YouSaid · the spoken record

Harvey Sawikin

lines on the record: 69
first: 2018-02-06
most recent: 2018-02-06
sittings or episodes: 1
sources: podcast

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“Other than a family member? I don't know, I think that I would give a shout out to my old law firm Waktail Lipton. They worked me very hard, but they always treated me like they treated their associates like real important people and they compensated us fairly and then when I left they were extremely nice to me. I then went on to write a novel which was published in nineteen ninety five which was about A law firm that some said was likewise and it wasn't a particularly favorable portrayal of the legal profession, I have to say. And Marty Lipton wrote me a note saying how much he liked the novel, and I thought that was just a class move. He's really somebody who stands out to me as a class act.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just amazing farm to table Russian food all over the city. The city looks good. There's a Uber and Yandex taxi you can get around. Everything works. And it's fascinating. There's a lot of museums to see. So it's just a fascinating place to visit. Tacon St. Petersburg. And I think that's a fantastic vacation.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say that right now of the places I invest in, the place I would recommend going to the most is Moscow because the city has really transformed in the last five years so that the hotels are great. There's a lot of great Russian food like Russian cuisine, but with a contemporary spin on it.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interview question for people. Did you have a stamp collection as a kid? You'd be surprised. I bet you, why are so many fund managers, art collectors? I think these are probably the kids who, when they had baseball card collections and coins and stamps and everything else.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Those kids. There are other kids who spend all their money on cotton candy and this and that, and I was always the other kind of kid. And I would say that this is also why so many fund managers or art collectors like I am because I don't get any particular pleasure in spending a lot of money on particular kinds of travel or this or that. But when I buy art, I have this feeling of both consuming and investing at the same time. And so I think most fund managers who are good, they have that gene for long term accumulation of wealth by acquiring stuff.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know, probably some I remember buying a mint set of Kennedy half dollars in the sixties when I was a little kid and Kennedy was, so I still, I remember exactly what it looked like. It had these real shiny Kennedy half dollar, and then the rest of the U.S. coins. But that started me as a fund manager. I mean, I think that if you scratch a lot of the top fund managers, you'll find a coin collector, a stamp collector, a collector. Because, I mean, it's the same impulse, isn't it? I mean, we all love to consume. But there are some of us that our favorite kind of consumption is consumption that is also feels like investment. So when you buy coins as a kid, you're buying something with your money, but it's something you know is going to have value over or you believe is going to have value over time. And I was one of the”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think they're going to replace gold. I think that there's a, I saw Cameron Winklevoss on TV claiming that cryptocurrencies were the new gold. And I could see, you know, I told you I've spent a lot of time analyzing people to see their level of truthfulness, and I saw in his eyes that I don't think he really believed what he was saying himself. They're not going to replace gold. Gold has been around, you know an ounce of gold buys you the same amount of wheat now as it did in Moses' time. I don't know if you will be able to say the same thing about Bitcoin, but whatever, the point is that gold has been, my point is not that cryptocurrencies went up, as that gold went down partially because of them. I felt that having some gold coins. Plus I used to be a coin collector when I was a kid, so the idea of buying some incredibly cool coins which also had investment.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“And a round along with Mercedes, which took half the round. So little things like that. I bought some gold coins recently.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“So Via is a private company that runs these like vans in big cities. They're in New York and a couple other cities. And it's really an alternative to public transportation. They're like an alternative to buses. And they have this incredibly sophisticated algorithm that matches people up on routes. And they even use some sort of AI to make sure that the route that it takes is also psychologically attractive to you. So for example, they pick up people in a line all over the upper west side and then they take them to their offices, but they don't take you out of the way, even if it would be shorter because they know that you're going to believe that they took you out of the way and it made it longer, even if it made it shorter. So it's unbelievably brilliant algorithm developed by these two former Israeli military guys, and so I was lucky enough to be able to put some money into that.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's nothing that jumps out at me right at the moment that I feel like is a screaming. That I would be so excited to just be able to buy some. I think like the whole thing looks pretty looks pretty good. It reminds me of where we were in about 2005 when we were only a couple of years into that bull market. I hope this one progresses in a more measured way and doesn't turn into a crazy. I think it will because people were burned last time. So I don't really see anything that in the public equities that I think is an absolute screaming. Screaming by. I mean, I do some things outside of my funds with my personal money that I think are interesting. I invested in a ride sharing service called Via New York. I think it's quite interesting. I think that's a model that could be very big around the world.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Merging markets, everybody's attitude is like, oh, I can just buy the ETF. Well, good luck, because look at the historical performance of not only the ETFs but the mutual funds against the top ranked EM managers, hedge fund managers, who Net of the performance fees and what they've delivered. So I think we're more like distressed debt than we are like, say, US equities, but that's self-serving, of course.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just as oil was getting ready to bottom out, just as the global economy was turning, just as Europe was starting to grow again, they just gave up and sold at the bottom of that particular cycle. So patience, long term, and I would say look for managers. Another thing is, and here this is sort of self-serving, but I believe that emerging markets investing is a very specialized skill, much like distressed debt investing. I've been doing it for twenty three, twenty four years. I think I learned something over that time, and so much like the top when I invest with other fund managers, if I invest with distressed debt, I wouldn't buy a distressed debt mutual fund, or ETF, I find the best manager and give them money, and I'm more than happy to pay them two and twenty. If they'll have me, a lot of times they're closed, you know, and I have to ask to please.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Environment, we just have to wait until things got good again. Emerging markets is very streaky. You have to be around when the good times happen. In terms of investors, They make the same mistake in emerging markets they make everywhere else, which is buy at the top sell at the bottom. I am begging I have a few investors who are either they put like a toe hold in my fund and they said they'll give you more later or they're looking at it and looking at it and looking at it I'm saying please don't wait until we're twenty percent from the top of the next bull market and then give me all the money Don't be like that please and most people that's what they're gonna do for me if that's the way it plays out for me for us the goal is going to be how to handle what do you do with inflows when you're not confident about the valuations and you feel you're near the top and sell at the bottom you know I had a couple of big investors I would say several of my biggest investors pull the rip cord at the exactly worst time at the end of twenty fifteen”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Good early returns in an emerging market, they think that they now master that market, they can do private equity there, they can do derivatives, they can do shorting and become very overconfident. So I think that's one of the biggest mistakes and liquidity mismatching. And just lack of patience. I mean, literally I was in a almost ten year bear market in emerging markets. And then it turned bullish about two years ago. But I had to go from two thousand eight to two thousand sixteen underwater no performance fees. Investors not particularly thrilled and we survived in that environment by very, very disciplined bottom up stock picking dividend investing for dividends, and we were able to kind of do okay relative to the markets. But we knew that in that”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“The managers that I've seen over the years fail usually fail for a couple of reasons. I mean, one is that they get arrogant and they forget that they're outsiders and they try to do things that are too funky get involved in sort of I saw one asset manager put like his of a portfolio equity fund, put almost his whole fund into a private company and then it got screwed and wound up losing the fund. I've seen a lot of people just get succored into very large illiquid things. So matching, and I learned a lesson myself in 2008 about matching liquidity to the terms of your fund and sort of style drift, I would say, is a big risk in emerging markets because people think that they can do anything. They think that they're just because they had some”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“You don't always get it right. You know, we've had some huge mistakes over the years thinking that a country was going to be great and then it went in a different direction. And sometimes you have to adapt to that.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“unto people. And I went to the Magnet store last week, and it was still, even the refurbished store was still no good. It was dirty. There were empty shelves because they have this just-in-time kind of logistical strategy, which is not working. There's empty shelves. And there was still inventory sitting all over the floor in carts. And then I went to this couple of other stores that were sparkling and new and filled with goods. And they just can't compete. So these are the things you see when you go. So even in the more developed emerging markets that have plenty of research coverage, you have to see with your own eyes sometimes frontier markets without a question you have to go. You can't develop an opinion about a frontier market unless you spend some time there, get to know the people, the business culture, get a feeling for what's going on there. And even then,”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“You visit a company. I was just in Russia. I visited a few retailers. And I visited a retailer called Magnet, and I first visited their stores two years ago. This was the market darling two years ago. But if you actually visited the stores you saw that they were letting them go to pot, they were dirty, there was inventory sitting all over the selling space. And then I went to their competitor X five, which was introducing a sparkling new store format, and only a little bit more expensive. And I said, you know, X5 is going to eat magnet for lunch. And we sold our magnet, which had a huge gain on, and at that time was I think it was the third largest holding in the ETF and switched into X5. And sure enough, X five has outperformed by a couple hundred percent. So then I went just recently, but they said, no, no, it's still good. They've just reformatted their stores. They're going to be just as good as X5s. This is the story that the brokers, the analysts are telling, while presumably they're still trying to offload magnetic.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Participating in it makes you feel good. And of course I feel like because I've been doing this so long, I have a fairly good gut for the managements if I see really good management. Last summer I met with Luke Oil, which is an oil company in Russia, and it was a new IR guy they had hired. And he was really impressive. Luke Oil always had some issue difficulties with investor relations, never had the right person, and I said, okay, this guy is awesome. I loved what he was telling me. He told me some things that while not inside information were very insightful as to some things that were going to happen with luke oil that have happened, like the decision to institute a buyback. So I felt like it increased dramatically my confidence in that position that we held, and we added to it. So you get these insights meeting with people and the opposite too.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all, I enjoy it for me going on the road is still extremely fun. Here in New York I am an obscure nobody when I go to Russia or Georgia I am a hero and everybody wants to whine and dine me and so on. But it's not an ego boost I just enjoy it and it's interesting and when you go to a I was in Georgia a couple months ago visiting with Bank of Georgia was one of our big investments and they have a subsidiary that's building the first hospital and clinic chain in Georgia and it was amazing I visited they showed us this one hospital they said this is the first neonatal clinic in Georgia this is the first sophisticated CT machine into Tbilisi and I really felt like we were part of something you know and then we went to a hydropower plant that they're building and you see you touch what it is you're”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“And if as for the long term, and that's the kind of person who, when you're down, they will add more. If they are convinced that your strategy is right and you know what you're doing, they'll add more and not run for the hills the minute there is a twinge. So those are my kind of favorite investors. And I've had some of them people like that for twenty years. Unfortunately, some of them are the funds are outlived some of our favorite investors and that's another interesting thing is to see whether the next generation has been adequately prepared what to do and how to invest. And sadly I find that the answer usually no.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's worth individuals and then some very sophisticated institutional investors who we filled a need. Then for five years we went through this amazing boom in fund of funds which transformed the whole hedge fund industry and created unbelievable bubbles all over the place. Everything a lot of that was pushed up by these fund of funds and most of them are gone. So we're back to the same type of marketing we did in the nineties again. And for me, like my dream investor is like a kind of a older, slightly stubborn person who's made money either investing or with a business and looks at is very skeptical, doesn't get fooled by slick sales pitches. And that's the kind of person”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a combination, I mean, we have our largest investor is a sovereign quasi-sovereign wealth fund. It's a very large asset manager, and we fill a need. They have a huge portfolio, and they were looking for a particular type of emerging market equity investor. We fit the bill, and we have them, and we have some other institutional types. But I would say that the more typical investor for us is a high net worth individual, somebody with a million dollars or two million dollars who feels uncomfortable as they should sticking that into an ETF or looks at Templeton Fidelity and doesn't like what they see in terms of performance and track record and says there's got to be something better and I'm willing to pay higher fees and for expertise. So that's the kind of investor we have. And you know, it's interesting because come full circle. When we started out in the 90s, our investor base was exactly like that.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“So we're only a year into it. We need another year, and then I would say first quarter of 2019, we'll start to see more significant inflows to the asset class. So we haven't really seen much in the way of inflows to my funds despite two years of extremely good performance.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Then we went into a period of very serious retrenchment with a couple of false starts and then sank down again, so you had ten years, and during a period like that obviously developed markets are going to perform better and tech and fang and all that people are not leveraged to global growth quite as much. But I think the leadership is switched again. And I think that money has barely even started to flow into emerging markets yet. I was talking to a fund of funds manager who's setting up an emerging market fund of funds and I asked him when do you think we'll start to see some inflows? And he said one year after the US market that the EMs start outperforming the US, people start looking at them. Then it'll take another year for them to figure out what they want to do. So two years after, that's when money will start to flow in. So they started out performing probably about a year ago.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, the U.S. is growing, Europe is growing even more than the US, GDP wise. China's growing. And not only is China growing, but after carrying much of the global economy on their backs for a few years, now they're growing more on the basis of exports again because Europe is their biggest export market and it's growing again and people are buying stuff. When I saw the car sales in Europe last year with the highest they'd been in 10 years. That's not fake. I mean, that's not fake news. That's a real factor that affects everything. And emerging markets are growing. So, I mean, outside of China, the others, outside of China, everybody's growing. So that reminds me of the period from 2003 until 2007. four percent global growth was happening and it was a great time to be in cyclicals and resource stocks and in emerging market equities.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say that we're now in a period where EM equities should outperform developed market equities after ten years of the opposite, to use a cliche, what's becoming a cliche. We have coordinated global growth for the first time since 2007.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“And they will be for a long, long, long time. There's like a 10 year process of getting the Fed out. So where's the problem? So obviously if the 10 year does keep going up, the yield keeps going up. At some point it does start to look like US equities are now facing very steep competition. It's going to be a factor. And I'll adjust my portfolio accordingly.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I say, you know, if you're going to argue that you know the fair value of the ten year and no one else does, that's a loser's argument. There is a lot of reasons why the ten year trade's where it does. By the way, so then I asked a friend of mine who's an expert on fixed income, you know, what do you think? Is it being pushed up by the Fed? He said, of course it is. If the Fed was not involved in the bond market, yields would be much higher. But they are.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I said, okay, I put 25% of my money into equities, and I said, okay, I'll wait until Graham's conditions are in place, and then I'll get fully invested. It didn't happen until 2009. That's when it finally was, and in fact, at that time, it was three times the earnings yield, I think by 2010, the earnings yield was three times the bond yield. And I said, boy, I should be buying US equities. And I did. I only wish I had gone fully invested. Like, I should have. But anyway, so, okay, it's not as attractive now. And but it still attractive. And so anytime, of course, I'm having these arguments with people all the time when I say that the U.S. market is still good. And they say, well, that's only because the treasuries are too cheap.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they have one thing in common which makes me positive on both, which is that equities still offer a much more attractive return than the relevant fixed income instrument. So for example in the United States, it's true let's say that the S&P is trading at twenty-three whatever it is. So your earnings yield is over 4%. The 10 year is 2.7%. So even after that move, it's 2.7. And people are getting excited, you know, look at the dividend. People forget that this is only a recent phenomenon, that the earnings yield. He was higher than the bond yield. When I started investing in 1992, I read The Intelligent Investor, and Graham says in there that you know that the US market is a good buy when the earnings Is at least two times the bond yield. And if it isn't, you should just put in like 25% integrities.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, it has a 4% dividend yield, which tells me that we're not toppy. That's a sign. It's never the PE, the market PE is ten. I've seen it at ten before, but not with a four percent dividend. I think it was probably a ten, let's say, go back to two thousand five, two thousand six, it was probably ten, but the dividend yield was probably two percent, if that. So it's a whole different ballgame in my part of the world, and I would imagine it is the same everywhere in emerging markets again ex China, because China is a different story.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“To see who has the best corporate governance, considering where it was 20 years ago, where they would shoot you for even asking where did the money go. So I think they're speaking my language, but I do love dividends. And our fund, well, the market has the MSCI Eastern Europe”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was stolen, and so shareholders like to see the cash on the barrel head means this is real profits I can touch it. But my last meetings I was in Russia ten days ago and I had some meetings, and they were speaking my language. They were saying, look, our new board has come up with a new policy. I met with a Russian steel company. This is amazing. They were the first company to institute a quarterly dividend. They have a new dividend policy. They're going to dividend out their entire free cash flow up to zero point three times debt to EBITDA. And if debt is below zero point three times EBITDA, they'll pay above one hundred percent of free cash flow to get it to that level. Then they complained to me that other Russian steel companies that are public were copying them their dividend policy and doing the same thing. When I left, I sort of said, oh my God, can it be Russian steel companies are competing?”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're dividend hungry, we love it. At the same time, you know, if a company has worthy investment projects, I'm more than happy for them to, well, it's the same thing that Warren Buffett always says. Like, you know, I don't want the dividends. I don't want the cash back. I want you to invest it. And that's easy for him to say in the United States where the investments are smart. Well, let's put that this way, where his companies tend to make smart investments. In our part of the world, a lot of that money...”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“The rest of the world, but I believe that in most of Asia ex China that's the mantra China I think is a different animal and I think people invest there need to be experts”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Going, and the only way they can pay dividends is by borrowing and paying dividends, but then you have companies that generate tremendous amount of free cash flow and share it with investors through dividends and buybacks. Those are the companies that are outperforming, that have helped us a lot in the last few years to outperform. And I think that this is a result of lots of emerging market company managers having It's a new generation of people who were trained in Western business schools or at least their familiar with Western practices and globalization has had this effect on these countries of kind of the mantra of value creation is much more widely accepted at least in my region I can't speak so much to”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's their market share? Those kind of questions. In a more developed emerging market, you can go on to price to book and PE and all the normal things. But I would say that there's been a big transition in emerging markets in the last ten years and particularly in the last five years away from headline numbers and to fundamental value creation, which is now what really separates the winners from the losers in the stock market. So if you look at there are companies in my market, in Russia that look very cheap on a headline basis because, let's say they have a three PE, but the free cash flow is non existent because the capex is inefficient and a lot of stealing.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“so there are limitations on what a retailer can do, but there are huge oil exporter, they have metals, so you kind of look at that. In a more developed market, you know, by then you already see what sectors have emerged, and you also want to see, there's certain sectors that are just non-investable for foreigners, anything related to defense usually is very difficult. But things that are sectors that have emerged and companies that look like public companies, once you're talking about a more developed emerging market, those are the ones. The metrics we use, again, it depends on whether it's a frontier market or whether it's a developed market. In a frontier market where the companies don't really have, let's say, great earnings yet, you're looking for market share, you use comparables a lot. Like if this was a Western telecom, what would it be worth?”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Now you could buy it. They had eaten red October, chocolates they could buy that share now, and but they didn't see the oil companies that wasn't a tangible thing that they had interacted with, so they didn't think that those were the things to buy. Incidentally, when Lloyd Benson, who was Secretary of the Treasury at the time, he visited Russia and Yeltsin gave him a share of Goom department store, and if Rid October Chocolate Factory, and I think Benson should be very angry because if he had given him luke oil, it went up a hundred times, and those stocks were dogs forever. So I think you have to ask, what is the key sector? Is it a retail? Is it going to be a consumer-oriented economy where you want to own things in banking retail? Is it going to be, or like you take Kazakhstan as another frontier market we've invested in, it's only under $20 million?”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“In a frontier market, the first question you have to ask you look at all the stocks in the stock market, if it's a new stock market, it depends on how they did privatization. If there could be a lot or only a few. And you need to identify what the country's comparative advantage is. What does this country have to offer? When we went to Russia, we saw, okay, this country is going to be one of the oil giants of the world. So oil stocks, you want to own oil stocks, you want to own for sure. And weirdly, when I think back to nineteen ninety four, those were not considered to be the blue chips. They were very interested in buying shares in Gum department store and in red october chocolate factory because these were things they knew, like they'd chopped at Goom.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Philosophical hatred of a particular company because it screwed them in the past, or whatever, bought out a subsidiary at an unfair price or whatever, and they swear it off forever, even if the company completely transforms. And I try not to hold those kind of grudges for a long time because people change, companies change, and it's dangerous to be rigid in this business because you could get left behind.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“They all happen to be index components. So if you can enjoy a stock that's in the index and wait it at the index level or close to it and feel good about it, that's not a terrible thing because you might be wrong. It could be that the stock emerges as like one of the great leaders of the market and you don't want to be forced to be in a position where you, and I see some of my peers in Russia, and, you know, and this is probably true in other markets too, they just have a”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that anybody who has a benchmark and then says that their benchmark unaware is just being stupid because investors are not benchmark unaware. Even the word benchmark agnostic is a little strong. I would say that I'm benchmark afraid. I'm afraid of the benchmark beating me. And beating me badly and for a long time, I mean, I can underperform the benchmark for a little while, but I do have an eye on the benchmark. So like some of the things that we have in our fund right now are some of the things that are big weightings in the index, and you don't want to be, for example, I don't shun SOEs just because they're SOEs, it doesn't mean they're bad. In fact, I would say three of the best Russian companies are state owned enterprises, and we own all three of them. Actually four now that I think about it.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“350, and you've ridden it to 19, it's very tempting to say, okay, I don't want to be a pig. I want to cash in. But is it over? No, I think it's halfway. And by the way, Sparebank's valuation is still attractive. It trades at something like one point two times book with a bank that is generating twenty percent return on equity in a market that feels like a bull market driven by rising oil prices. So I think that you have to put on different hat and a bear market is a different hat. This is very tough to do, and one of my weaknesses as a manager in a bear market, you have to, what they say go out back and kill all your darlings. You just got to shoot them all. Even stocks you love and you think in the long term are great companies, you got to sell them. And that is, I think the single hardest thing for a fund manager to do is to sell a long term buy because it's going to do bad.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I believe we're in a bull market right now. It's amazing that no one has used this word in emerging markets, even though they've been going almost straight up for two years. And my market, like my Russia fund, has been up like twenty three out of the last twenty five months or something, and yet we're not being inundated with new money, people don't seem to realize that we're two years into this fantastic bull market. That's what it feels like to me. And because I think I'm in that type of a market, I'm taking a slightly different approach, you know, I'm letting the winners run, the leaders that are emerging as the stocks that everybody wants like Sparebank, let's take an example in Russia. This is a stock that has gone from three hundred fifty, the GDR a couple of years ago to nineteen dollars today who's ridden it from let's say you got in.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“You need to understand that things can valuations can go to levels that you are not comfortable with, but certain stocks will emerge as the leaders of the bull market. You got to ride them. And don't get too fancy and too complicated.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a moment, a bull market. I've been through bull and bear markets. I can say humbly, I've been through one of the worst bear markets and one of the greatest bull markets of the last fifty years because I was in the Russian bull market and I was in the bear markets of two thousand eight and nine. And I would say that one of the key tasks probably the first piece of advice that we were ever given as emerging markets managers by a very smart guy who's still an investor of ours named George Robinson who runs a very famous EM fund out of London was your job as an emerging markets manager is to know whether you're in a bull market or a bear market and act accordingly. It requires thinking about a lot. It means that if you're in a bull market you need to go with the flow.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“As well as we did, I think we haven't had one of those periods for about ten years. Could happen, and I am prepared to underperform, and my investors by now they've been with us for so long, and we have such a long track record that they're willing to give us the benefit of the doubt when we're underperforming. And I say, look, it's becoming a bubble all the crap is going up. I'm not going to buy bad stocks just to keep up with the market because they become the liquidity play. And we can get away with that. I think it's harder for a younger fund to do that because people will say, oh, they lost it. They don't know what they're doing and they haven't had time to prove themselves through different cycles.”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think indexes are funds are even less I buy them in the US sort of somewhat hesitantly, but they're even less appropriate for emerging markets because of what you said the largest cap companies are often the ones that don't build any shareholder value so if you look at the Russian index you know one of the reasons it was only up 5% last year and we were up over 20% was because it was being dragged down by a few big SOEs that were not building value now I would put a caveat in there there are times when you need to be a stock picker and there are times when the index is going to outperform everybody else we've had some periods where you could have just thrown a dart in our region or in Russia and did just”
2018-02-06 · Invest Like the Best · Harvey Sawikin - Emerging Market Opportunities - [Invest Like the Best, EP.75] · IDENTIFIED FROM THE TRANSCRIPT · source