Author Topic: Fairfax India new issue  (Read 137825 times)

Lakesider

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Re: Fairfax India new issue
« Reply #290 on: March 29, 2019, 08:08:37 PM »
I don't know anything about the shipping industry but purchasing a tanker company in a country dependent on oil imports seems like a smart move. Hopefully it can expand like Saurashtra.

I think its likely a good time to be investing in the sector, rates have been in a trough over the past couple of years and operators have been taking losses. New deliveries are at a turning point in 2019 and capacity should start decreasing over the next few years, rates have steadied and could continue upwards.  New legislation in 2020 for low sulphur fules will increase the cost of running older ships so scrapping could increase further.

A lot of these tanker operators have been trading at discounts to the liquidation value, hard to tell at first glance but they could have got a very good price.


eclecticvalue

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Re: Fairfax India new issue
« Reply #291 on: March 30, 2019, 02:51:53 PM »
If anyone going to the Fairfax India AGM. Can anyone ask about why U.S. investors can't buy either the OTC or Canadian shares? When will it be fixed.

Spekulatius

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Re: Fairfax India new issue
« Reply #292 on: April 09, 2019, 06:06:55 PM »
Having said that, don't forget there are a heap load of well-run family companies in India to choose from - it's not tricky to create a small basket, or find a fund manager who knows what they're doing.

Can you name some examples of well run family business conglomerates?
To be a realist, one has to believe in miracles.


SnarkyPuppy

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Re: Fairfax India new issue
« Reply #294 on: August 10, 2019, 03:19:59 PM »
This is a question for American investors in FIH.  It was noted earlier in this thread that FIH could well be deemed a PFIC by the IRS.  Jurgis commented, "It likely will be [a PFIC] unless it acquires controlled operating businesses fast."  So I'm wondering how others are dealing with this issue.  Possible strategies:

(1) Ignore the risk and hope the IRS either doesn't notice or decides it's not a PFIC.  Might work if you're a small shareholder.  Huge losses if it doesn't work.

(2) Try to figure out the PFIC rules, and go by them.  My impression is that the taxes one would then owe would make the investment much less attractive--I think essentially, all unrealized gains are taxed like ordinary income each year.  Also it's unclear to me what information is needed for tax filing, and how to get it if the company doesn't help out. 

I've only owned one PFIC, and the (Canadian) company provided Americans a sheet each year with the necessary information to deal with PFIC filing. 

Useful link:

https://ustaxcompliance.wordpress.com/tax-triggers/a-pfic-primer/

Did you ever receive any closure on this issue?

EricSchleien

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Re: Fairfax India new issue
« Reply #295 on: August 13, 2019, 04:59:34 PM »
From Oct 19, 2018 - an email from Fairfax India

Hello Eric
Fairfax India is considered a PFIC for tax purposes.
Thank you
John Varnell
VP


This is a question for American investors in FIH.  It was noted earlier in this thread that FIH could well be deemed a PFIC by the IRS.  Jurgis commented, "It likely will be [a PFIC] unless it acquires controlled operating businesses fast."  So I'm wondering how others are dealing with this issue.  Possible strategies:

(1) Ignore the risk and hope the IRS either doesn't notice or decides it's not a PFIC.  Might work if you're a small shareholder.  Huge losses if it doesn't work.

(2) Try to figure out the PFIC rules, and go by them.  My impression is that the taxes one would then owe would make the investment much less attractive--I think essentially, all unrealized gains are taxed like ordinary income each year.  Also it's unclear to me what information is needed for tax filing, and how to get it if the company doesn't help out. 

I've only owned one PFIC, and the (Canadian) company provided Americans a sheet each year with the necessary information to deal with PFIC filing. 

Useful link:

https://ustaxcompliance.wordpress.com/tax-triggers/a-pfic-primer/

Did you ever receive any closure on this issue?

TwoCitiesCapital

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Re: Fairfax India new issue
« Reply #296 on: August 13, 2019, 08:46:38 PM »
For U.S. shareholders - the rules have been clarified where those who own shares in PFICs in tax-free and tax-deferred accounts are exempt from the tax treatment and reporting required by taxable PFIC investors.

I'm having trouble locating any official documentation on it. I can find text in a google search from PWC, but can't identify the source of the quote on their actual website or from their publications.

Quote from PWC google results
Quote
s a result, US persons that are beneficiaries of or have interests in an organization or account exempt from tax (e.g., an individual retirement account (IRA) or a Section 529 plan) that own stock of a PFIC will not be subject to tax and reporting obligations under the PFIC rules.


I did find the below on some Cohen & Steers CPA site:
Quote
The final regulations codify prior IRS guidance related to the definition of a shareholder of a PFIC. Specifically, owners of an interest in a PFIC that is held through a tax-exempt entity are removed from the definition of PFIC shareholders. Therefore, for example, neither beneficiaries of pension funds nor owners of an IRA should be treated as shareholders of a PFIC if the pension or IRA is invested in an offshore feeder fund (blocker) that is formed as a foreign corporation. This clarified definition should be a welcome relief to a significant portion of alternative investors who are now exempt from filing Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.

https://www.cohencpa.com/insights/articles/updated-pfic-rules-and-relaxed-reporting
« Last Edit: August 13, 2019, 08:50:29 PM by TwoCitiesCapital »

SnarkyPuppy

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Re: Fairfax India new issue
« Reply #297 on: August 14, 2019, 05:05:10 PM »
Thank you both, appreciate it.

obtuse_investor

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Re: Fairfax India new issue
« Reply #298 on: August 20, 2019, 02:18:03 PM »
FIH.U keeps on hitting 52 week lows lately: https://web.tmxmoney.com/quote.php?qm_symbol=fih.u

Do you think it is a macro thing? I haven't seen any news from holdings.
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor

wondering

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Re: Fairfax India new issue
« Reply #299 on: August 21, 2019, 07:10:48 AM »
It is currently selling at 85% of book value.  I will put myself on the line and say the stock is cheap now and it's a good to buy (I have bought some more shares recently and I intend to add more).  I am not too worried about these short-term quarter losses and marco-economic noise in the news.

The portfolio of investments - airport, chemical company, financial services, grain storage, banking, shipping etc... are all companies and industries that will grow with the India.

Added Prem's 20-30 year experience of doing business in India makes me very comfort to be shareholder.

In other news (I am not sure if anyone has posted yet).  CSB formerly Catholic Syrian Bank is going public.

https://www.fairfaxindia.ca/news/press-releases/press-release-details/2019/Fairfax-India-Announces-Filing-of-IPO-Prospectus-by-CSB-Bank-Limited/default.aspx