YouSaid · the spoken record

James Donald

lines on the record: 82
first: 2018-03-19
most recent: 2018-03-19
sittings or episodes: 1
sources: podcast

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“Because anyone doing what we do, active investment management, is going to go through challenging periods of time. And you have to be mentally strong to go through that.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I would say. The great thing about investing in general, but certainly in emerging markets, it's very stimulating, it's always challenging. It's not easy. You are always learning, very important. You have a plan. You have a process. And I think to be in this business, you have to know how to take pain.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Finally, I would say learn how to evaluate yourself, learn how to criticize yourself in a positive way. framework, constructive criticism. And understand what you do well and what you do badly.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“This is something we have to be concerned about because there are lots of millennials now working with us, and sometimes they have different priorities from. From the way we are. But I would say, first of all, you can combine your business interests and other interests, your personal interests in what we do. Obviously, the type of work we do can become challenging, but you can. I'm involved heavily in a charity, which makes grants to about 70 grantees around the emerging market world. I'm involved in an educational foundation, and those are things that are very, very important to me. I would also encourage millennials to think long term. The asset management business is a long-term business, particularly the long-only part of it. And you can't really be evaluated properly if you're not going to be long-term in your focus.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a part of Lake Huron called Georgian Bay, in the eastern part of Lake Huron. And it's, of course, a very, very big lake, and it's remote, very difficult to get to, but it's very calming place.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, when I can, I try and do a bit of exercise. Not as much as I'd like to, but I do try and do some. I read quite a lot. I quite enjoy some movies. I have a cottage up in Canada, so I go up there and travel in boats and see friends in those places. Even though I travel a lot for work, I do travel for pleasure as well. And go and see historical sites and places like Rome, for instance, is a wonderful place to go with incredible, incredible history.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, when I was at university many, many years ago, I was very involved in student politics. And I was the speaker of the university student council, which was actually quite a serious operation. And there was an election for president of the student council, and I think I could have been a contender, and I could have even wanted. And I decided not to go into that race, and I've lived to regret it.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That it would probably be a global effect if it happened. I think there's a high probability of that. I also think in the emerging markets in the last five or six years, markets have been quite affected and in some cases dominated by macroeconomic factors. And I would guess that they'll become more idiosyncratic, more stock focused at some point in time.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's very hard to tell. I would imagine emerging markets will develop further and we'll see some of the frontier countries joining the emerging markets. Vietnam, for instance, is a frontier country. Perhaps it'll develop its capital markets to become an emerging market, we'll see. So that's one thing. Some perhaps shorter term changes. We've seen a market in the last seven years where growth has been the most successful style by a long way.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. I mean, the other thing that's really changed is that information has ballooned. So 20, 25 years ago, being based in these markets was, I think, much more important. Whereas today, I don't think you have to be based in the markets. I think you can go and travel regularly. the markets because the information is instant.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Our universe has changed dramatically. So again, back in the 1990s, places like Malaysia and Mexico were huge parts of our universe. Portugal and Greece were part of our universe back then, very big parts. Greece has come back in, but it left for a while. Today, China has become the really big weighted country, but Brazil and India are also very substantial. So the universe has changed. And there's been quite a lot of sectoral change in it. There's been a lot more constituents of our universe, which I think is very different from the US, where I think the number of stocks has actually fallen. Over the last fifteen years.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Last spike, so it was the last spike in the railroad when they finished that off in the Rockies. And so that's a bit of my Canadian background. I still think the prince by Machiavelli. Is a brilliant book and tells you a lot about interacting in difficult situations and a very, very useful book from that point of view.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I very much enjoyed recently reading a book on the Wright Brothers by David McCulloch, I thought it was a very interesting book. I enjoyed reading the last spike, which is a Canadian book all about the building of the Canadian Pacific Railroad and the last.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You could do much worse. Well, I think he's probably one of the absolute best investors of all time. I also think John Templeton. Was one of, again, one of the greatest investors of all time. Very much a global investor. And very fundamental in nature. And I think I really think they were probably the two names that I would put at the top of the list.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, this probably sounds a little bit textbook, but I would say I very clearly understand the way Warren Buffett invests.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I've been fortunate. My father was an asset manager. It was a portfolio manager. And I never had pressure to go into this area, but he was certainly someone who understood the industry and was very helpful from that point of view. And I was fortunate later to get an opportunity to work a little bit in the industry. And then I took various exams to see if I enjoyed it more. So that was one mentor. I would say when I was at S.G. Werberg and Mercury Asset Management, several of my senior colleagues were truly investment people and were tremendously good mentors to me. And this is an industry that always has its challenges and you have to know how to deal with those challenges And they were very, very important to me.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Literally pushing a broom, which gave me a different perspective on the world, I think. And it was certainly quite an interesting life. I worked at a pulp and paper mill in northern British Columbia one summer, which was quite a tough job, to say the least. And I worked... Also, in a warehouse for a supermarket company unpacking boxcars, I would say these things motivated me to want to have an office job and ultimately motivated me to move into the investment world where I could be mentally stimulated.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the plan is to change that. The plan is to build something like two-thirds of the total infrastructure of the country. In the next 14 or 15 years, and that is with the Modi government. So it's a very exciting time in India. And I think it's important to highlight it because it may have a significant effect on worldwide growth.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Not okay. India is quite a different situation to China. The infrastructure is generally relatively old, although there's been quite a lot of infrastructure building in the last 15 years.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think India is worth mentioning at this point because according to, I think the leading plans in India, something like two-thirds of all infrastructure spending is planned to be built in the next 14 years.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think the evidence is there. I mean, China is today in many areas the factory of the world. And so that building of infrastructure has attracted a lot of big companies.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I would probably say they've already done that because if you go to Even mid sized cities in China, you'll find a beautiful new airport you'll find expressways and highways, you'll find in many places very, very good infrastructure. And they believe that is necessary to attract companies to set up factories or to set up potential for employment. And they've done that. And I think they are continuing to do that as we look ahead. Maybe we're not going to see big increases, but I think we're going to see ongoing spending.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think emerging countries have to think in terms of decades for their economic development. That is really the best way of looking at things. Because, again, they have the visibility because they can look at a country like the US and say, maybe we don't want to be exactly like what the U.S. is, but we can catch up in these various areas over the course of the next 10 or 15 years”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's fair. I think it's all part of the economic development program that the Chinese government would like to see.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's probably a little bit more than half the country that still is in a rural setting, but opportunities, economic opportunities are generally far greater in urban. Settings your opportunity to go to university, be educated much greater if you're in an urban location. And I think the government is definitely continuing to think of urbanization as an ongoing primary policy.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“From rural areas to the cities. There are over 100 cities apparently in China that have a million people or more. A mid-sized city in China is probably 8 million people like New York. New York City, right? And a big city is like Shanghai or Beijing at 20 million people.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the state owned enterprises have actual rights to have the capital often at lower rates. And so the amount of control the banks have or even the politicians who are in charge of the banks is limited.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That is correct. But on the other hand, China has changed a great deal in the last 30 years, but there are still old-style effects from the communist period. So, for instance, state-owned enterprises, companies that are wholly owned or are still majority controlled by the state or different government bodies, in some cases they have a constitutional right to bank capital. And so one of the issues in China that has been concerning investors has been particularly in the last six or seven years when the economy has been slowing down. Quite a lot of state-owned enterprises have been demanding capital from the banks.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they probably mean better diversified growth. I think they probably mean more technology and more modern industries and not just the big industrial old style industries. They've also indicated that they would like to see less financial leverage. In the economy, in the industrial sectors of the economy as well”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's less big than the US, but it's been growing much faster, and it has the potential one day to be as big as the US. I think the interesting thing is that last year at the Chinese Party Congress, they didn't actually come out with a target growth rate. It had been around 6.5%. This all has a lot to do with Xi Jinping, the president, and consolidation of his power. But the fact that they haven't got a target growth rate, I think, is important because perhaps it takes pressure off Xi Jinping and the leadership to some degree. I think there's also a wish in China to have better quality of growth and not just simply higher growth.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's easier for rudimentary economies to grow rapidly because there's a catch-up process with the developed world. And so over the last 30 years or so, the growth has been very impressive, but it's been naturally coming down because the catch-up is less and less.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“As long as you have an ability to do it through the connect system in Hong Kong, you're going to be able to buy Shanghai or Shenzhen listed ashares in that market to a large degree within those indices. And it's worth remembering the A-share market is, you know, if you take the full market is the second biggest. Stock market in terms of market capitalization in the world.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think there's some way yet to get to that line. One of the big changes that's happening this year is that the main indices will all have China Acres, so mainland traded shares in China. And the capital markets in China are increasingly converging with global capital markets. We still have quite a lot of work to do on the debt side in China. But this ASHA inclusion in the MSCI index. I think he is a major, major event.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“From what I understand with those four countries, they have worked pretty hard on mending their fiscal situations and their economic condition. And so I don't think they will be emerging markets, those four. Portugal is probably the closest, but I think they've all done a lot of very important work in the last six or seven years.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“While it had excellent banks in the period in the 1990s, some very, very well Run banks, but When indebtedness increased enormously and wasn't really kept properly in the economic figures of the country. It was a big negative surprise, and of course, no one wanted to be involved for the country at all.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And that has really compromised the economy and the indebtedness of the country has gone up dramatically. It's now back in emerging markets. And I would say we're waiting to see if the plans, the economic plans for Greece can rehabilitate the country, particularly the banks. Which have very, very high non-performing loans. But if the economic plans can work, then perhaps Greece can come back. It's a very sad story. A lot of the companies that I've seen over years have had terrible problems through this. And in many ways, it might have been a better thing if Greece had never put the euro as its currency.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Unfortunately, the situation that has befallen Greece has been a tragedy. It was an emerging market country. Then it joined the EU and essentially got a lot of EU fiscal aid.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there were some very, very well run companies and Pita Vissa, the big oil company, was always known as a company that had experts and was well managed. But unfortunately, quite a lot of that seems to have changed now.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a full regime change is the only thing that's going to change it. I mean, I spent a lot of time in Venezuela in the early 1990s. They had made a lot of progress.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Effectively I gave us an arbitrary value for that. So, really, we felt that is the best example of an uninvestable country”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“To a large degree caused by politics. And in 2005, 2006, basically the government said it was going to buy a lot of the publicly listed stocks and just give us a value they thought made sense. There was no real protection for investors there.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's something we look at very, very regularly. We look at what sort of protection we think there is for investors. The best example of an uninvestable emerging market has really been Venezuela, which has had terrible, terrible problems, as you know. Inflation, political growth.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it probably will take a little longer, but chili would be definitely the contender, I think, there. It's been a pretty successful economy and a pretty successful market.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, Israel made the move a number of years ago into the developed world. Mexico is a possibility and it's a reasonably well developed country and market. So that is a possible mover. How about anyone from?”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You'll probably see a combination of those things. I would guess. I think at some stage. Probably not in the immediate term, but you're going to see some of these countries like South Korea and Taiwan move into the developed world. And in all likelihood, I think there will be more and more companies in emerging markets. And you'll see the growth of those markets as a percentage of total market capitalization.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we have limits on what we can have in a given country So we can't have, you know, I think it's very unlikely we're going to have. Positions in five or six countries and nowhere else. That's really, we've never had a situation like that. We've always pretty much been invested. In something like 13, 14, 15 countries in a merged market, sometimes. twenty. But so we haven't really had that issue. But there are times when some countries are just not attractive for us and we'll have nothing there.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And if there's enough upside then to go onto the last step, that's where we look at some of these other type of factors like macroeconomic and political risk and governance risk as well. Very important for us. And discount for those. And at the end of the day, see if we have upsides that are competitive with what we already have in our portfolio”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“No, you're exactly right. Most of our strategies are more bottom up than top down. So we tend to start by identifying what looked like compellingly attractive stocks, valuation almost always plays some sort of role. As do fundamentals. In the relative value strategy that I'm most involved with, we are attracted to stocks that are inexpensively priced and have had pretty good profitability. We then look closely at their financial statements and footnotes to see if there are distortions that are caused by that and adjust for any distortions that we think are material. If the stock is still compellingly attractive, we'll then look into the future, into the next three or four years, and try and forecast the fundamentals, particularly the profitability, and derive a price target for that.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's a good chance with the economic scenario we're seeing now accelerating growth around the world from a very low base. That's usually a positive thing for emerging markets, and we're anticipating the likelihood of increasing profitability for merging market stocks relative to developed market stocks. If those things happen, I think we could see significantly lower discounts in valuation.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“In the way we invest, we tend to look at the actual stocks. And their valuations. And in a relative value world, we tend to look at it relative to the profitability of the companies. In a growth at a reasonable price type of strategy, we tend to look at valuations relative to earnings per share growth rates. As a whole, we'll look at the universe and we'll compare the universe in emerging markets to developed markets. Today, the price earnings ratio of emerging markets as a whole is at about a 30% discount to that of developed markets.”
2018-03-19 · Masters in Business · James Donald Discusses the Sensitivity of Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source