ICUMD

I applaud this tremendous performance. But I assure you, I am clapping very slowly for obvious reasons...

ETFs seem attractive for many these days due to relatively low fees vis a vis trying to create your own diversified portfolio. For non inclined, small portfolio investors, probably the easiest route. In this high liquidity environment, they have become massive. Since these are relatively new instruments, not sure how they will react in a major market turndown. The big question for me is how they will maintain liquidity if everyone heads for the exits at the same time. Could they snowball a correction? I dunno.

That's definitely a sound option. Having said that, i had originally purchased a few shares of FFH alongside a heavy heap of Fairfax India a few years ago. Interestingly, both have had the same dismal performance. Almost identical cagr. Let us see if the catalysts are now in place to see both rise. If the ncib is in place, the share price has not reacted at all.

Out of curiosity Viking, would you sell to a buyback at say $18? Or hold shares waiting for return to parity with BV?

Googl

IMHO, The bottom line is that cash is still the defacto intermediary. Not gold and not crypto. These need to ultimately be converted to cash. This allows banks to track you and the government to tax you. Interestingly, crypto is creating a whole economy from mining, businesses, trading etc. This is beneficial for productivity and taxation. Sure, trade in crypto for now. But try to escape the tax system, that's when things will get interesting. That's why I don't think a crypto to crypto bank/ trading system outside of government control has any long term prospect. That's not to say Governments won't start their own crypto or digital currency.

By liquid, I mean most transactions are conducted via cash. Gold needs to be converted first which may cause frictional losses over the short term.

In my eyes, cash and gold are currencies. Gold is inflation hedged due to inputs in obtaining it. Cash is more liquid. Both don't really have an intrinsic value since they don't do anything useful, though you could argue gold is slightly more valuable than cash in this regard since it takes effort to mine and purify it. IMO, the only reason to hold cash is to invest (purchase an asset, preferably cash generating), or spend (something that enhances your life in some way). Holding large amounts of cash without a goal to invest or spend is generally a bad idea due to inflation. Many wealthy people infact borrow to invest for this reason.

Let's see what happens once governments outlaw them, regulate them, tax them (capital gains) or make their own digital currency to compete with them. At a certain point sling the same course, I think crypto could become a destabilizing force economically, so escaping the above restrictions will become an impossibility. The rules surrounding crypto haven't yet been written.

I have a few gold and platinum coins I like to look at now and again. Platinum is probably a better bargain currently. Used to be a 'gold bug'. Now I just buy good companies. Would only buy Barrick if it crashes. Macroeconomic speculation has never worked for me.

I suspect social media has allowed greater numbers of 'fringe' ideology, such as crypto to proliferate. One can essentially come up with a crazy idea, garner support for it, and monetize it. Some examples that come to mind include: certain go fund me campaigns, nfts, Reddit GameStop group, old car and watch collectors, and yes, even antivax groups etc. All of these groups have in common an element of distrust in the conventional ideology. What causes any of them to burst? That's the million dollar question... Higher interest rates and the cost of money probably. Intrinsic value of any of these? 0.

Crypto is The Emperor's New clothes. Why? Currencies are always rising and falling and hold no intrinsic value. It's ability to generate cash flow is 0. It's a medium of exchange, not an asset. It's 'marketed' by early proponents to late adopters, who take on more risk. It's shares much in common with the Ponzi scheme. Its not 'legal tender' It's not limited in number since it's infinitely divisible. To summarize, I'm not a fan.

This is all wonderful. However, Fairfax needs to figure out how to share the spoils with the shareholders. To attract new investment, who's going to be interested when they can simply buy the highly performing publicly traded companies. I think with recent gains, we are trading 0.5 BV and maybe much less once BIAL goes IPO.

FFH seems to also have a discount to book value, maybe 20% or so? Perhaps it's a Fairfax franchise discount at the moment. I see Prem has buybacks on both FIH and FFH. Regardless to me, FIH prices entering the $12 range seem like a no brainer considering you can probably sell it back to Prem on the next Dutch auction. I'm quite certain Prem wants to own the whole of FIH outright as his Indian version of Brookfield.

The other side of the coin is the relatively small float and low daily trading volumes. Continual and significant buybacks by FFH should eventually exhaust the 'weak hands' and cause a rise in market value I would think. And FFH had been aggressive with buybacks IMO. Having said that, i am surprised the Dutch auction at $14.90 didn't flush out more low priced shares and increase current market value closer to that price. As far as BIAL, based on the Omers investment, it's total valuation is 2.9 billion USD. An Anchorage IPO will help better value this on the open market.

Your first point is well taken. I suppose FFH is hedging their bets on the discount until dec 2023 by buying up shares in the open market. Also via the Dutch auction. Re Omers, they have already purchased an 11.5% interest in Anchorage. Granted, I don't know the behind the scenes deal other than some 'ratchet clause'. Surely they will also be subject to the same fees? In any case, for us Fairfax India shareholders, hopefully the discount to book value is closed in the near future.

SJ, I don't disagree with any of this. FFH definitely wins basing performance fees on book value rather than market value. That begs the question, what is the true value of Fairfax India? $13 or 20? One of these is mis-priced. And why would Omers (a savy investor) buy Fairfax India rather than FFH ?

Things will get really interesting once Anchorage goes IPO on the Indian stock exchange. Omers is essentially their partner already. Monetizing the airport to the tune of 2 billion USD will really allow them to go on an infrastructure spending spree as the government divests prized assets. If there is any doubt to the market value of BIAL now, one only had to look at what was paid for other airports under the Private partnership plan. It's hard to interpret share price on low trading volumes. Now, with Fairfax having issued a new course issuer bid for another 5% of outstanding shares, hopefully more low priced shares will be sopped up.

The airport had an arrangement to get a 16% regulated return via the UDFs. I wonder if the new tariff arrangements are allowing for that or not. Of course, tariff price increases are meaningless without knowing if ridership will return or not, which is anyone's guess.

Or... They could use the proceeds to buy more BIAL which will be divested by the government...

So far so good. It appears Sanmar has sold about 50% of their IPO allotment at 541Rs. https://www.moneycontrol.com/news/business/ipo/chemplast-sanmar-mobilises-rs-1732-5-crore-from-anchor-investors-ahead-of-ipo-7300641.html

I've distilled my investment approach to simple. Bubbly. Things are overly optimistic currently for sure. A great time to raise cash and sell winning positions. I try to deploy into quality, cash flow positive investments during periods of fear aka Mar 2020. Interest rates: as mentioned by others, I suspect the fed has gone past the point of return and we will see lower for longer. We are in a period of tremendous prosperity and higher quality of living than anytime before. Technology is booming and consumption is high. When the fed is hosting the party with printing presses and setting the interest rates, why would they stop the party? Risk: what would cause a correction? Fear. If you see an implosion of non productive assets, you could see a domino effect take everything down. Some non productive assets = crypto, housing, non profitable tech stocks, memes, ark, spacs etc.

Looks like the IPO funds will be towards paying off debt. https://www.livemint.com/market/ipo/chemplast-sankar-fixes-ipo-price-band-at-530-541-per-share-11628133305178.html

At the bottom of p73, I see the fair value of Fairfax India as 2669M vs carrying at 1301M. Implied shares outstanding as per Yahoo finance is 149M. This gives a fair value of $17.90 USD per share. Thoughts?

Great results. BV $19.26 Share price $13.50. That's a pretty steep disconnect. Especially when paying performance fees on the BV increase AND FIH buying back shares at less than book. It also doesn't take into account the IPOs of Anchorage and Seven Islands which would likely send the BV higher. So, any guesses how long it will take to bridge this gap?!