ICUMD
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Posts posted by ICUMD
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2023: 35% Increase in BIAL Passenger Volumes
37 Million
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@hobbit great find. Thank you for sharing. Now if they can just get around to listing Anchorage!
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Canada has one of the strongest banking systems in the world and a 200 yr history of surviving depressions and wars. Also, they are an oligopoly.
Definitely attractive if you like dividend income.
A cornerstone of all Canadian pension plans.
I think non Canadians don't understand Cdn banking very well. Also, Canadian dividends for Americans are subject to extra taxation, so perhaps not as attractive.
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26 minutes ago, John Hjorth said:
Question likely especially for @ICUMD and @CorpRaider,
Which Canadian and / or North American banks are you invested in?
I hope that you wouldn't mind to share. - Thank you in advance. - And as already written : All replies from everyone welcome!
@John Hjorth My bank holdings are only Canadian. BNS is my largest, followed by BMO. Also have some TD and RY.
I bought heavily BNS at recent lows.
I think it represents the best valuation of the big 5 and a tremendous dividend at over 7% when I bought.
BMO I hold from the COVID lows in 2020.
These holdings will be never sells for me.
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Doesn't matter who's at fault in Indias partition.
Separating India into two independent countries, each with religious majorities and persecuted minorities is a failure of humanity and leadership.
As is the war in Israel.
Absolutely sickening to see all the senseless death and destruction.
This is the ultimate racism. And it is contagious. Spilling into university campuses and becoming the personal agenda of powerful billionaires apparently.
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Hard to respect this guy.
Reminds me of Animal Farm.
https://www.readthistwice.com/quotes/book/animal-farm
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My core strategy is around quality dividend companies. Focusing on increasing personal cash flow is a more quantifiable goal than trying to pin the tail on the 10 bagger donkey. The optionality of cash flow is tremendous.
I'd take a highly profitable, under valued equity paying a good dividend as my pick. Bank of Nova Scotia paying 6.5% would be a great example currently.
Rinse and repeat should generate an exceptional cash flow machine over the years.
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60% Cdn Banks
10% Cdn Rail
10% Fairfax India
5% Alibaba
5% Brookfield
5% Apple
5% Other bets
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4 hours ago, valueventures said:
Interesting. BABA and TCEHY seem to be very popular picks for 2024.
Out of curiosity, assuming you own Fairfax, how are you sizing Fairfax relative to Fairfax India?
Fairfax India is a very different business from Fairfax.
I actually don't own any Fairfax as it currently seems to be more fully valued. Was a steal in the 350s. Aside from management, the two have little in common.
Fairfax India on the other hand, is deeply discounted in my estimation. I think the thinly traded shares are much more valuable than the market makes them out to be. I'm confident the value will be realized over time.
Both BABA and Fairfax India are deep value plays on my books together totalling about 15% of my portfolio.
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BABA
Fairfax India
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China GDP per capita is 12,000 USD vs India 2,200 USD. Basically India is where China was 15 yrs ago.
Will be interesting to see how the next decade goes for India. A possible five fold increase in GDP per capita x 1 billion people = tremendous improvement in quality of life and economic productivity.
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From those diagrams, China is still very well interconnected. Further, a made in USA mandate will likely stoke inflation.
No easy choices.
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A generous heap of BABA.
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Seems like they would have generated about 160 M USD through the IIFL share sale. Prior to the sale, their equity stake was about 640 M. Not a bad way to raise capital IMO.
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9 minutes ago, TwoCitiesCapital said:
Does it matter? We pay it in shares, dilute shareholders, but retain liquidity to potentially undo dilution pending fill prices on NCIB
OR
Avoid the dilution and whats-ifs all together and pay in cash with the possibility Fairfax bids in public markets as mentioned above
I'm not entirely upset about either, but my preference is absolutely for the certainty of #2 than the hopes of #1.
As far as acquiring new companies? India isn't exactly cheap at the moment and the liquidity event Anchorage brings will likely take care of any intermediate term concerns you have there.
All in all, I don't view less liquidity in the short term as problematic.
Completely agree. I prefer the option they have chosen since it seems to be shareholder friendly. Personally, it's improved my confidence in management. Share price seems to have moved nicely since.
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The Performance fee being paid in cash will reduce cash liquidity for Fairfax India
I presume this will impair FIH.U ability to enact share buybacks through the NCIB and acquire new companies.
Do we know if FFH is buying FIH shares on the open market?
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Any draw backs or advantages to shareholders of Fairfax India in the performance fee being paid in cash rather than shares?
I guess we avoid dilution at these ridiculously discounted share prices!
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4 hours ago, dartmonkey said:
Yes, but I believe only 49% of that is for Fairfax, so $31m, and that is for an asset that is on the books for $1,233.7 (Dec 2022). However, we expect it to get much more profitable as its volume scales with little additional capital invested and unregulated non-aero revenue and real estate development revenues grow. So this is a great start, and hopefully means it may not need too much more capital.
I believe they have increased ownership to 54%.
Otherwise you are correct. This is a great start. I don't know what loans they may have taken on to fund T2 development, but the profitability allows for them to develop and refine and develop businesses within the existing physical structure.
Also, will hopefully attract investors for a planned IPO under Anchorage, marking to market this key asset.
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BIAL Record Profits - 63.3 M USD 2023 yr end.
Finally some outstanding news I've been eagerly waiting for. I guess Fairfax India does know how to run airports.
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Using Starlink at my home right now. Live in a border city in Canada.
Had terrible internet service from Bell, wired, but apparently at the end of a stretch of copper wire. Would cut out multiple times a day and very slow.
Starlink has been transformative. 50-80bps, always connected with no drops. No issues streaming video or having a smart connected home now. A life saver.
Downsides? Having to mount a dish to the roof with an ugly wire coming down the wall into the basement. Cost is expensive at $150/mo cdn. The price of rural living I guess.
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BIAL.
Wondering if anyone knows whether they are collecting their promosed 16% return on aero fees and 100% of non aero fees as set out in their operating terms with the government?
My understanding is that the Aero fees are regulated at 16%, and assured by changes to the User Development Fees (UDF) charged to each passenger and set out in each control period.
Have not come across a clear update on this question.
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26 minutes ago, vinod1 said:
Investors are in this because they are expecting 15%+ returns. Prem himself mentioned I think they would not be investing in India if they did not think they can make 20% (OK, that is Prem being Prem
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Paying 1.5% + 20% performance over 5%, would seem perfectly reasonable for most of these investors when returns are north of 15%.
Realized returns are 8.5%. Worse, these are investors who went to emerging markets seeking higher returns and they find S&P 500 had much higher returns.
Now, they feel stupid for paying the performance fee. So they are going to capitalize the costs and discount it. Hence, the discount to BV.
I dont think the discount would close unless
1) Fairfax India starts generating 15% annual returns, or
2) Fairfax India vastly outperforms US stocks, even if absolute performance does not reach 15%. Investors would be flocking to these non-US alternatives in that case.
Vinod
With the bulk of Fairfax India's valuation tied up in BIAL, a private company, there is no way of knowing if we are or are not ahieving that 15% compounded return. BV is only an estimate.
Value will be unlocked only if Anchorage goes public or there is a SIB and Fairfax offers a fair price per share.
Having said that, the share price performance over the last year or so wasn't bad considering the markets. We were impaired due to COVID affecting air travel. Hopefully 2024 offers some opportunity for fair exit of those interested in pursuing other opportunities.
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56 minutes ago, Dean said:
Ive been adding to this position but wow 45%...that takes some guts. Would love to hear your general contra thoughts on it as most everyone hates BNS. happy to take this to a BNS thread
Good to hear everyone hates it. Perhaps I have a high risk tolerance. Also, I like cash flow. My avg price is $58 Cdn. First purchased in the COVID lows of 2020. It is now retesting those lows. I recently added heavily at $56
In brief, Canadian banks form a core in my levered portfolio. BNS presents a very attractive investment with PE less than 8, dividend yield of 7.5%. 200 yr history, and the third largest of the Canadian banks. It remains highly profitable. Currently, valued the lowest in over a decade on multiple valuation metrics.
New management in place should make this a more efficient bank. So I think future is bright. Fair value is ~ $85. Maybe it takes 5 years, but I think it will be less.
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BNS 45% of my portfolio.
Large house
in General Discussion
Posted
Lots of variables that make a suitable house a home, size only being one of them. Location, quality of construction, proximity to work, crime, upkeep to name a few etc.
Generally speaking, larger = more frictional costs of running it = more headaches.
For example, have heard that in exclusive neighborhoods, trades people charge a fortune for basic things like painting, just because they can.
I was plenty happy just renting back in the day.
Job allowing, you can rent anywhere in the world. Having a family was main reason for me to buy.