Capitalize on Growth From This Emerging Market With Canada’s Warren Buffett

Here’s why Fairfax India Holdings Corp. (TSX:FIH.U) should be your top pick if you’re curious about growth from emerging markets.

| More on:

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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any stocks mentioned. Fairfax Financial is a recommendation of Stock Advisor Canada.

More on Stocks for Beginners

Young adult woman walking up the stairs with sun sport background
Stocks for Beginners

3 Top Canadian Stocks for Beginners in 2022

2022 is the perfect year to begin investing in Canadian stocks! Markets are down and stocks are cheap. Here are…

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Stocks for Beginners

Buy the Dip: 2 Insanely Cheap Growth Stocks to Buy Today!

Many Canadian growth stocks are looking insanely cheap today. Here are two stocks that have long histories of making investors…

Read more »

clock time
Stocks for Beginners

3 Stocks to Start Investing Today

Looking for a set of stocks to start investing today? Here are some great options that offer growth and income…

Read more »

Chalk outline of two arrows pointing in opposite directions
Stocks for Beginners

How to Save Thousands Per Year With Your RRSP

If you can hit your RRSP contribution limit each year, you could save thousands in taxes that could help boost…

Read more »

Portrait of woman having fun in the street.
Stocks for Beginners

New Investors: 3 Dividend Stocks to Buy Soon

Are there too many stocks to choose from? New investors can start their research in these solid dividend stocks!

Read more »

edit Sale sign, value, discount
Stocks for Beginners

5 Amazing Stocks That Are on Sale Today

After the recent stock market correction, tonnes of top-quality stocks are on sale today. Here are five amazing stocks to…

Read more »

stock analysis
Stocks for Beginners

2 Simple Strategies That Canadian Investors Can Use to Start Investing in Stocks

Here are two of the simplest and best investing strategies for Canadians to start investing in stocks today.

Read more »

Target. Stand out from the crowd
Stocks for Beginners

Top 2 Dividend Stocks for Beginners

Dividend stocks like BCE (TSX:BCE)(NYSE:BCE) are ideal for beginners.

Read more »