You can’t go back in time to invest in an Amazon or Google, but the next best thing is to find countries that will grow such businesses, and then invest in businesses that will benefit from them directly or indirectly.
– Ori Eyal, Emerging Value Capital Management
Ori Eyal, founder and Managing Partner at Emerging Value Capital Management, in an exclusive conversation with The Manual of Ideas discussed the importance of a macro perspective in global value investing, as well as the accrual benefits of economic trickle down effects.
Up first are Ori’s insights on should global value investors care about macro or not:
Macro does not matter in US, but outside the US it matters a lot. You can come-up with a great company to invest in, but you won’t make money if the country is falling apart. One of the guiding principles as a global value investor is to look at both the company as well as macro – research the company and the country.
Next, Ori speaks about the strong economies, strong countries and the benefits of technological trickle-down innovation:
There are benefits of technological innovation trickling down to banks, REITs, retailers – they benefit greatly from the massive technological innovation, which in turn pulls-up the whole economy with it. This is a far better outcome than a country where the whole economy is not keeping-up, which exacerbates the trickle down effect to most industry sectors.
Finally, Ori discusses how to think about existential risks & position sizing:
You always have to be careful thinking about country specific risks, and in some situations focusing on hedging currency risks might be a better investment of time than worrying about existential risks
Ori’s perspective on the importance of macro in global value investing, and thinking carefully about strength of economies & trickle-down effects are a highly unique perspective on the risks and opportunities in global value investing.