Welcome to the contrarian investor podcast. We give voice to those who challenge a prevailing sentiment in global financial markets. This podcast is for informational purposes only. Nothing on this pod cars should be taken as investment advice gets. We're not compensated for their appearance nor today supply payment in order to appear. Individuals on this podcast may hold positions on the securities that are discussed. This is our urge to educate themselves on make their own decisions. Now here's your host, Mr Nathaniel E. Baker. You're investing. Strategy effectively is on a global basis. You buy stocks, public equities in companies where there is a severe dislocation. So why don't you start off telling us our listeners a little bit about that? And then let's talk a little bit about specific opportunities now.

Sure, I better Thanks for having me. It's a pleasure to, you know, to be talking to Daniel in your listeners. What we do is is, you know, we understand. It's it's no other usual right, But we think it's very effective in the sense that, you know, invited investing right. Everyone is just trying to buy obviously good assets at big discounts, right? And frankly, went when someone you know in in what we called normal condition investing right in the United States, for example,

just tries to buy a deeply this guy, you know, discount a company, for example, writer or stock, you know, do things almost invariably must happen. Either the company is going through some sort of problem, or there is a perception that the company's going through some sort of problem, right? Well, you know, one of the other, whereas you know what we do, we buy great businesses at enormous this kaos 70 80 90% discounts, right?

Not because of anything that is happening or is perceived as happened. Who, the business, but simply because these good businesses that we by which are lodged under leverage liquid castle generating they happen to be in a in a bad neighborhood. Okay. And that's, you know, that is very much what we do. You know, we basically find these really out of favor countries, right to find great businesses. And there's Ah, there's a very poor nuance which is cos go out of business, right? If you buy a 90% discounted stalking United States, the odds are the company's not gonna go Are you know,

not gonna turn around, you know, turn around. Seldom turn to go for a buffet. Where is, you know, we basically relying The country's don't go out of business, and countries don't write countries don't disappear. Of course you have. You know, once in a blue moon, something like Venezuela or Cuba, Syria taking place. But, you know, these are not not just very,

very rare events, but also very easy to avoid events. So okay, basically. Well, you know, we're lying on the fact that countries will stick around. I good good businesses in these countries, you know, there will be a much more dependable reversion to the me, right? Okay. Very important nuance. And that's is that you know, we're interested in capturing these very, very specific parts off the psychological cycle,

so to speak. You know, we're trying to invest, for example, in Greece or in Turkey or in Argentina. But let's say Greece, when Greece is absolutely out of favor, right, and people hate Greece for many reasons, and then we're trying to capture this shift in perception, right? When Greece goes from everyone hates Greece to a point that you know people still think very, very unfavorably off Greece, but they can sort of live with grease. So that's what we called. You know this shift this dealt in perception eyes psychological arbitrage because the shifting perception is what drives these massive both crises post prices,

rallies, right, that actually have nothing to do with the economic cycle. It doesn't have anything to do with the economy in picking up they actually happen to a three years before Are the economy start speaking up in there Basically, psychology driven? And and finally, what's interesting about those moments is the fact that, you know, the local dedicated managers normally tend to do very poorly very badly in those instances, right? I mean, the industry is structured in a way that local managers specialize with large teams to cough to cover one specific market. They tend to do well, you know, we co normal condition investing. Call it 98% of the days of the year.

But in the 2% off, you know, all the days of the in between fast, which cries these days, they're just too close to the action there. Normally fully invested, they take big hits and they're psychologically impaired. So, you know, just look at the numbers. You know, Don't take my word for it. And, you know, you see managers. They're dedicated to specific markets doing really poorly and really badly during crisis. We know life, these local managers than actually having information on edge because of the use of years in normal conditions. But in crisis, they tend to

be handing out How do you identify the turnaround point were you will invest okay, because you say that it's two or three years before the actual economy turns. What kind of signals data or other indicators do you guys look for in determining whether you're gonna pull the trigger and go in and buy in a certain market?

Very No, it's a great question. My obviously, um, we look at this right. We say there, you know there's there's obviously too since right in the in the asset management industry, why one is losing money. The other one is dead money, right? So it's no good. Find something just because something's will achieve. Been having to wait out, you know, two or three years right there wouldn't know wouldn't necessarily obviously generate any insult returned. So what we do we want way completely separate our our deep for the mental analysis to the actual risk management and capped allocation. So,

you know, until the fundamental analysis, we basically followed three steps we look at Look at my pockets that have, you know, going down at least 50% of dollars 50 That basically means that, you know, we're looking, you know, good, large liquid companies that, you know, going down 70 80 90%. So that's what I want That is very easy to do. Anybody, anybody that, you know,

the Bloomberg Tumble could do that. Secondly, and that is the more there is a more difficult bit. You know, we look at what we say. It will look for a narrative off change, and it's a narrative of changing perception, Right? So, basically, why is Greece or Turkey Argentina gonna go from being completely hated totally out of favor to 80% out of favor? Because that's what's gonna drive the ram right? And that is this. This narrative off changing perception is normally associate ID, too, you know,

to a situation in which, you know, a country has been so mismanaged for so long that whoever is in power or whoever comes into power will be forced to do a few good things for the economy. And these few good things will be enough to do, you know, to drastically, you know, to to actually create this change in perception. I use many different examples that despite the leader in charge, you know you can take Argentina in 2013 right when Kristen vacationer waas, you know, obviously a very, very questionable, you know, leader, right?

Try to change the Constitution to allow for 1/3 mandate. And she lost that right? And and she lost that in Congress. She couldn't change the Constitution in the market. Interpreted that as you know, there was the bottom of the market, right? The market sort of concluded that whoever came along to replace Christina was gonna be forced, was gonna have to do a few good things. And that's exactly what happened, right? Because in the market rally, a lot of the names in Argentina went up 10 15 times. Some of the utilities, even Villa Christina was stealing power for another year and 1/2 before Michael came along, right it obviously know the example in Greece,

Greece is you know, Alex Tsipras, you know, comes along in general 15 with the plan off getting grease out of the out of the euro. Right? Going back to the drachma about the market, obviously, you know, gets terrified in nine months, you know, the country hits the wall in Cibola despite being who he is. I see a very, um you know, um, very strong. So left left ideology.

He's forced in the bailout program he's forced, you know, to become three years later, the biggest liberal reformist in the history off modern Europe, right? He actually had to implement 452 reforms because there was the those were the terms off the bailout they have of Germany and the European Union. Basically So poker, that's the narrative. I would look for a narrative that is compelling enough that tells us that because off circumstances, there will be some good things happening and they will change perception. And the thing is, you know, one of the assets that we buy and that is basically, you know, basically leverages are, you know,

over two and 1/2 decades of experience of looking and assets. And we basically, you know, instead of trying to do what most of the industry does in 90% of the days, which is, you know, I need to find the next Google or I'm gonna try to find the next Facebook. We don't need to do that. All we do is start with the most liquid largest companies in a certain country, right, Because look good in a Mattis Forest Management, and we basically, you know, exclude cos they're commodities off commodity related because we want to be exposed to the idiosyncratic story of the country. We normally get rid of companies that have, you know,

too much leverage or, ah, poor balance. Shit. You don't wanna have a full balance sheet in the middle of a crisis because you're probably not gonna be able to refinance. That's and we normally also exclude business Is that you know, because of the nature of the business, they also need to raise capital when our own going days is such as real estate development or infrastructure development. By the time I've done that, we've applied those three filters. The normally 20 large companies in the country they come down to about six or eight in the anomaly consumer, retail, power, telecom and banks. And then we go to these countries. You know,

I've been to Greece, you know, about eight times in the last two years. You know, way normally have two or three local brokers, and we do a lot of boots on the ground a lot off due diligence on locally. In those 68 companies, any tend to buy a basket off those, you know, 6 to 8 companies. So So that is what we call our friend, um, from the mental work. Once you've done that and we conclude, let's say you know, I want to be involved in Turkey and these are the five companies down,

You know, that I want to buy Well, actually put that away. And then we put our risk management job hats and because then once again, right, went to buy. We're not Oh, trying to pick the bottom right on the country. We know that in the markets in which we invest, right, drawdowns can be snotty percent down. Not now. You don't talk about 9% down, 10% down, which is what people encounter normally in normal condition. Investor,

we're talking about massive, massive drawdowns there once again, very much sentiment driven. Right? So you do that, you know, just trying to buy on the way down and dick the bottom, which, you know, a lot of violent vests extend to do and can be successfully doing in normal condition investing. We don't do so. Basically, we do. We do two things

before you get intel about. I want to go back here to the through the the entry points and choosing the entry points and the change in perception that you talked about. Yeah. And the two examples you mentioned Argentina and grease. It sounds like a lot of this has to do with changes in political leadership. Is that correct?

Well, yes or no, right? I mean, in the sense that in Argentina, you know, the market bottom in rallied with Cristina Kitchener still being power, she only left at the end of 14 in the market bottom, you know, in November 13. So the market rallying for another year and 1/2 she was doing power, right? The only thing that actually changed waas the perception that she wasn't gonna stay one forever. She was eventually gonna have to leave. And whoever came along was gonna be forced to do a few good things. You know, secrets.

You know the same thing when he actually came into power in 15 right? That basically, man, that you know, the market, you know, unsold off dramatically, right? Because, you know, he is who he is. And he came along with a with a very market on friendly speech, and only after he hit a wall. You know, nine months later and he had to be bailout by the European Union and complied to the European Union demands, you know,

the market once again started reacting well. So ironically, none of those instances there was actually a changing leadership can be a change in leadership. But But it's more forces of circumstances that create this. Basically conditions for better policy. Better policy to be implemented, Be it from the current government or from a new government.

Got it. Okay, cool. But okay. Going back to Greece, then. At what point do you find that it was safe to start looking a little bit more seriously and investing?

I'll go back to you know, I want you to questions at the same time because you know, we don't Our fundamental working grease, everything checked. The box is right. You know, the market was probably cheap. The narrative was there

for years. It's now 2015. No,

no, there was, You know, we got involved in 18 and 19.

Okay, So much. Okay. Wow. Okay, go ahead,

wannabe. Later. Yeah. I'll tell you the story about about about Reese, but we didn't get involved in too much later on. And the reason being right, we don't have fundamental what Greece was super cheap. Greece was, you know, the narrow tables there. We knew the assets that wanted to buy the mostly the banks, but not only you know, some other assets, but, you know, we wait for prices to confirm that our fundamental these is is, you know,

has some confirmation for market, right? Once again, it doesn't matter how good we think our investment, these is, is and how far. Oh, and deep our due diligence work is unless we receive confirmation in the form of price action. Not again. You do not get involved also, you know, back to your point when you decide to buy. We decide to buy when we see price breakouts on the way life we see prices going up through certain predefined breakouts and then we get it. You start getting involved, we build our positions in several different drunk. It's normally four or five tranches.

You know, as the market goes up, we keep adding to them. We raise our stop losses. That is very important to keep building up. We raise our stop losses, so I won't point in time. We're not gonna tolerate more than a certain Mattrick volatility, but call it about 8 to 12% called a 10 percents just for all intensive purposes here. So there is a maximum drawn down there will tolerate for each one of our investments, right, That is obviously acid specific. So we only buy on strength because once again, we're trying to avoid dead money. I don't wanna arrive in in Turkey Ah, year before I need to.

So I'm doing a fundamental war. I put it away and then I look at I look at basically price action guide me on building my position, and I you stopped losses in price also to get out of positions. When? When? When I need

to. That's an important distinction between you and the traditional contrary and investing style, or what we would consider or think of to be the concern investing style, which is first of all. Like you said, you don't try to pick bottoms. So when everybody hates something, you are okay with that, with also hating it and not investing. You wait and for the story to change and, more importantly, wait for the prices to change. And you give up some of the potential upside because you don't bite of dips. You buy on the on the way up. How do you? And so I imagine there's some complicated math involved there with figuring out when something is actually trending upwards, and it's safe for you guys to buy versus cell.

Yeah, I know. I think I think I think you know you. You absolute mail it right. I think, frankly, you know, the math, the mathematics around it, you know, it's actually not that complicated. What's much more complicated is our psychological disciplined, implemented and not overrule our system right, And that comes from a very strong conviction and past experience that there's no way around it, right? I mean, we are being contrarian simply by going to the places that we go to remember When we go degrees we go toe to go to Brazil,

we go to Argentina, we go to Nigeria and go to Qatar. Nobody there. People have left driving a year, two years. You know, prior no one is willing to touch those markets. Zero nobody. Right? So that is contrary in enough. Of course, what any other fundamental of analysts are invested will do. We do thorough work. But we combine that with our risk management process, which you know once again, maybe normal condition investing.

You don't You might not need as much You can get away without it in our in our in our environments, it is probably more important than anything else. You know, you do wait for prices to give us confirmation. We buy it on the way out, way out, you know, when we don't need to get out. And that's really and that's really you know what? What's protected his last year, for example, Have a few examples, right? I mean, Argentina in Turkey were incredibly volatile markets. They didn't they didn't necessarily follow a enough trend the same way that Greece,

for example, did right. So we had to get in and out of the markets in Argentina and in Turkey several times before making money. Right. So, you know, we have done it from them into work for you. No way. They could try to be humble too, You know, if we don't get the confirmation that you know that we need we don't try to be heroes, you know, we get out and then we, you know, were humble enough to get back on again because I've done the work right and that and that, You know,

we think that more more than not, you know, he pays off, remember? Because we're going to these these places, right? And that, I think, is the more contraire and part of what we do. Yeah. You're buying things literally. At 90 95% discounts, right? We bought. We bought banks in Greece from 56% book value. It doesn't matter if you like,

50% rifle off the bottom. Still, it's still cheaper asset in the world to buy. And frankly, considering that there is a 345 times upside or some What? Some of those investments you know, with thing that is that is that that is the best. The batter more prudent that a risk with dumb thing

to do. You have exit points, just like you have entry points, right when you're and you will, like you did last year in Argentina and Turkey Sell these positions off entirely, right?

Yeah, but But the interesting thing is, right. I mean, once again, just going back to you know, humility is very boring for us, especially because, you know, these these markets could be so you know, so So so of all time, so assertive, right? That the same way that we don't second guess the market on the way down me. And he would never gonna try to pick the bottom right, because the bottom line might be 90% down. We cannot afford to keep going to get by on the way down.

We also don't second guess the market on the way up. You know, the market on the way up. You know, a lot of times goes up more than five times, right? We have, you know, one Greek banged last year that went up five and 1/2 times, right? So we don't we know that the markets in these sentiment driven environments, they overshoot on the way down. They overshoot on the way up. So, you know, to avoid second guessing the market on the way up,

we never sell our positions on strength as a typical value investor will do. We only we wait for our stop loss limits to be hit. And we get stopped out for the game tonight. So we gotta stop, gain or, you know, whatever you wanna call it. But the idea is, you know, we refrained from second gas in the market. Now we let our profits run. We're trying to generate weak o positive cart owes its right. Where's we like to have gains on larger amounts of capital and losses on smaller amounts of cap?

Right. So it won't be like, but you you won't put in a limit order that Okay, when this reaches 50 50% gain or whatever, we're out.

No, because in a lot of instances, you know, you know, things are fun. 100% off. Yeah. There you go. Another 500% once again, right? I mean, we've done everything that we could have done. It doesn't fill them in tow, work from the And from then on, you know, we we once again, you know, we let prices be absolutely the drivers of our decision on and we have no protection away, down and have leeway on the way up.

Okay, A lot of really interesting stuff there. Philip Reed. I want to come back, and I want to ask you about what's going on in today's markets and where you might potentially see opportunities. But I first want to ask you more about your background. But before we do any of that, I want to take a short break. Starting now, you listen to the contrarian investor podcast on iTunes. Spotify stitcher on other platforms with podcasts have found subscribe and supply and almost rating beyond social media. Search for contrarian investing Podcast on Twitter and Instagram. You find us on Lincoln as well. Go to Lincoln dot com forward slash contrarian podcast. We want to hear from Alice is evil. Your phones to feedback at contrarian part dot com repositories of all podcasts, episodes and materials is available on our website contrarian part dot com Now back to the program.

He is Mr Baker. Okay. Welcome back. We are back. Phillip Reed, This is the portion of the podcast where we get into the guests. Origin story. As an investor, you've been doing this for a while. You set up Helm investment partners a little bit more recently. But when you tell our listeners about your background and how you got involved with investing,

Sure. Well, um, you know, I'm half English and half Brazilian. I you know, I live in UK, lived in the States, but mostly I was brought up in Brazil in a thing that is very much part of the DNA off my investment philosophy. Right by, you know, but my being Brazilian, basically, you know, I got used and I was I was you know, basically I grew up and I was brought up, you know,

through or in volatility, right? I know. Embers glow, you know, as a kid, even before starting work, you know, we saw presidents being ousted. We saw currencies being replaced maybe three times in a year. Moratoriums the folks right? There was very much part of our of our you know, bring him part of our coach of hyperinflation in the eighties, you know? So, Andi,

I started my career around a college at this, Um, that is his bank. There was called, Ah, Bank Garantia There was actually founded by the founder off three G capital. You know the area, the Brazilian trio that actually consolidated the beer market in the world. Mr. George apart. A lemon. Who's Brazilian? Swiss. So basically, you know, made his money.

Adele said, you know, in this bank and there was a very active emerging market, basically, investor right, so I got to see is a very junior, you know, analyst right out of college. But I got to see the bank making very successful investments in all these, you know, Latin American crisis off the nineties in Mexico and Brazil, but a swell in Argentina, you know, I go, I go. The bank that involved in the self is Asian prices in hell off Korea and Thailand and 97 Russia 98.

So there was obviously, you know ah, very much part off part off off the seat off our investment philosophy. I then went on to McKinsey and company which was a great, you know, greatly learning to really, really mean it. And I think really helped me understand cos from the inside and bottoms are I ended up going to Stanford Business School on then eventually to Golden Socks, Marathon Asset Management. I ran there there, Brazilian operations here, and then and then I spent many years at one of Brazilian leaving. Finally invest in companies called TARP on in some trouble. And then, you know, I decided to leave about and set up Helm about three and 1/2 years ago in June July 16 because he once again right throughout my career,

in a lot of the companies that I I want that in Palmer off. I saw these opportunities in many different markets bid in Brazil or in Argentina or in Greece. And frankly, you know, those opportunities were not part of the men date or the strategy. So, you know, I decided that, you know, just, you know, setting up hell to do exclusively that no mental, a sense right, and in a very convinced because not only for the reasons I've described in terms off you know, the investment philosophy and the risk management, but but also because,

you know, there isn't actually any institutional investor doing that right now. We actually way look right. We look, we look for people, then do what we do in a way to to learn and exchange ideas. And frankly, so far we have found some families the world actually do that on their own capital. People that came to Brazil in the nineties and Bharti know the telcos and the power companies people that went to, you know, to Russia and 94. But, you know, we haven't really been able to find funds that do exclusively that inequities, right? You have folks that do some of that sometimes you know that.

But I know not very many inequities. And, you know, we like to think that happy a exclusive, fully dedicated focus to do what we do, you know, also also helps us being the being disciplined in

the way that we we approached. Interesting English and Brazilian is an interesting background. I have to ask who you support in soccer based on that

man. You know you want to be right or you wanna be happy.

Well, that's yes, My question. D'oh!

You know, I've seen better days, but I mean, obviously about being being, you know, wanting to be happy. I definitely support Brazil.

Okay, which is Yeah, which has not been very good recently,

but okay, that's not has not give me the game. Ban have been asked about the years.

I do love thee. Indeed, indeed. Yes, True. Whereas England has, of course, had to wait since 1966 as we all know. Yeah. Anyway, back on topic here, um, you touched on it before you guys buy equities. Only now when you do that, do you by the local locally traded shares or the 80 ours, or

both way by wherever there's, you know, this this most liquidity. Because again, security is paramount for what we do until the risk management choose the most liquid market. And that actually various right. I mean, you have Greece, for example. There's more liquidity locally, so we trade in euros in Turkey. There's more liquidity locally. So intriguing. Leader in Argentina, there's more liquidity in the U. S. And Grady are So that's what we do in Brazil.

It doesn't really matter. Have a very liquid markets, you know, both both both locally and us. So you know, a group of liquidity,

everything, everything. Will you hedge any of your positions

at all? We never do it because we know when and if we get our equity seizes, right, My definition is gonna be buying the equities in local currencies very, very cheaply, and the currency is going to be very, very appreciated as well. So it ends up being a double double me. You actually, you know, you actually have returns on both ends and the next it was a big contributor of that as well.

Yeah, that's actually pretty refreshing. Take, I can't tell you how many people I speak to you on this podcast and elsewhere who claim that they hedge everything and everything is hedged, which is, frankly, not even possible. And if it worried, probably getting exactly 0%. But anyway, okay, let's talk now about these current situations. The world is obviously in interesting places, as you know, better than probably just about anybody. And Corona virus. Maybe we could talk about that a little bit, but where are you right now? Seeing opportunities to buy equities.

So, you know, maybe I'll tell you about a foot of first. You know, we're not about, you know, 45 50% in Greece. Still still, the narrative is tremendous of the new the new prime minister, Mr Kidnap with Mister Pockets, who we actually match last year a couple times is is really means business. Western educated Harvard, Stanford Mackenzie, you know, has been accelerated privatization, reducing the size of the states, but cleaning up,

you know, helping the banks came out the balance sheets. Ah, very rational, reasonable, market friendly person in a very, very good team, Really getting things done already. And then in Greece, we have, you know, have the banks we have. We have, ah, come on a large position in the power monopoly called ugly part cooperation with, You know,

I think it's a It's a great story. It's a great turn around story. The company had been used by the fried government as a you know, in a way, a public policy company on private generations on before. And it's now being being turned into a, you know, a normal value creating company and this and this tremendous upside. The company has about 70% of market share in the power marketing, Greece. We have about 25% of the portfolio in Turkey. Turkey in multiple terms. It's still one of the cheapest markets in the world. 0.36 point four times price to earnings 1020. Uh, that is,

you know, it's ah, it's ah, it's a much deeper diversify market. These are the grease we own. We own telcos. Your airlines will retail companies. So you know, banks, right? This is up is an interesting, interesting market, you know, albeit more volatile, right? The the the narrative.

It's not as necessarily as Lilia and Turkey, you know, oftentimes finds itself involved in a lot of geopolitical conflicts. And, you know, it's the case now in Syria, right? You know, Hogan and putting her being, you know, having set off in a week in dialogues around bats also know there's a little bit more more volatility. But once again, we think that you know, rates came down tremendously a little bit a little bit too much and too quickly, and that that actually, you know,

scared everyone. But I think because inflation has been surprising to the ballast side and the economy has been picking up in a way investors have being willing to. We need to ride the market. And that's create really, really, really positive momentum in the Turkish market as well. Huh? Wake said about Julie. Okay, is a, uh it's about 10% of our portfolio right now. Chili is a one of a kind in Latin America, right? It's significantly Maur solid institutions, much more organized Country doesn't have a lot of vulnerabilities that the other countries have in terms of balance of payments and pensions and so forth. So it is an oily CD country that,

you know, went through a, you know, sort of confidence of social restaurant crisis in October, the market's sold off significantly. You know, we believe that there, you know there is. You know, the BB, the actual economic crises is no really going to be to be very significant. Okay, has bean a dent in confidence and they will show up in the numbers, but not in the magnitude that are reflected. Evaluations are opinion, and I think there's a path,

you know, the country's gonna hold a referendum in in April to decide how in if to, you know, to rewrite and constitutions to address some of the some of the social concerns that better population has right now, you know, there's also it's also market, that is, you know, you have quite a bit liquidating some of the names as well, you know, have a brewery company there. We have a lithium company there as well. On banks we have We have a small part of our harm. Our portfolio about five and 1/2 6% in Pakistan. Okay, Pakistan has done,

you know, dozens off IMF programs in the last 50 years. It's being, you know, it's been, you know, in the math program since dozen 18. Right things are things are potentially happening. There were either is being basically the gun first trying to address a current account deficit problem or, more specifically, a trade balance problems. So there's been a lot of initiatives around boosting exports and textiles and tech technology, um, so on so forth and restricting somewhat enforced right. The government increase interest rates to slow down the economy as a way to also decrease imports so far has been successful. The market bottom last August after going down 75% in two years,

and I'm talking about the the U. S. Listed P A. K. Yeah. They went down 70%. 25%. So massive. So write Opera Alley. You know, that is a that is a smaller, a smaller part of our portfolio. So, you know, there's this plenty of interesting opportunity is and frankly, you know that without any potential adjustment,

right there might my definitely take place. Give him where the, you know, us equities market is trading right now. Right? Right. So if something were to happen, we like to think that we would certainly be stopped out off men of our positions, But we will be liquid. And we have, you know, potentially very interesting opportunities to try to capture.

Yeah, with Chile, Aren't they a big supplier of commodities to China? Copper and lithium and et cetera.

Yes, the idea they are indeed. And then in that,

in fact, I think the market's sold off a little bit, like over the last couple of the last couple weeks due to the Corona virus. Fear so

yeah, absolutely. I think I think you know, if you look at, you know, 23 years of time horizon, you see that because copper be going down right for a long time. Chilean market, you know, has also being setting off a long time, even even before the global crisis. Right? And since then, obviously, you know that the cell office be has been un providing and Ben, even though copper, I be I be improving,

you know, the market still kept selling off, right? So that's why I think there's even taking the copper in Corona virus trajectory to accounts that the land market is is cheaper than it should be. You like to know that that that there has been volatility, you know, brought about by China and buying by the commodities cycle in general?

Yes. Which all this of course, begs the question with China specifically, Have you looked at that at all over the last couple of weeks? Because the you know, they're too. There's been quite a bit of selling,

you know, Nefario. We know this once again, right? I mean, you know, there's this. I could spend a lot of time trying to understand what's taking place in the heart of China. I am not qualified, released to to get any any reasonable conclusion instead, and that goes for everything that we do, you know, instead of trying to predict new crises or trying to short a market that should be going down. But it's not. We didn't do anything off that for prices to tell us what to do. If the Corona virus is, you know,

happens to be a problem that is not priced in or is bigger than what people anticipate, we're gonna we're gonna hit our stops and we're gonna have a fun that is 95% cash. I think that is the beauty of it. You know, once again, right? Even if that were to happen in some months time, there will be there will be a bounce back because it's happened for the last 2000 years. And then we would, you know, keep our from the mental work. Ah, current. We would be traveling to this. Places would keep sticking to management teams. And when time is ripe, we would get back on the different investment. These is in the narrative.

Okay. What about potential future areas? Are there any places that you're watching? Maybe where there's an election on interesting election this year

or other areas besides You know, we're gonna visit Pakistan in March, and we also way also gonna visit Egypt. Okay, Same. You know, in the same trip, like Jim. It's, you know, can definitely be, you know, in Arab interests for us as well. Um, you know, we're looking at we're looking at Mexico. Mexico is is no nearly assed cheap in the narrative is,

um it's not great in the sense that, you know, we speak to a lot of people in Mexico for a long time. In a thing. People are starting to become pretty concerned, right about about about president over the lower stood over measures and now look, but still, once again, you know, that hasn't been reflected in prices. Right, right, right, right. Brazil is always always an interesting place. But but once again,

right, I think you know, we feel pretty constructive in some of the narrative in Brazil, which, you know means that the market should, you know, should could go up. And, you know, I should get going up. It's not cheap, but it's always always on the radar. Argentina is definitely a place that we spend still quite a bit of time looking at right. I personally go to Argentina three or four times a year. No, you know,

it's being historically Ah, great. Great crisis markets to them, even though a very volatile one. And I think once again our risk management process is crucial after in Argentina, Argentina, you know, we think that the jury is out. The narrative and the governments of the speech hasn't bean very market friendly in the last few weeks, and the market has been selling off. Some of the Argentina banks are about 5 to 8% down today, US. So, you know, at some point in time, it could be it could be cheap enough,

and eventually, once again, the country might be forced to do a few good things. And when it happens, you know prices will we'll, You know we'll have that as a reflection, and eventually it's time to get back on again. But, I mean, we don't see once again, wouldn't see that happening at. And we're not in the business of predicting in your back. Got it. I happened to read, react, leave eventually a significant amount of money on the table on the way up and capture what in our opinion. It is a much better risk with

you mentioned Greece and your portfolio, 50% is increase. How much of those our legacy positions and how much of it is stuff that you added over the last say year?

Oh, you know, we've had pretty much every single position for the last year.

Really? So it was all recent trades.

It's Yeah, it's been, you know, it's Bean. It's bean. You know, it's been working out pretty well right up there. It's been a textbook solution in terms off in terms of fundamental fundamentals and prices. You know, I have been having reflecting that. You see, that's PPC. You know, the public power company is a little bit a little bit younger as a position, but not dramatically.

You still see upside in Greece?

Well, I see. I see tremendous upside in Greece. Tremendous upside agrees to see, you know, the banks in Greece fluctuating between 2020 and 33% book value writer thing within prices can easily, you know, go up 50 to 100% in 1,009,020. Um, you know, we see PPC as you know, more than doubling in 1020 as well. Just because fundamentals, there's a company. Indeed. I should be going from 300 million in 1019 to about 8 to 900 million in twenties. So three times as much media in a year,

right? You know, 40% of that is simply because the government decided to increase electricity tariffs by 17% and they have very, very clear big move. Leave us. What? You know the company. So yeah, we see we see a lot of upside and grease. And frankly, the current leadership, you know, is a big part of why there's

some pretty remarkable we're having this conversation about Greece considering where the country was, You know, eight years ago. I do not think that he would turn around in my lifetime. But there you go. That's okay. Wonderful. Philip Reed, thank you so much for joining us today. It And we look forward to speaking to your all again next night. Thank you for listening to the contrarian investor podcast way. Hope you enjoyed this episode to subscribe to this podcast simply open your favorite podcast software and search for contrarian ancestor. Follow us and social media by searching for contrarian investor on Twitter and Instagram. Simons reports on feedback at contrary import dot com, we look forward to speaking to again next time.