MUMBAI: Prem Watsa is often called the Warren Buffett of Canada. And, this long-time believer in value investing has great faith in India's entrepreneurs and the country's economic potential, which is why he plans on putting more money into companies here.The Hyderabad-born chairman of Canada's Fairfax Financial Holdings reiterated in an interview to ET that Thomas Cook, purchased in 2012, will be the vehicle for all acquisitions in India. Watsa, whose famously against-the-grain investments include the Bank of Ireland, BlackBerry and property in Greece, is clear about why he thinks Indian companies are a good bet."If you take out an annual report of an Indian business, you can understand it. There are tonnes of companies that have done very well. So, not a lot different from the story in North America," he said. "India has good companies, English as a link language, democracy, rule of law and very positive demographic trends. That's the big advantage of India."Watsa, 63, was in India last week on one of his annual visits to meet employees of Thomas Cook and Ikya Human Capital Solutions, a Bangalore-based HR solutions firm. Thomas Cook acquired Ikya in 2013 for about Rs 256 crore. Watsa is also an investor in India Infoline, the financial services firm, where he holds about 10%. Watsa said that the cash flows generated by Thomas Cook will be reinvested in India. "Thomas Cook is a free cash flow business," he said. "As the cash flow comes and we invest it in India, we might bring some additional money from abroad into India."Watsa's bullishness on India is in contrast to his caution on global equity markets, which he said could be in bubble territory. Stock prices around the world have been climbing for the past three years.The Dow Jones has risen 56% in the past three years, while the S&P 500 has climbed 63%. The Sensex is up 21% in the same period. "We are very careful. There are a lot of unintended consequences, so we try to be careful," Watsa told ET in an exclusive interview last week."On the other hand, (in) 2008-09, stock markets dropped 50% and right after that drop we removed our hedges. Today we are 100% hedged on our common stock portfolio and we have lots of cash."Watsa rarely buys expensive, high-profile stocks, preferring to rummage through the debris of stock market busts to identify fundamentally sound companies quoting at below-par multiples. While some people call this contrarian, Watsa prefers to use the term, value investment."When I was a young man and I was introduced to that book (Graham's Intelligent Investor)... for me it was like a road to Damascus moment and I became a value investor," he said. "So I've been value investing for a long time, the approach is not so much contrarian as we are looking for value."In 2011, after a now-famous phone call, Watsa teamed up with Wilbur Ross and other investors such as Fidelity to buy a 35% stake in Bank of Ireland, the troubled Irish bank stricken with bad debts and plagued by depositor panic over an imminent collapse.That investment was a success and Ireland last year underlined its revival from the 2010-11 bust by exiting the euro bailout programme. Watsa went on to invest in property in Greece, reinforcing his reputation as someone willing to take a risk for the sake of value."To find value investments, you must focus on price," Watsa said. "We like Amazon as a company but it makes very little money. We wouldn't buy Amazon as a value investment. If you would have had this interview with me 4-5 years ago, I'd say I would not buy BlackBerry because it was priced too high relative to its value -- $70billion-50billion. We take a long-term view and we make sure we get paid for the risk that we take based on the price we pay for the stock."One such long-term view resulted in Watsa investing in the struggling BlackBerry in 2012. He bought a stake of about 10% and invested another $1 billion last year to keep the company going.Watsa said BlackBerry will focus on the enterprise server market and is backing new CEO John Chen to turn around the once-iconic smartphone maker.Is value investing relevant at a time of stock market bubbles? When stock prices have been driven to artificially high levels by central bank pump priming?"Always has! Always will!" he said. "There will be periods like when the tech boom of the 1990s bust. If I could go a little further back in time, the high price of oil when the Shah of Iran was taken out, the same sort of thing happened where companies with no revenue but only oil reserves in the ground were selling for billions of dollars."The market, he said, goes through extreme phases. But that is no reason to disbelieve the philosophy of value investing, which holds that value is created not by external stimuli but by sound fundamentals, governance and management.Despite sky-high stock markets and excitement about a possible US economic revival, Watsa confesses to some scepticism."Right now, the central banks are pumping a lot of money into the economy," he said. "Despite this liquidity, the economy in the US is very tepid, inflation is the lowest in 50 years. Most people think in the future inflation will happen, we worry about deflation... We worry that in America there is still too much debt, lots of consumer, government and company debt."