Seeking Values

1957: Something of Value - Brooks

Today has been a "classroom day", spent in the company of some of the leading financial planners and several top drawer Fund Managers. Today's key themes were probably to be expected - what on earth is going on in Europe? and what will the impact be on our clients? Well, as with all investment seminars, there are as many opinions as there are people (and a few more besides). The question of Europe hangs heavily in the air, reactions are mixed. For starters, "Europe is not terribly significant" (6-9%) of the global market and shrinking each year in terms of its global impact, though the way the media cover the story one would liken its significance to a catalyst for an End Times scenario. There are better places to invest (yes I would hope so too) but what irks me is the way that the financial services industry makes blanket statements about parts of the world. We are talking about people, indeed we are talking about our peers, friends and family, not simply "them" or "the consumer"...it may be politically expedient to forget that nations are nothing more than a collection of people, but to discuss the world in such terms does rather miss the point, that business exists to serve people and investors exist to help business flourish. So whilst I might agree that, yes Europe is a mess and is only a small part of global markets, it is our neighbour and whilst its size may be increasingly diminished, failing to reflect on the societal impact of an unstable Europe would perhaps be like missing the bad apple, which will eventually pass its dis-ease to others. Only time will tell.

As for regional investment, there was mixed and arguably divided opinion on this. The only speaker to make helpful use of data in his slides suggested that investors need to focus on companies not countries. A valid point, but the cultural differences of countries, combined with their political and legislative take on life is not something that even a multi-national company can easily bypass. The truth is of course that investors need to seek out value and diversify, being mindful of where most growth is likely to reside, though historically this would also carry the highest risk, due to the size of the relevant market or exchange (and possible Government interference). Investment Management Firms need to search for the next big thing... the next Brazil, Russia, India and China (BRIC)... it was suggested that the "next eleven" or N11 would include South Korea, Turkey, Mexico, Indonesia, Nigeria, Bangladesh, Egypt, Philippines, Vietnam, Pakistan and Iran.... somewhat controversial and of course would probably require a significant change in political leadership on all sides.

Thankfully, there were signs of hope that growth is returning and indeed happening (largely in non-OECD nations) and that investors must think globally. Something that we at Solomon's do with our clients - we aren't UK centric in our investment approach (thankfully). Perhaps one of the most refreshing talks was an interview with Hendrik du Toit, the CEO of Investec Asset Management, who spoke of values, serving our clients and being a faithful fiduciary, something that resonated with me and I hope is clearly expressed and imbedded in our client service.