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FRFHF just moving along with other markets recently


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If you look at the FRFHF, FXI, DBB (commodity metal ETF) graph for the 3 month graph, it is all moving in the same direction. After reading some of the annual reports, I was thinking FRFHF was shorting some of the Chinese companies and commodity, and expecting to move in opposite direction. Did failfax have to eliminate the China short positions, after the Chinese government made shorting illegal? I thought shorting Chinese stocks were illegal only for Chinese companies. Please shed some lights on why FRFHF is going down along with other indices recently. I was expecting them to move in the opposite direction of China and commodity index, especially in the recent market volatility. Please share your thoughts.



If you look at the FRFHF and FXI 1-year graph, the only times they moved in the opposite direction are


Jan15 to Feb15

April second week to May15



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FXI is in a huge bubble territory. FRFHF was singing all negative about China. Why should it move in the same direction most of the time? Hard to think it is coincidental.


Fairfax has limited exposure to China, commodities, etc. They do have quite a bit of exposure to EM through their investments in India, but even that is only a fraction of the company as a whole which is mostly U.S./Canadian insurance and bonds. There is absolutely no reason you should expect them to trade together and any trading together they do is purely coincidence or a sign of a general equity "risk off" environment in which all equities exhibit much higher correlations to each other than is normal.

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