Fairfax India new issue

[glider3834]

 

two interesting comments from PW - privatisation of railway stations & possible logistics opportunities with Fedex

Read more at:
https://economictimes.indiatimes.com/news/india/modi-has-made-india-business-friendly-prem-watsa-chairman-fairfax-financial-holdings/articleshow/92027160.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

[ICUMD]

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

[ICUMD]

11 hours ago, glider3834 said:

 

two interesting comments from PW - privatisation of railway stations & possible logistics opportunities with Fedex

Read more at:
https://economictimes.indiatimes.com/news/india/modi-has-made-india-business-friendly-prem-watsa-chairman-fairfax-financial-holdings/articleshow/92027160.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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?

[Daphne]

Likely divided between FFH and FIH.  Remember Digit is in India.

[Viking]

12 hours ago, glider3834 said:

 

two interesting comments from PW - privatisation of railway stations & possible logistics opportunities with Fedex

Read more at:
https://economictimes.indiatimes.com/news/india/modi-has-made-india-business-friendly-prem-watsa-chairman-fairfax-financial-holdings/articleshow/92027160.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

@glider3834 it is looking pretty likely that Fairfax’s next big investment(s) will be in India. 
1.) Fairfax (and Fairfax India) has a pretty outstanding long term track record of investing in India.

2.) part of the strategy/secret sauce is partnering with outstanding entrepreneurs.

3.) i certainly am just starting to appreciate the enormous transformation happening in the Indian economy under Modi from Socialism to Capitalism. Sounds simple but it is exceptionally difficult to pull off (just look at the epic fail in Russia). These sorts of transformations take decades and it appears India is still in the early stages. 
4.) the privatization drive in India has been going on for some time… perhaps in 2022 we see some large transactions. It looks like a lot of work at Fairfax has been going on in India for a couple of years on this front (delayed by covid). 
5.) My guess is Fairfax will be looking to partner with the usual suspects (OMERS etc) and is including total partner contributions as part of the ‘$7 billion over 5 years’ forecast. Also, ‘5 years’ timeline will likely stretch out to 7 or 8 given the realities of how fast things like this move in India.

6.) where will the money come from for Fairfax? Proceeds from Digit IPO might be one source of funds. Perhaps Anchorage gets to its next phase of development later in 2022.
7.) India is exceptionally well positioned to benefit from geopolitical shift in the West away from China. Just another tailwind.

—————

Below are the parts of the Q&A with Prem (from the article you linked to) that i found most interesting: 

 

Q: Now of course the other thing is about Fairfax and we were casually talking when you were in Delhi and you were talking about how much capital you have put in and how much you want to put in? 

Prem: Sure. So we have put in about $7 billion. We’ve put in about $5 billion through Fairfax India and in total we control about $7 billion of investments. And I’m thinking we’ll put in at least that much more in the next five years. India is the best place to invest. We have to invest in a way that’s good for everybody. Good for your employees, good for your customers, good for your shareholders. And you have to give back to the community here. 

Q: Any time frame in mind for the investment of another $7 billion? 

Prem: In the next five years. We think the opportunity is huge. Particularly when the government is welcoming business. Wherever business is welcome, business will come. Many businesses all over the world will invest in India. 

 

Q: Could this $7 billion go into companies that come up for privatization? 

Prem: It could be that. It could be some of the companies we bring from North America to India. There is privatization taking place in the railway stations and other sectors, we look at them all. 

 

Q: I read on the railway stations front that Fairfax is doing a pilot? 

Prem: I’d love to tell you but these are in early stages. We are looking at all the opportunities. 
 

Q: Any thoughts on the new logistics policy and Gati which has a focus to bring down logistics costs? 

Prem: Only thing on that is we are very close to Fedex and Fedex is looking at India and we are looking at it with them. 
 

Q: This could include warehousing and storage and all of that? 

Prem: Yes, in broad terms. India is a huge opportunity. So where does it make sense? We want to deal with high class entrepreneurs, such as Madhavan Menon (Thomas Cook Chairman), Kamesh Goyal who has built Digit from scratch, Hari Marar (CEO of Bangalore International Airport Limited), Ajit Isaac who heads Quess. These are people who have built institutions.

 

Edited June 6, 2022 by Viking

[Crip1]

Invert, always invert.

 

I’m trying to kill this company as an investment and am having a tough time doing so. So far, here’s what can kill it:
•    Substantively higher inflation in India compared to the US causing currency devaluation. 
•    Political change. Modi will not be in charge forever and a less business-friendly regime can either limit the progress towards a more capitalistic society or reverse it. Capitalism was on the rise in Russia a couple of decades ago and, well, we know how that worked out. 
•    Execution risk. So far the batting average looks solid, but the market has a way of humbling everyone.

Those are my biggies. Any others?

 

-Crip
 

[ICUMD]

1 hour ago, Crip1 said:

Invert, always invert.

 

I’m trying to kill this company as an investment and am having a tough time doing so. So far, here’s what can kill it:
•    Substantively higher inflation in India compared to the US causing currency devaluation. 
•    Political change. Modi will not be in charge forever and a less business-friendly regime can either limit the progress towards a more capitalistic society or reverse it. Capitalism was on the rise in Russia a couple of decades ago and, well, we know how that worked out. 
•    Execution risk. So far the batting average looks solid, but the market has a way of humbling everyone.

Those are my biggies. Any others?

 

-Crip
 

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.

 

 

[Viking]

4 hours ago, Crip1 said:

Invert, always invert.

 

I’m trying to kill this company as an investment and am having a tough time doing so. So far, here’s what can kill it:
•    Substantively higher inflation in India compared to the US causing currency devaluation. 
•    Political change. Modi will not be in charge forever and a less business-friendly regime can either limit the progress towards a more capitalistic society or reverse it. Capitalism was on the rise in Russia a couple of decades ago and, well, we know how that worked out. 
•    Execution risk. So far the batting average looks solid, but the market has a way of humbling everyone.

Those are my biggies. Any others?

 

-Crip

Given where Fairfax India is trading today (big discount) hard to see how a buyer of the stock at todays price could have their investment ‘blow up’. Probably the bigger risk is the stock goes largely sideways for many more years (continuation of the current trend) - Fairfax India continuing to be a value trap like it has been for many years.
—————

Discount to BV widens: One issue specific to Fairfax India is the chronic and large discount to BV. Why does it exist? Why has it persisted for so long? Why can’t the discount widen?

 

Fairfax: There is also the risk that Fairfax buys Fairfax India back at a big discount to BV. Fairfax has been VERY opportunistic in this regard in the past - at the expense of minority shareholders. One scenario: Fairfax India drops to 0.50 X BV and then Fairfax swoops in and offers to pay a ‘big premium’ to the price it is trading… of 0.65 X BV.
 

Fairfax also is a big winner if the stock price of Fairfax India stays crazy low (Fairfax can keep increasing its ownership at very attractive prices). Incentives can be a powerful thing.

 

Global bear market: One immediate risk is if we get a multi-year bear market like the 1970’s. Global in nature. Cause? Persistently high inflation. And growth disappearing. Resulting in stagflation.

 

I wonder how super high energy costs combined with famine (or much higher food costs) will play out over time in India - especially if they stretch into multiple years. Social unrest = populism = political change. The recent demonstration by farmers was pretty widespread and caused Modi to pivot. But i am a complete novice when it comes to politics in India.

 

Much stronger US$ leading to severe multi-year sell off in emerging markets. 
—————

Having said all the above, my guess is Fairfax India will spike much higher at some point in the next couple of years and we will all look like idiots for not buying more at todays prices given it is obviously cheap and super well managed. I do own a small position (2.5% of my portfolio) as a long term hold.
 

 

Edited June 7, 2022 by Viking

[glider3834]

1 hour ago, Viking said:

Given where Fairfax India is trading today (big discount) hard to see how a buyer of the stock at todays price could have their investment ‘blow up’. Probably the bigger risk is the stock goes largely sideways for many more years (continuation of the current trend) - Fairfax India continuing to be a value trap like it has been for many years.
—————

Discount to BV widens: One issue specific to Fairfax India is the chronic and large discount to BV. Why does it exist? Why has it persisted for so long? Why can’t the discount widen?

 

Fairfax: There is also the risk that Fairfax buys Fairfax India back at a big discount to BV. Fairfax has been VERY opportunistic in this regard in the past - at the expense of minority shareholders. One scenario: Fairfax India drops to 0.50 X BV and then Fairfax swoops in and offers to pay a ‘big premium’ to the price it is trading… of 0.65 X BV.
 

Fairfax also is a big winner if the stock price of Fairfax India stays crazy low (Fairfax can keep increasing its ownership at very attractive prices). Incentives can be a powerful thing.

 

Global bear market: One immediate risk is if we get a multi-year bear market like the 1970’s. Global in nature. Cause? Persistently high inflation. And growth disappearing. Resulting in stagflation.

 

I wonder how super high energy costs combined with famine (or much higher food costs) will play out over time in India - especially if they stretch into multiple years. Social unrest = populism = political change. The recent demonstration by farmers was pretty widespread and caused Modi to pivot. But i am a complete novice when it comes to politics in India.

 

Much stronger US$ leading to severe multi-year sell off in emerging markets. 
—————

Having said all the above, my guess is Fairfax India will spike much higher at some point in the next couple of years and we will all look like idiots for not buying more at todays prices given it is obviously cheap and super well managed. I do own a small position (2.5% of my portfolio) as a long term hold.
 

 

viking I just wonder if FIH would be able to spin off its publicly listed holdings into an actively managed exchange traded fund (ETF) - which should trade closer to NAV - units could be issued to current FIH shareholders - & then retain the private/unlisted investments in FIH as a separate company? One issue could be debt - they may not be able to leverage their investments - but then is the leverage actually worth the cost in terms of the current deep discount to BV.

 

Edited June 7, 2022 by glider3834

[ICUMD]

3 hours ago, Viking said:

Given where Fairfax India is trading today (big discount) hard to see how a buyer of the stock at todays price could have their investment ‘blow up’. Probably the bigger risk is the stock goes largely sideways for many more years (continuation of the current trend) - Fairfax India continuing to be a value trap like it has been for many years.
—————

Discount to BV widens: One issue specific to Fairfax India is the chronic and large discount to BV. Why does it exist? Why has it persisted for so long? Why can’t the discount widen?

 

Fairfax: There is also the risk that Fairfax buys Fairfax India back at a big discount to BV. Fairfax has been VERY opportunistic in this regard in the past - at the expense of minority shareholders. One scenario: Fairfax India drops to 0.50 X BV and then Fairfax swoops in and offers to pay a ‘big premium’ to the price it is trading… of 0.65 X BV.
 

Fairfax also is a big winner if the stock price of Fairfax India stays crazy low (Fairfax can keep increasing its ownership at very attractive prices). Incentives can be a powerful thing.

 

Global bear market: One immediate risk is if we get a multi-year bear market like the 1970’s. Global in nature. Cause? Persistently high inflation. And growth disappearing. Resulting in stagflation.

 

I wonder how super high energy costs combined with famine (or much higher food costs) will play out over time in India - especially if they stretch into multiple years. Social unrest = populism = political change. The recent demonstration by farmers was pretty widespread and caused Modi to pivot. But i am a complete novice when it comes to politics in India.

 

Much stronger US$ leading to severe multi-year sell off in emerging markets. 
—————

Having said all the above, my guess is Fairfax India will spike much higher at some point in the next couple of years and we will all look like idiots for not buying more at todays prices given it is obviously cheap and super well managed. I do own a small position (2.5% of my portfolio) as a long term hold.
 

 

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. 

 

 

 

[hobbit]

https://www.livemint.com/companies/news/iifl-mega-deal-abu-dhabi-s-adia-to-pump-in-rs-2-200-cr-in-iifl-home-finance-11654794726574.html

 

The market cap of the entire company as of today is only INR 12500 Crore ( 1.6 Billion USD) . Should be an easy 2X from here which means an additional 350M to FIH book value.

[glider3834]

https://www.newindianexpress.com/cities/bengaluru/2022/jun/16/wait-is-over-modi-to-inauguratekempegowda-international-airport-terminal-2-in-october-2466118.html

 

date to be confirmed but looks like October opening for T2 aka  the 'garden terminal'

 

 

[glider3834]

https://www.hindustantimes.com/cities/bengaluru-news/bengaluru-airport-recognised-as-best-in-india-south-asia-101655461485551.html

[glider3834]

On 5/29/2022 at 10:03 AM, glider3834 said:

I put this chart together - sourced data from Airports Authority of India 

 

BIAL passenger numbers continue to recover - running at 82% of 2019 level in April (versus 41% of 2019 level in January)

 

Bangalore International Airport - May-22 passenger traffic now at 85% of May-19 levels

 

https://www.aai.aero/en/business-opportunities/aai-traffic-news

[Viking]

I have been trying to better understand India’s posture on the war in Ukraine. The speaker in the video below succinctly explains one of the key factors driving India’s response: security. Go to the 35:40 mark of video (discussion of India starts at 32:30 mark). China is India’s primary external threat. India’s security/military is built around managing the Chinese threat. And pretty much all of India’s military equipment is supplied by Russia - including munitions and spare parts. (Vietnam is in the exact same situation). And it would be massively expensive for India to pivot away from Russia (the speaker said it would not be like a consumer pivoting from Apple to Android when deciding to switch smartphone platforms  which got a good laugh from the audience).
—————

Viking’s additional comments: There are also significant economic benefits to India of supporting Russia: cheap oil, cheap fertilizer and first in line for grain shipments. All important for a country looking to raise much of its population out of poverty. And also wanting to avoid an all too possible political crisis (driven by high energy prices and lack of food).

—————

 

 

Edited June 27, 2022 by Viking

[Crip1]

10 hours ago, Viking said:

I have been trying to better understand India’s posture on the war in Ukraine. The speaker in the video below succinctly explains one of the key factors driving India’s response: security. Go to the 35:40 mark of video (discussion of India starts at 32:30 mark). China is India’s primary external threat. India’s security/military is built around managing the Chinese threat. And pretty much all of India’s military equipment is supplied by Russia - including munitions and spare parts. (Vietnam is in the exact same situation). And it would be massively expensive for India to pivot away from Russia (the speaker said it would not be like a consumer pivoting from Apple to Android when deciding to switch smartphone platforms  which got a good laugh from the audience).
—————

Viking’s additional comments: There are also significant economic benefits to India of supporting Russia: cheap oil, cheap fertilizer and first in line for grain shipments. All important for a country looking to raise much of its population out of poverty. And also wanting to avoid an all too possible political crisis (driven by high energy prices and lack of food).

—————

 

 

My father, God rest his soul, gave more than a few pearls of wisdom over the years, one of which being "Wars are fought for economic reasons, yet wars screw up everyone's economy".

 

-Crip

[Saluki]

1 minute ago, Crip1 said:

My father, God rest his soul, gave more than a few pearls of wisdom over the years, one of which being "Wars are fought for economic reasons, yet wars screw up everyone's economy".

 

-Crip

 

Norman Ralph Augustine said "Bulls do not win bullfights; people do. People do not win people fights; lawyers do."  I would add that "countries don't win country fights, no one does." 

[rohitc99]

12 hours ago, Viking said:

I have been trying to better understand India’s posture on the war in Ukraine. The speaker in the video below succinctly explains one of the key factors driving India’s response: security. Go to the 35:40 mark of video (discussion of India starts at 32:30 mark). China is India’s primary external threat. India’s security/military is built around managing the Chinese threat. And pretty much all of India’s military equipment is supplied by Russia - including munitions and spare parts. (Vietnam is in the exact same situation). And it would be massively expensive for India to pivot away from Russia (the speaker said it would not be like a consumer pivoting from Apple to Android when deciding to switch smartphone platforms  which got a good laugh from the audience).
—————

Viking’s additional comments: There are also significant economic benefits to India of supporting Russia: cheap oil, cheap fertilizer and first in line for grain shipments. All important for a country looking to raise much of its population out of poverty. And also wanting to avoid an all too possible political crisis (driven by high energy prices and lack of food).

—————

 

 

This may not be a popular view in the west, the question to ask - why should india support ukraine/europe ?

 

Ukraine has voted against india in most international forums. Europe/US have not been any better in the last 70+ years. Now that they need support from India for whatever reason, they talk of moral reasons etc.

 

India is acting in its own interests as have US and Europe in the past. Russia has supported India when US was supporting Pakistan. So there is reason India should not leverage the situation to its own benefit

[Crip1]

3 hours ago, rohitc99 said:

This may not be a popular view in the west, the question to ask - why should india support ukraine/europe ?

 

Ukraine has voted against india in most international forums. Europe/US have not been any better in the last 70+ years. Now that they need support from India for whatever reason, they talk of moral reasons etc.

 

India is acting in its own interests as have US and Europe in the past. Russia has supported India when US was supporting Pakistan. So there is reason India should not leverage the situation to its own benefit

The caveat to the commentary below is that geopolitical politics is not in my circle of competence, so take it for what it’s worth.
I’m not stating that India should support Ukraine, but I think it’s important to not explicitly or implicitly condone invading a sovereign state if for no other reason that it’s trend-setting (and don’t underestimate that). Much of the citizenry in North America is bellyaching about energy pricing, some of which can be attributed to the invasion of Ukraine, and that definitely has a negative impact on all of us in terms of inflation. That, however, is not nearly as concerning as:

• The loss of life and liberties for thousands, if not tens of thousands, of innocent people. Everyone should be outraged over this.
• The impact on hundreds of millions of people who depend on food and fertilizer from Ukraine and from Russia. The crisis that may be caused by this is, honestly, unconscionable. 

The west can only do so much in terms of dissuading Russia from their actions. Sanctions may be putting pressure on the Kremlin, but the entities who are best able to dissuade Russia are China and India since both are chief trading partners for Russia. It’s more to do with humanitarian concerns and world economics than “supporting” Ukraine/Europe/The West. 

 

-Crip
 

[rohitc99]

On 6/27/2022 at 4:25 PM, Crip1 said:

The caveat to the commentary below is that geopolitical politics is not in my circle of competence, so take it for what it’s worth.
I’m not stating that India should support Ukraine, but I think it’s important to not explicitly or implicitly condone invading a sovereign state if for no other reason that it’s trend-setting (and don’t underestimate that). Much of the citizenry in North America is bellyaching about energy pricing, some of which can be attributed to the invasion of Ukraine, and that definitely has a negative impact on all of us in terms of inflation. That, however, is not nearly as concerning as:

• The loss of life and liberties for thousands, if not tens of thousands, of innocent people. Everyone should be outraged over this.
• The impact on hundreds of millions of people who depend on food and fertilizer from Ukraine and from Russia. The crisis that may be caused by this is, honestly, unconscionable. 

The west can only do so much in terms of dissuading Russia from their actions. Sanctions may be putting pressure on the Kremlin, but the entities who are best able to dissuade Russia are China and India since both are chief trading partners for Russia. It’s more to do with humanitarian concerns and world economics than “supporting” Ukraine/Europe/The West. 

 

-Crip
 

You make fair points and i don't disagree. However the viewpoint in India, is that Europe has not really cared about their 'humanitarian' concerns all these years and have focused on their own narrow interests. Now expecting other countries to do otherwise is hypocrisy

 

if you are interested, you can watch some of the video/speeches by the India foreign minister on this topic

 

I think outside of the media chatter, India is definitely trying to balance its equation with the both the sides in its own self interest

 

[Spekulatius]

On 6/27/2022 at 1:21 AM, Viking said:

I have been trying to better understand India’s posture on the war in Ukraine. The speaker in the video below succinctly explains one of the key factors driving India’s response: security. Go to the 35:40 mark of video (discussion of India starts at 32:30 mark). China is India’s primary external threat. India’s security/military is built around managing the Chinese threat. And pretty much all of India’s military equipment is supplied by Russia - including munitions and spare parts. (Vietnam is in the exact same situation). And it would be massively expensive for India to pivot away from Russia (the speaker said it would not be like a consumer pivoting from Apple to Android when deciding to switch smartphone platforms  which got a good laugh from the audience).
—————

Viking’s additional comments: There are also significant economic benefits to India of supporting Russia: cheap oil, cheap fertilizer and first in line for grain shipments. All important for a country looking to raise much of its population out of poverty. And also wanting to avoid an all too possible political crisis (driven by high energy prices and lack of food).

—————

 

 

The war in Ukraine shows yet again (just like the war in Lebanon decades ago) that whoever buys Russian weapons buys garbage. This is likely becoming a bigger problem with sanctions impeding high tech components in Russian weapon systems and likely the ability of Russians to supply spare parts.

 

I expect Russian weapon exports to tumble as a consequence of the war with Ukraine.

[Spekulatius]

On 4/24/2022 at 1:44 PM, Viking said:

Fairfax India’s initial IPO was done in Jan 2015 at $9.50 (net of taxes). They did a second large capital raise in Jan 2017 at $11.75. Shares are trading today at  $12.60. 

 

What has the company done over the past 7 years? They have assembled a wonderful collection of assets/companies. Each is well run, well positioned and growing nicely. Book value of Fairfax India today is about $20. Is book value accurate? Roughly speaking i think it is. 

————-

Investors buy companies HOPING management grows the business and builds value for shareholders over time. The interesting thing is investors are able to buy Fairfax India TODAY at a price not far off the IPO price of 7 years ago… and get 7 years of outstanding performance ALMOST FOR FREE. And, given the outstanding track record of current management, INVESTORS BUYING FAIRFAX INDIA TODAY WILL ALSO FULLY PARTICIPATE IN ALL FUTURE GROWTH. It really is a completely bizarre set up.

 

Put simply, the current valuation of Fairfax India ($12.60) is completely NUTS. It is worth much more than that today. And, given managements stellar track record, it will be worth much more in the future. THE ONLY QUESTION IS WHEN WILL MR MARKET FIGURE IT OUT? It is a question SOLELY of timing. For an investor with a long term focus (where timing does not matter) then Fairfax India priced at $12.60 is called wonderful opportunity. With shares priced at $12.60 investors are getting a very high margin of safety. 

I think investors regard FIH as a high cost / poorly performing and externally controlled CEF. Those ought to trade at a large discount to NAV.

 

Don't shoot the messenger. I think FIH might be a trade at times, but as a long term investment, I think it's a lost cause.

[ICUMD]

5 hours ago, Spekulatius said:

I think investors regard FIH as a high cost / poorly performing and externally controlled CEF. Those ought to trade at a large discount to NAV.

 

Don't shoot the messenger. I think FIH might be a trade at times, but as a long term investment, I think it's a lost cause.

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.

 

 

 

 

 

 

[Crip1]

5 hours ago, Spekulatius said:

I think investors regard FIH as a high cost / poorly performing and externally controlled CEF. Those ought to trade at a large discount to NAV.

 

Don't shoot the messenger. I think FIH might be a trade at times, but as a long term investment, I think it's a lost cause.

As far as being a lost cause, you very well may be right. One has to acknowledge that.

 

The question for holders (and I am a holder) is whether the market is right about the long-term prospects or if the holder is right. The increase in BV for FFHI over the past 7 years has not been great but it’s been reasonably acceptable, which compels me to think that market has it wrong. But, one has to acknowledge that the market may be right.

 

If one does believe that the market is right, then there’s the exit strategy. If it was not sellable at US$12.50 then it really should not be sellable at US$10.97. This is akin to someone accepting an offer of $450K on their house that when they rejected an offer of over $500K a few months ago.

 

Personally, I have a lot in this position so if/when it moves higher I will look to lighten my position and redeploy where things look better. And when I do, as one with the Sadim* touch for selling stocks, I’ll be sure to let this board know as my selling has more often than not been a good entry point.

 

-Crip

 

* Midas spelled backwards

[modiva]

The stock has been a poor performer. The saving grace is that it held up reasonably well relative to the market, YTD. 

 

I have been buying dips and I am fine as long as the BV keeps going up. The IV is even higher, with the airport assets. They own great businesses with greater potential. Hopefully it catches up to the BV soon.