If you’re like most Canadians, then you probably lack exposure to emerging markets, which can offer next-level returns in the long run. Sure, you may have foreign stocks from U.S. exchanges or even a Canadian ETF which provide a diversified mix of foreign investments. But what if you could invest in a single security that trades on the TSX which will give you exposure to the high-flying Indian market without having to browse the NIFTY 50 — the index for India’s National Stock Exchange (NSE) — for undervalued growth plays in one of the hottest emerging markets out there?
Well, here’s the good news: you can. And the best part is that Prem Watsa, the Warren Buffett of Canada, runs the show. I’m talking about Fairfax India Holdings Corp. (TSX: FIH.U); it is a Canadian holding company that invests in both public and private securities as well as debt instruments in India and businesses operating in India.
You’re probably familiar with Prem Watsa and Fairfax Financial Holdings Ltd. (TSX: FFH), which has been a long-term play for investors who want are wary of market downfalls. Both FFH and FIH.U have Prem Watsa’s cautious approach to preserving capital, but the difference is that Fairfax India Holdings is focused on finding value and delivering long-term capital appreciation in a much faster growth environment in the emerging market of India.
You’ve probably never considered investing in an emerging market like India before. There’s a higher degree of risk when investing in foreign companies like this, aren’t there? And besides, Warren Buffett made it clear that investors should remain within their circle of competence and not venture into the unknown.
Sure, you could keep a majority of your investments in developed countries, but I believe you may be missing out on opportunities that may offer way more upside for just a little bit of risk. Also, you’re not picking your own Indian stocks; it’s a daunting task for many Canadians, who probably can’t name a single company based in India! Prem Watsa and his team are making the moves, and you can bet that minimizing downside risk is one of the top things on his agenda.
Prem Watsa has a proven track record, and I believe Fairfax India Holdings could be a fantastic long-term play that could give your portfolio a nice boost.
Shares of FIH.U currently trade at an 8.22 price-to-earnings multiple, which is absurdly cheap considering the enormous growth potential. If you’re interested in investing in India alongside Canada’s Warren Buffett, then do yourself a favour and pick up shares of FIH.U today.
Stay smart. Stay hungry. Stay Foolish.
