the Muskokas. Unlimited access to nature - boating, fishing, camping, skiing (yes, even downhill), world class mountain biking. You name it. For cottages, consider Batchewana bay/ Montreal Harbor area.

A nice overview of Aviation prospects in India. https://m.economictimes.com/industry/transportation/airlines-/-aviation/as-traffic-picks-up-aviation-sector-charts-expansion/articleshow/92774641.cms

No doubt! Some people will jump into marriage at first glance of an attractive partner. Not all marriages work out. Crypto certainly has a monetary value right now (19k for bitcoin). It's the future value I have yet to see a convincing number. For bitcoin, sure I'd buy some sub $100. But then I'd only be dating. Not married! As far as currency, I'd personally still rather own a few onces of gold at current bitcoin prices.

There is an important difference in gambling, crypto and value investing. If you believe in value investing, it is possible to evaluate profitability, valuation, quality etc and place a bet on price direction. You can be wrong, but iteratively you can learn and improve. Great examples of this Buffet et al. Gambling is a completely different strategy, depending on the game. Learning and repeatability is probably more difficult to consistently get correct. Crypto has yet a completely different set of rules. Maybe the rules are still being written? Few understand it yet many players in this arena. Lots of good evidence to play what you know best.

Reminds me of the BreX scandal, but on a larger scale. I wonder though if a large scale crypto collapse would cause a wide spread equity sell off through negative wealth effect, fear and irrational behavior.

Point well taken. At the time I made my initial position, I was motivated by the pure play in India and quality of assets. I also reasoned based on the tremendous growth rate potential in India, ties to government via Modi etc. that the fees would be justifiable. Clearly, the story hasn't panned out this way. So the question now becomes, how and when do you reduce your position if you are invested in FIH.U? Incidentally, I held Brookfield Property partners which was bought back by BAM. They did the buyback at a fair market price. Hopefully Prem is true to his intentions with helping realize 'Fair' value for holders of FIH.U. If not, he may risk difficulty raising funds in the future for similar endeavors. It seems that he has bought out other institutional investors at their loss already during prior buybacks.

You may be correct. FIH has had a difficult last 5 years. Pandemic impairing BIAL - its prized asset, weakening INR, and now tightening credit conditions. Admittedly, there are better places to 'park' your money. Having said that, as an owner, its hard to sell at these ridiculous price levels. Low trading volumes have really confounded 'price discovery' on the markets. Lets see if there is any performance gains to be had as T2 BIAL opens, passenger volumes increase and they continue to develop the airport city. Anchorage spin off and possible buybacks are also something to look forward to. Also, I'm interested in seeing what further Indian infrastructure they add. They have cash on hand -I'm confident they will continue to deploy it meaningfully. Many top companies - FFH, BRK, MSFT, AAPl have had quiescent (flat) periods for many years before take off.

In Downtown Toronto, condo rent price increases have severely lagged purchase price for nearly 20 yrs in my older luxury building. In 2002, I could rent a 1 bed for $1650 or purchase for 200k. Today, the option is rent for $2150 or purchase for $600k. (Not to mention condo fees increasing from $350 to 700 over this time). Perhaps interest rate increases will narrow this gap?

RY, BMO, BNS - Canadian banks are exceptional long term holdings. SU: continue to hold this since it appears to be a cash flow machine.

Added to BAM.A

Maybe time to buy coal stocks? (Kidding) CBC News: Europe may need to return to coal as Russia reduces gas flows. https://www.cbc.ca/news/science/europe-coal-1.6494598 But not seeing the case for demand destruction at current prices. In fact, there seems to be desperation to get energy at any cost.

Agree with this. Oil profits going to share buybacks, debt reduction and dividends. Demand destruction? Maybe if we go full blown recession. What's the alternative? Even coal is making a comeback. All those years of ESG. Time to pay the oily piper.

On the balance, with the pandemic over, regardless of inflation and currency issues, I see people returning to travel in 'leaps and bounds'. Also, I don't think Indians are as indebted per capita as their North American counterparts. So, I think the airport will become a cash generating machine. Ditto if they add Rail stations. Same thing can be said for the opportunity in banking. Csb, IDBI etc. Presently, I think there is a great opportunity for Fairfax India to scoop up all these quality infrastructure assets for a steal. Unique alignment of privatization of government assets, Modi and Prem friendship/trust, encouragement of FDI, and rising middle class. With rising technology, wealth and connectivity amongst a billion people, I bet demand for FIH owned assets will grow at an exponential rate. Ultimately, the value proposition becomes ridiculous and too good to pass up. FIH will necessarily need to rise in price. I also believe there is investor demand for these assets ie. Recent Indian Airport auctions etc. At the end of the day, I am satisfied with the ability of Fairfax India in being able to pick up quality infra assets at attractive prices. More than satisfied actually. At this stage, flying under the radar may not be the worst thing. And all of this should occur regardless of inflation, recessions, currency, geopolitics etc. Speed bumps they may be, but I can't see any of them permanently tempering demand. But a long term view, faith and patience is needed. And that is not easy. IMO this is the challenge of value investing. Once the value has been realized, the opportunity is gone. I hold about 7-8% of my total portfolio in FIH.

In my mind, the biggest risk for setback is a major worldwide recession prompted by higher interest rates and higher oil/ energy prices. Inflation would hopefully recede in this scenario. Such circumstances could reduce FDI and put us back another 5 years. But I'm no economist.

Interestingly, huge gap in Prems stated invested capital of 5 billion USD in Fairfax India and current market cap of 1.6 billion. Even if we're trading at a 50% discount, that puts us at ~ 3 billion. Where's the extra 2 billion?

https://www.aircargonews.net/cargo-airport/wfs-breaks-into-india-with-cargo-handling-deal-in-bangalore/

My impression is that inflation has a slow and sluggish response rate to slowly rising interest rates. OTOH, a sudden crash in equities and housing could halt further rise in inflation through wide-spread demand destruction, though not necessarily. It seems to me that currently, people have too much paper worth and feel rich enough to absorb the oil and food inflationary pricing on the whole. Not yet seeing us be anywhere close to demand destruction.

From my review of BIAL developments, they are extremely forward thinking with many partnerships with AWS, IBM and the like. Having met Hari Marar, he seems like solid leader, wll spoken and with a good vision. They are also developing the business park and aero city. The pandemic was a 2 yr setback, but I forsee a lot of pent up demand returning. They will lever technology to maximize passenger volumes. While an aiport terminal may have a rated capacity, such ratings are meaningless in India. (Have you seen their rickshaws, trains and buses? Haha) There are already plans for a terminal 3 and possibly opening up HAL. What will be most interesting is how they stream various revenues, esp non aero, from the travelling passenger volumes. On top of all this, they are supposed to recapture their 16% aero rate of return via user development fees. Let's see what the coming months show in terms of passenger volumes and revenues. Will not be surprised to see overshoot on both fronts.

Thanks for posting this info. Very reassuring that volumes are getting back on track. Maybe they will even overshoot. Hopefully asset impairment is behind us.