Prem on prospects in India

[nwoodman]

http://economictimes.indiatimes.com/et-now/experts/very-bullish-on-fin-services-in-india-prem-watsa/videoshow/54689041.cms

 

Cheers

nwoodman

[ValueMaven]

Thank you for finding and posting this! 

 

Sincerely,

VM

[chrispy]

The more I read and hear, the more intriguing FIH is.  The prospects in India sound fantastic and with their knowledge and experience in India it appears to be a great opportunity at a good price.  The quality businesses already in place have a major moat plus large growth opportunity. Now I need to get an account with a brokerage that charges less for foreign exchanges (US citizen).

 

With all emerging markets, it will be a bumpy ride.  FIH would seem to be lucrative in the long term though.

[Bog]

Thanks for the link.

 

I am starting to warm up to Fairfax India as well. I do not know a lot about individual companies in India, so i think the Fairfax option is a good way to go.

[captkerosene]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

[Guest longinvestor]

I do like that Prem is taking a contrarian view 're India but he is clearly out on a limb assuming that the key man in charge, Modi  will remain so for another couple of election cycles. Anti-incumbency has been the unchanged theme since the 1970's.

[karthikpm]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

 

By that logic, you should invest in Mongolia ( IQ 101)

 

https://iq-research.info/en/page/average-iq-by-country

[cwericb]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

 

I would question the IQ of anyone who would use this as investment criteria. Also the comment suggests someone doesn't know a lot about IQ testing.

 

 

[InspireByReason]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

 

I would question the IQ of anyone who would use this as investment criteria. Also the comment suggests someone doesn't know a lot about IQ testing.

 

+1

[InspireByReason]

How the hell would you value something like this?

[Parsad]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

 

Absolute rubbish!  And a very damaged way of thinking intellectually.

 

Martin Van Blerk, who runs the Baobab Fund out of Botswana (IQ 70), has found plenty of opportunties for his fund. 

 

Michael Lee Chin, who used to run AIC Funds, and instead plowed a billion dollars into his home country of Jamaica (IQ 71), has done very well for himself. 

 

Tata, Ambani, Khosla, etc...have made riches in India and other parts of the world, and plowed money back into India.

 

These are just a handful of thousands of examples I could give you!  Cheers! 

[captkerosene]

The Mongolians seem to have done pretty well given their lack of resources and difficult neighbors. I suppose I would consider investing there if the right circumstances arose. (The Khan boys took over much of the world.)

 

Prem is brilliant and I'm a huge fan.  I suspect that Prem will do very well in India - I'm much less certain that india will do well. I'm sure that there are thousands, no, millions, no, tens of millions of people from India that are much smarter than me (or is it I?). I wonder why so many of them chose to leave? But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.

 

It's never in good taste to insult someone's countrymen or relatives. That isn't my intention. My intention is simply to bring attention to something that most people are unaware of.

 

I think I'll pass on investing in Jamaica and probably Haiti too. Although I'm happy to contribute to charities that alleviate human suffering anywhere.

[Parsad]

<i>But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.</i>

 

Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.

 

I would suggest that the differentials you are seeing in IQ's is because of the lack of infrastructure, resources and low per capita income...not the other way around.  If you level the playing field in terms of access to resources, you change the outcome...combat corruption and create a free-market system, and the citizens will flourish.  What was Singapore's IQ like before Lee Kuan Yew took the country in a new direction?  How did China become the global colossal it has become?  Were U.S. patriots any more intelligent than their British compatriots...but what have we seen happen over 240 years?

 

Cheers! 

[InspireByReason]

<i>But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.</i>

 

Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.

 

I would suggest that the differentials you are seeing in IQ's is because of the lack of infrastructure, resources and low per capita income...not the other way around.  If you level the playing field in terms of access to resources, you change the outcome...combat corruption and create a free-market system, and the citizens will flourish.  What was Singapore's IQ like before Lee Kuan Yew took the country in a new direction?  How did China become the global colossal it has become?  Were U.S. patriots any more intelligent than their British compatriots...but what have we seen happen over 240 years?

 

Cheers! 

 

Agree 100%. IQ is a consequence of good infrastructure not the other way around, the IQ's of Indians will rise as the infrastructure and policies of India is improved.

[Parsad]

<i>But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.</i>

 

Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.

 

I would suggest that the differentials you are seeing in IQ's is because of the lack of infrastructure, resources and low per capita income...not the other way around.  If you level the playing field in terms of access to resources, you change the outcome...combat corruption and create a free-market system, and the citizens will flourish.  What was Singapore's IQ like before Lee Kuan Yew took the country in a new direction?  How did China become the global colossal it has become?  Were U.S. patriots any more intelligent than their British compatriots...but what have we seen happen over 240 years?

 

Cheers! 

 

Agree 100%. IQ is a consequence of good infrastructure not the other way around, the IQ's of Indians will rise as the infrastructure and policies of India is improved.

 

A good read on this stuff would actually be the 2016 Dakshana Annual Report that Mohnish writes.  Each student he gets into an IIT is going to have a compounding effect on their families, siblings, communities and even Dakshana itself.  He's providing the infrastructure and resources. 

 

It used to be referenced as routinely as washing one's hands that African-Americans were inferior to white Americans because they had a genetically lower IQ.  Everything has proven this notion wrong over the last 100 years as the playing field was slowly leveled.

 

Cheers! 

[captkerosene]

But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.

 

<i>Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.</i>

 

I think you, and WEB, made my point better than I did.

[cwericb]

I know a number of people who have little or no education that would do very poorly in an IQ test. Yet they have been very sucessful in business and have very well for themselves. High IQ does not necessarily mean someone will be successful in business.

 

On the other hand, I also know numerous extremely bright university professors, doctors, lawyers and other professionals who are for ever having money problems.

 

Anyone who thinks that they can compare the average IQ in one country to the average IQ of another knows very little about IQ testing.

 

[Shawn]

The average IQ in India is 82. While at the same time the average IQ in China is 100. Prem may find some real gems there but I don't like investing in places with low IQs.

 

I would question the IQ of anyone who would use this as investment criteria. Also the comment suggests someone doesn't know a lot about IQ testing.

 

+1

 

+2

[Shawn]

But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.

 

<i>Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.</i>

 

I think you, and WEB, made my point better than I did.

 

This is ignorant, Buffett is referring to a country with opportunity for him to build his wealth. If he were born in Bangladesh in 1930 he would not have had the same opportunities to go to the schools he went to and be exposed to the things he saw that influenced him to become an investor. Has nothing to do with IQ and IQ has nothing to do with success. Rose Blumkin couldn't read or write and build one of the best furniture businesses in North America, Temple Grandin was autistic and became an American icon, as Sanjeev pointed out there's a dozen examples of people we could refer to.

 

 

[rukawa]

But, the best predictor of success in life is IQ. Multiply a 20 point IQ deficit across a billion people and you end up with a lot of needy people. They drain the resources that would otherwise go towards funding infrastructure and investment. Taxes go up and wealth gets redistributed.

 

<i>Again, that's rubbish!  Buffett and Munger have high IQ's, but Buffett has said numerous times that he would not be successful if he had been born to parents in Bangladesh and would have probably ended up as a Lion's meal if born in parts of Africa.</i>

 

I think you, and WEB, made my point better than I did.

 

I feel like if you are going to talk about IQ you aught to be thoroughly familiar with the critique of IQ provide by either Ron Unz or Thomas Sowell.

See here:

http://www.theamericanconservative.com/articles/race-iq-and-wealth/

 

The single best example which destroys the idea that the IQ of a population predicts success is the Russian Jews (Rose Blumpkin was a Russian Jew) who migrated to the US from 1880-1910. When they first came to the US their IQs were tested during WWI and found to be among the lowest. Their rise from extreme poverty to parity with American levels is unprecedented in American immigrant history. No group has achieved greater success in less time. Russian Jews are now thought to have higher IQs than the rest of Americans and a disproportionate number of Nobel prize winners are Russian Jews. For example Feynman, Glashow and Weinberg are all Russian Jews from NY.

 

If you were trying to use IQ to predict what would happen to the Russian Jews, or for that matter other immigrant groups like Italians and Irish, you would have been dead wrong.

 

 

[TwoCitiesCapital]

IQ is simply a measure of your expected success in academic endeavors. In an economy that become more and more complex and requires more and more education/training to be successful in, it will generally be a better indicator of success; however, you can never take generalities and apply them to an individual.

 

In simplified economies with simpler jobs, IQ will be far less of a predictor of success. Having a lower IQ in a simpler economy like India's isn't a bad thing. As they progress and grow, more people will go to school for longer and IQs, on average, will rise.

 

It's as simple as that. Even in the U.S., I know individuals who tested in the top 5% of students in the U.S. who flunked out of college because they didn't have discipline. I know people who didn't go to college and have found greater financial success than the majority of my peers who did because they did have discipline. In general, IQ might have something to do with overall success in America, but no individual is tied down because of that.

 

 

[cwericb]

captkerosene:

 

Still having trouble following your logic. So you would focus your investments within countries with higher IQ averages.  Countries such as Spain, Mongolia, Andorra, Estonia and Latvia - all with equal or higher IQ rates than the US.

 

So how are those investments working out?

 

I see the Mongolian Stock Market (who knew?) is down 50% in the past five years and I don’t think the IBEX (Spain) has done so well either.

 

Since you say you don’t mean to insult anyone, I have to assume that you are truly ignorant of IQ and IQ testing results and would suggest you might do some more research on the subject.

 

You remind me of the teacher who gave his class IQ tests and then graded the students, 1st, 2nd, 3rd, etc and then posted the results. He got fired for that.

 

IQ testing is notoriously unreliable and I could go on if I thought you were really serious.

 

We probably all know guys who are dumb as dirt yet became self made millionaires and also know geniuses who don’t have a pot to piss in.

[captkerosene]

<i>The single best example which destroys the idea that the IQ of a population predicts success is the Russian Jews (Rose Blumpkin was a Russian Jew) who migrated to the US from 1880-1910. When they first came to the US their IQs were tested during WWI and found to be among the lowest. Their rise from extreme poverty to parity with American levels is unprecedented in American immigrant history. No group has achieved greater success in less time. Russian Jews are now thought to have higher IQs than the rest of Americans and a disproportionate number of Nobel prize winners are Russian Jews. For example Feynman, Glashow and Weinberg are all Russian Jews from NY. </i>

 

Jewish is a religion, not a race. Ashkenazi Jews score the highest in the world in IQ. Sadly, the rest of the Jews are not so lucky. The average IQ in Isreal is only 90. Your example suggests to me a conclusion exactly opposite your hypothesis. IQ can be measured and it predicts success.

 

 

[captkerosene]

<i>captkerosene:

 

Still having trouble following your logic. So you would focus your investments within countries with higher IQ averages.  Countries such as Spain, Mongolia, Andorra, Estonia and Latvia - all with equal or higher IQ rates than the US.</i>

 

That is but one variable.

 

<i>So how are those investments working out?</i>

 

Very well. I'm heavily into Russia. Lots of scientists and mathematicians. 99% literacy rate. Cheapest market in the world with everything else I care about moving in the right direction. (Ease of doing business index just improved eleven places to #40 - even with sanctions in place.)

 

<i>I see the Mongolian Stock Market (who knew?) is down 50% in the past five years and I don’t think the IBEX (Spain) has done so well either.</i>

 

Commodity prices and rampant socialism are other variables.

 

 

 

<i>Since you say you don’t mean to insult anyone, I have to assume that you are truly ignorant of IQ and IQ testing results and would suggest you might do some more research on the subject.</i>

 

Thank you for your suggestion.

 

 

<i>You remind me of the teacher who gave his class IQ tests and then graded the students, 1st, 2nd, 3rd, etc and then posted the results. He got fired for that.</i>

 

I'm an investor, not a teacher.

 

<i>IQ testing is notoriously unreliable and I could go on if I thought you were really serious.</i>

 

This isn't a joke to me. I'm not trying to agitate. I brought it up because I thought it was an important consideration that few (due to PC concerns) were aware of. If you feel that IQ tests are too unreliable to use then I'm fine with your decision to ignore them.

 

 

 

<i>We probably all know guys who are dumb as dirt yet became self made millionaires and also know geniuses who don’t have a pot to piss in.</i>

 

I actually don't know anybody that's dumb as dirt that's made millions. But if I did, what would that prove? The answer is: Nothing. The sample size is too small and there is likely significant selection bias. Also, there are clearly other variables that come into play. Do you really want to stand by an assertion that IQ and success aren't correlated? And if you'll accept that intelligence is an important variable for an individual then isn't it also important for a country?

 

Buffett's criterea when hiring someone: <i>Intelligence</i>, energy and integrity. (Emphasis mine.)

[nwoodman]

With respect to all,  can we please quit this line of reasoning. The IQ thesis debate, has been well argued by  both sides,  so let's leave it at that.  My original post was simply drawing attention to Prem's view on the prospects for India.  This will either work or it won't. 

 

I think a more interesting topic of discussion is whether PM Modi can make changes required for growth, that in turn, will achieve above average returns for Fairfax.

 

Cheers

 

nwoodman