 Good day, fellow investors. When it comes to investing, investing now in India that has a very little GDP per person and it's growing at the fastest rate in the world, five to 10% per year, will probably continue to grow that fast, might be a very, very smart portfolio exposure, very, very smart thing to do. Now, simply let it grow for the next 20 years like China did and therefore, I always look for Indian investments. And one investment that is very interesting is Fairfax India. It has been founded by Prem WhatsApp, what they call the Canadian Buffet that is originally from India, but moved to Canada and built a Canadian empire of financial banks and he has set up this investment vehicle that you can buy on the Canadian Stock Exchange and gives you exposure to great Indian assets like the Bangalore Airport. So who wouldn't want to own an airport in India and the company owns I think 50% of the airport there. It's an 8 million people city, people fly more and more in India. Simply very, very interesting. Then they have a financial services company that skaters to the growing Indian population, which is still growing, which is a very, very nice factor when it comes to investing tailwinds. And the third business, they have three great big businesses and then many smaller. And the third business is a chemical business producing plastics in India and Egypt and all those emerging countries demand for plastic as GDP grows is expected to really, really boom. And they have a lot of investments, some in agriculture, building new silo's for storage, et cetera. So a company that's oriented to expose to the Indian growth. And then when I see such a holding company, okay, I want to dig deeper. I want to see what are the look through earnings? What are the earnings of each holding put that into my Excel file that give me the really earnings return that they are delivering compared to the market capitalization? And then I want to see, okay, what are the pros and cons of investing? And then see whether this fits as a portfolio exposure. Fairfax India went public at $10 per share in 2015. And now we are just at $11 per share while the Indian economy grew very fastly over the last five years. There have been good developments. And let's see whether this is a bargain now that the stock has been significantly hit and whether this is a good exposure to the Indian economy. Let me give you an overview and that will discuss some facts that we'll see whether you can swallow before investing. So these are the holdings. IIFL Finance is a group that they hold with does wealth management loans and securities trading. So as the market there grows, as the financial grows, as the economy grows, this is something very good to be exposed. Then there is Farcam Chemical Company, another chemical company, Sunmar Producing Plastics. And we have Bangalore International Airport that they own a big chunk of, which is something very, very good. For example, IIFL Finance, they expanded the number of branches by almost 10%. Everything is growing, customer base is growing. Their focus is on small ticket loans. They have separated to three companies, finance, wealth management and securities trading. So all the things that will do well, especially as the economy is expanding. The results are good. The companies are very profitable. This is in Crores, the profit. I think it's one Crores, 144,000 US dollars. So the equity value is 150 million. It is a bit higher on the balancing of Fairfax, but profits are 20 million for the first six months. So should be 40 million in total. And they get, as the Fairfax owns 26%, they should get about 10 million in debt as look through earnings. So not to waste time, I have looked at all the companies they own. What are the earnings on those companies? And then I have made an Excel sheet to show, okay, what are the real earnings? What is the real balance sheet value? And what is the share of earnings that Fairfax actually owns? So this is my quick overview Excel table. And I have come out that earnings currently for 2000, for the last fiscal year were 100 million. You must think that Fairfax's market capitalization is 1.6 billion. And 100 million in earnings on average should sound good. But then when you count for the share in earnings, we are at 50 million. So 50 million on 1.5 billion, it's a price earnings ratio of 30, which is still very high. But when you account for companies like Sunmar that will have new plants in operations over the next two years and reach full capacity in Egypt and India on the plastics, only in a few years, it might turn a profit. So the 100 million loss might turn to 100, 150 million in profits. So I should give 50 million there. International airport last year profits fell 50%. So I should increase their air as I think an airline went bust there. So travel should recover new airlines, new slots, et cetera. So that should again be, I don't know, 50, 100 million they are building a new runway, et cetera. So that should again can be 50 million for Fairfax and then finance, the IIFL is growing and that should also be again 50 to 100 million. So at some point in time, I think that Fairfax India can reach 100, 150, 200 million in look through earnings through their companies, which is something very interesting. If they do it thanks to the Indian growth over the next few years, something very interesting on the current market capitalization of just 1.6 billion. We are talking returns of above 15% plus exposure to the growth in India. So you would say very, very interesting company. You have Prem Watsa that they are controlling that all the accounting is good. I think if they put 500 million in a company, then they control that everything works well. So very, very positive, very interesting exposure. I really like the airport and then it comes to the story of my life when it comes to investing. You find something good, but if it doesn't tick all the checks, then it's simply, I'm sorry, not for me, next. And if you want to be a great investor, then you say no, in 90, 90.90, 99% of the cases when you do research. So I spent a lot of time to look at, to look through earnings. Those told me, okay, if the stock falls another 40, 40% it could be interesting for that perspective as there are earnings, there are quality assets and there is plenty of upside from the growth. But then you look at fees, actually it was a comment on my stock market research platform. I thought that I would have checked it before investing in it, but I thought I will follow the stock. It should have fallen 40% to reach my target. But then I've checked their fees and it's not just a holding company where the management gets a salary. It's a hedge fund with a 220 fee. So over the last years, they have charged, they charge themselves 9 million in fees, fees on what did we say, 50 million in look through earnings so what's 20% of the earnings are going to the company plus they take 20% on every increase in value above 5% per year on a cumulative rate. And the returns there are 14, 14% on the bond they have invested and they simply take 20% out of that. And in 2017, they have taken 114 million as a fee in the form of shares, doesn't matter, but that's a huge cost. And that's something that the company now, the earnings will take three years to cover just that growth. So this is definitely a no, no, no, no for me because I don't like the structure. If it would have been just a normal holding with the 9 million fees and that's it, I might have thought about it. But with the performance, I'm cutting my upside and they'll cut that upside as soon as stock prices go up, then they calculate the upside based on their cashflow estimations that have nothing to do with what's really going on in the businesses because the difference between the cashflow estimations and the actual look through earnings are pretty volatile. So Prem Watsa is not the Warren Buffett of Canada because Warren Buffett doesn't do such schemes where you simply skim off the top and you leave practically nothing except or a good story to your investors. So Fairfax India for me, no, no, no, no, thank you. And goodbye, I don't know how to say it in Hindi. Please subscribe if you like this investigative analysis, check my stock market research platform for the companies that I really like. And there is also, there are always big reports and understand the risk reward, see what fits yourself for yourself. And that's it, invest, think about buying good businesses, margin of safety that have positive tailwinds but where you are not robbed by paying huge fees. Thank you and I'll see you in the next video.