Welcome to Inside Active, a podcast about active managers that goes beyond sound bites and headlines and looks deeper into their processes, challenges and philosophies and security selection. I'm David Cohne, I lead mutual fund and active research at Bloomberg Intelligence. Today my co host is Laurent Julie, senior equity strategist at Bloomberg Intelligence. Laurent, thank you for joining.

Welcome to Inside Active, a podcast about active managers that goes beyond sound bites and headlines and looks deeper into their processes, challenges and philosophies and security selection. I'm David Cohne, I lead mutual fund and active research at Bloomberg Intelligence. Today my co host is Laurent Julie, senior equity strategist at Bloomberg Intelligence. Laurent, thank you for joining.

Me today We come.

Me today We come.

So you wrote an interesting note last week about Japanese EPs growth during the third quarter. You know, I'd love to see how these companies performed in terms of EPs growth and you know, maybe some positive surprises.

So you wrote an interesting note last week about Japanese EPs growth during the third quarter. You know, I'd love to see how these companies performed in terms of EPs growth and you know, maybe some positive surprises.

So in fact, we did a quite deep dive into the September quarter results of Japanese companies and as you mention, I mean the results came out better than expected. As a quarterly year of your growth was around twenty six percent compared to seventeen percent initially expected. But I think the key point is that the breadth of positive surprise has been quite narrow. Out of eleven sectors, only Free delivered positive surprise. There are technology, financial, sorry, healthcare and materials, and also soft Bank Group also did blowout market expectations. In fact, if you exclude those three sectors and soft bank, in fact, the Japanese results would have been much lower than expected. In addition, if you look at the full year guidance which has been provided by the companies for the moment, there are still seven percent below the market consensus and they were revised only one percent during the reporting season. So that's quite disappointing, and I think it was not enough to get the market excited. And the last point that I would like to make is that I think now investors focus shifted back to the macro and especially what the BOJ will do at its next meeting, which is towards the end of December. For the moment, the probability of a twenty five basis point rise is about sixty percent because later inflation data are still above two percent, and also the currency, as we can a little bit compared to the month of July. So I think market expect the BOJ to provide support to the currency. And that's it.

So in fact, we did a quite deep dive into the September quarter results of Japanese companies and as you mention, I mean the results came out better than expected. As a quarterly year of your growth was around twenty six percent compared to seventeen percent initially expected. But I think the key point is that the breadth of positive surprise has been quite narrow. Out of eleven sectors, only Free delivered positive surprise. There are technology, financial, sorry, healthcare and materials, and also soft Bank Group also did blowout market expectations. In fact, if you exclude those three sectors and soft bank, in fact, the Japanese results would have been much lower than expected. In addition, if you look at the full year guidance which has been provided by the companies for the moment, there are still seven percent below the market consensus and they were revised only one percent during the reporting season. So that's quite disappointing, and I think it was not enough to get the market excited. And the last point that I would like to make is that I think now investors focus shifted back to the macro and especially what the BOJ will do at its next meeting, which is towards the end of December. For the moment, the probability of a twenty five basis point rise is about sixty percent because later inflation data are still above two percent, and also the currency, as we can a little bit compared to the month of July. So I think market expect the BOJ to provide support to the currency. And that's it.

Well, that's great, and speaking of international stocks, i'd like to welcome our guests. Graham Forster, a portfolio manager of the International Equity Strategy and Global Equity strategy at Orbist Investment Management. Graham, thank you for joining us today.

Well, that's great, and speaking of international stocks, i'd like to welcome our guests. Graham Forster, a portfolio manager of the International Equity Strategy and Global Equity strategy at Orbist Investment Management. Graham, thank you for joining us today.

It's great to be here. Thank you for the kind invite.

It's great to be here. Thank you for the kind invite.

Well, before we kind of jump into your background, i'd love to hear your thoughts on you know what Laurent was just you know, mentioning you know, you know what kind of occurred during the third quarter in terms of Japanese EPs.

Well, before we kind of jump into your background, i'd love to hear your thoughts on you know what Laurent was just you know, mentioning you know, you know what kind of occurred during the third quarter in terms of Japanese EPs.

So I think there's interesting things happening in Japan. We tend not to look at a quarter by a quarter basis, but you know, in terms of what's happening on the longer term, longer term trends. But I think some of the things that Lauren said rhymed the financials. I think we were quite large in the financials for some time. That's come down quite a lot because they're trading, you know, that sort of more normalized multiples. But I think I think there could be much more in terms of positive surprises coming out of that sector, because if you think about what they've been through for twenty years in terms of their altitude training, from having such low rates for so long and building up the muscle to survive and not quite thrive, but at least survived through that period and wrote tad more into sort of feed driven businesses. I think if you start to see rates move off, you know, off zero and and and higher from here, which I think is more likely to happen than not, you'll see a lot more positive surprise on their interest margins and people expect just because it's been so low for so long. And also they're doing you know, a lot in terms of capital efficiency and unwinding all of their cross shareholdings and and that's releasing capital. I think they're in a nice phase. It's just that you know that the prices are reflecting some of that positivity.

So I think there's interesting things happening in Japan. We tend not to look at a quarter by a quarter basis, but you know, in terms of what's happening on the longer term, longer term trends. But I think some of the things that Lauren said rhymed the financials. I think we were quite large in the financials for some time. That's come down quite a lot because they're trading, you know, that sort of more normalized multiples. But I think I think there could be much more in terms of positive surprises coming out of that sector, because if you think about what they've been through for twenty years in terms of their altitude training, from having such low rates for so long and building up the muscle to survive and not quite thrive, but at least survived through that period and wrote tad more into sort of feed driven businesses. I think if you start to see rates move off, you know, off zero and and and higher from here, which I think is more likely to happen than not, you'll see a lot more positive surprise on their interest margins and people expect just because it's been so low for so long. And also they're doing you know, a lot in terms of capital efficiency and unwinding all of their cross shareholdings and and that's releasing capital. I think they're in a nice phase. It's just that you know that the prices are reflecting some of that positivity.

So I'd like to take a step back and kind of I know our audience would love to hear how you became a portfolio manager.

So I'd like to take a step back and kind of I know our audience would love to hear how you became a portfolio manager.

That's going way back, so I I mean I I was studying applied mathematics at Cambridge University in the UK, and I could have gone down that route. There's a lot of lots to be said for academia, but I you know, the short story is that I started getting interested in decision making under uncertainty, and that involved an interest in investing and an interest in games which had that characteristic like you know, you think think poker, and you know, that's that's what kind of led me into the investment industry. I find I found it interesting from the perspective of everyone suited to something. Right, your character and you know, your aptitude is typically suited to doing something in the world. You know, that's how we've evolved as humans. We all have some role to play, and mine was I found I had an aptitude for decision making in the situations where there's a lot of uncertainty. And you know it if you think about game selection, which we think about a lot in the poker world and in the investing world as well, I think investing as a whole is sensible game selection because what it does, given there's so much statisticity and so much noise in the business, and the noise to skill ratio is actually quite high. It attracts in a lot of in the poker world, they call them fish people who who you know, play the game but really, you know, really shouldn't be playing the game. They don't really have an aptitude for it, but they're attracted to it because they can win. They can win for you know, two three sessions. In investing, you can win for years without having real skill and edge and therefore it's a game that anyone feels they can play. So you drawing a lot of people and if you can do it well that there is sustainable edge you can you can develop. So I was attracted, you know, for I guess for those two reasons.

That's going way back, so I I mean I I was studying applied mathematics at Cambridge University in the UK, and I could have gone down that route. There's a lot of lots to be said for academia, but I you know, the short story is that I started getting interested in decision making under uncertainty, and that involved an interest in investing and an interest in games which had that characteristic like you know, you think think poker, and you know, that's that's what kind of led me into the investment industry. I find I found it interesting from the perspective of everyone suited to something. Right, your character and you know, your aptitude is typically suited to doing something in the world. You know, that's how we've evolved as humans. We all have some role to play, and mine was I found I had an aptitude for decision making in the situations where there's a lot of uncertainty. And you know it if you think about game selection, which we think about a lot in the poker world and in the investing world as well, I think investing as a whole is sensible game selection because what it does, given there's so much statisticity and so much noise in the business, and the noise to skill ratio is actually quite high. It attracts in a lot of in the poker world, they call them fish people who who you know, play the game but really, you know, really shouldn't be playing the game. They don't really have an aptitude for it, but they're attracted to it because they can win. They can win for you know, two three sessions. In investing, you can win for years without having real skill and edge and therefore it's a game that anyone feels they can play. So you drawing a lot of people and if you can do it well that there is sustainable edge you can you can develop. So I was attracted, you know, for I guess for those two reasons.

It's great. And so you're at Orbis, you know, can you tell us a little bit more about the investment philosophy of the firm?

It's great. And so you're at Orbis, you know, can you tell us a little bit more about the investment philosophy of the firm?

So Orbis I've been I've been at the firm since two thousand and seven. What what I thought? I found fascinating when I was thinking about, you know, where in the investment world do you go? One thing that struck me was what is the enduring What is the enduring way to gain edge in investment management? And for me, you know, given we are owning pieces of businesses, it's obviously assessing the value of what you earn. Right that there's there's all these there's a plethora that's of different styles that have developed within the investment industry. There's the quant sidne and you know, the quality and this growth and the value and all these different flavors of investment. For me, that there's only really one signal. There's only really one signal, and that is understanding that the value of a business and trying to buy at a big discount to that, and that should be enduring as long as as prices move away from intrinsic value. And that's really the core of Orbis's philosophy and what drew me to the firm. You know, it's interesting from the sense I was talking about game selection. Given the industry invests attracts a lot of or has the potential to attract a lot of people who really don't have sustainable edge, you would think that there would be quite a large cohort of management firms and people within the industry that have very long term superior track records. And as I was digging, you know, around in the data back in two thousand and six when I was thinking about where I should be in this industry, it's really quite hard to find examples of sustainable long term excess performance. There aren't that many, which is fascinating, and I think there's a whole host of reasons for that, but one of the ones that stood out was Orbis, and it goes right back to nineteen seventy three. So Alan Gray founded Alan Gray Limited, nineteen seventy three, and then the sister firm was Orbis, which was started in nineteen ninety and we run about five or six different concentrated long only and hedge strategies and I've generated on average between five and ten percent excess return over the various benchmarks. And if you think about, you know, what is the power what's you know, what gets us to work every day? What's the power of that? Well, it's Warren Buffett's sort of time compounding. Most of his wealth has generated after the retirement age because he stays in the game for a long period of time and excess returns. And Alan Gray Limited, you know, the original firm assist company to Orbis, has been investing for fifty two years. And if you just sort of stuck the equity as premium, you just got the equity's premium plus the risk free rate for fifty years. You know, you're extraordinarily wealthy. If you can do eight or nine percent above that, it's just incredible the wealth and the way the wealth can compound. So that struck me and that was one of the reasons I joined. And we've been doing the same thing since. So I'm responsible for the International Strategy that started in two thousand and nine, which is a four five billion strategy outside of the US. And I also I am a portfolio manager on the Global strategy, which was one of the flagship strategies for August we started in nineteen ninety.

So Orbis I've been I've been at the firm since two thousand and seven. What what I thought? I found fascinating when I was thinking about, you know, where in the investment world do you go? One thing that struck me was what is the enduring What is the enduring way to gain edge in investment management? And for me, you know, given we are owning pieces of businesses, it's obviously assessing the value of what you earn. Right that there's there's all these there's a plethora that's of different styles that have developed within the investment industry. There's the quant sidne and you know, the quality and this growth and the value and all these different flavors of investment. For me, that there's only really one signal. There's only really one signal, and that is understanding that the value of a business and trying to buy at a big discount to that, and that should be enduring as long as as prices move away from intrinsic value. And that's really the core of Orbis's philosophy and what drew me to the firm. You know, it's interesting from the sense I was talking about game selection. Given the industry invests attracts a lot of or has the potential to attract a lot of people who really don't have sustainable edge, you would think that there would be quite a large cohort of management firms and people within the industry that have very long term superior track records. And as I was digging, you know, around in the data back in two thousand and six when I was thinking about where I should be in this industry, it's really quite hard to find examples of sustainable long term excess performance. There aren't that many, which is fascinating, and I think there's a whole host of reasons for that, but one of the ones that stood out was Orbis, and it goes right back to nineteen seventy three. So Alan Gray founded Alan Gray Limited, nineteen seventy three, and then the sister firm was Orbis, which was started in nineteen ninety and we run about five or six different concentrated long only and hedge strategies and I've generated on average between five and ten percent excess return over the various benchmarks. And if you think about, you know, what is the power what's you know, what gets us to work every day? What's the power of that? Well, it's Warren Buffett's sort of time compounding. Most of his wealth has generated after the retirement age because he stays in the game for a long period of time and excess returns. And Alan Gray Limited, you know, the original firm assist company to Orbis, has been investing for fifty two years. And if you just sort of stuck the equity as premium, you just got the equity's premium plus the risk free rate for fifty years. You know, you're extraordinarily wealthy. If you can do eight or nine percent above that, it's just incredible the wealth and the way the wealth can compound. So that struck me and that was one of the reasons I joined. And we've been doing the same thing since. So I'm responsible for the International Strategy that started in two thousand and nine, which is a four five billion strategy outside of the US. And I also I am a portfolio manager on the Global strategy, which was one of the flagship strategies for August we started in nineteen ninety.

So how does the process work on the international equity strategy, you know, applying that philosophy.

So how does the process work on the international equity strategy, you know, applying that philosophy.

Well, it's all very intrinsic value, you know, focused what we spend almost all our time trying to figure out the value of businesses. I think that's the enduring signal in all of the noise, So you spend your time doing things that really count. I would say there's a couple of characteristics of the firm that may be a bit differentiated and worth talking about. One is very very independent decision making, very independent decision making, and that that actually varies across the investment industry. There's this idea of wisdom of the crowds, right, You've heard and a lot of academic, literal and wisdom of the crowds. Crowds make good decisions, do they not. There's a wisdom there. I think what that is based on the wisdom of the crowds is you imagine your jar of candies, your child sweets, and everybody's guessing how many candies are in the jar, and the average of all this guess is actually quite good. That's the wisdom of the crowds. The key thing with you know that that, you know, the success of the wisdom of the crowds is independent decision making. Everyone is guessing independently of each other, and some people are way off, some people are closer, but on average it comes out quite good. If you had a circle of people around the jar and they're all chatting about how many candies are in the jar, and there's a you know, there's a few dominant voices in there, and they, you know, they, and some people are just referring to their wisdom, and if you had then then I think there's been I don't know if there's been studies done on this, but I suspect that would be a horrible outcome versus the very independent decision making. So the market is much like the second case. Everyone's standing around the jar and talking about it, and that's why you get such big distortions in markets. What we try to do internally is be very, very independent and deliberate about that as to how we make decisions. So the analysis is very independently driven and the views are independently driven, and then we have then we have a sort of a method to sense check that. So that's one kind of thing that runs through the firm independent decision making. The second is accountability. Everyone's accountable for their independent decisions. I think one of the mistakes the industry makes, generally speaking, is you take great stock pickers who are exceptional at finding those unique opportunities, and you promote them into managing a portfolio, and then those key insights that they've had over the years of picking one or two stocks a year. You know, Warren Buffett, you only swing at the fat pitches. You know, really there really is something to that gets diluted by having to look at the other forty stocks in the portfolio, and then you know, that's where things start to go wrong. So what we really try to do is emphasize, you know, we value we value one or two stock picks a year. So our analysts are focused in these niches around the world, and all they want, all they've got to do is find one to have one of two great insights, one or two ideas and then they build a paper portfolio of those best ideas, and then you track that performance over time, so you get an idea of you know, what people are good at, what people are not so good at. You get a great signaling mechanism to the portfolio managers as to which share should be in the portfolio. So that's you know, the individual accountability around that's really important. And the third thing is alignment. You need alignment within the firm. We all need to be pulling in the same direction. But critically you need alignment with clients because another one of the problems with this industry, and there are many and I keep listing them, is that the actual return that a manager delivers is very rarely what the client gets because the client is trading in and out of the funds and they're buying at the top of the selling at the bottom, and you see it over and over again. So but if you can drive alignment with your clients to the extent that the dollar weighted return of the client experience is the same or better than the actual you know, the line on the chart that you're showing in terms of the fund return, that's absolutely critical. But those are the kind of the key, key elements of our structure.

Well, it's all very intrinsic value, you know, focused what we spend almost all our time trying to figure out the value of businesses. I think that's the enduring signal in all of the noise, So you spend your time doing things that really count. I would say there's a couple of characteristics of the firm that may be a bit differentiated and worth talking about. One is very very independent decision making, very independent decision making, and that that actually varies across the investment industry. There's this idea of wisdom of the crowds, right, You've heard and a lot of academic, literal and wisdom of the crowds. Crowds make good decisions, do they not. There's a wisdom there. I think what that is based on the wisdom of the crowds is you imagine your jar of candies, your child sweets, and everybody's guessing how many candies are in the jar, and the average of all this guess is actually quite good. That's the wisdom of the crowds. The key thing with you know that that, you know, the success of the wisdom of the crowds is independent decision making. Everyone is guessing independently of each other, and some people are way off, some people are closer, but on average it comes out quite good. If you had a circle of people around the jar and they're all chatting about how many candies are in the jar, and there's a you know, there's a few dominant voices in there, and they, you know, they, and some people are just referring to their wisdom, and if you had then then I think there's been I don't know if there's been studies done on this, but I suspect that would be a horrible outcome versus the very independent decision making. So the market is much like the second case. Everyone's standing around the jar and talking about it, and that's why you get such big distortions in markets. What we try to do internally is be very, very independent and deliberate about that as to how we make decisions. So the analysis is very independently driven and the views are independently driven, and then we have then we have a sort of a method to sense check that. So that's one kind of thing that runs through the firm independent decision making. The second is accountability. Everyone's accountable for their independent decisions. I think one of the mistakes the industry makes, generally speaking, is you take great stock pickers who are exceptional at finding those unique opportunities, and you promote them into managing a portfolio, and then those key insights that they've had over the years of picking one or two stocks a year. You know, Warren Buffett, you only swing at the fat pitches. You know, really there really is something to that gets diluted by having to look at the other forty stocks in the portfolio, and then you know, that's where things start to go wrong. So what we really try to do is emphasize, you know, we value we value one or two stock picks a year. So our analysts are focused in these niches around the world, and all they want, all they've got to do is find one to have one of two great insights, one or two ideas and then they build a paper portfolio of those best ideas, and then you track that performance over time, so you get an idea of you know, what people are good at, what people are not so good at. You get a great signaling mechanism to the portfolio managers as to which share should be in the portfolio. So that's you know, the individual accountability around that's really important. And the third thing is alignment. You need alignment within the firm. We all need to be pulling in the same direction. But critically you need alignment with clients because another one of the problems with this industry, and there are many and I keep listing them, is that the actual return that a manager delivers is very rarely what the client gets because the client is trading in and out of the funds and they're buying at the top of the selling at the bottom, and you see it over and over again. So but if you can drive alignment with your clients to the extent that the dollar weighted return of the client experience is the same or better than the actual you know, the line on the chart that you're showing in terms of the fund return, that's absolutely critical. But those are the kind of the key, key elements of our structure.

So if we go back to the intrinsic value, are there metrics that help drive that?

So if we go back to the intrinsic value, are there metrics that help drive that?

Ultimately, what are you doing when you invest? What is your objective? What's your utility function? The utility function has to be to make money. I'm afraid that's everyone's utility function. And so it's the cash. The cash that that business can generate is the key. And you know, some businesses are throwing all of that cash that they generate back into the business for growth, but ultimately the reason they're doing that is that they can generate cash off a bigger base in the future. So if you want to just cut through the chase, what is the was the core to intrinsic values, the cash that you're going to get out of that business over the long term versus you know, obviously the price you pay and then and so that's the high level, and then you're going down. There's lots of layers below that in terms of, you know, what are they doing with the cash today, how fast are they going to grow, what's the distribution of outcomes around that, how uncertain is the.

Ultimately, what are you doing when you invest? What is your objective? What's your utility function? The utility function has to be to make money. I'm afraid that's everyone's utility function. And so it's the cash. The cash that that business can generate is the key. And you know, some businesses are throwing all of that cash that they generate back into the business for growth, but ultimately the reason they're doing that is that they can generate cash off a bigger base in the future. So if you want to just cut through the chase, what is the was the core to intrinsic values, the cash that you're going to get out of that business over the long term versus you know, obviously the price you pay and then and so that's the high level, and then you're going down. There's lots of layers below that in terms of, you know, what are they doing with the cash today, how fast are they going to grow, what's the distribution of outcomes around that, how uncertain is the.

You know, just a follow up question on this. Usually I don't know, if you screen a large amount of companies to try to identify first what could be the set of opportunities. I mean, are you using a more specific valuation metric, either price to book or EV to a BIDA or P And do you related to either return on equity or operating margin to better guide you towards what could be a good investment opportunity which is unfairly valued.

You know, just a follow up question on this. Usually I don't know, if you screen a large amount of companies to try to identify first what could be the set of opportunities. I mean, are you using a more specific valuation metric, either price to book or EV to a BIDA or P And do you related to either return on equity or operating margin to better guide you towards what could be a good investment opportunity which is unfairly valued.

So all those metrics are critical, all of them. You know, the return on capital business generate is absolutely critical to the value of that business, the growth rate critical, and then what do you pay? So we try to put all the pieces together and get a view as to what the business is worth holistically. Now, when it comes to screening, we have a very dedicated quant group and they are doing a lot of good work on which areas of the market could market could be dislocated. And the way we do that is we run our own proprietary internal models. They're effectively fancy dividend discount models, so cash flow based models, where we run that on every stock in the world, and then we monitor and we see, Okay, what's looking more interesting and what's looking less interesting. That's helpful, but ultimately there's a lot of noise in it, right because the model you know, uses the past, doesn't know the future right come in. But you know, on top of that, we it's absolutely critical to have a big investment team. So we're a forty billion dollar asset manager, which isn't that big in today's you know, today's inflating money. And and so the size of our vest ten is quite large versus the the asset base. But we think it's absolutely critical because we're so geared to our performance. We're so geared at delivering returns for clients that are above the averages that you need to combine both breadth and depth. And so we have a big analyst team to cover the world, but we also have a lot of depth within each area. So when it comes to screening, each analyst's just looking at Japanese financials or they're just looking at European industrials, they have a small, smaller universe, a universe they can manage the universe that they can understand what the top twenty company is, what they're worth, and then and therefore you are screening that whole universe. Screening is important, but it's a little bit less so because you know, you have that deep knowledge within each section.

So all those metrics are critical, all of them. You know, the return on capital business generate is absolutely critical to the value of that business, the growth rate critical, and then what do you pay? So we try to put all the pieces together and get a view as to what the business is worth holistically. Now, when it comes to screening, we have a very dedicated quant group and they are doing a lot of good work on which areas of the market could market could be dislocated. And the way we do that is we run our own proprietary internal models. They're effectively fancy dividend discount models, so cash flow based models, where we run that on every stock in the world, and then we monitor and we see, Okay, what's looking more interesting and what's looking less interesting. That's helpful, but ultimately there's a lot of noise in it, right because the model you know, uses the past, doesn't know the future right come in. But you know, on top of that, we it's absolutely critical to have a big investment team. So we're a forty billion dollar asset manager, which isn't that big in today's you know, today's inflating money. And and so the size of our vest ten is quite large versus the the asset base. But we think it's absolutely critical because we're so geared to our performance. We're so geared at delivering returns for clients that are above the averages that you need to combine both breadth and depth. And so we have a big analyst team to cover the world, but we also have a lot of depth within each area. So when it comes to screening, each analyst's just looking at Japanese financials or they're just looking at European industrials, they have a small, smaller universe, a universe they can manage the universe that they can understand what the top twenty company is, what they're worth, and then and therefore you are screening that whole universe. Screening is important, but it's a little bit less so because you know, you have that deep knowledge within each section.

Coming back towards the Japanese equity market, so, I mean a lot of investors think they are definitely structural change happening in the economy, but also in terms of corpor right governance, where potentially companies management are much more shareholder friendly than they used to be. I monitored the position of your portfolio, and you were heavily invested in Japanese equities at the beginning of the year. You have reduced your position, which is quite a wise move because I would say since about March April, the Japanese market has not done anything spectacular. So do you think, as you were mentioning earlier, that potentially the Japanese market, despite all these good news, this is already priced in. Or do you think that, in fact, all those structural change could really carry this market for many years to go.

Coming back towards the Japanese equity market, so, I mean a lot of investors think they are definitely structural change happening in the economy, but also in terms of corpor right governance, where potentially companies management are much more shareholder friendly than they used to be. I monitored the position of your portfolio, and you were heavily invested in Japanese equities at the beginning of the year. You have reduced your position, which is quite a wise move because I would say since about March April, the Japanese market has not done anything spectacular. So do you think, as you were mentioning earlier, that potentially the Japanese market, despite all these good news, this is already priced in. Or do you think that, in fact, all those structural change could really carry this market for many years to go.

I'm more in the latter. Despite the fact that our position is reduced, I think we've been investing in Japan with great hope and expectation that corporate governance was going to improve since about nineteen ninety eight, and every year our team go to Japan and they talk to management teams and they get the same kind of blank stairs when we talk about you know, better capital management ETCA. Over the last five years, that's dramatically change. We go to Japan and we we're talking the same language, and our team, our Japan specialist team. Twice a year, we've done a lot of presentations to management and you know, the management teams are listening, stuff happening, they're acting, and that's a big deal. It's a big deal for market market that has become so capital inefficient over such a long period of time. So I think it is enduring, and I think there is that there's there's a there's a momentum to it, just like there was a stagnation to the previous you know, the way it was. It's a very sort of consensus driven society, so the way it was was very sticky. But as soon as it starts to change, everyone starts to change together. And that's exactly what we're seeing. What the problem is that the yen is so cheap now that the the exporters we think over earning and so a lot of those companies on a normalized earnings basis don't look as interesting to us, and they are the big they're the big stocks in the market, you know, the the big liquid businesses. So the opportunity today in our view sits in the MidCap domestic companies that are suffering under this very very weak end. So if you can find MidCap Japanese businesses where you know, you have this nice corporate governance story we like, for example, the drug stores in Japan, where there's this kind of the more interesting things going on on the consolidation side, and and you know, and and on a couple of management side. If you can find those businesses, domestic businesses, they're cheap, and you have the yen upside as well, because you know, they they're true yen assets, so you can get that, you know, the uplift from the end, which we think will eventually appreciate just because it's it's so undervalued at this point. That's where the opportunity is. The trouble is you have to access the liquidity and you know, so you have to buy baskets for these companies. It's just a bit more tricky for a very sort of focus bottom up investor.

I'm more in the latter. Despite the fact that our position is reduced, I think we've been investing in Japan with great hope and expectation that corporate governance was going to improve since about nineteen ninety eight, and every year our team go to Japan and they talk to management teams and they get the same kind of blank stairs when we talk about you know, better capital management ETCA. Over the last five years, that's dramatically change. We go to Japan and we we're talking the same language, and our team, our Japan specialist team. Twice a year, we've done a lot of presentations to management and you know, the management teams are listening, stuff happening, they're acting, and that's a big deal. It's a big deal for market market that has become so capital inefficient over such a long period of time. So I think it is enduring, and I think there is that there's there's a there's a momentum to it, just like there was a stagnation to the previous you know, the way it was. It's a very sort of consensus driven society, so the way it was was very sticky. But as soon as it starts to change, everyone starts to change together. And that's exactly what we're seeing. What the problem is that the yen is so cheap now that the the exporters we think over earning and so a lot of those companies on a normalized earnings basis don't look as interesting to us, and they are the big they're the big stocks in the market, you know, the the big liquid businesses. So the opportunity today in our view sits in the MidCap domestic companies that are suffering under this very very weak end. So if you can find MidCap Japanese businesses where you know, you have this nice corporate governance story we like, for example, the drug stores in Japan, where there's this kind of the more interesting things going on on the consolidation side, and and you know, and and on a couple of management side. If you can find those businesses, domestic businesses, they're cheap, and you have the yen upside as well, because you know, they they're true yen assets, so you can get that, you know, the uplift from the end, which we think will eventually appreciate just because it's it's so undervalued at this point. That's where the opportunity is. The trouble is you have to access the liquidity and you know, so you have to buy baskets for these companies. It's just a bit more tricky for a very sort of focus bottom up investor.

In terms of implementation. Yeah, so now maybe a bit a bit more macro questions have been given that all the market focuses around the potential tariff policies of Donald Trump. I mean, I don't know if you. I know you are more bottom up rather than top down. But do you think that there are international markets which may be better positions than others and that you would favor investing given that some of them could be definitely at risk of those trade policies are coming from the US.

In terms of implementation. Yeah, so now maybe a bit a bit more macro questions have been given that all the market focuses around the potential tariff policies of Donald Trump. I mean, I don't know if you. I know you are more bottom up rather than top down. But do you think that there are international markets which may be better positions than others and that you would favor investing given that some of them could be definitely at risk of those trade policies are coming from the US.

I think it's difficult to invest on that basis. On the one hand, Trump is quite a predictable character, and he's been saying the same thing since he was twenty two years old. You know what he thinks by now, but you don't know exactly how he's going to implement and you don't know to what degree each let's say tariff that is put on that will be put on, You don't know you know how enduring they'll be. And in terms of the intrinsic value of a business, you know, that's ten years of free cash flow, it's not six months based on a tariff policy. And the other thing we know about Trump is he's quite a transactional person. And so you know, if you can get a good deal from a country or extract something that he feels, okay, the USA has gained in this transaction, the tariffs, you know, might be fleeting on whichever country they're dealing with, So it is just a difficult environment. From that perspective, I think what one thing you can say is we are on a trend now. It looks like a very clear trend towards a much more protectionist world and a breakdown of the global world order of as we've known it for the last thirty forty years. And that you know, you can see that in the USA, but you can also see it all the way across Europe as well and in various other countries. I think it's a little bit of a function of an aging population. As we age, you know, just very very simplistically, we've become more conservative and adverse to change, and you know, I think that's we're seeing that playing out in politics all around the world. And so I worry about Europe in terms of the potential for the the EU too. I don't want to say break up. There's a protect there. There's in terms of people becoming more nationalistic. I think they'll be more global conflict just because the global world order has been in place for so long and when you have a very strong, you know, huge power that the US has been, it just kept everything, you know, it kept everything quiet as soon as you start as soon as that starts breaking down. In a period where individual countries have not built up their defense capability because it's just atrophied over the last twenty thirty years, I think that you're going to see a lot of friction across borders as well. So those will be the macro things I would be concerned about in terms of the new policies of the US administration. The biggest thing I worry about is the you know, the efficiency drive from from elon Musk and because that that could be game changing if they can execute on on on getting their their their fists in order, because that's that looks like an inevitable freight train for a long time in terms of the deteriorating fiscal position in the US. So it'll be interesting to observe how that evolves.

I think it's difficult to invest on that basis. On the one hand, Trump is quite a predictable character, and he's been saying the same thing since he was twenty two years old. You know what he thinks by now, but you don't know exactly how he's going to implement and you don't know to what degree each let's say tariff that is put on that will be put on, You don't know you know how enduring they'll be. And in terms of the intrinsic value of a business, you know, that's ten years of free cash flow, it's not six months based on a tariff policy. And the other thing we know about Trump is he's quite a transactional person. And so you know, if you can get a good deal from a country or extract something that he feels, okay, the USA has gained in this transaction, the tariffs, you know, might be fleeting on whichever country they're dealing with, So it is just a difficult environment. From that perspective, I think what one thing you can say is we are on a trend now. It looks like a very clear trend towards a much more protectionist world and a breakdown of the global world order of as we've known it for the last thirty forty years. And that you know, you can see that in the USA, but you can also see it all the way across Europe as well and in various other countries. I think it's a little bit of a function of an aging population. As we age, you know, just very very simplistically, we've become more conservative and adverse to change, and you know, I think that's we're seeing that playing out in politics all around the world. And so I worry about Europe in terms of the potential for the the EU too. I don't want to say break up. There's a protect there. There's in terms of people becoming more nationalistic. I think they'll be more global conflict just because the global world order has been in place for so long and when you have a very strong, you know, huge power that the US has been, it just kept everything, you know, it kept everything quiet as soon as you start as soon as that starts breaking down. In a period where individual countries have not built up their defense capability because it's just atrophied over the last twenty thirty years, I think that you're going to see a lot of friction across borders as well. So those will be the macro things I would be concerned about in terms of the new policies of the US administration. The biggest thing I worry about is the you know, the efficiency drive from from elon Musk and because that that could be game changing if they can execute on on on getting their their their fists in order, because that's that looks like an inevitable freight train for a long time in terms of the deteriorating fiscal position in the US. So it'll be interesting to observe how that evolves.

Okay, Now a question which is more about process, which is your selling discipline? I mean, which is I think is very relevant when you have a value based investment strategy. I mean, when do you decide to exceed a position? Is it just because you think it's just fairly valued, you were right, and so you take your gain or I know that some people tend to run with their winners. And also when sometimes I mean there's especially in Europe for example, there are a lot of investment case which are value traps. Sometimes some are our value traps, others are not. So some companies initially may lose or your investment may lose money, but you may be right over the medium to long term. So also how do you react to when one of your investments is not turning out right? I mean, how often do you reconsider what do you do to make sure that you are on the right track or that potentially it could be a value trap and it's better to sell with a ten or fifteen percent loss rather than a fifty percent one. So how do you approach those both goals of on the on the positive and negative side.

Okay, Now a question which is more about process, which is your selling discipline? I mean, which is I think is very relevant when you have a value based investment strategy. I mean, when do you decide to exceed a position? Is it just because you think it's just fairly valued, you were right, and so you take your gain or I know that some people tend to run with their winners. And also when sometimes I mean there's especially in Europe for example, there are a lot of investment case which are value traps. Sometimes some are our value traps, others are not. So some companies initially may lose or your investment may lose money, but you may be right over the medium to long term. So also how do you react to when one of your investments is not turning out right? I mean, how often do you reconsider what do you do to make sure that you are on the right track or that potentially it could be a value trap and it's better to sell with a ten or fifteen percent loss rather than a fifty percent one. So how do you approach those both goals of on the on the positive and negative side.

So that I mean, there's all great questions. I mean, the very glib, high level answer is, as you would expect, price versus intrinsic value is key. So if you know, you realize you're intrinsic value, then then the position will But there's a second element of that is that the market environment might be such that there's a lot of things that traded a big discount. You know, if you look at twenty twenty one, very you knowaningful discounts in certain areas of the market, in which case we might sail before something gets to intrinsic value because we can buy something else at a much deeper discount. So that's the very high level answer. Now your your point is much more kind of in the weeds and intricate in the sense that what if you're wrong, what you know? How do you what if you're intrinsic value is wrong? And so we I think that we're very conscious of the biggest trap you can get caught in this business is getting dogmatic on a position and what you think of business is worth and you keep doubling, and you keep doubling, you keep things deteriorating things, and that's, you know, such a big trap. So what we we have a few things in place for that. One is we review positions if they've been in the portfolio and they've not worked, or they've been in a long time and they've not really done very much, or something's changed in the thesis. We have set points. We review But the bigger and most interesting piece is probably to talk about our decision analytics team. I talked about individual accountability running through the firm, and we've obsessed about collecting data on every person's decisions right back to sort of the early nineties, and we got this big database of everyone's decision making over time, and we have a specific team called the decision Analytics team, and they take all that data and they pick it apart and they figure out what it is you're doing wrong, and what it is you're doing very well, and how you can improve and how you can change. And we look at things common to the firm, to the funds, you look at things that are very specific to individuals, and we try and tailor that analysis. And one of this the elements is you know, selling decisions or you know, getting stuck in. So one of the common comments are common bias. You you you're sitting in a position and a losing position, and you're just not doing anything. It's almost like you're frozen. And then we do see that across certain individuals in the firm, and the data can pull that out and just hold it up to you and say, you know, based on what you currently hold these stocks fit that pattern, and you get you'll get a nut, they'll call you up. But you also get sort of digital nudges within your platform, within through email saying I have a think about this. You know, maybe you should be doing this so x or y, maybe you should be reviewing it.

So that I mean, there's all great questions. I mean, the very glib, high level answer is, as you would expect, price versus intrinsic value is key. So if you know, you realize you're intrinsic value, then then the position will But there's a second element of that is that the market environment might be such that there's a lot of things that traded a big discount. You know, if you look at twenty twenty one, very you knowaningful discounts in certain areas of the market, in which case we might sail before something gets to intrinsic value because we can buy something else at a much deeper discount. So that's the very high level answer. Now your your point is much more kind of in the weeds and intricate in the sense that what if you're wrong, what you know? How do you what if you're intrinsic value is wrong? And so we I think that we're very conscious of the biggest trap you can get caught in this business is getting dogmatic on a position and what you think of business is worth and you keep doubling, and you keep doubling, you keep things deteriorating things, and that's, you know, such a big trap. So what we we have a few things in place for that. One is we review positions if they've been in the portfolio and they've not worked, or they've been in a long time and they've not really done very much, or something's changed in the thesis. We have set points. We review But the bigger and most interesting piece is probably to talk about our decision analytics team. I talked about individual accountability running through the firm, and we've obsessed about collecting data on every person's decisions right back to sort of the early nineties, and we got this big database of everyone's decision making over time, and we have a specific team called the decision Analytics team, and they take all that data and they pick it apart and they figure out what it is you're doing wrong, and what it is you're doing very well, and how you can improve and how you can change. And we look at things common to the firm, to the funds, you look at things that are very specific to individuals, and we try and tailor that analysis. And one of this the elements is you know, selling decisions or you know, getting stuck in. So one of the common comments are common bias. You you you're sitting in a position and a losing position, and you're just not doing anything. It's almost like you're frozen. And then we do see that across certain individuals in the firm, and the data can pull that out and just hold it up to you and say, you know, based on what you currently hold these stocks fit that pattern, and you get you'll get a nut, they'll call you up. But you also get sort of digital nudges within your platform, within through email saying I have a think about this. You know, maybe you should be doing this so x or y, maybe you should be reviewing it.

You know.

You know.

Really what it's a one good way is start from scratch. If you're going to start from scratch today, where do you own this or not?

Really what it's a one good way is start from scratch. If you're going to start from scratch today, where do you own this or not?

You know?

You know?

I know, we know you own it? Would you own it if you're just building a portfolio? So a little mental exercises like that helps simple stuff. But that's been really helpful to have the objective data driven team come in and and help us to understand, you know, what we could do better in that regard.

I know, we know you own it? Would you own it if you're just building a portfolio? So a little mental exercises like that helps simple stuff. But that's been really helpful to have the objective data driven team come in and and help us to understand, you know, what we could do better in that regard.

I mean, one of my last questions is your often has done tremendously wells on the short and medium and long term as well. I mean, what do you think of all the market has missed on all these market opportunities that you have been able to identify. Do you think it was really the work on the valuation that you are better at really estimating what is an interesting value of a company? Or do you think because market is paying too much attention to the noise, or so it's I think what was a very good comment about Portfralio manager sometime coming from being an industry analyst with very great expertise on a limited set of stocks, but then when you have to manage a much bigger set it becomes a much bigger challenge. Or what do you think is really behind your the result of your success.

I mean, one of my last questions is your often has done tremendously wells on the short and medium and long term as well. I mean, what do you think of all the market has missed on all these market opportunities that you have been able to identify. Do you think it was really the work on the valuation that you are better at really estimating what is an interesting value of a company? Or do you think because market is paying too much attention to the noise, or so it's I think what was a very good comment about Portfralio manager sometime coming from being an industry analyst with very great expertise on a limited set of stocks, but then when you have to manage a much bigger set it becomes a much bigger challenge. Or what do you think is really behind your the result of your success.

I think a part of it is, you know so that latter, well, let me hit that first. It's difficult. The industry is so difficult because you could have the most skilled person looking at Japanese financials and you could reward them incredibly well for a wonderful job they're doing. And because that is the secret source having people do that, that's the secret source of any manager having that expertise and someone with an incredible judgment finding those few ideas a year. But we're all people. We've got to manage people, and people have career aspirations and they don't want to be looking at one sector for thirty years, and so you have to manage that balance. But what we think we've done quite well is sort of is emphasized internally and externally just how critical that is, that is the engine of our success. Having key people with the stock pickers across our different team. That's number one. Number two, I think sometimes the market goes absolutely bonkers, right, We've seen the period like it's the people standing around the candy jar and convincing one or two people convincing everybody else that there's only ten candies in the jar when there's a thousand or whatever. It's just they get so inefficiencies get so out of whack at certain periods. And we saw that of course in the late eighties, we saw it in the mid seventies, we've seen in the late nineties. In twenty twenty one was the biggest we've ever seen. We've got data on this. You can see the dislocations were absolutely immense. So having a portfolio that's able to move capital efficiently and effectively to those most dislocated areas in a really kind of dispassionate way, I think about it as you know, the market could be a surface, and if the surface is completely flat and perfect, it's efficient. But you know, often these big crevices emerge and they're the inefficiencies and big undervaluations, and the portfolio has to be like water. It has to just flow into the crevices with no friction. And so we've been quite good at that getting the portfolio the right areas. And then it's at other times normal times, it's just it's just the being very, very disciplined and mechanical about what we're doing and finding those sort of rare inefficiencies which comes from the specialists and comes from having the right people.

I think a part of it is, you know so that latter, well, let me hit that first. It's difficult. The industry is so difficult because you could have the most skilled person looking at Japanese financials and you could reward them incredibly well for a wonderful job they're doing. And because that is the secret source having people do that, that's the secret source of any manager having that expertise and someone with an incredible judgment finding those few ideas a year. But we're all people. We've got to manage people, and people have career aspirations and they don't want to be looking at one sector for thirty years, and so you have to manage that balance. But what we think we've done quite well is sort of is emphasized internally and externally just how critical that is, that is the engine of our success. Having key people with the stock pickers across our different team. That's number one. Number two, I think sometimes the market goes absolutely bonkers, right, We've seen the period like it's the people standing around the candy jar and convincing one or two people convincing everybody else that there's only ten candies in the jar when there's a thousand or whatever. It's just they get so inefficiencies get so out of whack at certain periods. And we saw that of course in the late eighties, we saw it in the mid seventies, we've seen in the late nineties. In twenty twenty one was the biggest we've ever seen. We've got data on this. You can see the dislocations were absolutely immense. So having a portfolio that's able to move capital efficiently and effectively to those most dislocated areas in a really kind of dispassionate way, I think about it as you know, the market could be a surface, and if the surface is completely flat and perfect, it's efficient. But you know, often these big crevices emerge and they're the inefficiencies and big undervaluations, and the portfolio has to be like water. It has to just flow into the crevices with no friction. And so we've been quite good at that getting the portfolio the right areas. And then it's at other times normal times, it's just it's just the being very, very disciplined and mechanical about what we're doing and finding those sort of rare inefficiencies which comes from the specialists and comes from having the right people.

Now you had mentioned your decision analytics team, and so kind of brought up in my mind. Do you have a you know, as part of the process, a risk management aspect of you know, trying to limit risk for the portfolio. Is that part of it in terms of decision making?

Now you had mentioned your decision analytics team, and so kind of brought up in my mind. Do you have a you know, as part of the process, a risk management aspect of you know, trying to limit risk for the portfolio. Is that part of it in terms of decision making?

Yes, So I would say there's three things that go into a position. Size one would be discount to intrinsic value, the big one, right, Two would be the distribution of outcomes around an intrinsic value. You know, some some some companies you have very high confidence in how the future is going to look as high as you possibly can have in a sort of uncertain world, and other companies you've got a massive range of outcomes. Massive you are, and that gives you an intrinsic value range. It's huge, and you know, if the price is at the bottom of that, that's great, but you might not put a big position behind it because just the distribution of outcomes are so wide. And the third is, which is to your point, correlations in the polio. So what we don't want, which quite often happens in markets, is inefficiencies will gather all in one area. We don't want to just put all our capital in that one area, even if we're very confident. So we have a risk team which is sort of four or five people, and they analyze the market, they analyze the portfolio, and they look for correlations which are obvious, you know, the kind of sector and commodity and interest rates sort of stuff, but also ones that aren't obvious, because those are the ones that bite you. If we're building and we're using some AI in that in terms of trying to identify I mean, when we think about AI is really I'm really talking about large language models because AI has been around for a long time, but specifically the innovation now is applying that to language and so you can apply that in your business to you know, what what what things that aren't captured in your typical quant model. Can you find in ten k's and your reports you know that are common to these different companies that you hold, and then bring that to a risk model for example. So those are the sorts of things they.

Yes, So I would say there's three things that go into a position. Size one would be discount to intrinsic value, the big one, right, Two would be the distribution of outcomes around an intrinsic value. You know, some some some companies you have very high confidence in how the future is going to look as high as you possibly can have in a sort of uncertain world, and other companies you've got a massive range of outcomes. Massive you are, and that gives you an intrinsic value range. It's huge, and you know, if the price is at the bottom of that, that's great, but you might not put a big position behind it because just the distribution of outcomes are so wide. And the third is, which is to your point, correlations in the polio. So what we don't want, which quite often happens in markets, is inefficiencies will gather all in one area. We don't want to just put all our capital in that one area, even if we're very confident. So we have a risk team which is sort of four or five people, and they analyze the market, they analyze the portfolio, and they look for correlations which are obvious, you know, the kind of sector and commodity and interest rates sort of stuff, but also ones that aren't obvious, because those are the ones that bite you. If we're building and we're using some AI in that in terms of trying to identify I mean, when we think about AI is really I'm really talking about large language models because AI has been around for a long time, but specifically the innovation now is applying that to language and so you can apply that in your business to you know, what what what things that aren't captured in your typical quant model. Can you find in ten k's and your reports you know that are common to these different companies that you hold, and then bring that to a risk model for example. So those are the sorts of things they.

Look at, maybe in terms of sectors. Coming back to investment strategy and some of your earlier comments about the generation of cash and how potentially is the market value it. Do you have any preference when investing in sectors? I mean, do you think that there are sectors which are definitely high grows, very high return on capital employed because there are some really mootes within those sectors which favor I mean the returns. So do you have any preference or are you very agnostic about Okay, I'm looking everywhere because all investment opportunities can happen in any sector.

Look at, maybe in terms of sectors. Coming back to investment strategy and some of your earlier comments about the generation of cash and how potentially is the market value it. Do you have any preference when investing in sectors? I mean, do you think that there are sectors which are definitely high grows, very high return on capital employed because there are some really mootes within those sectors which favor I mean the returns. So do you have any preference or are you very agnostic about Okay, I'm looking everywhere because all investment opportunities can happen in any sector.

So very much the latter I mean preferences are dangerous in my opinion. Okay, you end up biasing yourself towards certain aspect, and I think that can color or what should be a holistic view of intrinsic value of a business. And you know, the decision analytics team help us a little bit with that in terms of our own individual preferences and biases. Now, it is true that certain people are better at certain things. So you can always think of like someone who is more oriented towards growth companies, as you know, if they're doing it well, they are genuinely better at being a futurist trying to look around the corner, really thinking deeply about what the future is going to look like. And there are other people that an'swer good at that, and so that's okay, that's okay to have a preference one way or the other because it's around what you are good at, what your superpower is, and we try to structure the firm to allow people to leverage their superpower as much as possible, but holistically across everybody in the firm. We should not be pushed one way or the other towards certain types of companies. It should be should be driven by what you know, holistically what a business is worth. And so that's you know how I would think about it.

So very much the latter I mean preferences are dangerous in my opinion. Okay, you end up biasing yourself towards certain aspect, and I think that can color or what should be a holistic view of intrinsic value of a business. And you know, the decision analytics team help us a little bit with that in terms of our own individual preferences and biases. Now, it is true that certain people are better at certain things. So you can always think of like someone who is more oriented towards growth companies, as you know, if they're doing it well, they are genuinely better at being a futurist trying to look around the corner, really thinking deeply about what the future is going to look like. And there are other people that an'swer good at that, and so that's okay, that's okay to have a preference one way or the other because it's around what you are good at, what your superpower is, and we try to structure the firm to allow people to leverage their superpower as much as possible, but holistically across everybody in the firm. We should not be pushed one way or the other towards certain types of companies. It should be should be driven by what you know, holistically what a business is worth. And so that's you know how I would think about it.

Okay, great, So we just have one more question for you before we let you go. More of a I guess reflective question. You know, I know you mentioned Warren Buffett at the beginning of this, you know, as a good investor. I was just curious if you had, you know, any there are any investors at the start of your career you wanted to emulate.

Okay, great, So we just have one more question for you before we let you go. More of a I guess reflective question. You know, I know you mentioned Warren Buffett at the beginning of this, you know, as a good investor. I was just curious if you had, you know, any there are any investors at the start of your career you wanted to emulate.

So in the start of my career, you know, you go and you read everything you can. That's what I don't think I've read an investment book for ten years, but I read them all early and I felt like I gathered as much as I could possibly get from the different people. And you know what what did strike me was people all had different ways of going about it. You know, Warren Buffett was very different to Peter Lynch, very different to George Soros and and I love that right because you know you can you can try to pick bits from each of them and each thing works better at different times and different market environments. The one person I would would highlight who is won't be well known, but he started at Fidelity in the in the sixties with with I think with Jerry's is it Jerry side? Is that the guy's name and Peter Lynch and all of that cohort so with a very very strong group and Fidelity in the sixties was Alan Gray who was the founder of the Orbits. And Alan Gray and the reason I would choose him because he was exceptional, absolutely exceptional, and he was so under the radar because he was very, very private about everything he did, to the point where he believed that if he talked publicly about things, positions, or whatever, it would impact his decision making and there for impact client returns. He was so obsessed with, you know, generating the best return he possibly could four clients that he would almost his privacy came as a result of that. He would be very you know, wouldn't He didn't like the active way of going investing. But he was exceptional and I got to work with him directly here for quite a few years before he died, and he was right up to the end. He was passionate about stock picking, obsessive. It was just in his blood. And he was so flexible in the way he invested. It was bottom up, intrinsic, value driven, but he could go anywhere deep deep value, high high growth. He could. You know, he would sometimes come into my office and show me all of these charts. He was a chartist technician, you know, he was a macro guy. He could do currencies. It was just his mind was absolutely phenomenal. And I learned, you know, in a men to amount from him Oh.

So in the start of my career, you know, you go and you read everything you can. That's what I don't think I've read an investment book for ten years, but I read them all early and I felt like I gathered as much as I could possibly get from the different people. And you know what what did strike me was people all had different ways of going about it. You know, Warren Buffett was very different to Peter Lynch, very different to George Soros and and I love that right because you know you can you can try to pick bits from each of them and each thing works better at different times and different market environments. The one person I would would highlight who is won't be well known, but he started at Fidelity in the in the sixties with with I think with Jerry's is it Jerry side? Is that the guy's name and Peter Lynch and all of that cohort so with a very very strong group and Fidelity in the sixties was Alan Gray who was the founder of the Orbits. And Alan Gray and the reason I would choose him because he was exceptional, absolutely exceptional, and he was so under the radar because he was very, very private about everything he did, to the point where he believed that if he talked publicly about things, positions, or whatever, it would impact his decision making and there for impact client returns. He was so obsessed with, you know, generating the best return he possibly could four clients that he would almost his privacy came as a result of that. He would be very you know, wouldn't He didn't like the active way of going investing. But he was exceptional and I got to work with him directly here for quite a few years before he died, and he was right up to the end. He was passionate about stock picking, obsessive. It was just in his blood. And he was so flexible in the way he invested. It was bottom up, intrinsic, value driven, but he could go anywhere deep deep value, high high growth. He could. You know, he would sometimes come into my office and show me all of these charts. He was a chartist technician, you know, he was a macro guy. He could do currencies. It was just his mind was absolutely phenomenal. And I learned, you know, in a men to amount from him Oh.

That's great. This is a great discussion. Graham, thank you again for joining us.

That's great. This is a great discussion. Graham, thank you again for joining us.

Thank you that much fun.

Thank you that much fun.

And Laurent, thank you for serving as my co host today. All welcome until our next episode. This is David Cohne with Inside Active

And Laurent, thank you for serving as my co host today. All welcome until our next episode. This is David Cohne with Inside Active

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