ICUMD

Certainly, some headwinds in these regards. However, BIAL was hit hard by COVID, while all the while developing a slam dunk prize asset. (T2, land, etc) IMHO, it's like quitting the marathon that was delayed by bad weather just as the starting gun fires. I'm sticking it out for another 1 - 2 yrs, then will decide whether to pare down my FIH holdings or not. Not too worried by possible recession. This will simply present further buying opportunities. On the brighter side, lots of other assets have been hit much harder than FIH, particularly technology. I don't feel like I've missed out on other major opportunities in this regard. I remain confident in the value of the underlying assets.

Arguable the Fed had to do what it had to do. Perhaps it even made all the right decisions. Of course people are going to be mad the punch bowl is being taken away. The 'mad' emotion is harmless. It's the 'reaction' that matters - both on the part of the Fed and the people.

Well, in my mind that's the question. Are things going to occur in an orderly way? Rising interest rates giving way to a soft landing? Alternatively, the rich may complain about the 2x or 3x increase in prices. The poor may be absolutely crushed by debt such that food and shelter is difficult to afford. And therin lies the problem. Poor outnumber rich by far. Try living in Toronto or Vancouver on minimum wage.

I think there are two issues: 1. Market uncertainty and the Fed managing expectations 2. What actually happens. If there becomes a disconnect between 1 and 2, watch out! I agree, there could be an ugly surprise ahead if fear reigns Supreme. I think of the Kondratieff cycle and wonder if we are entering the 'Winter' just before the credit crunch. https://images.app.goo.gl/w8dZD8kofeSTz71j7

I own land - about 45 acres. Low carrying costs, in the city limits of where I live. Picked it up for a song. Plan to hold it 20+ yrs. Plus, it gives me somewhere to drive my 1965 Massey Ferguson 135 and grow some plants. My home? I'd never sell as it's an irreplaceable waterfront property. I'll continue to buy BAM for all my other realestate needs.

Proof will be to how high interest rates need to go to tame inflation. It's quite pervasive and in all sectors of the economy. I'm skeptical the long term average of 6% interest rate will slow this train!

Agree with this. Real-estate ownership is unique in that it's a business in a sense. There are carrying costs and revenues. Even a primary residence helps generate money close to your place of employment. Having a mortgage means the bank owns your capital, which the owner has the optionality of buying back overtime, but also carries the bulk of the risk. Sound like a bad business? I think it is. Its no different than buying a piece of gold or a rolex watch waiting for it to appreciate or 'inflate'. Low interest rate environments are favorable for all asset classes, but watch out when the rates rise a credit tightens.

As per the AGM, I believe they are using a discounted cash flow method to value the airport. It seems like a complex model due to various assumptions and sources of revenue. I would think that once Anchorage listed publicly, there would be a mark to market. It appears that this event may by yet 2 - 3 years away. It seems that their airport valuation models are very conservative, on top of the discount to BV. So patient conaissors will see the deal.

I've had a few days to reflect on the AGM and my Fairfax India holding. AGM further cemented my thoughts as follows: 1. Consistent track record of identifying excellent Indian investments and turning them around in 1 - 2 years with 25% return or way more. (with the exception of NCML) 2. BIAL: again, the gem in the portfolio - really leveraging India's growing middle class, multiple revenue streams and popularity of air travel. This has taken a hit due to COVID, but will rebound spectacularly in the next year as pent up travel returns to normal and likely overshoots. A brand new Terminal 2 will attract new travellers. 460 Acres of land being monetized is the cherry on the cake. The governments plan to push back the aero returns to the second control period - is reasonable. Overall, I don't think the government will reneg on the 16% contractual aero rate of return, as this will hinder further foreign investments. Further, ownership of BIAL gives Fairfax India certain intangible 'privileges' in Bangalore - ex. control of HAL, large land holding, influence over rail transit and profile/influence with the local government. Interesting to say the least. 3. Performance Fees At current discount to BV prices, I think this additional cost is more than baked in. 3. Parallels - The best parallel for this company is really Brookfield Asset Management. Except, these guys have a 'home field' advantage with their ties to India. 4. Shareholder friendly? I think they are. They are doing buybacks at attractive valuations - by both Fairfax India and Fairfax Holdings (even though FFH doing so reduces their performance fee returns). They stated that they will not be doing share offerings at current prices. They are internally raising money (about $450 Million) to do more deals. And their recent deals seem to be solid - Maxop, Jaynix etc. Lots of good developments to come in 2022! 5. Low share trading volumes. This is a wild card. I think, any significant attention to this company will cause it to skyrocket. In many ways, its akin to some of my startup company investments. So, if you have patience, its a good investment in my mind. Its profitable, attractively valued and boasts investments in infrastructure and well established businesses in a growing, developing country. Hard to see any of this not work out overall.

Perhaps it depends on how much of a conspiracy theorist one is. The devils advocate would say: In the past 10-15 years, the most wealthy have been advantaged by being able to leverage their assets with low interest loans and avoid taxes in many instances. Inflation will allow them to pay off these loans with cheaper dollars. Maybe the same folks who run the monetary system? On the other hand, Perhaps Inflation is just an unintended consequence of necessary monetary easing during the pandemic, reaction to the sub prime mortgage crisis, supply chain issues and now the Russian Ukraine war and price of oil. Regardless, I think sticking to the basic tenet of buying quality businesses will help navigate these times.

Not an expert here, but could be by Central bank design. Monetary easing stoking inflation and helping reduce debt loads. Likely unanticipated was the Russian - Ukraine invasion causing oil to spike which is driving inflation across the board much higher. Challenge will be getting people back to work post COVID and filling all the job vacancies. Unless that happens, supply chain issues can remain keeping inflation high. Recession risk is also high. Imo, it will be difficult to get people to go back to work, at any pay.

Agree. I would argue that a FIH share buyback at current attractive prices will be a bigger bet on the airport. The airport is really the gem in the portfolio.

Looks like FIH sold IIFL wealth for proceeds of 190 million USD. Net gain of 65 million. Looking forward to see where they put the proceeds. Share buybacks seem to make sense!

Alphabet - the Berkshire of Technology in my books.

I suspect Fairfax India is keeping its capital for more acquisitions while FFH is buying back simply as a way to deploy cash at an attractive valuation. It will get interesting once Anchorage lists on the Indian exchange.

From today's developments. Can only speculate reasons for the investors to sell at current market prices. OTOH, Fairfax's playback is clear. Buy back aggressively FIH.U while at a tremendous discount to BV. They have purchased back nearly 10% of the company in the last six months. Anticipate ongoing buybacks, if not an outright takeover by FFH.

Thank you. You are correct. Very positive action for the future.

Good catch. The claim is mysterious. I don't believe the share price has even traded that high since Dec 31, 2021. Yet they claim they bought the 1.4 million shares under an 'automatic share repurchase plan'. Is this separate from the NCIB? Are they selling to themselves ie. Fairfax to Fairfax India?

I wonder the same thing. Can't help but think there is a strong level of manipulation going on to keep the price suppressed. And it's been doing this for quite some time now.

Thanks for posting. At these prices, upside is very good IMO. Share repurchases I think will remain 'safety net' to ensure mark to BV periodically. Bial continues to build out its infrastructure with construction of the Metro to its doors and terminal 2. They are also executing well on their aerocity plan. An inflationary environment should make these assets even more valuable. Not the worst way to have exposure to a emerging market, especially at current prices.

The 2008 Lehman moment seemed to be aborted by central bank intervention and bailouts. I doubt the central bankers will let the house of cards fall. They are not afraid to raise liquidity. Any wobble, and bam... lower interest rates IMO + bailouts. I try to keep powder dry for the wobble.

Can you claim a capital loss if your adjusted capital base is more than $252 USD? Overall, it does seem to me that the shareholders are paying tax on the deemed dividend at their own expense and in favor of Fairfax. (Unless you are in a tax exempt account).

With the rising popularity of EVs, it will be interesting to see how additional electricity will be generated. That's a lot of windmills and solar farms in Germany.... Good thing they will have a couple of mothballed nuclear reactors on standby!

I suppose inadvertent bloodstream injection of vaccine could cause uptake in the heart muscle, spike protein production there, immune attack and myocarditis.

Probably dividend payment to follow?