We Study Billionaires - The Investor’s Podcast Network - RWH040: Go Global w/ Laura Geritz

Episode Date: January 21, 2024

In this episode, William Green chats with Laura Geritz, founder of Rondure Global Advisors, which scours the globe in search of high-quality companies trading at attractive prices in places like India, China, Japan, Thailand, Taiwan, Turkey, Brazil, & Mexico. Here, Laura makes the case for allocating more money to undervalued stocks outside the US. She also discusses her unusual lifestyle, which is built around relentless travel, voracious reading, & abundant time to think. IN THIS EPISODE, YOU’LL LEARN: 00:00 - Intro 08:15 - How Laura Geritz earned the nickname “Money Bags.” 09:41 - How she broke into the investment industry by living in Japan. 12:55 - How she was shaped by the frugal, unflashy culture of rural Kansas. 22:57 - What she learned from her mentor & partner, Robert Gardiner. 30:14 - Why so many talented women quit the investment business. 36:54 - Why she believes many investors are taking too much risk. 38:56 - Why foreign stocks may be overdue for a powerful rebound. 41:20 - How she weighs the risks & rewards of Chinese stocks. 52:26 - How she screens 70,000 stocks to identify great businesses. 1:03:36 - What foreign investors don’t understand about Japanese companies. 1:11:51 - How to become a continuous learning machine. 1:25:38 - How Laura handles adversity when her investing style is out of favor. 1:32:06 - Why she maintains a remarkably uncluttered calendar. Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Laura Geritz’s investment firm, Rondure Global Advisors. Graham Greene’s book The Quiet American. Yasunari Kawabata’s book Snow Country. Michael Pollan’s book A Place of My Own. Rolf Potts’ book Vagabonding. Pico Iyer’s book The Half-Known Life. William Green’s podcast interview with Pico Iyer | YouTube Video. William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book. Follow William Green on X (AKA Twitter). Check out all the books mentioned and discussed in our podcast episodes here. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts.  SPONSORS Support our free podcast by supporting our sponsors: River Linkedin Marketing Solutions NetSuite Fidelity Shopify Toyota TurboTax Babbel American Express Business Gold Card Fundrise Vacasa HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hi there. Our guest today is Laura Gerrits, who's the founder, CEO and chief investment officer of a firm called Ronjure Global Advisors. Laura played a starring role in my book, Rich Ope Wiser Happier, where I wrote about her at some length in a chapter on high performance habits. Every time I speak with Laura, I'm reminded of what a fascinating and independent-minded investor she is. As you'll hear in this conversation, she's constructed an extremely unusual life. Laura grew up in the American Midwest, and her investment firm is based in Salt Lake City, Utah, but she's become the most international of international investors. She tends to travel for about six to nine months a year, roaming widely in countries like India,

China, Indonesia, the Philippines, Mexico, and Turkey. In all, she's traveled to something like 75 countries, returning to many of them again and again in search of great businesses at enticing valuations. Laura also has a home in Japan, and she speaks Japanese. Intimately, she plants herself for weeks on end in a city like Nairobi or Dubai or Amsterdam or Paris or Bangkok, and then she uses these places as hubs, so she can travel around those regions more efficiently, visiting companies. and studying the local culture and economy.

Everywhere she travels, she reads multiple books about that place, ranging from classic literature to mystery novels to economic history. One reason why I'm fascinated by Laura is that she's a wonderful example of what it means to be a continuous learning machine. Over many years, she's built a formidable competitive advantage through this combination of relentless travel, boots on the ground research, and voracious. reading. It helps that she also does an exceptionally rigorous screen twice a year of about 70,000 stocks, which helps her to identify which markets are undervalued and where she

should travel in search of opportunity. All of this deep research has led Laura to believe that now is a particularly interesting time to consider investing more heavily in foreign stocks. As we discuss in this conversation, the best bet since 2010 has been simply to invest blindly in large US tech stocks and ignore the rest of the world, especially emerging markets which have performed dismally. But as Howard Marks often points out, investors should never forget that cycles eventually end and that the pendulum can suddenly swing dramatically in the opposite direction. Of course, the problem is that we never actually know when these cycles will end, so the timing can be really difficult. But I think it's worth paying attention when a smart,

season, disciplined and value-oriented investor like Laura tells you that she's seeing a great deal of opportunity in unloved foreign stocks after so many years in which they've been desperately out of favor. In any case, I hope you enjoy our conversation. Thanks so much for joining us. You're listening to The Richer Wiser, Happier Podcast, where your host, William Green, interviews the world's greatest investors and explores how to win in markets and life. Hi, folks. It's a great pleasure to welcome today's guest, Laura Gerrits. Laura leads an investment firm called Rondiour Global Advisors, which invests very heavily in stocks outside the United States, mostly in developing countries like China and India and Mexico and Vietnam,

but also in developed countries like Japan, where she has a home. As some of you may remember, Laura was a very important and exceptionally thoughtful character in my book, and so I'm always really thrilled to get to talk to you again, Laura. So thank you for joining us. It's lovely to see you again. again. Thank you for having me. And thank you for the conversation. I'm really looking forward to it. You have an extremely unusual background for a fund manager and started out about as far from the world as Wall Street could be. Can you give us a sense of where you came from and how you grew up? Well, you know, I grew up in western Kansas, town police, Kansas. And, you know, for those of you

who read, think in cold blood, you know, the beginning, these sort of fields of lead, for those of you who like, you know, prefer movies think of dances with wolves. I don't know if you remember the scene at the opening of dances with wolves. It's sort of Fort Hayes is where I grew up. And this is the last sort of bastion of civilization. I feel back in the time of Westford expansion.

So I think that sort of perfectly solves up where I grew up on the plains in this flat place, you know, a really beautiful place. And a lot of members of your family had been farmers and factory workers, right? So it wasn't like you were destined for a white collar future on Wall Street. No, I knew nothing about the investment industry or asset management growing up. You know, my father was a literature professor. My mother was a scientist. So I grew up in this sort of interdisciplinary household, a world of literature and science and books. And I didn't discover investment management or assets. at the management. So I got a lot older. So, and just my farm, my family farm, or my father's farm, and we still

hold today, my aunt and uncle live on that farm. It's called Longview Farm. We thought about, actually, we thought about calling Rongers Longview Farm in the world of sort of, sort of, protecting your name, or making sure you don't have this sort of, you know, name that's more common. It wasn't

that protected enough. But the patent lawyers kind of disputed the name, so we we went with Ranger, which has a different sort of meaning. But yeah, my family farm was called Wannamhee Farm and sat on the hills, overlooking the Missouri River in Kansas. So really beautiful place. I've talked a bit in the past with Tom Russo about the connection between farming and investing,

and also more recently with Peter Keefe about the amount of time he spends out in nature and how studying predators has been very helpful to him as an investor. Do you think there are things that you're carrying from your, childhood on the farm that have helped you as an investor? My, I mean, all of it, you know, the notion of resilience and, you know, win by not losing because, you know, my grandparents, my other grandparents, you know, came from a factory environment and they're all very conservative people. They live through the World War II, the Depression.

And I just grew up with this notion of resilience of being able to survive through anything. And also just this longer term view and perspective online. So yes, I'm a big fan of herself. So actually, I was just reading his last chapter of the revised grandadne God's charities analysis on glow trotting. But yes, I'm a big fan of the notion of planting seeds when you're investing. And what did your family make of it when you started to go into the investment business? Were they sort of bemused by the fact that you would chase off to money?

Because my sense was that your family wasn't particularly interested in money. Even, you know, my dad has never been interested in more, you know, like they, they live, I mean, my grandparents, if you look at my grandparents on my father's side, they actually had a lot of wealth from farming, but you never saw that in their disposition. They lived far below their means. They were very frugal. So that sort of personality or that sort of, I guess you would say, philosophy of frugality was prevalent in my family, even though they weren't fairly affluent for. the small town in Western Jans. So for sure, I grew up with this mentality or notion of fragility. And I don't think my mother quite knows what I do today. So I'm not one who talks about what I do for a living very often. If people ask me what I do, I usually say I work in finance. So no, I don't think that was thought of as a career from my family.

But you were always quite numbers oriented, right? I remember you saying that as a kid, you loved math. then you, what did you use to do with your father's allowance, which is the story I remember you're telling on a podcast you and I did together with my former colleague, Dean Chatsky? You talk about gaming and in your, you know, people like enjoying games, you know, I grew up playing games. I said I really benefited, you know, as a child from my parents' lack.

They're great at a lot of subjects, science, literature, all sorts of subjects, but math was maybe not their special piece. So there were times my mom. I remember one time she said, will you go, I'll pay 10 cents a peach if you out and pick the peaches off the ground? And I kind of looked down and I'm like, I don't think my mom realizes there's thousands of peaches on the ground. So I went out and did that. And I'm like, my mom was like, what do I owe you? I'm like, you owe me $100.

You know, that was a lot of money back then. And so, you know, I benefited from that. And for my father, it was you can have $5 a week or you can, I'm going to put all my change when I come home in a jar and you can have my change. She said, you know, I watched my father's habits for a little while, and I said, I'm going to take the change. And I ended up having the highest allowance in school by the car. And that's when I acquired the nickname Money Bags, because every time you got in the car with me, you know, I had these bags that were jingling because they were full of change. So I grew up playing these games when I was little and always enjoyed them. And then you ended up with a very unusual education for someone to go into finance. You studied history and political science at the University of Kemp. Kansas and then ended up getting a master's degree in East Asian languages and culture from

the University of Kansas. And then went off and actually lived in Japan. And I remember you once saying to me that you lived in the Japanese countryside and you were doing some sort of social and economic study of peasants and lords in the Tokugawa period, which I looked up and is something like 1603 to 1868. How does... Sorry, what were you going to say? One of those wonderful papers, you know, that'll put you straight.

to sleep at night, you know, but only one of those, one of those things that's only done in academia, right, this very narrow study, but yes. I once had an editor who told me that he had written a paper. He'd done his master's thesis on bare imagery in 18th century literature. And when I laughed, he looked so put out. Like, he didn't realize just how obscure that was. So these studies of Japanese peasantry and, Japanese feudal lords and the like, how did this strange education going off to Japan,

studying these things that weren't really related to investing in any way, set you up in some way for a life as a money manager? I think, you know, the time frame I was going to college was this period, I think, of the original kind of Friedman, the world is flat era, right? You had the fall of the Berlin wall. You had the opening of China. You had, when I was, was in school, I was taking South African history when apartheid crumbled. So you had this sort of great period of globalization starting. And I think I was aware of that in a school and this international education would differentiate me from sort of everyone else. And so that's part of why I studied, you know, what I studied also just as a challenge in studying at the time frame of Japanese

because it's still known today if you're an English speaker is one of the five hardest languages, not according to the CIA anyway, for English speakers to learn. So there was a challenge in wearing this language. I didn't fall in love with the culture until later. I guess when I was living there, I was when I really fell in love with the culture and the literature of Japan. But I can say the way it prepared me for what I do. There was this one period of times we talked about technology further,

where I looked after I'd gotten in the industry and said, what makes a great portfolio manager? And, I mean, you know, we spend some of our time in spreadsheets. I think in our earlier years, when we're really learning, app, chowning and numbers and math, you spend a lot of time in spreadsheets. But that sort of evolves over time. And one of the things about portfolio managers, and it is this multidisciplinary industry. I have to be able to go public speak and talk to clients in a way that they can understand

and write and read and think. My father would always say, you know, liberal arts taking, you know, studying liberal arts, it's about how to think, not necessarily what you study. So that's why I think that education is so important, taught me how to think. Yeah, and you're synthesizing information from so many different areas as a really good investor. I mean, we'll talk much more later about your weird reading habits and travel habits, which are very idiosyncratic. But it feels like from very early on, your willingness as someone from rural Kansas to go off to the middle of nowhere in Japan and start studying the world. from a different perspective, very characteristic of you from very early on, it sounds like.

My parents studied abroad, too. They had quirky degrees, you know, English, but then also minored in art. You know, so my father and mother had actually did a study abroad program in Mexico. So I grew up with parents who wanted to see the world and thought it was important to understand the world. And my sense was that in some way you felt like if you were going to break into the investing profession, which I think you wanted to do from fairly early on, you were going to have to set yourself apart in some way. You didn't have the Ivy League pedigree,

the sort of compulsory degree from Wharton or Columbia Business School or whatever. I probably wore a chip on my shoulder from that for a long period of time. You know, it was probably eight to ten years in where sort of I lost that ship. And that was a really freeing experience, you know, because I think probably if you look at the education, I've given myself, it rivals some of the best educations. I intentionally seek out knowledge. So I read prolifically and take courses when I don't have to. And so it took me a while to get over that, you know, I think you definitely had a disadvantage by not having that education early on in the industry. I think having a chip on your shoulder, though, is weirdly helpful in getting you started because it forces you to hustle in a way that people who are smug and self-satisfied and think they actually know may not be inclined to do.

When I came back from Japan, I wasn't taking business classes or finance forces, but I was reading the Wall Street Journal every day at college. I was interested in finance and money, but I just didn't know anything about the industry. You know, there was no one who, I didn't have a mentor who taught me about the industry and that there were jobs in this field. So when I came back from Japan, you know, I wanted to do something global. I still didn't know about the asset management industry. My father said to me, you know, there's this fantastic company in Kansas City. In a time frame, it was 20th century, not American century. And it was, they were hiring bilingual client relations representatives.

And he said, this is one of the top hundred companies you can work for in the country. So, you know, why don't you try to get a job there? And so I had gone to interview in New York. And my husband, you know, this was sort of goes back to my husband, who is also a guy from Western Kansas. He's a believer, you know. And if you think about what he thought it would take to be successful in life and get to this point of wiser and happier, he thought, okay, we need to accrue savings so that

we can choose what we want to do in life. And so he's like, I think we can accrue savings. savings by staying in Kansas. So that's sort of how I ended up in the 20th century, accruing savings of what exploring the world. And then I think also to the people who come to work in Kansas City, you know, there's sort of a different breed of people too. So that was sort of a nice sort of people to be surrounded by in the early years. And American Century Investments as it became was a very prominent firm back then. And you went to, I think in probably 1997, became a bilingual investor relations rep. And I remember

talking to you once about what it was actually like being on the phones and talking to clients about asset allocation and diversification and how they would sort of often they would start their conversations by saying, you guys suck and they would always be complaining. What did you know? Sorry, say again? Yeah, it was the period. It was a tech bubble, you know? So we ran diversify up strategies. So, you know, I spent a great period of time getting yelled at for, you know, only having 35% returns or something on those lines. You know, they were sold extraordinary returns, but they weren't keeping up with the NASDAQ of the moment. So that was how I started. But that was still in the days where people called. I sort of cheated too. We talked about this before. I knew I would

never have to use Japanese on the phone in American century. If you think about the culture of Japan, I mean, you know, it's, it's a culture that, it's sort of funny because, you know, when you think about crap, and there's, I mean, it's, you know, again, a culture where there's a lot of contradictions, but, you know, you have imperfection in architecture, you know, but people who are Japanese and they want to speak English, they, they want to speak imperfect. So I didn't think, I didn't think anyone would ever call in, you know, who actually spoke Japanese, so, and no one ever did. Really? Yeah, no, once, American. 20th century that Sun Cream had gotten required by partially acquired by

JP Morgan and so the only time I really ever used my language skills and they got rusty for a while was when a camera crew came in

from Japan to interview and so that was the only time I really used my Japanese. And when you think about what that

experience of talking very directly to clients actually taught you about things like fiduciary responsibility, how did that

have an enduring effect on you? I think we hear often in this industry. I don't get the sense that a lot of people understand it's not their money. I listen to that over and over again. And to me, like, the greatest reward is doing something well for a client. I mean, I live and grieve. I don't always do.

You know, I don't always, you know, I'm not always right and I'm making mistakes. But, you know, it's always sort of been in the back of my head. Is this someone else's money? This is someone else's future. You know, this is their goal. this is their children's goals. So that matters to me. It really matter hearing these people's stories. I mean, I know you're a great storyteller. And for me, just hearing other people's stories is really magical. Thanks. I remember once Will Danoff, who's obviously one of the legendary

investors at Fidelity showing me this old photograph of a kid who had just been born and his parents sent him this photo and said, you know, this is who you're managing money for this kid who's going to go to college eventually. And he had kept that all those years. And he said to me once, frankly, I care more. It was a very, it was quite a powerful statement. Like I got the sense that actually really caring not so much about the private planes and the, and the yachts and the big cars and the big extensions on your house, but actually really having that sense of caring about the client is a very powerful motivator if you have it. I think was in 20th century from leadership. There was and coal. I mean, that's a

also part of Midwestern culture, right? There's a culture of frugality in the Midwest, of humility. You know, the sense of humor in the Midwest is self-deprecating, so nobody takes themselves too seriously. And so there's actually, you know, even among these, I was, I didn't know anything. When I, I actually feel very lucky because I've never felt like having to have this sort of like focus on quality of life or a lot of free time or because I found a job I love to do. And so there's not really a separation between work and life for me. And so I think

I'm really fortunate. And then in my early years, I was surrounded by this group of people who you wouldn't have known, I didn't know anything about how much the industry was paid. I just really loved the job. And I was paid very little. So in that time frame, you know, I started as a bilingual client relations really represented. So it wasn't paid very much. And but you wouldn't have known, you know, that you were surrounded by this great wealth. because it's just not the culture of the Midwest. We actually competed for worst car. I was on one of the largest funds in the country at the time.

It was the second, I think the second biggest fun in the country. And, you know, one guy drove this ancient civic. You know, my windows were actually had fallen off my car. So they were taped up. And then, I mean, it didn't snowed in Kansas City. So we're all like, you know, it was like something out of the Incredibles where we're all in these mini cars, you know, driving into work. So that was just the culture of Kansas City.

I mean, there's not this culture of flashing money in fact. And I think Japan has a very similar culture, which is why I feel comfortable there, right? You know, the Nieland Sticks up gets hammered down. So, you know, this sort of culture of showing your importance by flashing your wealth is just nothing. I just didn't grow up in my culture. It's not important to me in any way, shape, or form. And presumably coming from farming communities as well, those were places where people would have tremendous wealth in terms of land and cattle and the like.

Yes. But you couldn't tell it from their clothing. My grandpa, you know, my grandpa and grandmother, you know, they splurged twice. Once was on a, they bought a grandfather clock. And then one time they, it was beautiful clock, and they had this very small farmhouse. We had a tiny TV in the front room, the only TV. But my grandfather wore these beat-up overalls. And here this band was a millionaire.

You know, you would have never. known it, right? And ever so everyone I grew up with and surrounded myself with through most of my history is like that. I would even say, you know, the great respect, you know, I chose to promote Grand Jure P.

That's what those founders are laying as well. You know, they have this culture that I really adore of, you know, it's about more than just me. They're very charitable. They care about their community. So. The person you partnered with at Grand Jopee, Robert Gardner, who,

you worked with at Wasatch, I was thinking this morning, I literally, I wrote an article in 1998, where I went to Utah when Robert was a very young analyst. Well, no, I guess he was running this hot microcap fund at Wasatch. And I wrote an article that was basically, I think it was called the Rookers. And the subtitle was something like all these mutual fund companies are paying these outrageous wages to these hungry young stock pickers and are they worth the money, these young whippersnapper kids? And I was there with Robert when one of the stocks he had bought, I think it was K&G, was collapsing and it went down something like 80%. And it was a terrible time for microcaps and small caps and his fun fell sound like 20%

over the next few weeks. And so it's funny that all these years later, that's the person that has played this sort of very formative part in your life. He was my office made for a long time. So, and he was generous with his time, you know, in mentoring and coaching. So, and I just, you know, is the personality of caring about something greater than himself is, it's very similar to the philosophy. I think you grow up with on the plains of Western Jansis. So. Well, he was also a devout Mormon, right?

And I always, I invested with Wasatch for a long time in Jeff Carden's fund for many, many years. And I always, maybe it was an absurd piece of stereotype. thing, but I loved the fact that there were Mormons. I sort of felt like Sam Stewart, who ran the firm and Robert Gardner, like, they were very, they were very serious about morality, about taking care of your money. And they would close the funds when they were absurdly small in this self-defeating way that was so wonderful for clients. Yes, yes.

I mean, they're still like that. So, I mean, I always consider myself an honorary number of the culture. You know, I'm not from Utah, but there's something about the culture. where I grew, you know, there's something about the culture of Western Kansas is similar, you know. And Robert, you said to me at one point, would, even if he had sort of mediocre returns one year, would just refund the fees. Yes, he's done that in the past. So, I mean, it, I, we talked about this, but I mean, the one thing that there's not a day that goes by, and those guys, don't think about their fiduciary duty. and so to me being partnered with people who think that way, it's important, you know. So, yeah, he really cares about his clients.

I mean, he takes us here. And all of his biggest victories, I mean, which I don't want to say his biggest victories, but almost every time you hear about a win, it's when he's done something well for clients. So in that culture kind of pervades or entropy. So it's just a great group of people. One thing that was interesting to me when I look back on that period is, I remember being in Robert's car. So I was a 30-year-old whippersnapper of a journalist.

And I remember his fund had closed at some ridiculously small amount, like $100 million, closed and used shareholders so that he could really protect his existing shareholders by really truly buying microcaps instead of having this sort of asset creep and style drift because of massive bloating of assets. And he said to me, look, if you wanted to invest, you know, I would let you invest because we spent so much time together and, you know, he was obliged to you. And I remember just being like, oh, that's very kind. And I wouldn't have let him

do me a favor like that anyway as a journalist back then. And also, I remember thinking, well, I don't know how good you are. And I have no idea how good you will be. And it really highlighted for me when I saw how enduringly good he did turn out to be. It highlighted for me just how hard actually it is to identify whether a fund manager has what it takes? I think it's hard because, I mean, well, you look and you think, you know, does the person have an actual discipline, approach to investing? You know, did they have a process? Do they have?

And then the other thing, does that process translate to the other members of the team and these other personalities? How do you, how do you, you know, transmit that process? but I think that's very hard to tell from an outside view. And then, you know, you look at people in the industry. This is true for me at the moment. I mean, I mean, I am working in the most out-of-favor asset classes, I think, on the planet, you know. I think the only people left in the emerging markets, right, or the very old, the very senior and devoted or the very young, because they can't get a job in private equity or venture capital.

So they've had to take a job in emerging markets. So luckily, such a role in this industry, right? There's hard work and then there's being in the right place and the right time. And sometimes you can be good and just be in the wrong place at the wrong time. I mean, I love how it works, you know, and he read his most recent letter on C-Change. And, you know, I think we've been through this period of absurdly easy money. And we say this all the time internally, you know, don't hit these bold markets with brains. And I think, you know, that your comment again about who is good and who is bad,

that's particularly hard to tell right now, too, because the bull markets have made a lot of things good for a long time. So, but I mean, I think just when I look at the people who I have thought on as good investors in my life, they approach stocks in the markets with an incredible amount of humility and they have a lot of respect for their clients. So to go back to your story, you moved to the investment team at American Century in 1999 and you got on the financial analyst team. I think at a time when you once told me they were getting 12,000 resumes for every job. And I'm wondering like when you look back why you think you succeeded against such high odds. What did they look at and think, yeah, this young woman from the middle of nowhere, although it wouldn't have been the middle of nowhere to them. what it takes. Why do you think they saw something in you? Well, and I, you know, I owe them such a debt of gratitude because, yes, I had no accounting background either. This was an accounting job,

you know, I'm a financial analyst. So they were looking at the time frame for people who saw globally, who thought about other places because they already had, you know, I love Adam Grant's book when he talks about cultural enhancements and a culture fit, but they had enough accountants. And then that's a random financial analyst of their timeframe. What they needed was someone who could think globally. And so I think that is why I got the job. You know, I was a foreign language speaker. I lived abroad.

And I was lucky enough for fortunate enough. One of the first stocks I was ever given was Tiffany's, at a time frame when Japan mattered to Tiffany. And I really understood the culture of the Japanese consumer. So that gave me this different lens into that stock that I think others didn't have. And it wasn't a good time in many ways for women in the business. I mean, it's never really been a great time for women in the business.

And I'm always sort of trepidious getting onto this topic. But I remember you once saying to me, there was a, there were just no female role models there at the time. And you once told me that there was a, there was a woman there who was basically told you'll, you're never going to be promoted because you were. from eight till five. Can you talk about that,

about just the pressure and the realization very early on that you were going to have to deal with this tremendous challenge, not necessarily just of structural sexism, but actually of the hours that were going to be required to become really, really good? Yeah, I mean, she was actually married to the head of IT at the company and you know they had children

so she said I can put in this amount of time which actually most people were only putting in that amount of time anyway there were a few extraordinary people who were really trying to advance powering head but but the fact that she couldn't was you know that she actually said I think most people just would never admit openly

that these are going to be my hours right so she was penalized for being honest So I don't really see why she couldn't have achieved that level of success because a lot of people were only working those hours anyway. I mean, especially like if you're doing domestic equities. Now, if you're doing international equities, I can tell you, you know, for any young person thinking about the real becoming an analyst or portfolio manager, I mean, there is sort of no, you know, end and beginning to your day because some market is always open somewhere. So, but I mean, most of us who've been international and, you know, with the long hours of international, also just absolutely love, you know, learning about different cultures and places and stocks and talking to different people. So there's a different level of a reward, you know, you're compensated for the hours worked by the knowledge that you gain from doing these, you know, unique markets. So, but yes, that was, that was, I think I told you or mentioned this to you, but when I lived and decided to start, it was with a greater purpose of trying to do something to create a role model or strang out in the industry. It certainly wasn't for monetary reasons because it's starting a business.

And one of my friends jokes who did a startup company, we called startup not for profits. So it's very, very difficult, you know, to get to the level of scale where you're making a lot of money again. And it was never my intention to earn the kind of money I made working for other companies. It was about, you know, trying to do something to change our industry. Yeah, what I saw in, you know, when I left Wausatch, was exactly what I saw. When I started in the beginning, the actual number of females who were left in the end. It was actually, I think the number of females in actual research had gone down. So from when I started, and I can count on one hand, maybe add a finger,

how many people were at American Century, you know, who were chiena. So, Really? Yes. So, I mean, there was one woman who was a role model for me. She actually came up in a similar way to me, and she quit in her 40s. She just set it up. Let's take a quick break and hear from today's sponsors.

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through all of my notes from our past interviews last night. And this really struck me, you're talking about alpha males in the business. And you said, most of the women I know in the business have quit in their forties. They just tire of it. Part of it is that it's draining to be surrounded by personalities that don't fit yours, this linear thinking, chest beating personality, the desire to be on the cover of a magazine before doing anything that generates the success that warrants that.

Can you talk about that, that sense that there, as you put it, there were all of these people who wanted to dress like Mark Mobius and thumped their chest but weren't actually as successful as Mark Mobius? You know, maybe life has gotten kind of controlling my own destiny or on your, maybe it's gotten a little better for me because I saw it out from men who are great partners in the last at least five or six years of my career is sort of different type of male.

I mean, we didn't talk about the positive males in my life. I have had some of the best male mentors and men who have supported sort of this push for more diversity in the industry through the years as well. So I always say, you know, I know we're both big fans of Martin's way. So, you know, the Little Book of Safe Money. He has that one of... Oh, Jason's way. Yeah, yeah.

Jason, Jason. I don't know why I said that. Thank you so much. Yeah, the little book of safe money, right? I'm a huge fan of that book. Yeah. There's that great chapter, provocatively titled sex, right? Yeah.

Gender pair is in the industry. And I think, you know, some of my best years is money manager who has been or I have been paired, male and female pair together. I think that's just a great pairing in money management. And again, I think a lot of them, you know, when you talk about sort of the traditional stereotypical female personality, well, this gets into nature and nurture in our industry, right? But, you know, a lot of the great value investors have these characteristics

that are similar to, you know, how you describe a female investor, you know. They manage for risk as well as return. So a lot of my greatest influencers are, you know, these great male. value investors. So anyway, I think that's all interesting and I'm confusing what I'm saying here, but I think a lot about nature versus nurture in our industry. And I think a lot of investors are a product of their early years or their foundational years when they're investing. You know, when I started investing the tech bowl was starting to blow up. So I'm naturally risk-averse. And then, of course, I was nurtured to be risk-averse as well. But then I look, you know,

the last 12 years when it's been sort of the higher than the main of your portfolio, the more you've returned, the more risk you've taken, the more leverage you've had, the better your returns. I mean, I think you have a whole generation of investors, male and female, who've been nurtured to take risk. Yeah, I think that that idea that you're very much shaped by the market in which you grow up is really powerful. Because I, like you, I started covering Wall Street, I guess really in the late 90s, I got serious about 97, 98, 99, 2000. And so I was watching the craziness, the crazy behavior, and then it coming undone. And I was invested with people like Marty Whitman, who you'd invested with.

I think that was the first fund you ever, you ever earned. So these really hardcore deep value survivors, people who were built for resilience. And so then when we saw everything fall apart, it kind of confirmed for us in some way this probably temperamental tendency to be risk averse, to be afraid of things falling apart. I think that's right. So, I mean, just think about how much the, how much sort of a risk mentality is dominating and investing right now

because just of how, I mean, I'm a believer that period of pre-money or easy money went far too long. And so I think it's ingrained this culture risk-taking that might be dangerous in a world where, you know, again, how our Marxist sea change where rates may be higher for longer. I mean, you're having to rotate your mentality dramatically in this environment for one, well, again, I'll use Dahlio here, you know, cash is trash, which I am a diehard believer in Ben Graham. So cash is never trash to me, you know. There is an optionality value of that cash. It's very important for sort of, you

you know, a resilience factor in that cash is important. But I mean, that was the environment we've been in for 12 years where cash is trash. And so now I think, you know, when you're getting 5% on a 30-year or 10-year treasury, cash is no longer trash. So I think the sort of mentality of debt or leverage has to change. And you think there's some kind of shift going on. I mean, as Howard Marks, who you've always revered and who I revere and have written about extensively, always talks about this kind of pendulum effect where just when you start thinking one thing works,

the other thing starts to work. And so you wrote a paper with your colleague, Blake Clayton, who's the co-CIO and a portfolio manager at your firm, Rondeur, white paper saying, talking about how deeply out of fashion emerging markets have been after this kind of perfect storm. since 2010. And you have this strong sense that it's very likely to shift over the coming years. Can you talk about that, what the case is for emerging markets at a time when pretty much everyone has decided, I don't want to do this anymore. I don't, you know, they've lost interest in the same way that people like Jean-Marie

Evayard were penalized in the late 90s for being international value investors. Well, I mean, the dollar is just literally, I mean, that quote, right, the dollar. is our currency and your problem has just swashed everything around the world. So, I mean, I think your case is, you know, if that ever reverses, you know, you have two drivers of really not just emerging markets, any international stock right now because you have weak currencies around the world and then you have a good, cheap value, relatively cheap valuations. So even even in a world of higher interest rates, valuations have come down. So I think, you know, you have, when we started, Ranger, I thought large-cap U.S. stocks were actually quite attractive. I mean, I started as a large-cap global stock analyst in a period when big caps were in favor. So I was very aware that Microsoft looked like it was sunk the perfect intersection of quality and value and momentum because the Fed kept the momentum cycle going through a very long period in time.

So you had that. But I don't think that world looks quite as perfect today. You know, the quality is there, the momentum in these big caps is there. The value isn't is there as much as it used to be. And the value is there in international emerging market stocks, at least in the high quality ones. So at some point, I'd like to think of the dollars, it's the catalyst and these stocks have value. In that paper that you wrote with Blake Clayton, I was very struck by some of the statistics you used about the cycles. that have occurred. And so you wrote that from 2010 to 22, the S&P rose 355%, whereas the MSCI Emerging

Markets Index rose 26%. So, I mean, just an astonishing underperformance. But then you pointed out that there were these previous periods that were very different, which is something that I write about a lot in my book, the sort of Ben Graham idea of the first shall be last and the last shall be first, right? So emerging markets outperformed from 1999 to 2010 with the rise of the bricks. And then before that, from 1994 to 1999, the US outperformed. And before that, from 1989 to 1994, after the Berlin Wall fell in 1989, emerging markets outperformed. So there's this sense that we go through these cycles where it's not like holy writ that

the US and large-cap stocks must outperform forever. And I think investors forget this. I mean, I think one thing we didn't talk about, too, is I think allocations are down in that, you know, single digits now to emerging markets. Because going back to like this generation of investors again, I mean, there's a very large generation of investors who have only seen the US go up. And particularly a few stocks in the US go up. I think that's also the product of the easy money period we've been in.

I mean, easy money benefits scale. It benefits the biggest companies and the biggest countries. We didn't write about this in the article. I was separate. Sometimes we do white sheets because we don't think the intention spans are there anymore. And then we call white sheets a white paper. Five white sheets equal a white paper. But there's also, like, it's unbelievable if you look at, like,

it's hard to like, you know, want to be boots on the ground. I love being boots on the ground personally, but you look, you know, there has been one heavy influencer in the world. And again, I'm going to, again, we keep going back to Howard Marks, but in C-Chance, he just talks about the dominance of the global central banks in terms of its influence on investing. And I think that is just their control, sort of this control of the interest rate environment and the consequence of, you know, building of the wealth.

effect and then the unraveling of the wealth effect is going to heavily influence how stocks do. But how we see it percolate in international or emerging markets is if interest rates come down and the U.S. can, you know, the first thing, interest rates go down, stocks go up, the consumer starts to get a little, you know, extra money in their pocket, and they go out and spend. And then the job markets gets better. You know, it's just building a wealth effect. But that was like highly beneficial to the biggest of big countries. It was beneficial to Korea and Taiwan who make everything that the U.S. consumer consumes in the form of chips, you know, semiconductor chips in cars. They are the factory, I think, for the U.S. consumer.

And then it benefits, it benefited China to a great degree because of scale, the scale of China, the absolute size of China. So, you know, these really kind of complicated things can be boiled down into kind of one simple cause and effect. So, and that's the world we've kind of been in. either those markets are in favor or they're not, then they're in favor or they're not. It's sort of an uninteresting time as an investor, I think, where sort of narrative dominates or interest rate environment dominates fundamentals. Yeah, it's worth, it's worth just reminding our listeners of this sort of eternal truth that the pendulum swings, but you just never know when it will.

And so I was looking at this statistic from Clifford Asnus, who said that U.S. investors have only one sixth of their equity allocation in overseas markets. How can that be smart? I mean, it just doesn't feel like it can be to me, you know, like you look at dilation. You look at, I mean, I'm a big believer. I mean, actually, you know, and I usually not seem Taliban too, you know. He calls it a white swan today, right? He's like, this should be obvious.

The U.S. has let money go, you know, we've kept the cost. capital too cheap, too long. He thinks, you know, it's almost like thinking about crackatilla, right? You've got this risk building an assist on where I think diversification, you know, if anything, you know, the longer this occurs, the more diversification makes sense. But this notion of concentration and concentration in the U.S. big caps has been what has worked for so long that I think people forget that. I agree that pendulum shift. We actually see Blake Clayton's a really smart guy. But he actually talks a lot about the pendulum swinging double and triple time in China in Taiwan and Korea, you know, and swing so fast. China is a particularly interesting case,

because as you and Blake pointed out, it's by far the largest component of the MSCI emerging markets index. I think it's 33 percent or thereabouts down from about 42 percent in 2020. And when you compare places like Mexico that I think is 2% or Brazil, that's 5%. You see just how important China is. And so there's a sense in which if you're investing in emerging markets heavily, which you are, you're so dependent on whether China is popular or not. And China obviously has gone through this terrible period, but first, I mean, partly with the COVID lockdown policy, the hostility of the government towards private enterprise, the clubbed things like Alibaba, which I bought when it was incredibly cheap and just it keeps getting cheaper.

Massive debt problems in the property sector now. And you have quite a lot of money in China. I mean, I think when I lost, look, 20% of your portfolio at Ronja New World Fund was in China in about 18 different stocks. How do you think about China, which so many people at this point are saying is uninvestable and it's just going to fall apart and it's peak China and the future is terrible and the demographic disadvantage as it appalling. Why is it attractive to you?

Well, I mean, the demographics are bad everywhere. I keep thinking of, I love that, you know, Louis Ice Age, when, you know, the dodos are out playing with the watermelon playing football and, you know, they throw the watermelon, it goes over a cliff and their female, you know, runs over the edge of the cliff and falls. And, you know, the dodos are like, oops, there goes our last female. I mean, that's a problem around the world. I mean, it's not just a China-specific problem. problem. That's why I love spending time in Japan too because it's such a petri dish for,

you know, all these problems that are coming from the rest of the world, the easy money policies that have prevailed there for so long and then shrinking demographics and how do you deal with that? So I think that's a common problem that isn't unique to China. It's a global problem. But we really try to invest in companies that we think are quite good that can grow in spite of sort of this macro landscape. Our process doesn't sound all that different than Ben Graham on, you know, it's a combination of Ben Graham and weren't both in global markets. You know, it's what companies grow thoughtfully over time,

who is in good capital allocator buys back shares based dividends. So there's sort of these smart companies that we think still can grow in this landscape. I mean, I think China is going to have to look more like the rest of the world. It's going to have to become a nation of consumers. So whether it can pull that off or not, I don't know. But we've been too early. I don't know if we were too early or too late. You've always had in, I guess, in our world where we think in terms of relative,

where at least we're supposed to think in terms of weight relative to the index, we've always been underweight China. Just because of the exact problems you point out, you know, there's such a small set of companies that fit our quality criteria, or transparency criteria, you know, where we think they're less enforced by the large hand of the government. Yeah, and I was looking at your holdings and there were things like Alibaba, which I was saying has been a costly mistake for me, but luckily not that costly because I didn't have that much

in it. Going signlies now at least, you know? Yeah, that's a treat when it doesn't go down a couple of percent today. That's a good day for me. And then 10 cent holdings, which a lot of good investors think is cheap. And then things like Yum, China Holdings and China Tourism Group, Judy Free and Sing Tao Brewery. And so it looks like there's a sort of common denominator that you're looking for fairly conservative companies that are likely to survive, whatever.

Insanely molded that businesses, right? I mean, we're looking for financial characteristics, great balance sheet, you know, good cash flow characteristics and the ability to use that cash flow well, even in bad times. I mean, part of the good thing about a bad. economy or a bad market is good businesses tend to gain advantage during those periods because everything else goes under. I mean, I go back to 2000. I think it was, I get my time, years confused these days, but you go back to the last market in China, you know, 2000, I think that was 15, but that was a time frame when China, the businesses, they're consolidated. So you actually

had these incredible modes for me. You were going from fragmentation to, you know, oligopolistic or monopolistic industries. So that was a very important. actually a period of time where you see that good balance sheets and businesses with the moat only get better. So, you know, you think about the U.S. during the worst periods of the macro environment, you still had stocks that were big winners. And you're always looking for good companies that are at a reasonable price that are likely to survive whatever. And you're often looking for them in horrible countries that everyone hates at that particular moment. So this is not dissimilar to your approach in places like Turkey over the years or elsewhere.

Yes. Yeah. So, I mean, that's, you know, good businesses got more reasonably priced. When most people had heavyweights in China, we thought the market was way too expensive. I mean, the animal spirits were incredible, stocks were overvalued. So we didn't have much investment there. I guess this was a couple of years ago. I mean, it's part of why we had just two good year last year.

We didn't own Russia and when Russia, Ukraine happened, we didn't own any. And then, you know, we were dramatically, we sold a lot of China when it got expensive during COVID. So China, if you remember, their policies were the best at the beginning of COVID. And so the stock market was on fire and stocks were expensive. And that's when we were peeling back on our China weights. And I think we've been too early this time. You have this unusual process that I wondered if you could explain quickly to people, because it starts with you doing this bottom up screen of something like 70,000 companies around the world to give you a sense of where there are patterns of underpriced stocks or overpriced stocks, places you need to avoid.

Can you talk about how this iterative process of doing this enormous and very time-consuming and arduous screen helps to guide you and keep you out of trouble? Yeah, I mean, it's, I mean, honestly, it's, if you read defensive investor and you go back to reach your and tell her an investor, I mean, we have stolen a lot from Dan Graham. I mean, we look, we start with the balance sheet. I mean, that's, that's where I differ from Walsatch. My original mentors were value investors. You go by, oddly enough, that it grew up in mid-American century, my mentors, I was an accidental tourist to Graham and Buffett. They were teaching me, I was 25 years old. They're teaching me, you know, Graham and Buffett, and I had no idea.

That's what they were teaching me. But so, you know, we just apply that to the international markets. I mean, we look, we start the screen and encapsulates. What does a balance sheet of a company look like? It goes back, you know, 10, 15 years, 15 years, but looks at the balance sheet, the history of the balance sheet, the cash flow, whether the company adds economic value. So we start with balance sheet. You say, does this company have reasonable leverage?

or is the debt on the balance sheet improving? So, you know, you're looking for these terms in the business. And then you're saying, is this, well, you know, is this the type of business where it's acceptable to have some debt? You know, is it a business where there's a high level of recurring revenue or a simple business where people, consumers tend to consume even when it's bad, you know, ramen noodles or but some. And then we look at the cash flow.

How does the company use the cash flow? You know, are they investing for growth? You know, did they pay dividends? Do they, you know, buy back shares? And then last but not least, we really look at, I mean, this is from this kind of book, like studying how Warren Buffett invests, but, you know, does their margins suggest that they have a competitive advantage? And then Graham, you know, does they have stable or durable growth?

We're not looking for the fastest growth, but we're looking for a business that, you know, has a history of growing through a lot of environment. And then we whittle that world down. And believe it or not, it's, you know, when you whittle the world, world down today, there aren't that many companies that fit that level of quality, you know, as when you look around the world. So here's another reason, you know, when we talk about international emerging markets that we haven't gotten to, but you always hear this, well, quality of the company must be terrible in small cap land, right?

Well, in America where stock prices have gone up, up and up, I think what has been left in small cap. And given we've had high levels of inflation, how we define small. cap should probably change. But I think if you're using old definitions of small cap free inflation, you know, then yeah, the quality of a small cap here probably isn't all had good. You've got a lot of unprofitable companies in small cap land today. But I mean, we're dealing with small countries. You know, you've got countries like New Zealand where the population is just tiny or Australia. We're dealing with nascent economies. So that means, you know, you can have an 800-pound gorilla in a small cap land. When you look overseas, I mean, the quality of companies quite good down cap is overseas,

especially because it's been out of favor so long. So, you know, we're not sacrificing quality down cap. So you have this very systematic process on the one hand where you do this ridiculously detailed screen, I think, twice a year. And then you spend much of your work week kind of going through these companies one by one seeing whether they fit these requirements. So you can reduce those 70,000 companies to something like 300 to 500 companies, maybe that's your target list. And then the thing that's really distinctive is you go travel like crazy. I remember you once telling me that you would travel six to nine months a year. And you've talked to me about, in the past, your investing style resembling unconstrained free verse. And the company is named

Grandeur, right, right, after a passage from a Walt Whitman poem. So on the one hand, there's this very systematic, rigorous process. And on the other hand, there's this very free, flexible process that's more creative that really revolves around travel and reading in an incredibly broad way. And so I wanted to switch to that topic because I think it's something that's so distinctive about your approach. And it's very idiosyncratic. It's not common in the investment industry. So first, let's talk about travel. How many countries have you been to over the years? 75. So, and many of those countries, like if you think about where there's a broad array of high quality,

moated businesses, some countries I've been to many times. I mean, you know when you go to Korea, Korea is still a country where you exchange business cards. And, you know, I walk into a corporate meeting and I don't want to exchange cards with me. You know, it's probably a slam that I've been in meetings a few times. But yeah, so there are some places, you know, I've only been once or twice and some I've gone to many times. And can you talk about the pattern recognition that comes from that? Because I think of you going, whether it's to a place like Turkey, where I remember you once telling me, look, I was there when the hotels were $1,200 a night. And I was there when the hotels were $75 a night.

Can you talk about the pattern recognition that comes from these repeated boots on the ground, trips. Well, we just, we, I was in, when I was in Japan, this, I'll get an example. I was in Japan this last time. I actually wrote my quarterly letter on the, you know, hamburger economics. I was talking about the big Mac index, but I noticed every country we've been to over the last five months. So everything that's not dollar denominated or dollar oriented has really cheap hamburgers right now. This goes back to international markets today. They're cheap, you know, almost anywhere you go, emerging, developed. You know, it's funny, we read that stuff here.

We read that stuff. We know the dollar is strong, but I don't think you realize it until you're on, really truly realize until you're on the ground, just how strong that dollar is today. So, you know, these are things we see. I think because I'm a consumer analyst, and, you know, I was trained first in consumer.

That was my first sector. And so, so much of what I do, or the types of companies that we invest in or where my circle of competence slides is tangible. So, you know, I can watch people's behavior, and that's really helpful to me to see what they're doing. But you're right. I mean, just there's a combination of this real rigor.

We don't have a lot of time. We're in this industry. And it's, you know, we've got to narrow down or riddle down the world in a way that makes sense. So we narrow down, you know, these are the types of companies or the businesses we're going to look at. And then getting on the road, it serves multiple purposes. I think, again, it goes to everything today is interconnected, I think.

You know, there's no company that exists in a vacuum and exists within a global economy. And so for me to try to go out and solve through what makes this company take, it requires doing a lot more than just reading a sell-side report on the quarter. Another thing that's very unusual about your approach is that you're not just constantly traveling to countries to visit companies, but you've actually planted yourself in many different countries for extended periods of time. Can you talk about what you've done in the past, some of the places where you've put yourself and how you do it and why that's been so helpful to you? There was a part of it, you know, too. I mean, it was actually, you know, when shared, the shared economy came about all this apartments, you know, it actually became frugal. It's actually, because his plane ticket is actually often the most expensive part of travel.

So you'd go and you'd rent this apartment in this place. You'd get on the time zone. I think one of the biggest things was like saving your own health, you know, getting in the same time zone with these companies. You know, you were able to get a lot more done. and operating in the U.S. time zone in a U.S. frame of mine, you know. So I've hugged out of when I was covering Africa, I used to hub out of Europe a lot. So if I were going to French-speaking Africa, I would hub out of Paris. Because the flights were really common, you know, and easy.

So if I were, you know, traveling to English-speaking Africa, I had hubbed out of the U.K. I've hugged out of Japan. I've spent weeks in Indonesia. I'm not one either. You know, you hear about people who, you know, they go live in Thailand and they go hub out of, you know, a beach city. I mean, I like Bangkok, so I'll stay in Bangkok. I find it fascinating.

And you learn a lot about how people behave when you're in, when you spend time in these places. You learn a lot about culture. I think I remember you saying to me you'd also spent a lot of time staying in places like Abu Dhabi and Dubai, and you'd spend a month in Kenya at one point, and you'd go to Tanzania so you could learn more about East Africa. And I think there was a time you stayed in Amsterdam for an extended period, Paris for extended period.

So there's a Thailand, Singapore. So there's a, this is an unusual way to build a kind of competitive advantage by having a deep sense of how a particular part of the world operates, what the culture is like there. I think it saves a lot of time, too. I traveled recently with two or three, there were three different generations of investors, sort of entry level or new investors, like the beginning of their career,

kind of mid-career investors, and then, you know, I'm usually the most senior person in the room these days. But, you know, it's so interesting how you approach things, because for me, there's this nuance of culture. I don't know how to explain it,

But like the first part of a lot of meetings is lost in translation. I think we all waste a lot of managerial time by sort of not understanding these cultural things when we go into the meetings. So, I mean, I think one of the things it has enabled me to do is cut to the chase of what makes the investment tick a lot quicker by understanding how the company functions within its particular culture. I think that's important. And I think that that can really come from reading a lot. you also have this sense of, I would say, respect for the local cultures that's different, I think, from a lot of the brash Americans. And I count myself as an honorary brash American having lived here since my early 20th. Although I did live in Hong Kong and London along the way.

But I remember you talking to me about Japan and you obviously years ago had bought a home in Kyoto. So you spent a lot of time there. And you talked to me about just how different the actual priorities of a Japanese company are to the priorities of a U.S. company. Can you give us a sense of that? Because it just, it's a perfect embodiment of why you actually need not just to impose your own values on the cultures that you're visiting. And ESG are responsible investing before it was fashionable, right? I mean, it's, you know, stakeholder customer, you know, customer comes first. You know, there's these, there's these actors, you know, that we don't count.

I mean, mainly, mainly employee, you know, we don't think as much about employees in Western culture customers. It's really, you know, sort of this environment of managing for the quarter, you know, maximizing profit, right? Yeah. Profit maximization, right, in the short term versus, you know, you. you know, surviving for the long term, I think. I think it's dramatically different culture.

And I know, by the way, I know, you know, we both have one, I think we both love Ground Green. I'm big huge, grand green. My favorite, one of my favorite books of all time is the Quiet American. So that probably sums up who I am a lot. I mean, I'm embarrassed by Americans overseas often, you know, and I've embarrassed myself a few times by being American overseas. But, I mean, this notion of there's no such thing as a quiet

American, I think, is, is, that statement rings true. So I try not to bring my Americanness to global investing. I think maybe you have, we, we take a unique approach, you know, when we think, when we thought about, like, who we wanted to be as responsible investors, we wanted sort of this answer. Well, I didn't want this Western notion, you know, of, I think the problems in the U.S., I mean, this is changing. And, you know, you look at Europe, a lot of these problems are rich people's problems. I've always said after spending all kinds of time in Africa, poverty has no carbon footprint. That's completely true.

And so you think how we try to approach, you know, going into each different country was with respect for the culture and, you know, trying to speak on the company's terms and not our own. And how do you think that? I don't think we have any business selling a company in. India how they should run their business. I don't have that little, this notion of like, I am listening to your podcast. The older I get, the less I know is so true. So on one planet, should I be going into India telling someone who's lived and run a business in that culture forever how to run their business? I just don't think I should. I remember Monish Pabrai once saying to me, talking to me about a famous investor who had gone into Japan and was telling them,

You know, here's what you need to do to fix your economy. And, you know, he was this sort of big billionaire activist investor in Japan. And he's like, this guy's just going to get his head handed to him. And it was a kind of wonderful example of a foreigner, in this case, an Englishman, I think, so we're equally to blame. A foreigner thinking we could go in and civilize the locals and tell them how to be better and smarter. I mean, I think even just language, you know, like a nuances of language, Americans are direct. So many cultures are not direct. And so I think by going in with this notion that everyone is direct,

I mean, a lot of times people will say something in, especially, I think, I'll speak to Asian cultures because I know they're the best, but they will tell you what you want to hear to get you to leave them alone. No, so, I mean, you have to go into a meeting. You know, this is, again, why reading is so important. Mosaic theory is so important to me because most cultures are not going to tell. I don't think Americans, they'll tell you what you want to hear too, and they'll strongly voice their opinions, even if their opinions are dead wrong. Because, you know, I think particularly when I was younger, right?

Maybe I was a braver investor when I was younger because I thought I was right or knew I was right. You know, now I feel like I'm wrong all the time. You know, there's just this immense sense this time goes on of not knowing all the things I want to know. So anyway, I think that sort of level of humility and nuance of culture is important. I always tell people in Japan, you know, yes, maybe no, I will try means no, maybe means no, perhaps means no. And if you get them to say no, then you really said something wrong. So it's just a different world. And I think a lot of North Asia is in that mold as well, you know.

And I was surprised, I was surprised when I traveled to Africa, how much sort of the culture of a group or community was more pervasive there. It almost felt Asian in nature, you know, versus Western, I guess, if we're using Western. You once had a lovely image that you explained to me where you were talking about seeing the world in terms of nesting dolls and having this sense of only having got to the second layer. Can you explain what you meant? Because it's a very good way to visualize this kind of acceptance of our own ignorance in a way. Now I think I might only be on the first. But yeah, now I'm in the world, there's a complex place. I mean, I think it's one of the reasons I avoid complexity in businesses at all costs.

Well, I don't think I'm very smart, so I stick to simple businesses. but I mean, understanding a simple business in a complex world, you know, is something I believe tremendously in. But I feel like, you know, with each trip, you discover something new. And it's not what you think you're going to discover when you go. So, like, it's always a surprise to me what it is I find out on a trip. The image you had given me was you, like with those Russian nesting dolls, there's a whole series of layers.

and we're always sort of on the outside. Maybe you get to the second layer, but you're nowhere near the center. And I think it's a really helpful way to visualize our own ignorance or level of knowledge. I think a lot of it too, the more I read. I mean, you can take, I'm just one person in a complex world. You know, there's only so much I can know.

So by picking up a book, I can still harness somebody else's knowledge, a different personality type too. So they may be seeing the world in a different way. And I think, you know, like not reading or not traveling. And I do all the fundamental work too. I mean, during COVID, I read more 10 Q's and Ks and I was loving it. Then, you know, you can imagine I build models.

But you look and you think it's sort of like when you check into an Airbnb and you see a puzzle and it's snowing. And I think the other way to think about is like you get like partially done with a puzzle and then you realize like 10 pieces are missing. so it kind of drives you crazy. So to me, traveling and reading is kind of discovering those missing puzzle pieces. And I walked, I was in, my colleague went to, Blake went to, he was in China. And I think he was in Indonesia this quarter, last quarter, he was in the Philippines. I was in Japan between a couple weeks. And it wasn't, my Tiffany was like, oh, you know, at least, you know, the finance industry may have interesting business models again,

because there is leverage and I think the strong are going to survive so that you might have consolidation in Japan that you weren't going to expect. So it's always something different that you discover on a trip and it's not what you think you're going to discover that you discover. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up and customers now expect proof of security just to do business. That's why VANTA is a game changer. Vanta automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC 2 or running an enterprise GRC program, VANTA

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slash income. This is a paid advertisement. All right. Back to the show. You also do a lot of structured reading before the trip. And I wanted to talk a little bit about what you've referred to me as intentional reading. How do you structure your study of these countries before you go on a trip? What are you reading?

Whatever I can find. So, you know, it's a very odd, almost compulsive habit of, so I'm actually going or traveling with my husband on a business trip, my his business trips for the first time ever, actually. He's going to Australia for work in a couple of weeks. And I'm joining his trip. You know, I'll be working remotely. but I went out and bought, I will buy whatever book I haven't read on Australia. And I will, you know, it's a joke.

My husband always asks, you know, do you have enough clothes in your suitcase or is it just full of bucks? But every country I get sure I bring a minimum three books. I like to leave room in my suitcase for discovering other books. And just like you, William, I read physical books still because I fold them, I highlight them. Right. There's a purposeful reading. It's intentional reading. And you reread a great deal as well, which I was very struck by. I remember you saying to me that you would read the Quiet American Graham Green's novel every year. You'd read the Intelligent Investor every year. There were a bunch of books you just would read over and over again.

What's the benefit of that type of compulsive rereading? You're kind of cold, but, you know, really, you know, me, I think passages are passages that really really mean something to you? I don't know. That helped you identify with thinking about the world in a different way. Again, I mean, I think if we're trying to

generate alpha, I mean, you have to be different at the right time. So we have a culture. I always find it interesting that we have this culture of reading. We all sit back and we read the greatest investors. And the greatest investors tell us things like don't trade. You know,

the greatest investors sell us plant seeds. but yet in culture, our culture is quantity over quality, more over less, surface level over deep thinking. And so I think in some ways you have to sort of rebel against the culture in order to actually be a good investor. It's also striking to me. You have both on the one hand this kind of rereading obsession, right? I remember you saying to me recently that you'd been rereading things like William Faulkner's, the Sound and the Fury or Macbeth by Shakespeare. And then at the same time, you have this tremendous brets in your reading.

Like before these trips, you would often say, okay, so I'm going to read economic books, political books about this country, but I'm also going to read great literature, and then I'm going to read mysteries and thrillers because they give you more of a sense of pop culture. Can you talk about that combination of going very narrow and repetitive, and yet at the same time, tremendous breaths, why that's helpful? I think there are certain books that just resonate with you in life, right? Just for your own personal enjoyment or fulfillment, I mean, for me,

The Quiet American is one. I love, I think a lot of people who have lived in the West for a long time also love a river runs through it. I mean, that passage at the end where, you know, you have the river running over these rocks and it's reminding him of the passage of time, you know, it brings even all the, you know, it brings or keep the tears that last passage. but I think there are certain passages and that you just reread just for the pure beauty of the language

and it just resonates with you. Another one from me is Snow Country, the opening Japanese novel, but Japanese novels we talk a lot about they have a lot of white space. You know, it's a culture where people don't have to be speaking all the time. You don't have to fill empty space

and so you have these beautiful novels. But back to someone gave me the advice a long time ago on mentor, you know, I was telling him, you know, my reading, I've been to stop kind of in finance. And he was a global traveler. His background was very similar to yours, actually, UK, Hong Kong. But he said, I would recommend that you read mystery novels set in these wonderful places.

So read travel books and novels and mysteries set in all these magical places, politics. And what I learned about the countries from those books often, you know, one book said, in Malaysia could be better than spending tons of time there or even just what you learned from reading nonfiction. So I think reading these, you can, I think it would go back and you think about Moby Dick and I think about Jansis and you know, they're talking about travel and Movie Dick and he said, well, I can't remember who makes the reply. But he says, well, I can see a lot or I can see the whole world from where I'm standing. And I think there's an element to that is what reading industrious. I mean, when you grow up in Kansas too, right, you can really see the world.

You can see the curve of the earth from Western Kansas. So anyway, I don't know how to explain it very well. It's hard to articulate just those, you know, when your mind is free, when you have white space, when you're reading, that's when your best epiphanies come from that have nothing to do with actually what you're doing. You also have this very unusual approach where you pick one big topic a year, which I think is fascinating. Can you talk about that and what some of the topics have been in recent years? This year, it was, and it still is, I've been getting more collected in multidisciplinary, but it started to sort of, and it does almost always tie into my interest in the markets. You know, I see value in Japan. You know, you see this great intersection

of high quality and value. So I started with reading about craftsmanship. up in in Japan and cooking because I've read almost all the literature in Japan so I moved on to a new topic but so you know I was reading these beautiful books about you know craft craftsmen and in Japan so in cooking you know there's this you know a lot of I think a lot of the investors you spoke to and what struck me about your book was how many of us sort of hold this so in philosophy of Zen and so I was reading you know the art of of, you know, zen cooking and all these sort of craftsmanship books, you know. And so that was my topic for the year.

And how has it helped, Laura? Like, what is it, how does it resonate into investing? Well, we haven't talked about this, but the older I get to feel, you know, there's this compulsion in America to do something to trade. So sometimes reading just, like, distracts you from your worst compulsion, too, right? with just to trade. So there's this element of just slowing down to do deeper research to think. I think when you're thinking about these craftsmen too, it helps you think about what really

makes a great business as well. You know, what is it about these craftsmen that, you know, parallel to these great businesses in Japan? Because a lot of the great businesses there, too, started as some form of craft. So that's something I pulled from these books. but it also makes you think a lot about that environment of investing too. It's just the lower process. That was my topic next year's historical fiction.

So I've already picked it out. It's a bunch of meaty books. I remember Nick Sleep talking to me about how he got me to read Michael Pollan's book where he was building his writing shed in his garden. And one of the reasons he got me to read it was he was talking about things that are lovingly made. over long periods of time, things that endure. And in a way, you think of, you know, Nomad, the fund that Nick and Zach K. Sakaria were running together, it was lovingly made.

It was constructed with this great care. There's a sort of crossmanship. And then you think of Buffett talking about painting his masterpiece with Berkshire, that, again, it's lovingly made. I think there's something very powerful about this idea of trying to make things that endure that are made simply but with great care. We also talk about every year when you think about portfolio management, right? It's like Janney and painting a picture as well.

So one of the things like reading and changing topics and travel does is, you know, I like to think about starting every year with a blank piece of paper. you know, would it look the same today? Would I paint it differently? I mean, I certainly think it best of crap. You know, every year, how do you get better? You've also, I was thinking, I was looking through some of your old topics that we've discussed over the years.

And I just wanted to give our listeners a sense of the breadth of what you've done. There was one time, I think we spoke in in 2020. And you said, oh, yeah, I've been focusing on U.S. frontier history plus explorers. And so you're saying, so I'm reading all the books on the West, on the Dust Bowl, on Native American history and Willa Kather, who I love, who's great. Death Comes the Archbishop is fantastic. And then there was a, yeah, it's a great book. And then there was a time where you were focused on the Middle East. There was one year where you told me you were focused on Russia and physics.

And so you were doing the history and literature of Russia and physics at the same time. There's another time you told me I'm doing explorers, starting from the Vikings. And another time where you told me I'm doing. oil. Sometimes you bite up more than you can chew, right? Russia is a big topic. Oil was a smaller topic, you know? I mean, Marx was asking in that recent leather, too, about, like, what are the sea change

events? To me, well, that was a sea change for emerging markets in international investing, you know, because if you go back in U.S. history, the last few years of history, anyway, when the U.S. was importing oil from the Middle East, see, this. These are topics that I get from my book that I don't think I would get from reading young, you know, sell-side analysts who are focused on a quarter, but you look and you think, okay, just from traveled, from reading, from doing 10 Q's and K's and working at companies, we were exporting dollars to the Middle East when we were not, you know, when we didn't have our own oil, when oil shill and shale oil wasn't working at a profitable level in the United States, oil rights the state high for a long time. You know, you had innovation in an industry that isn't very innovative. And we drove down the cost of producing a barrel of oil or producing oil in the United States. And we ended up in the U.S. running a, you know, we run a trade deficit for a long time.

And when you're sending money to the Middle East for oil, these are countries built on sand and oil. And they don't have a lot of other things. They're not producing Nike tennis shoes or, you know, they're not producing food. Those dollars percolate out to the rest of the world when they go to the Middle East. So when we started producing oil and when we stopped having a trade deficit, this was a pivotal change in the global economy because the dollar strengthened, the dollar became hard to get it for the rest of the world. So to me, that was just this weird sort of connecting the dots thing that you get from reading

and doing all sorts of different work that isn't just staring or building a spreadsheet. So you're doing the building of the spreadsheet and you're doing the very systematic analysis and you're going to visit all the companies. But it's very interesting to me that you have this very freewheeling, more creative approach. And I mean, just to give our listeners a sense of just how deep it goes, you also have a kind of what you regard as ronjour university, right? This sort of in-house university. Can you talk about what you do with your colleagues, how you, how you get together very consistently to, whether it's to cover an accounting topic or to read books that you then discuss together.

Well, you know, we had gotten out of the habit a little bit in COVID. So we've been getting back into the habit again. But I mean, one of the things we've been doing is listening to more podcasts as a team as well. You know, I think COVID brought about a lot more really should podcast. So that was something we did. We did EDX and Coursera. Last year, we all studied the CFA, ESG curriculum together. So that was what we did as a group last year.

It was a little different than normal. This year we were reading the Tibetan Book of the Dead together. It turns that I had the done translation. So my colleague had a really good translation. I didn't have a very good one. So we were, you know, those are some of the things we do. And for us, I think, I mean, I think it's time used by. if anything, the thing that you're spending,

you know what the good companies are throughout the world. I know today is fairly well, what are than good companies, right? It's having the discipline and the behavior and philosophical mindset to not do something stupid. That's what I find myself, you know, as I get older and older. It's just as much about, you know, your just disposition for investing, your ability to stomach the bad times.

I don't celebrate the good times. like I used to because I know that the bad times will come. Investing far. Do you think having read all these books about difficult periods in American history and other history, like whether it's studying the dust bowl or whatever, whether that actually helps you in terms of your own resilience and ability to endure difficult times? Because you've been in the desert in a way for the last 12 years, right, while emerging markets have been hated. I mean, it's the worst time that you, you could be somebody who would be buying small cap emerging market stocks. I mean, you've just, you've just been going against the tide for year after year after year.

Very difficult. And I'm wondering if you're reading and your sense of history enables you actually to handle that kind of adversity. Well, maybe this goes back to two that talking about, you know, sort of Zen philosophy and Zen practice. I mean, there's all sorts of things other than just meditation that are like mindfulness, this training. I think reading is one of them. Travel is one of them. It sort of takes you out of your comfort zone, takes you away from your daily, you know, routine. It expands your mind. And I think also it helps you, I don't know, focus on things are bad, things are good. You know, there's things we can't control, right? That's just, I can't control this, so I'll focus on

controlling what I can control. You know, I'll run the process. Someday the process will come back in favor again. The worst thing I can do is change the process, you know? So, I mean, I can make the, we don't make the process better. We can get better at our craft, but the basic elements of the process of identifying a good company haven't changed. Yeah, so in a way, it's having the strength and discipline to keep doing things that

haven't been working in the trust that they'll eventually work because they make sense? We keep going back to Hart, but I was at a, I went to my first kind of big event. It was the Ivy Value Conference. It was held in person this hearing Toronto. Marks was the keynote speaker, but he said, you know, I was on some panel, but he said he was speaking about his writing in the 90s. And he said, you know, that was a period of time for, I think it was the 90s. I'm, I'm, I'm, going to forget the exact periods, but I'm going to paraphrase what he said because it was sort of this similar moment for me, but he said there was this period of time where he was

writing and he didn't even know why he was doing it because he was so out of favor, nobody was reading. And then all of a sudden, voila, you know, his memos became red and people asked him questions, but he said he went through like this decade where no one asked him a thing. I think it may have been 25 years, literally. I mean, it was a very long time. I think that's right. So, I mean, that's resilience. You know, that's resilience to keep, you know, practicing your craft when nobody has an interest. So if I look at our team in general, everyone's really passionate about stocks.

I mean, you know, I don't feel like it ever gone to work a day in my life. So, or at least since I've been in the investment industry. One of the things that's very distinctive about you and your approach that I found very very thought-provoking myself is the amount of empty space you leave in your life to think and read and write so you can distill your ideas. And I wrote you about three weeks ago and I said, you know, Laura, I'm kind of embarrassed, but I put myself in this impossible situation where I said because of my perennial inability to say no to anything, I've taken on way too much. And here I am, I'm always preaching to people about the importance of reducing complexity and I'm

constantly piling on ever greater amounts of complexity in my life. So I said, could we postpone our interview, which was supposed to be about three weeks ago? And you wrote back to me, not a problem at all. I'm wide open the next few months. And you said, that's intentional. It's just stocks and writing. And that struck me as very typical of you to be so focused on giving yourself enough time to read, to write, to think, to analyze stocks, to visit companies. Can you talk about this? mindset of very intentionally leaving your time less cluttered because it strikes me, I've been thinking about this a lot recently and this strikes me as just inordinately important and something that I'm failing to do the whole time. I coming from a culture where it's hard to see you know as well.

Like we, you know, I grew up in this place where you just, you want to help people. I think for me, I'll tell you know, COVID-19 was this horrible thing and in almost this personal great thing for an introvert. You know, it was introverts of paradise, right? Like offices never work for me. Office works for people who I think when people are afraid of you, office works. When you're not approachable office works, right? But when people are not afraid of me, they've never been afraid of me. So you put me in an office, you know, and I've got.

that someone will come to talk to me, you know, every however many minutes, right? And they say every time you get interrupted, that's 24 minutes that it takes your brain to get back to focused on the task at hand, right? I mean, and we know that, we know that about ourselves too, like when we're interrupted, it takes a long time to get back to that state. And so, yeah, I mean, I try not to take on very much. I've learned to say no. I stayed in myself a lot.

I moved again during COVID. You know, Utah has become, I love Utah. I love the friends I've made there, but it's become a more popular investment destination. And I don't want to be called, you know, by a broker every day, even though some of them are my greatest friends, you know, with a company coming through that doesn't fit my process. I just don't think that's a good use of time.

So I'm very intentional about folks. focusing on the stocks that we screen, reading about the environment that those companies are operating in. So as a Japanese company, I want to know a lot about Japan. And then writing for me helps me invest, helps me sort of purge my brain. So it's writing as synergistic to investing. So for me, so. I remember during COVID, Laura, you said to me that you had rented this small house in a very quiet part of Idaho that had a stream. in the garden. And I think you said to me, I have three outfits and 45 books. And it struck me,

Bill Miller was much the same. I remember him once saying to me, yeah, COVID was just great for me. Like, nobody bothered me and I could just sit around reading. And for me as well, I felt kind of guilty about it. But, you know, I love my family and my wife started working in an office and started working from home. So I was much less isolated because I was working at home. And my kids came back from college so they were at home. It was kind of wonderful. It was I could be at home, see my family when I wanted, and the rest of the time, just kind of read and write and think. It was amazing, that reduction of complexity. Introverts paradise, right? I mean, because the funny thing about investing, this is a buff of comment, but he always says, you know, stocks are the easy thing. People

are the hard for it, right? And so, you know, and I think that that's true for introverts, and our industry attracts a lot of that personality type. But yet, you know, the whole corporate culture, right, is corporations are typically led by extroverts. So there's this element of sort of misery or distraction that just doesn't work for my personality. So I've kept up, we have an experienced team as well. I think it's different when you have, or you're mentoring or training young people. They need more physical. with a team that's really passionate about stocks and dreams.

And then I don't need to sort of bully them to doing their work. They want to do their work. So, yeah, I keep my calendar pretty clean. Plus, I'm a miserable. My husband, I don't think I'd still be married. My husband tells, you know, if I put too much on my calendar, I'm a miserable person. And your husband is often in a different country, right? I mean, I remember your husband, Rob, who, when we first spoke, was,

handling sales for baseball and the like for a big company and would go around Asia. He would be based in Kyoto. You would be based for months a year in Utah and then you would go off on trips together. So you'd sort of structured your life in a way. So you didn't have kids. You had a husband who was incredibly supportive of your work but wasn't around the whole time. Yes.

I mean, we did that right. Six months before, I think I told you, six months before, COVID, we'd downsize. we said, why don't we need this much space? You know, like, you're always on the road, I'm on the road, I can go to an office, and then we ended up COVID hits and we're in a loft condo with both of us doing night calls, right? Like, it was not a conducive environment for work, which is why we rented a house in Idaho.

And we didn't stay there. We should have locked that house down because it was funny. We were there early and it was cheap because no one was traveling. It was just the beginning. And then the prices went through the roof because everyone sort of did this staycation sort of thing. So, but it was, it was, you know, really empty and lovely. And, you know, I read a lot about it. I mean, I really went back to basics.

I don't know if a lot of people said this about that timeframe, but it really went back to basics. I read all these things that you had wanted to get into, but just didn't get to, you know, about companies. you also over the years you've had this ability to detach yourself physically from the noise right so so I remember you once telling me that you would go every year to a little island off australia that only had eight houses can you talk about that because it seems consistent right you you have this little condo in utah that you downset size two you have i think a 900 or 1,000 square a foot of home in Kyoto. So like these are, you, you've managed to withdraw from the noise actually physically.

Tell me, tell me about Australia and how that kind of this, this island sort of embodies that ability to give yourself the piece to think and read and write. I was raised on throw. So, you know, this sort of anti-materialism or I guess it's like cheap life as simple as possible so that you can actually enjoy your time or focus on the things you want to focus on, whether that's achieving a sort of financial level of comfort that allows you to focus on what you focus on,

whether you have commented on this. I constructed a life, you know, I have a partner, you know, that was very intentional. It allows me, I mean, not a lot of people, right, can disappear from the U.S. for months at a time, you know, without having some sort of commitment back home they have to get to. I told you recently you should read.

I just read that in Zagabonding by Rolfs Pots, which was absolutely wonderful. He's constructed a life that's very similar to mine. And I didn't, you know, you don't look at the biography at the end at the beginning, and I was reading this and I'm going to be, boy, this guy could be like my twin, you know. And then it turns out he was from North Central Kansas,

you know, as I went back and read the book, but you would love it because it has all your favorite authors. You know, it's just littered with all these beautiful things. thinkers. But yes, you know, yeah, for sure I constructed this life of of being able to get away. And Badera, it's called Badera. I shouldn't give that away. There's actually a really expensive hotel on the other side of the island that I've never set foot on. And you can't get to it from these houses because

you've probably been, it's Australia, you'd get bitten by a poisonous spider or snake, you know, going through the jungle. But the island itself, you know, you have a cell tower that's far away. You have no internet. You have these sort of houses that you have to, the bolts only come every five days, so you carry your stuff, your groceries, and you get off at the house, and I carry books and some food, and, you know, and I read and meditate, and it's when I typically write a quarterly letter, but it's really lovely for thinking. I think when I was writing my book, I don't know if I stole this phrase from someone else, or if I came up with it myself, where I talked about intentional disconnection from technology,

and it seemed like you were a very good embodiment of that. And then you and I were discussing the interview that I did recently on the podcast with Pico Aya, who talks about not having a, who also lives in Kyoto much of the year, who talks about not having a cell phone and not actually using his computer in the morning and just answering email for like an hour and a half every afternoon. And other than that, he's writing by hand and he's traveling constantly to report. But it's a very quiet, very simplified life. I'm curious how you use technology in general, how you protect yourself against this sort of

this barrage of inputs from phones and computers and Bloomberg terminals and the like. I hadn't picked up my phone. I can't tell you the last time I picked up. I have like a few select people who I've marked, you know, where I'll pick up my phone. but I do not randomly pick up my phone, and I haven't done that for years, just because, you know, mainly I'm getting sold. I mean, I am an ardent believer in everything monger and Buffett say

about how many times you get sold in this industry. So I avoid that at all costs, especially at firm or science. Can you imagine what we'd be sold? You know, a couple of your really good in Nets and management. So I tune all that out. all of my, I have a filtering system for all of my emails. I've created a filtering system or only a few email a day actually come through to my inbox. And then I selectively go in at the end of the day and I read research.

I don't read trading emails because I don't find most trading I don't find insightful. The original research report might be insightful, but the trading memo isn't all that insight into me. And then, you know, I really block a lot of email. and I only read it at certain times of the day. And yeah, and I should mention, like, when I talk about building models, we have harness technology as well to our advantage. So we have incredible tools for the firm, you know, our size. So we have this, I would say, this sort of, I guess I want to call it,

like a CFA caliber model where we enter a ticker in our initials and you hit a button. And it literally pulls in all the historic data for a company. I can compare and contrast, like I can enter a ticker, multiple tickers, and compare and contrast this business to any business I want in the world on any metric I want. And then all my time is built on the forward thinking and the model. I spend very little time thinking about the past. So you're not a Luddite.

You're using technology in ways that are very powerful for you, but you're not letting the technology own you. Yes, quite sophisticated actually in our utilization of technology. So, I mean, when we early on, when we had consultants come in and look at our technology, they were pretty amazed by what we had accomplished. So, I mean, we literally, I can build a model of five-year forward model in 20 minutes with incredible amounts of detail, cash full, balance sheets, income statements, competitor valuations,

evaluation, the drivers, it's pretty incredible technology we've built and used. And then we, I mean, we have the screens that we use from monitoring the portfolio. I think we try to eliminate all things that are not things where we need our intellect or our thinking. So we try to get rid of all tasks that are very monotonous and not thinking cows.

And you're not being bombarded by day-to-day news either. It seemed to me that you, from what you've told me in the past, you weren't spending a lot of time reading news updates on your Bloomberg terminal or even reading daily newspapers. You are much more focused on books. And I remember you once saying to me, you wrote to me in 2021 and you said, I generally tune out CNBC unless I see someone like Greenblatt or Marx hop on air. I thought that's really interesting that you're actually very consciously taking yourself away from, I guess what Nick Sleep would call this very perishable information that kind of has a very short shelf life.

Yes. Well, and I think because everything went up in a period of low interest rates or declining interest rates, that sort of short-term sinking or like bombardment with liquidity. comments, that even became more pervasive, right? So getting away from it, completely ignoring it became more important. Sometimes our colleagues have more insight into our personality than we do ourselves. And I asked my colleague once, I said, you know, why? Why is it? You know, I don't get as much anymore from rating, you know, this in this report or,

and he's like, well, you've, you know, you're more senior now than most of these. things that you're reading, you're focused on the longer term, they're focused on getting you to trade, right? Every level, there's invest, the industry of investing is absolutely in opposition to investing, right? The industry of investing is to get us to trade and to buy something. And in my mind, being a good investor is doing, not doing those things, right? So I'm always trying to not do those things. And to not do those things, you really have to tune out what you're being sold on a day-to-day racist. You're also tuning out social media, right? I mean, I think I see you a little bit on LinkedIn occasionally sharing something that someone like Blake has written. I don't see you on

Twitter at all. I think we used to be friends on Facebook. Now, I looked yesterday to see you, I think your Facebook account disappeared. Someone else actually has stolen the name Laura Gerrits on Facebook. Is that right? Like you kind of consciously disappeared from social media in a also because you're moving away from this sort of ephemeral distractedness. It's tricky because, you know, what is so difficult, and I'm sure you feel this challenge as well, is that we think that might be the future direction, you know, particularly LinkedIn of where content is being read, right?

You can see that eyeballs are going to LinkedIn and not to your personal website, right? So, I mean, you do want to get your content to where, or you're thinking to where it is being read. So I think that's one area where we're constantly bound. I personally battling what should, how should I approach this, you know, because I don't think I'm particularly good at being on social media every day. I mean, I actually go to read, you know, I go to read a lot on social media because

in some senses, like at least I know who's publishing what and I can trust the information. So, you know, with LinkedIn, if you're publishing something, I can trust it. Half the time when you Google something, you don't know if you can trust the information or not. So I do use LinkedIn for that purpose, but I'm not, I would have probably never been on Facebook or Instagram to begin with one of them. I think my friends forced me at some point when we were out to dinner, you know, we're going to put you on social media. So I probably had all of three posts. I think what's interesting is as I try to figure out like what I know. need to learn from you and kind of clone from you. Like one, one of the things is that you've shifted

very much towards what I, what I call in the book, the art of subtraction. Like, you're, you're prioritizing what matters. And I, I remember when we met, um, I think it was in 2019, you and I had, um, lunch at this sushi restaurant. I love in New York, Hatsuhana, which still one of my favorite restaurants on earth. And you talked to me about Stephen Covey's paradigm of big rocks and and little rocks or gravel. And I was looking at it last night at this video because I wasn't really familiar with this concept. And it shows this video of this woman trying to, you know, she's got a jar full of this gravel.

And on top of it, she's trying to jam these big rocks, each of which represents like a major long-term goal or a priority, like her family or her biggest clients or some big career opportunity. And then Stephen Covey says to her, well, so now take this other jar. and he tells her to put the big rocks in at the bottom and then she pours these little pieces of gravel around the rocks. And you said to me, I'll call you back to you. You said, I think one of the things I'm good at over the long haul is getting rid of the little rocks. I have very few distractions.

I just screen stocks, travel, come back, build models, build portfolios, outsource the stuff I'm terrible at. It's so true today. I mean, and I still think of that coming class and our lunch all the time because we were talking about books. I think you had just started your book club. Yeah. And that was in time and you'd ask, you know, there's always a question when you're with someone and sits with you for a long time. And your question about team sat with me for a long time too, you know, why do you have a team of people? And I think there's one, you know, secession issues.

There's two, like, you know, everybody on our team is sort of different. good at different things. And, you know, so we're better as a whole than we are as well. But yeah, I mean, I still think that art of subtraction is just, it gets more important by the day, doesn't it? Yeah. We're just bombarding. And it's very, it's very difficult because if you're reasonably successful, you get

more and more complexity in your life and you're more and more reachable. So you get more and more opportunities, more and more feedback from people who are really nice and who you want to reply to because you don't want to be rude to them. And so you just have this, this accelerating complexity. And then on top of it, all of the information that's coming in at you constantly. So Pico Aya was saying that we get more information in a single day than Shakespeare got in his lifetime. And so just the complexity. So it seems to me that one of the keys to a successful and happy and abundant life is actually to be,

extremely clear about what matters to you, what's really important and what's really adding value and what you're here for, and then really to have the discipline to reduce the other stuff. And the reason I'm emphasizing it and saying it out loud is because I don't do it. I mean, I've been good and that. I mean, starting, I mentioned this to you, starting a business is not the best thing for like the art of subtraction, right? I mean, because you can draw into so many things that you're not particularly being the same thing. We're having interest in doing.

So that part at first, I don't think I managed that well in the very beginning. And then I've gotten better at managing it. You know, I've partnered with people, I think, where we all complement each other really well. So we're each good at different things. And I mean, you've probably seen Blake is an exceptionally good writer.

He probably gave any credit where credit wasn't due. And in that way, white paper. But yeah, you know, we have a team of writers too. So even things like quarterly lettering, we can almost seamlessly move it from one person to another without the voice being lost. So yeah, I think it's just critical to be. I've gotten back to even the team agrees that the things I'm the best out are looking at stocks, reading, you know, reading, which helps me look at stocks and writing. So I'm very much focused on those things today. I think the other thing I do reasonably well is

talk to clients because I hear about them. But yeah, I don't know. One of my books on my recent trip to Japan, I just read his Finnish Chico's new book. The Haps Real and Life, oh, it's brilliant. Yeah, it's a lovely book. Yeah. It's just brilliant.

It's about all these different cultures, how they, you know, I guess, you know, in conflict in ways, but all trying to pursue the same goal, which is back to your point about, they're focused on what is paradise, finding paradise. And so it's sort of this, everyone has the same target,

but they're getting there in different ways and different belief systems. And so I think, you know, keeping your eye on the ball or on that target is really important. I told you, like, one of my favorite books is Snow Country. And in the beginning of the book starts with, you know, there's this train going through a tunnel. And you talked about going through this long tunnel into Snow Country. And so I'm always sort of trying to find that snow country, right? I mean, Japan is this beautiful place for writing because you've got this white, you know,

it's a snowy's place on Pumhurst, so you have this sort of white and cleansing palette there for creativity. So it's this great place for the imagination. He also talks a lot. I'm not sure I'm here, but he talks about like we all have the same amount of time, right? Time is the same for all of us, but each one of us uses. our time differently. And, you know, that's such a profound statement to me because I want to spend my time subtracting the things I don't like. I want to do the things I absolutely love because time is finite. So when you look forward now, I mean, you're about the same age as me, right? Maybe a little

younger. I'm 55. Really close. Yeah. So when you look forward and you think, I've got to subtract all the nonsense, all the stuff I don't care about. Here's what I really care about. Like, what's your, what's your sense when you look at the next 30, 40, 50 years of like, here's, here's what will actually make this a really successful and happy and abundant life. He's great. You know, what's great. You know, when I was young, I used to look forward a lot more like that. I was a very poor, I was planning my retirement at age five, you know, like I'm saving and, you know, thinking about retirement. But today, I'm actually very very far. I'm actually very, you know, very content in the moment, you know. It's funny, more so than I've ever been in my life. And I think

it's because of the removal of all those sort of things that I didn't enjoy. So, you know, it's funny. I don't know. That's sort of a Zen way of being too, right? It's just being in a moment. So I'm really happy just celebrating the moments today versus, you know, again, always kind of thinking about what is, what is retirement look like, right? Because, you mean, think of anything, that's another thing, COVID taught us, right? We may not have, you know, 30, 40 years. Now, I'm not, you know, this isn't some yolo, you know, mentality, but it's definitely, you know, it's amazing how we evolve as thinkers over time

or as human beings. And do you think the meditation that you've done and studying Zen and I remember you went to Tibet when you had a sabbatical at Wasatch and you were going to Tibetan temples or like, has that helped you to rewire yourself so that you're more capable of being in the present without just fixating on the future the whole time? I think being in some of those cultures that are better at being in the moment is really helpful, right? I don't know, you know, you look at just, I mean, this is a bigger topic altogether, but you look at the proliferation of technology in our mental health. I mean, they seem to go side by side, right? And so going to these places that live a different way to me at least teaches me how to balance the best of our culture and the best of theirs, you know.

So I think so. If anything, I don't know how often you, I think you've heard you say before, you know, you've tried meditation. But, you know, Soto, sitting, you know, Soto's in is so uncomfortable. If anything, it makes me appreciate everything else during the day. and so. How much do you sit and meditate? In Japan, I have a like place in Japan, you know, cushion. My place in Japan is not big.

And as you know, my husband works out of it part time. So it's also kind of this, you know, hybrid. It was hybrid before hybrid to school. But yeah, we have a like a pillow and I'll just go sit and kind of cleanse my mind for, you know, 20 minutes a day. And it might not be through, you know, actual meditation. but cooking to me is also, you know, a form of Zen practice. So I don't know if you've ever been making a sauce or something and your husband comes up

and asks or your wife or whatever your kids come up and ask a complex question. I mean, it's impossible to answer a question while you're like trying not to get lumps in whatever it is you're making. My cooking capability is extended toast and oatmeal. That's about as far as we go. So that's one of the forms of complexity I've removed from my life. I think a lot about these things that you're wrestling with, and it feels like you've done a really good job of prioritizing what's really important

to you, subtracting complexity, focusing on the things that really matter, and then just kind of plugging away. Well, I think when I met you, you know, I was in that point in my life where, you know, you are, you know, your investment style is in. are popular and in demand. And as a consequence, you're exhausted. And so, like, you know, and you're trying to, I was also at the point in my life where you're sort of coming into this sort of, I don't know, whether you want to call it like

bigger, what is the bigger purpose in your life? So I was in sort of this period of transition. I think I've learned. Actually, yes, I was coming to this, you know, conclusion that you practice the art of abstraction. And I've gotten even better at it. The years have gone by. So it's, yeah, it's really nice to be kind of content in the moment.

Is there any final thought you'd like to leave us with before I let you go? Because I know I've exhausted you with a million questions. Oh, no. I've enjoyed your, I mean, I actually forwarded your PICO, your podcast onto a bunch of people I know because, I mean, it's just so good. But it got me, I had kind of gotten out of some of my practices during COVID, and it really got me back into this sort of, you know, intentional reading practice. And, you know, so I really appreciate what you're doing and, you know, the deeper thinking you're enabling us all to enjoy. I really enjoy your podcast. Anyway, I forwarded it on. It was great.

Oh, thank you. I don't have anything to add. Well, it's been a, it's been a real pleasure, Laura. And I, I've, been a great admirer of what you've done with Rondure and just with your career. And the way, the way in many ways, you've structured your career out of these passions for continuous learning, constant reading, obsession with books, obsession with travel and discovering other cultures and obsession with stocks. It's a kind of beautiful thing to see the way you've aligned your life around these,

these passions. Well, I'm, I'm envious. I mean, I'm not, I try not to, like, be envious, you know, anymore in my life. you wrote such a beautiful book and it's something I've always wanted to do. There's an area where I have not subtracted enough to accomplish what you accomplished. So, it's truly a beautiful book. Well, I figure you'll end up writing a book at some point, but I know you're a very good writer, but I sort of figure it's so busy doing, you know, chasing around the world and visiting companies and like, it's not a bad thing just to keep collecting string for the book, which I'm sure will come out at some point in the next decade.

that you'll work on. Maybe. Maybe. I would love to do that, but anyway, I just want to congratulate you on all your success and the wonderful book you wrote. Thank you. I'm so glad you were in it. And I look forward to many more conversations in the years to come. Thanks so much, William. Thanks so much. Take care. Thank you. All right, folks. Thanks so much for joining me for today's conversation with Laura Gerrits. If you'd like to learn more from Laura, you may want to check out my book, Richard, Wiser Happier, where I wrote about her at some length in a chapter titled High Performance Habits. I'll be heading to Switzerland in a week or so to visit my old friend, Guy Speer, and I'll be interviewing him at his home in the mountains for a future episode of the podcast.

In the meantime, please feel free to follow me on Twitter or X at William Green 72, and do let me know how you're liking the podcast. I'm always really glad to hear from you. This morning, I was especially moved to receive a message from a devoted listener named Samuel, who's currently serving as a soldier in a very dangerous war zone. Apparently he's been downloading the podcast and listening to it during calmer moments when he's whiling away the time. Samuel wrote to me,

I'll wager there is a good chance that I'm your only listener who's had to go back 15 seconds to hear some pearl of wisdom because a nearby tank or explosion has been too loud for me to hear. So I wanted to send my very best wishes to Samuel and to any of our other listeners who are out there going through particularly difficult and perilous times, is hoping for the return of peace. In any case, I look forward to being with you all again very soon. For now, stay well and stay safe. Thank you for listening to TIP. Make sure to follow Richer, Wiser, Happier, on your favorite

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