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shalab's Achievements


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  1. Hope it works out for you and others putting their money into it. The fund is already big at 2.6 billion. India economy is at 2.7 trillion. So it is at ~0.1% of India GDP. If it goes up to 10B to harvest more fees, it will be at 0.4% of India GDP. So for someone to do better than SP500, a lot of things have to go right. India economy is slowing down like everyone else. Furthermore, when FRFHF issues statements, one has to look deeper to see what is marketing talk for the faithful and what is not. When they say Modi is the difference, one has to look at the numbers before and after in companies financial results. I don't see any major difference personally. In fact, India has been ruled by 100-200 families who are interested in protecting their family businesses while hurting the average person. This hasn't changed and is unlikely to change anytime soon. So tread carefully. Let us say this can compound at 8% in dollar terms, higher than the last five years average in very favorable conditions. After paying 20% performance fee and 1.5% management fee, your return will be 4.9%.
  2. It matters for two reasons - foreign trade, the dollar is artificially high - this depresses us exports and boosts imports - yield curve - it is inverted - https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield - negative yield curve slows down the economy or puts it in recession or both
  3. Still having difficulty to admit they made a blunder in raising rates https://finance.yahoo.com/news/fomc-fed-june-meeting-interest-rates-130018529.html
  4. I hope it works out for you in the long term. Fairfax India share price increased at 7.2%/year for five years till the end of 2018 and it has dropped since then. This is before fees and expenses. So SP500 has out performed Fairfax India significantly. Fairfax Africa has returned -10.6% per year.
  5. I stand corrected - I should have said the prices aren't increasing as fast as the Fed is expecting. Prices are definitely going up but below the Fed target rate. Asset prices (houses) have come down in the last year. Shalab, It seems that we disagree about where we're going although it will have to be, in the end, the same destination. "However all data is pointing to the other direction, i.e., prices going down." This yield inversion talk is getting confusing but one of the most significant and fundamental measures I've been following agrees that asset prices may have entered a deflationary phase: the Tooth Fairy payout. https://www.prnewswire.com/news-releases/tooth-fairy-payouts-plunge-for-second-consecutive-year-300798356.html I've been able to match the Tooth Fairy payout until 2012 and then it seems that the payout has been looking for a reversion to the mean. You will also notice that the US regions that have suffered from globalization have shown their resentment through lower payouts.
  6. I noticed it with their annual report but then it was impossible to ignore with the Q1 report. It is not clear why they use leverage so much especially when it is not needed. The obvious explanation may be the correct one - they can collect more fees. I wonder about the people investing in this instrument - reminds one of Biglari Holdings shareholders. https://s1.q4cdn.com/293822657/files/doc_financials/quarterly_reports/2019/FIH-2019-Q1-Interim-Report-(Final).pdf They use 600 MM in loans on 2 B capital. (30% leverage). The number of shares outstanding has also increased year over year by about 2.2%. The whole scheme is seems odd - if one looks at BIAL (the investee) - it is leveraged. Then the instrument investing in it is also leveraged. (FRFHF India). To add to it, the instrument holding it (FRFHF) also leveraged. It is triple leverage :P Also the fee structure is adversarial in nature for the common shareholder. There is double jeopardy. The period from January 1, 2018 to December 31, 2020 (the "second calculation period") is the next consecutive three-year period after December 31, 2017 for which a performance fee, if applicable, will be accrued. The performance fee for the second calculation period will be calculated as 20% of any increase in the book value per share at the end of period Investment and Advisory Fees The investment and advisory fees are calculated and payable quarterly as 0.5% of the value of undeployed capital and 1.5% of the company's common shareholders' equity less the value of undeployed capital. For the first quarter of 2019 the company determined that the majority of its assets were invested in Indian Investments, which are considered deployed capital. The investment and advisory fees recorded in the consolidated statements of earnings in the first quarter of 2019 was $8,289 One is better off holding INDA or related funds - the expense ratios are far lower and affordable. https://etfdb.com/etf/INDA/
  7. Parsad says USA consumer prices will go up if USA workers take home more money this year. However all data is pointing to the other direction, i.e., prices going down. The USA saving rate has been higher than average compared to the recent past, where savings rate on disposable income is at 7-8% of GDP. This is excluding contributions to 401(k), ESPP, IRA/Roth-IRA, HSA etc. which can soak anywhere between 0 - 35% of income. https://www.reuters.com/article/usa-bonds-tips-umich-idUSL2N23L0MC https://tradingeconomics.com/united-states/producer-prices Barrons ran an article saying rate cuts are needed and more importantly some QE may be needed by year end: https://www.barrons.com/articles/the-rate-cut-the-economy-doesnt-need-but-the-markets-do-51560557553?mod=hp_DAY_1 https://www.barrons.com/articles/the-fed-may-have-shrunk-its-balance-sheet-too-quickly-51560504607?mod=past_editions Meanwhile, the person that has invested with Parsad is betting on a deflation. (FRFHF) CPI-linked derivative contracts The company has entered into derivative contracts referenced to consumer price indexes (“CPI”) in the geographic regions in which it operates that serve as an economic hedge against the potential adverse financial impact on the company of decreasing price levels. At March 31, 2019 the company held CPI-linked derivative contracts with a fair value of $16.2 (December 31, 2018 - $24.9), notional amount of $113.6 billion (December 31, 2018 - $114.4 billion) and weighted average term until expiry of 3.4 years (December 31, 2018 - 3.6 years). The company’s CPI-linked derivative contracts produced net unrealized losses of $4.3 in the first quarter of 2019 (2018 - $20.2). Net unrealized gains (losses) on CPI-linked derivative contracts typically reflect the market's expectation of decreases (increases) in the values of the CPI indexes underlying those contracts at their respective maturities (the contracts are structured to benefit the company during periods of decreasing CPI index values).
  8. I am fairly certain it is the pension funds of Europe. Berkshire is a better/safer bet than the negative yields. https://www.ipe.com/analysis/analysis/ipe-top-1000-european-pension-assets-grow-by-9/10014864.article Amazing notes transactions, gfp, Thank you for sharing. Berkshire working on both sides of its balance sheet. Do you know who is the decision maker at Berkshire on such transactions? - Mr. Buffett, or is this perhaps the playground for Mr. Hamburg? To me it's incomprehensible that somebody will tie up capital for 20 & 40 years respectively on such conditions. I wonder who is buying this stuff?
  9. yield curve inverted again: https://www.bing.com/videos/search?q=inverted+yield+curve&docid=13840512517203&mid=9937A21325DBF8F47CD09937A21325DBF8F47CD0&view=detail&FORM=VIRE
  10. Ed Yardeni, recently pointed out that Chinese imports actually declined 0.9% in price in the past year after the 10% tariffs were implemented. This was mainly due to the fact that China devalued its currency to offset the tariffs and maintain market share. http://blog.yardeni.com/2018/10/chinas-syndromes.html https://www.nytimes.com/2019/05/21/opinion/china-trump-trade.html Also - US home buyers are getting better rates https://www.cnbc.com/2019/05/23/china-trade-war-leads-to-lower-mortgage-rates-for-americans.html Huawei approach https://www.wsj.com/articles/huaweis-yearslong-rise-is-littered-with-accusations-of-theft-and-dubious-ethics-11558756858?mod=hp_lead_pos5
  11. Minneapolis Fed President Neel Kashkari said Thursday the bigger problem was how the Fed had conducted monetary policy this decade and not its current approach to targeting 2% inflation. "Ms. Brainard's views illustrate how the central bank's center of gravity has shifted over time. While she was initially reluctant to lift rates, she said by last summer the Fed would need to raise them high enough to slow the economy given the expected boost from the tax cuts and federal spending increases. Several officials last year had projected inflation would begin to rise above the 2% target even with continued rate increases. Now, officials are conceding their economic models may not be working as they did in the past. Inflation excluding volatile food and energy prices posted an annual gain of just 1.6% in March and 1.8% in January, according to the Fed's preferred measure. ... Policy makers will never have perfect information on the real economy," he said in remarks in Santa Barbara, Calif. "But raising rates while inflation was low is an example of a shortcoming of how we implemented our framework rather than a shortcoming of the framework itself." https://www.wsj.com/articles/feds-brainard-says-central-bank-should-welcome-modest-rise-in-inflation-11558023372 Fed admits its short comings
  12. Certainly hope so - I was expecting a lot of negative headlines but found only one in bloomberg that said "Buffett Confronts Tech-Driven Change Amid Investor Questions". Disappointed to say the least. Now we need more seeking alpha articles and the "globe and mail" folks disseminating investing advice to sell Berkshire in favor of their favorites.
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