Expert Investor: Mary Manning – Why Asia Is Too Big To Ignore

BRYCE LESKE: [00:00:40] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status, our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? [00:00:55][14.7]

ALEC RENEHAN: [00:00:55] I'm very good price. I'm very excited for this interview. We have done a lot of industry deep dives in our time on equity markets. But one thing that we've spoken about is doing more country deep dives or continent deep dives and really getting to understand different parts of the world a little bit better. Like investing is truly global now. We've spoken a little bit, a little bit about Europe on our Osborn's TV show. But today we're going to be doing a deep dove on our closest neighbor and probably one of the more exciting regions in the world. And that's Asia. [00:01:29][33.7]

BRYCE LESKE: [00:01:29] That is Asia. And we have an expert in the studio to help us through it. We would love and very happy to welcome Mary Manning. Very welcome. [00:01:37][7.3]

MARRY MANNING: [00:01:37] Thank you very much for having me. [00:01:38][0.8]

BRYCE LESKE: [00:01:39] So for those of you who haven't come across Mary before, she is the portfolio manager at Ellerston Capital for the Ellerston Asia Growth Fund Ellerston Asian Investments, which is available on the ASX. The stock ticker is a I and the Ellerston India Fund. Prior to joining Ellerston, Mary spent five years at Oaktree Capital Management, the famous firm co-founded by Howard Marks. Mary also has an MBA from Harvard and a Ph.D. in economics from Sydney University and is one of Australia's foremost experts in investing in Asian markets. And we're going to be unpacking it all today. So we're very excited. [00:02:18][38.9]

MARRY MANNING: [00:02:18] Mary Kate, thanks so much for having me. [00:02:20][1.5]

ALEC RENEHAN: [00:02:20] Very impressive CV. I don't think we could have got anyone better to help us unpack Asia before we get into the continent and the investing opportunity there. We have a couple of introductory questions just to get to know you a little bit better. And where we like to start with these interviews is the story of your first investment. We generally find there's a good lesson or a good story that comes out of it. So to kick us off today, can you tell us the story of your first investment? [00:02:46][26.0]

MARRY MANNING: [00:02:47] Yes, absolutely. It's quite interesting what my first investment was, because it has kind of been a precursor to my whole career investing in Asia and emerging markets. So when I was in business school, this was late 1990s. I do a summer internship in Beijing and I worked at a company that was called VXI China. It was one of the first VC companies in all of China and it just helped Chinese entrepreneurs try to like get off the ground. And we worked in an office that had no landlines and everybody had a mobile phone and some people actually had two mobile phones. One was their work mobile phone, and one was their personal mobile phone. And most of the entrepreneurs that we worked with, they didn't have real offices either. They were kind of on the go and they had one or if not to mobile phones. So my first investment was actually China Mobile. And if anybody who's listening is one of my investors, my phone, don't worry. Now I do much more work on the companies in which I invest. But at the time, literally, that was my analysis, that there are a billion more than a billion people in this country and they all are going to have at least one phone. And so it was the math was pretty simple. And, you know, China Mobile was kind of the only way to play that China Mobile at the time, had an ADR and still does. And so as an investor base in North America, it was easy to buy. I think that's we can get into it later in the show. But that's one of the issues people often have with investing in Asia and some of the different countries in Asia is that it's harder to invest. You may need a different account or you you know, there's there's different tax implications or something of that. China Mobile was super easy to ADR, so I bought it and I held onto it for about five or six years. So that was my first investment. And it's quite interesting that now I spend almost all my day looking at stocks in China and elsewhere in Asia. [00:04:22][95.2]

ALEC RENEHAN: [00:04:23] And just for people who heard the acronym ADR and I'm familiar with it, it stands for American Depository Receipt. Can you just quickly explain what that means and how it allowed you to invest in a Chinese stock? [00:04:34][11.2]

MARRY MANNING: [00:04:35] Yeah, absolutely. So Chinese stocks or stocks that aren't from America can live in America as ADRs and they can list on Nasdaq or whatever exchange. But then you just buy it like it would be an American stock. But it's it's domiciled elsewhere and it's revenues and earnings come from elsewhere. But it's very easy because it's just like any other U.S. stock. So some of the biggest stocks in the world, like Alibaba, for example, is has an ADR, a lot of stocks, as have ADRs, because it just makes it easier for them to pay for people who invest in them. [00:05:03][28.1]

BRYCE LESKE: [00:05:04] So, Mary, you have worked at some of the best funds in the world for some pretty legendary investors, George Soros, Howard Marks. What have been some of the major lessons that you've taken from these investors? [00:05:16][11.8]

MARRY MANNING: [00:05:17] Yeah, it's a good question because I do feel very blessed to have worked for these kinds of, you know, iconic investors and certainly at the beginning of my career. So I guess working at Soros, one thing that I saw, you know, I wasn't like sitting across the table from luxury and I was down the hall from him. But I guess he obviously made his money. You know, shorting the British pound and breaking the Bank of England was kind of his his signature trade and those don't come along very often. So I think one of the main things that I learned working there was the benefit of having a big world view. So the first time I actually met George was not in the office. It was at the Council of Foreign Relations in New York, which is an organization. And they bring in world leaders. And you have to your firm or you as a person have to be a member of it. But it's very high level. Like, you know, at the time I was doing, you know, Tabo Mbeki was the president of South Africa. So you just go and go and meet like these these kinds of things. So I actually met him there before I met him in the office. And then I introduced myself. I said, actually, I work for you. And so just to sort of meet just to know that at his age at the time, which was already, you know, 60, 70 probably, that he's still so interested in world events and had such a big world view. I mean, he's an iconic investor, but he has done a lot of intellectual thinking about the theory of reflects the reflexivity and about open societies. And he has his whole philanthropic just the ability to be a big thinker. But then take those those, you know, very high level thoughts and crystallize them into a trade that makes money. I think that that that is an amazing skill to have very few people in the world to have that people are either at the 30000 foot view brain or the red. I'm a tactical. You know, I have a tactical brain and I'm making the trades. So I would be able to marry those two and have exposure to someone like that earlier in my career is is was really important. Working at Oak Tree, I guess I'll say two things. One is just again, you know, Howard, Mark's brain is is amazing. So, again, I wasn't sitting across the table from him, but the I'll give you one anecdotal evidence. So I actually worked at Oak Tree in New York. And then I left for three years and I did my Ph.D. and then I went back to Oak Tree in the Singapore office. And at one time Howard came to visit the Singapore office. There was only about 10 of us. So we all went out for lunch and I was sitting next to him and I'm thinking, oh, good. I'm going to say for the entire lunch to Howard Marks. And so I mentioned, oh, you know, I just finished my Ph.D. and now I've come back to the firm. And he was like, oh, what did you do? And my thesis was totally random. It was about like African economic development and the impact of epidemics on, you know, health. And he his intelligence is so like both deep and broad. At the same time, I've heard that, like Bill Gates is is similar, that instead of saying, oh, that sounds pretty random onto the next thing, he's like, what? What were your thesis conclusions? Well, what does this mean? What does this mean for health care? And just having the the intellect to be able to have a topic that he probably knew absolutely nothing about. And he kind of got the whole gist of what I just spent four years analyzing in about two minutes or so. Just to have exposure to people who have that sort of intellect is really important. I think the other thing that that Howard is is amazing for is is taking the firm are on a journey. So when I first started, Oaktree was I mean, it was it was a very established firm. But over the time that I was there, the firm doubled and then they, you know, expanded around the world. So they had Los Angeles in New York and London and multiple Asian offices. And then they did sort of a back door listing and then they did a full IPO and then he sold the company. So from a wealth generation perspective, you know, there's a lot of people who are good investors, but they actually don't do a very good job of running their own firm. And I think that that Howard Marks is an amazing example of someone who can do both invest in other people's companies and use all that knowledge that you use to make good investing decisions to actually, you know, do it himself. Yeah. [00:09:01][224.1]

ALEC RENEHAN: [00:09:02] Mm hmm. Well, a lot to unpack the I think the first thing is you have to be incredibly smart. But then it also sounds like they're both incredibly curious. You know, Howard wanted to learn about your thesis. George wants to learn about things outside, like the investing nasch. And I guess they're constantly trying to learn more. [00:09:22][20.4]

MARRY MANNING: [00:09:23] Yeah, absolutely. And I think that that's important. You know, it has had implications for my career. And it's probably one of the reasons why I really like doing emerging markets and like investing globally is because there's always something new to learn and there's always something going on in a corner of the world. And it's obviously, you know, often very important to that corner of the world. And so I feel like I've never been bored a day of my life in this career because there's there's always something to learn. And I think having those people as examples was good to have early on in my career. Mhm. [00:09:51][28.3]

ALEC RENEHAN: [00:09:52] So you worked for some of the best investors in the world. You've done a Harvard MBA, you've done a PhD, a Sydney Uni. Throughout all that experience and all that learning, have you developed a personal investing philosophy? [00:10:04][12.5]

MARRY MANNING: [00:10:05] Yes, absolutely. So I'm a growth investor and that is that if stylistically I am a growth investor and that aligns very nicely with investing in certain sectors and in certain regions. So Asia's an amazing structural growth story. And so for me, finding high growth companies in the best structural growth story in the world is relatively easy. I also the my favorite sectors are the sectors where I have expertize our technology, consumer and financials. And those are also, you know, growth sectors. So I am definitely looking for growth. And part of that, you know, the first. Firms that I work for in investing, or certainly, you know, when I was buying China Mobile, that I didn't start from day one with that it was something that was formed over time. And one thing, you know, if your listeners are interested, one thing that really helped me crystallize my thinking about being a growth investor was just actually crunching the numbers. So I worked for for I was actually at Ellerston when I first started there and the portfolio manager that I worked for, you had to get 50 percent upside to be able to pick a stock. And so in markets, particularly developed markets, to get mispricing of 50 percent is very hard. Like markets are efficient. And as you guys know, you know, technology is making markets more efficient every single day. So to say that there's a stock out there, that is where the multiple is 50 percent mispriced is very rare to find. So if you're an analyst trying to find five, 50 percent upside, you figured working backwards, you figure out very quickly this stock is going to have to have some growth if it has some growth and the multiples maybe a little bit off, I can get my 50 percent upside. If it has a lot of growth, I don't even need any change in the multiple at all. It can just grow to it. It can compound to it's 50 percent upside over a few years. And so that really for me, that discipline of having to find a certain amount of upside and realizing I'm not going to get there inefficient markets without growth really sort of drove me into the growth corner. So that's my style in terms of investing. But your question was it was also about philosophy. So I think, you know, my philosophy is investors that, you know, No. One, you are I have a fiduciary duty. And so this is not about having fun or it's interesting. Like, it is fun and it is interesting. But that's that's not the point. The point is that you have a fiduciary duty to people who have entrusted you with your money. And, you know, the second thing which is getting a lot more attention now is that you are actually a steward of capital and that, you know, the sort of the rise of ESG and sustainable investing is really highlighting that, that, again, it's not about having fun and being interesting. It's about doing your fiduciary duty and being a good steward of capital. And that's sort of my philosophy about investing and having like and a number of different funds that access the retail market is actually very good. It keeps you in check on those two things. So, you know, I met a lady and she's like, well, my parents just passed away and they have given me this inheritance and I think I'm going to put it in your fund. And I was like, you know, I was like, first of all, talk to your financial adviser, please. But, you know, knowing that you you are like looking people in the eye and them saying, you know, I want a dividend because this is what I live off of or something like that. That is very good for me philosophically as an investor to remember that this is other people's money and I have a duty to invest it in a certain way. [00:13:08][182.9]

BRYCE LESKE: [00:13:09] So let's dig into Asia now as an investment opportunity. You've mentioned there that you're a growth investor, so I'm assuming that is one of the drawcards for specialty in Asia. But why else are you interested in Asia as an investment opportunity? [00:13:25][15.6]

MARRY MANNING: [00:13:26] Yeah, so maybe I'll just give a few points around the growth story first, because it's it's not as simple as just saying it's high growth. I think the important thing is that it's structural growth so you can get growth. In fact, right now you're getting growth in a lot of markets because last year sucked in a lot of markets so that if you come from a low base, then then you can get growth. But Asia Asia's different. It's a structural growth story in terms of demographics. And, you know, India, which I think we'll talk about a bit later, is a good example of how you're going to and Indonesia is another one. You're going to get growth just by the demographic change that happens. And then because these are emerging economies or less developed economies, you have a lot of things around that that are also structural growth. So whether it's the build out of infrastructure. So, you know, when I first went to some of these economies 20 plus years ago, when I started investing like there was no infrastructure, and seeing that build out, you know, provides a backdrop for growth. There's technological leapfrogging. So we're seeing this a lot. You know, we saw it with mobile phones. That's kind of the example I gave at the beginning. You're seeing it now with e-commerce. So I think you go to some developing countries in Asia or elsewhere in the world and there's like no shopping malls, but everybody has a phone. And every company in every country in the world now has like some sort of e-commerce behemoth, whether it's Alibaba going in or whether it's homegrown. You know, in my view, they're just going to leapfrog that whole Billett of shopping mall sort of thing. So, you know, Asia has has that technological leapfrogging part of the structural growth story. And then there's just sort of overall productivity gains that happen in Asia, which don't happen in other markets. So that growth is is structural and it's sustainable. And that's why I like it a from an investing perspective. I guess the second thing is valuations are generally lower. So there still is sort of that emerging market risk premium. And we can talk about that later. I have quite strong views on that because, you know, if you look at what's happened in the U.S. and Europe over the last, let's call it four years, where everything that happened with Trump and, you know, sort of putting bans on certain assets and, you know, civil unrest on Capitol Hill and a major pandemic that's completely out of control. And Brexit and a lot of things that happened to developed markets. If those things happen in emerging markets, they would get absolutely smashed, but they happened in the US and it keeps it an all-time high, you know, every day. So I think that that that that. Valuation discount that gets placed on emerging markets is largely unfounded for certain countries, I say like most of North Asia, for example, that's unfounded at this time. So you have the fact that they're growing. And like I was saying before, in terms of how are you going to get your upside, they're growing a lot faster and the multiples lower. So if you take that high growth and you put in a higher multiple, you can get higher for valuations for the stocks. And then I think the last thing is that Asia is potentially less efficient. So, you know, there's there's, you know, sort of more ways to find those inefficiencies than there would be maybe in some developed markets. [00:16:12][165.5]

ALEC RENEHAN: [00:16:14] So I think Asia is an interesting investing opportunity for a lot of retail investors in Australia and in most Western countries. Are there any key misconceptions you see about the continent and investing in the continent from the retail investing community? [00:16:28][14.9]

MARRY MANNING: [00:16:29] Yeah, there's quite a few, actually. I guess at the top of the list would be that Asian countries have are Asian companies are bad ESG, that that is something that I hear all the time. Is that. Oh, but isn't there because in corruption high and how can I be sure the accounts are right and stuff like that. So, you know, my view is that companies in Asia that ESG is not nearly as bad as people think it is. If you actually meet with the companies, particularly in the large cap, you know, my the average market cap of my portfolio is 200 billion dollars. So when you're when you're up at that end, you're not dealing with sort of your family minority shareholder squabbles. You are you know, these are very high quality companies and the ESG is generally a lot better than people think it is. The flip side of that coin is that I don't think ESG in Australia is nearly as good as people think it is. And things like the royal commission and, you know, recent thing of some of the commodity companies have shown that. So therefore, we put those two things together. And the gap between ESG in Asia and Australia is much smaller than people think it is. I think the second thing is that, you know, people misconception is that there's extremely heightened political risk in in Asia and there certainly is some political risk. But I've been investing in Asia since that, you know, in investment capacity in Asia since the Asian financial crisis. And there are always ups and downs in politics. And things generally continue to go up and there's ups and downs in politics in Europe and the US also. And that that some it's a bit of a double standard that isn't a reason not to invest in those countries, but people use an excuse not to not to invest in Asia. And then I think the last misconception is for for domestic retail investors is that they think they can get exposure to Asia, enough exposure to Asia via domestic stocks. So they say, oh, I don't need to invest in China. I own Rio and BHP. And if China is doing well, these companies will do well. Or, you know, I owned, you know, some milk company and it is selling lots of infant formula and milk to China. So, you know, I'm covered. And I think that that is a very simplistic view of Asia. So obviously, I think one of the best reasons to invest in Asia is because of the technology companies there. And you are not getting that sort of indirect exposure by investing in Chinese, I mean, in Australian commodity companies or Australian consumer companies that sell to China. And, you know, so so that and also, you know, China is just one country in Asia. That's the other thing which bugs me, to be frank, is that people are saying, well, I have exposure, I have indirect exposure to to China. And it's like, well, but there's thirteen countries in my in my benchmark and they're all very different. And so just having indirect exposure to one of them does not count as Asian equity like sufficient Asian equity exposure in my view. [00:19:05][155.1]

ALEC RENEHAN: [00:19:05] We're probably going to even though you've said that about China, we're probably going to focus mostly on China and India in this discussion. But of those 13 countries outside of China and India, which one do you get most excited about? [00:19:19][13.7]

MARRY MANNING: [00:19:20] Oh, that's a good question. So I'll give you a long term view, because things are a bit weird now because of covid. So when I say I'm excited, it's not like I'm excited about investing there tomorrow. I think obviously Indonesia has a lot of potential because it's a very big country, has a very young population, has a lot of sort of demographic similarities with India. And there's some really interesting companies that are coming up. So go Jack is one. And, you know, they've just they're merging with a PDA and they're going to list potentially possibly a spark or they're definitely going to list in the U.S. and to have that sort of first unicorn coming out of that, that's really exciting. I also quite like, again, not right this moment, but in general, I like the Indonesian banks. I mean, if you look at the credit penetration in countries like Indonesia, it's very, very small. And if you look at the opportunities for technological leapfrogging in Indonesia because of the geography, like there's so many islands and you don't want a bank branch on every single island. So it's very efficient, have digital banking. So I think there's a lot of opportunities there. Korea and Taiwan are they're not really emerging markets, but obviously they're still part of Asia. But the technology supply chain and the the growth of mid-cap technology companies in Korea and Taiwan is a dominant feature sort of of. Equity markets and so I think that's not a new story, but sort of the dominance of those two countries in terms of technology is not going away anytime soon. Hmm. [00:20:47][87.3]

BRYCE LESKE: [00:20:48] So we did have a question from our community around the political stability and investing in Asia. But I feel like you've kind of touched on that in terms of not really worrying about it, given that it happens all over the world. So let's move on to some of the major industries and sectors in Asia. What are you kind of focusing on at the moment? [00:21:09][20.7]

MARRY MANNING: [00:21:10] So for the I started the fund almost six years ago now, and there's three core sectors and there always has been, and there probably always will be. So are technology, financials and consumer. So those are the three growth sectors together. Those typically account for 85 percent of my portfolio. And part of that is because, you know, in my process or looking for for growth companies, those sectors are the ones that fall at the bottom of the process because they meet all our growth criteria and our high quality criteria and our valuation upside, although all the different things that we're looking for in the companies that we invest. But I think there's there's reasons why they fall through which are worth going through. So technology Asia is a technology technological powerhouse. And you've seen sort of with the rise of the Tencent and Alibaba parts of the world, that China really sees technology as a way that they're competing with the U.S. And it was really about four years ago now, we actually it was in the middle of the trade war when Trump was going really hard on the trade war. And we actually wrote like sort of a white paper about this, saying that it's not actually a trade war. This is about technology. At the end of the day, this is going to be about technology and that is going to be the determining factor with respect to the pace of American hegemonic decline versus the rise of China. So I think that that's a really exciting reason to invest in Asia, and especially for Australian investors. It offers diversification because there aren't that many technol like, you know, very high tech, large cap opportunities domestically. And the feedback that I've heard from our investors is that they already own Fang and they have for a long time now. So to increase your exposure now and diversify that technology exposure, Asia is a really, really good way to do that. And I guess the second is consumer. So, you know, you have two countries in Asia that have over one point two billion people. And for a small market like Australia, that is just, you know, the opportunities that that many people like, just bodies on the ground. And and what they're going to consume as those countries continue to develop is really, really powerful and then financials. So when I was at Saurus in the financial Xalisco financials, kind of like my pet, my pet sector. And the reason I like it, well, I like it globally right now, frankly, because during covid a lot of financials and a lot of financial company management thought there was going to be a huge covid NPL cycle. So they all did major provisions and then that NPL cycle has not shown up. So now they are either having very small provisions because they've all written before. There's even some scope in certain countries for there to be right back. So that's a very positive part of the financial story. And then also, you know, interest rates, they're certainly not going any lower, so they can only be flat or up. And that's generally positive for financials. And also right now, as I'm sure you've talked about on on other shows, you're seeing a rotation out of some of the higher, like growthy, extremely expensive names into Lapine names and financials generally fit that bill. Like the average PE of my tech portfolio is probably 30 times and the average PE of my finance, the financials in the portfolio is probably 11 times. So for that reason, I'm massively overweight financials now, but in general in Asia, financials are good because credit penetration is so low in Asia. So like in India, you know, mortgage penetration is nine percent. So they could grow mortgages at 20 percent a year for many, many, many years. And they're not going to run out of people who want to mortgage. And so overall, like putting that together, I think financials is a really interesting sector. So it's, you know, tech, consumer financials. [00:24:29][199.4]

ALEC RENEHAN: [00:24:31] So we've we've touched on the fact that there are two countries in Asia with over one point two billion people, China and India. By 2050, they're expected to be the two largest economies in the world. So both of them to leapfrog the US and everyone else. How do I guess how do you compare and how do you think about these two countries from an investment perspective? [00:24:51][20.9]

MARRY MANNING: [00:24:52] Well, that's a great question, because people often ask me, is India the next China? And I say, no, it's the first India. It's not going to, you know, to think that India is on the same development pathway as China, but it's just a decade behind maybe is not the right way to look at it. So I don't like starting with the negative, but if how I look at it, that's certainly not how I look at it. I look at them as and, you know, I do have background as a development economist. So I certainly recognize the developmental paths of these two countries and they're not the same. And so sort of the earlier question that the reader had before, you know, obviously India's the biggest democracy in the world or the listener had before India, the biggest democracy in the world. And China is not a democracy. So right from the get go, you have to two totally different countries. But the way that I look. And it is you from a macro perspective, I think you need exposure to both. So, you know, I have this slide in one of my presentations that's like Asias too big to ignore. And I think that for both of those countries, if you think of what you said at the beginning, that by 2050 they're going to be the two largest economies in the world. The last numbers I looked at, which are maybe a little bit off because of covid, but by 2030, it's expected that China is the biggest economy, then the U.S. and then India. So you have two of the three largest economies in the world are in Asia. But when you ask people about their portfolios, they generally have no exposure of very little exposure to either. So I think at some point people need to get their head around the fact that, you know, these are massive economies and you're going to need to have exposure to them. And then other than that, though, one of the things that I'm hoping is more similar between the countries is that you've seen the rise of these huge mega cap tech companies in China, and thus far you haven't seen that in India. But I think we can talk about that later. There is a very attractive IPO pipeline in India and we're hoping that there's a homegrown Tencent and there's a homegrown Alibaba and there are certain supply chains and things that list in India or companies that become very big in India so that it's similar to China in terms of those mega-cap tech companies. [00:26:52][120.0]

ALEC RENEHAN: [00:26:54] Yeah, we are very excited to get into that. And some of the companies specific stuff before we do. You know, with China and India, the demographic story is, you know, the big conversation. And you spoke about that earlier in terms of structural drivers. And, you know, there's this saying demographics is destiny. And, you know, people sort of think it's almost preordained that all this development will happen because of the demographic mix. But I guess, you know, China has seen a lot of that growth. India not so much. There's a lot of potential growth there, but it's not, I guess, guaranteed. What makes you confident that India will be able to realize the potential that the demographics offer? [00:27:37][43.4]

MARRY MANNING: [00:27:38] Yeah, OK, so this is that is a very good question. And before I answer it, I'll just say, obviously, I am aware that India is going through a difficult time right now and that covid in India, certainly the second wave has been absolutely devastating and will continue to be for at least the next few months. So the comment that I say with a longer term perspective, not as what's happening right this moment. So I get to ask that question a lot because people say India always looks like it has a lot of potential. And is it is it delivering? And to be frank, when I first started investing in Asia and emerging markets, India was not my favorite country, even though those demographic building blocks were there. And one of the main reasons was they didn't have the policy environment in place. They didn't have the political leaders in place, and they didn't have the leadership there to sort of taking India on the path that it needed to go on. I remember, like historically, India had all this import substitution and they still have a big current account deficit. They have to import a lot of oil. And it was just kind of a bit of a macro mess. And I think that in 2014, when Prime Minister Modi was elected, that really changed a lot of things. So, you know, he did a lot of very bold policy changes, whether it's like democratization or introduction of the GST or reform of the banking system. I mean, these sound boring, but they're actually for a country like India, they're actually really important to to get right. So I think that having the right political leadership is absolutely critical for India, achieving its potential that the train is moving no matter what. But if you have a good conductor like, it can just move a lot faster and that will be much better for India's long term development. I think the other thing that's important to highlight about India is that there are these big companies like Infosys and and TCS, which, you know, they're like almost 100 billion or over 100 billion dollar market cap companies now. And they have an expertize in I.T. services. And India is also the biggest manufacturer in the world of pharmaceutical products. So a lot of people don't appreciate this about India. They think it's it's the consumer story. And you want to buy like Nestlé and Hindustan, Unilever and in India, because there's all these Indians that are going to be buying more stuff as the economy develops. But it's important to highlight that India's actually been very, very successful in actually exporting different products, too. So back to your original question. That's one way and it's completely different than China. China went down the sort of manufacturing route and India is like services, you know, and pharma. So, yeah, I think India needs the right political leadership. And Modi, it'll be interesting to see how the population responds to his handling of covid, because, as you may know, there's state elections going on. And that's part of the reason why the infections have gotten so out of control because he just kept on campaigning and kept encouraging hundreds of thousands of people to go to rallies. And the criticism, which I actually agree with, is that he has put winning winning state elections over the health of Indian people. And whether that comes back to haunt him in the next election is yet to be seen. [00:30:22][163.5]

ALEC RENEHAN: [00:30:22] So Mary were interviewing someone on the show soon. David Halpert from Prince Street Capital. He has this thesis around digital decolonization and how the big US tech companies have. Basically colonized the world and that a lot of countries are now decolonizing in some ways and they're seeing their own sort of platforms, you know, payments, platforms, social media platforms sort of push the US giants out. Is that a trend that you're seeing in Asian markets? [00:30:56][34.2]

MARRY MANNING: [00:30:57] That's very interesting. I'd never thought of it that way before. So in China, definitely no. So China has had the wall up, and like nobody's getting in. And that is part of the reason why you've had the ascent of the 10 cents and the Alibaba and even now the PDS and Matson's that you mean you have like half a dozen Chinese Internet and tech-related companies that have market caps of 200 billion-plus? So, yeah, it's easy to thrive when there's a big wall up that's not letting in your international competitors. So I'd say China definitely not. I think for and Korea, I would also say definitely not. So Korea, you know, there's a company called Naver, which we own, which is kind of like the its kind of like the Google of Korea. There's another company called Chacao, which is kind of like the Tencent of Korea. And it's spinning outhouses like Sculpey and Kakao Bank. So there's I would say no in Korea. Part of this may also be language. So you have countries that have a completely different languages and have the right like they don't use they have a different like they have characters instead of instead of letters that that could be a big barrier to entry to. Some of the US funds are the sort of U.S. tech companies in ASEAN. I would say that that that is probably true. And in India, I would say that sadly, that is definitely true. So I think Facebook is like India's second biggest market in the world or something like that. And I even notice. So almost all of the broking and interaction with the brokers and sell side analysts in India on WhatsApp. So it's it's very much a Facebook WhatsApp sort of market. And whether, you know, Reliance and Reliance Geo can combat that at this time, you know, it's not exactly the same. But, you know, that's a question that remains to be seen. So I would say it differs across Asia. India is probably the one that's been colonized the most and one that has been colonized the least. [00:32:50][113.2]

BRYCE LESKE: [00:32:51] Well, let's chat about Reliance and Geo, but before we do, we'll just take a quick break to hear from our sponsors. So, Mary, any conversation about Indian companies obviously has to start with Reliance, its ticker is R-AL. It is India's largest public company and it has been of interest to many Western tech companies, you know, Alphabet, Facebook, Microsoft. What is the opportunity with Reliance and its subsidiary, GEO? [00:33:20][29.1]

MARRY MANNING: [00:33:21] OK, so I say that the opportunity is threefold. First of all, Reliance is a conglomerate and it has three main parts. So the first is sort of their old boring business, which is like petrochemicals and energy. And people are like, oh, it's news, but it's actually important in terms of the other two sector segments because this is a cash cow and it allows them to continue to spit out cash and spit out cash every single year, billions of dollars of free cash flow so that they could invest in you and invest in retail and bring them up to the size of companies that they have now. The other thing I mentioned about the boring bit is that Saudi Aramco is taking a stake in it. And, you know, NBSK, the prince was on CNBC recently saying, you know, the deal is going to happen very soon, probably next three or six months. And so the fact that you know, Saudi Aramco is buying into their energy assets is a big sort of tick in the box because if anyone knows about energy assets, it's the Saudis. So that's the business that nobody really likes. But it's still very important. OK, and then the geo business, basically, they had nothing about five, six years ago. They had no foray into telecom at all. It was not one of their core businesses. And they spent tens of billions of dollars building up a mobile phone network, basically from scratch, and now they have over 400 million subscribers. So to do that in such a short period of time is amazing. And part of the way that they did it was that it was lost leading for quite a long time. But when you have this cash cow spitting stuff out, you can do that, which none of their competitors had that option. So they just really, like, cleaned up the competitive landscape. So now when you meet with Reliance IRR and talk about GEO, they say that they want to be the Tencent of India. And again, that kind of bugs me. It's like, is India the next China just like be your own, be your own thing. But I think what they mean by that is that they want to be an ecosystem. So the thing about Tencent Alibaba is that their ecosystem stock so once you're in WeChat, then you get offered all this other stuff. It's kind of like being in the in the Apple ecosystem. Once you're in, you're not going to go get a Samsung phone. [00:35:17][115.2]

ALEC RENEHAN: [00:35:17] Yeah, we've spoken about super apps a little bit on the show and in our thoughts Darters email and. Yeah, I guess that's the perfect example of that. [00:35:26][8.5]

MARRY MANNING: [00:35:26] Yes, exactly. So I think that's what reliance they don't maybe really want to be Tencent in terms of they want lots of revenue from gaming, but they just want to be an ecosystem. And thus far they are they are doing really well at that in terms of the other apps that they're offering and the sort of connectivity between the different businesses. So I think that's going to be very powerful. And then the third business is retail. And that is a you know, the synergies between retail and GEO are very strong because like I was saying before, everyone has a phone and you're actually the biggest retailer. The opportunity for e-commerce is very strong. So those two businesses, GEO and retail, are going to get spun out from Reliance sometime in the next two years. So the deal will probably go first. It's anticipated later in twenty twenty-one or twenty twenty-two, and then Reliance Retail will go after that. So and these once they get spun out, the estimated market caps are going to be very big. So is supposed to be around 70 billion US and retail will be about 60 billion us. And so these are like to be spun out at that, that size is really amazing. So that's the I mean, that's the operational opportunity for Reliance. But the investment opportunity is that when these companies list, they're going to trade at much higher multiples and they're trading at within Reliance. So we do some of the parts all the time on Reliance. And, you know, if they list at 60 or 70 and if Saudi Aramco comes in at a valuation that's higher than what's in your some of the parts than the current Reliance stock will go up because that's some of the parts is going higher. [00:36:56][89.7]

ALEC RENEHAN: [00:36:57] So you mentioned retail there. And if we stay in India, a big e-commerce battle is, I guess, underway. Amazon in India and then Flipkart, which is owned by Wal-Mart, is is also there. And I guess they're really going head to head for supremacy in the Indian e-commerce market. What do you how do you think about, you know, the e-commerce, the state of e-commerce in India and Flipkart, I think is about to IPOs. So if you have any thoughts on on that proposed IPO, I would love to hear them. [00:37:28][31.5]

MARRY MANNING: [00:37:29] Yeah. So I guess there's a couple of things. One is that they are going head to head and to get back to Brice's earlier comment, the fact that Alphabet, Facebook and Microsoft have all invested in Reliance and that Wal-Mart has bought into Flipkart and they're going head to head with Amazon, this shows you that when the CEOs and the head of strategies at these big global tech firms looking around the world, their eyes are all have all ended up it and India at some point because there is no other market in the world where there's one company that all those. Big competitors from the US have gone in and like Wal-Mart, this is one of their biggest forays into e-commerce anywhere and that they could have done anywhere in the world, they could have done it in the U.S. and they they chose India because that's where they see the sort of opportunity set. So I think the thing is that one thing to highlight about Amazon and and Flipkart is that India is a massive market. So it doesn't have to be winner take all. There could definitely be room in it in a country of one point two plus billion people. And, you know, one of the third one of the large economies in the world for for two major e-commerce players. The other thing I'll say is I actually did a study for an organization called Asia Business Link, and they're sort of mandate is to help Australian businesses succeed in Asia. So I did a study for them about how multinationals have succeeded in India. And it is a difficult market to succeed. And if you're a multinational, it is very, very localized. So one of our companies, Hindustan, Unilever, you know, it's obviously Unilever company in India. They have this whole strategy called winning in many Indias and they break India down into it's not even by the state. It's like this is a massive country. And you can think of it as a massive country. Need to think of it as like many, many different smaller companies, countries. Sorry. And I think there are a lot of examples of multinationals or big U.S. companies that go into India and they don't understand they don't understand that India is different and they understand that there's lots of different Indias within India and they just fail and pull out. You know, a lot of the auto companies are good examples there. So I don't know how Amazon is going to do, to be frank. But it's much harder to be an outsider coming into India and trying to succeed than it is to already be on the ground. So the Flipkart IPO is supposed to come sometime. There's no timeframe on that. Like like Reliance and Geo. It's it's pretty, you know, confirmed when they're when they're going to come. But it's estimated to be around 25, 30 billion dollars. So, again, these are not like little microcaps that are listening there. They're listing it at very big valuations. But that's something that we will definitely be interested in participating in when it does happen. [00:39:58][149.2]

ALEC RENEHAN: [00:39:58] So given we're talking about, you know, big tech companies and, you know, sort of multibillion-dollar market cap companies, if we move to China, we've touched on a few in this conversation, Tencent, Alibaba, those Jojoy, May, Twan, Baidu, like these are massive companies in their own right. Most of them are pretty heavily localized in China. How do you think about the, I guess, international opportunities for a company like Tencent or a company like Baidu? Like do you think they will break out of China or do you think they will be domestically focused tech companies? [00:40:36][37.3]

MARRY MANNING: [00:40:37] I think they will continue to be domestically focused because there are so many like so they have their ecosystems and then they have like different verticals and then they have, you know, so they can go down and they can go out, but they can continue to go down and out without leaving China. So, for example, give you Baidu is a company that I own in the portfolio right now. I didn't own it for a really long time. So it's like the Google of China. And it was just kind of like a boring search thing. And ad revenues were going down and there was no reason to own it. And they have recently gone into the electric vehicle space. So they have partnered with Julia, which is one of the domestic auto OEMs, and they are providing sort of like the tech for automated driving. And they have a huge cloud business and they have all these other sort of ancillary businesses to search which are not currently in the valuation, which make it really exciting at this time. If you look now for Alibaba and Tencent, you know, Cloud is a major driver. So these aren't, you know, like for Tencent, games are still the cash cow. But there's other things that are growing much faster. Similarly for Alibaba and May one, they right now are going very, very hard into grocery. So Matsen did a ten billion dollar equity raise earlier this week and they said we're spending six billion dollars a quarter to get to do a land grab in grocery. And so if they're doing landgrab in grocery, well, Alibaba is going to have to do it also. Otherwise, they'll lose market share. So I think that there's still so much going on in China that they don't really need to go elsewhere. That's operational. But one thing I will say is that you should Google it if you have time after. But there's just like her own unicorn list where this organization goes through, like ranks and lists all the unicorns in the world. And they also have part of the report which looks at what are the biggest VC funds in the world. And actually, Alibaba and Tencent are not only two of the biggest tech companies in the world, they're two of the biggest VC companies in the world. If you define that as an investment in unicorns. [00:42:26][109.9]

ALEC RENEHAN: [00:42:26] We did a deep dove on Tencent at the start of the year and we found a spreadsheet that someone had put together where they tried to list as many Tencent visa investments as possible. And they estimated there was up to seven hundred. I don't think there's a full list anywhere, but we're going through the list. And it was like, you know, Buzzi companies like roadblocks after pay like they might be a Chinese operator, but they are investing globally. [00:42:26][0.0]

MARRY MANNING: [00:42:50] Exactly. So that's I think that internationalization will happen more from an investment perspective than it will from an operational perspective. [00:42:57][7.6]

BRYCE LESKE: [00:42:58] So, Mary, you spoke, spoken. A lot in recent presentations about the IPO pipeline in Asia. Why are you so excited about it at this time and how is it different from the IPO pipeline elsewhere? [00:43:08][9.8]

MARRY MANNING: [00:43:09] Yeah, so I'm super excited about it. So I've been covering Asia for 20 plus years. I've never seen the IPO pipeline this hot or this exciting. So part of the reason is that they're all new economy companies. So when I first started doing Asia, the IPO pipeline was like, you know, the National Bank is getting privatized or, you know, there's some big state that the state telcos this was a big thing. And like the 1990s, in the 2000s, the state telco is like Telstra and CBA. But there were tons and tons of IPOs like that. And, you know, that's fine. That's great for the countries that those sorts of companies are listing, but it's pretty boring for the investors. So the IPO, IPO by now, one thing I'll say is that the kinds of companies are very interesting. So it's very, very tech-heavy, as you would expect. And as I was saying before, in terms of like diversification for Australian investors, you know, that's really attractive. So some of the ones that we've had in the last six months are JADI health. So that's a spin-off from Jadi Dotcom and it's like the online pharmacy and they have some other businesses, but primarily like the online pharmacy of JD. And that was a very attractive IPO. And then Choiseul, which is the second biggest competitor to tick-tock and abidance in China, they also IPO and these companies are appealing it like fifteen hundred dollars billion-plus sort of market caps. So that's the second thing that I'll say, is that these are not small caps. So, you know, we have a small-cap and a micro-cap team in Australia. And I look at some of the deals that they're looking at and then I look at these companies that literally so so, you know, like, for example, Choiseul, they did a pre-IPO round of, you know, I think was four billion dollars and you had to put in three hundred million dollars. That was the ticket size. And so these are like these are really big, big companies. And the thing to specifically answer your question that's different than before is that when you have small IPOs, maybe they're interesting companies and maybe they're hot IPOs and you participate. But when they list, if there are five billion dollar market cap, they're making no difference to your benchmark at all. And as a you know, I do benchmark independent, but I like the whole point is to outperform the benchmark Ren. And so the difference with these companies is that when they list if they list in their market cap is 150 billion dollars, they get on the benchmark right away. MSCI says we're doing a special entry thing and a week from now it's going to be at two percent rate. So like meet one, it hasn't been listed for that long. It's already almost a three percent rate than the benchmark level. So this is this is very different because as an investor, you you need to be looking at the IPOs, not just as IPOs, but as companies that are going to be in your benchmark straightaway. I think the other thing that's really exciting about the pipeline is this not just China. So there have been, you know, obviously China, Hong Kong exchanges one of my biggest overweights because you were just going to see massive, you know, IPO pipeline out of China. But if you look at the unicorns, you know, there's there's cooping, which is sort of the Jadi Alibaba of Korea listed earlier this year, you know, again at 56. And it went up quite a bit. So it's a very big market cap company. You're seeing Gogia and Talk Pedia, which we already talked about. You're seeing, you know, grab from Singapore, which is kind of the uber of Singapore. So it's not just and then all the Indian ones, which we've also talked about, this is not just a China pipeline. It's actually quite pan Asian. And I think that that's exciting. [00:46:23][193.8]

ALEC RENEHAN: [00:46:23] Yeah. You mentioning some of those companies, you do start to realize just how big the opportunity set is. The one potential IPO that I think would make the world extremely excited. It would definitely make Bryce very excited because he's a big user of this company's product. Do you think dance will IPO? [00:46:42][18.1]

MARRY MANNING: [00:46:43] I do. [00:46:43][0.1]

MARRY MANNING: [00:46:43] yeah. I definitely think that they will IPO. And this whole what I was talking about before in terms of, you know, political risk and the double standard, like Trump just didn't, like, ticked off because I screwed up one of his rallies. So he went on this rampage about trying to ban talk and stuff. So I think that by dance, yeah, it is going to IPO in terms of the expected valuations, it's anywhere between 200, 400 billion. But even if it's, you know, like 400 billion, what kind of companies IPO at 400. Now, that could be crazy. We don't have enough information on the financials right now to know whether that's true or not. But regardless, even if it's a low end of that range, that's still got big. [00:47:20][37.0]

ALEC RENEHAN: [00:47:21] A trillion. [00:47:21][0.5]

MARRY MANNING: [00:47:22] Yeah, well, that's yeah, [00:47:24][2.2]

BRYCE LESKE: [00:47:24] it's the IPO. [00:47:25][0.3]

MARRY MANNING: [00:47:25] It's like so the way that we're looking at IPOs, they're obviously super competitive. So it's not like you say, oh, I'd like one hundred million dollars of the IPO and you get one hundred million. You know, some of the brokers have told me that they look at all the people who want to participate and they cut the list in half and the bottom half are zeroed out straight from the get-go. And the big accounts at the top were like, you know, the global sort of behemoths and fund management. They all get a decent allocation and everyone else in the middle is fighting for the scraps. So I'm in the fighting for the scraps part of that thing. But as long as you get scrap and you've done the hard. Work like this is what we did for Choiseul and Jadi is that you've done the work and you know, OK, this is a company that I want to own long term. I'm not in this for the IPO flop. Then you're buying more on the first day. And what the IPO gives you is a lower average entry price. So in terms of where you go from there, there's a there's lot of upsides and build-out for these companies. And if you can get any participation in the IPO, it's just, you know, helping your return later on. [00:48:22][57.1]

BRYCE LESKE: [00:48:23] So there's no doubt that the Asian opportunity is massive. But for a retail investor, getting access is becoming easier, but still not as easy as if we were to buy into the US or whatever it might be from your point of view. What advice would you have for retail investors interested in the Asian opportunity? [00:48:43][20.2]

MARRY MANNING: [00:48:45] Yeah, so it is getting easier. Part of the reason why we have an LLC and also a unit trust is because people want that liquidity. So they want you know, I want to be able to invest in Asia, but I want daily liquidity. And so that's part of the reason that we have an LLC. And I think we've we've gotten very positive feedback on that. The second thing I'll say about having it like is we do have a decent dividend. So like I invest in growth stocks, you wouldn't expect me to have a dividend because there's no dividend passthrough. But Asian markets have gone up a lot since we started and I've realized a lot of profits. So if you go in an like structure, you can get both that upside. And our dividend yield right now is around four and a half percent. So that's quite attractive to do a lot of people. One thing I will caution your listeners about is in addition to the people who say, oh, I don't need to invest in Asia, I have to milk are the people who say I just bought Tencent and Alibaba and I'm done. That's my whole OK. Those are amazing companies, the two of the biggest weights in my portfolio. I get that. I'm not at all disputing that. But you do get access to everything. All the exciting things are going on in Asia. You need a diversified portfolio and you need someone who's watching it all the time. So just to invest in those two stocks, I think a lot of people got burned because Alibaba actually had a terrible November to January. And it's still sort of the stock price is languishing down at around that level. But I think it highlighted to a lot of people that Asia is a complicated market and you can't just try to play the whole thing and all of the metrics that are going on in all the countries by buying two stocks, which are actually very similar in one country. [00:50:08][83.6]

BRYCE LESKE: [00:50:09] And just a reminder that marry your fund, the LSC that you're talking about is the Ellerston Asian Investment Fund. And its ticker is EAI. [00:50:18][8.5]

MARRY MANNING: [00:50:19] Yeah. To just finish up on your question, India is a very difficult market to invest in, and that's part of the reason why we have it different because you cannot open up an account in India, unlike China has very, very few aders there's like Infosys and one bank and one loss-making travel company. So you really again, you can't get a portfolio by buying EDS. So that's one of the reasons why we started the India Fund. A high net worth investor came to us and said every other market in the world, I do it myself. I can't this it's just all too hard in India. So please start a fund sort of grown from there. But I think there's there's a large spectrum in Asia of markets that are easy and difficult to invest in. [00:50:58][38.8]

ALEC RENEHAN: [00:50:59] That's the kind of scale that we need where we can go to a manager and say, I want you to start a fund. This thing that I'm interested in, [00:51:06][6.9]

BRYCE LESKE: [00:51:06] the equity markets community, one in Indonesia specific [00:51:08][1.9]

MARRY MANNING: [00:51:09] you what to find these guys. [00:51:11][1.6]

ALEC RENEHAN: [00:51:13] So one other question for the retail investors, and this is definitely something that I've grappled with, is when we're talking about a country like India or just maybe emerging markets, more generally, a lot of people default to market cap weighted indexes because that's what's available on exchanges in, you know, Western countries like Australia, the UK, the US. How do you think about an indexing approach in a country like India? [00:51:40][26.4]

MARRY MANNING: [00:51:41] So I don't have a problem with market cap weighted at all. In fact, I've thought a lot about this and unlike some developed countries or emerging markets, maybe twenty years ago. So if you were to look at emerging markets twenty years ago, the largest market cap companies would be the privatized oil company, the privatized bank, the privatized telco. And those are not the best stocks in the in the country. They got to be that way because they had some government support and then they just appeared and they were big in Australia, actually kind of fits that category, too. If you look at, you know, many years ago what were the largest companies. But what's happened now is that the companies that are the biggest market caps got that way because they're the best. And so if you look like Samsung in Korea, yes, of course, it's 35 percent of the cost or whatever it is now, because it's like an absolute behemoth, which is just, you know, been incredibly successful. And TSMC is the same thing in Taiwan. Yeah. It's it's the most amazing semiconductor country company in the world. And, you know, Alibaba and Tencent, we've talked about a lot of reliance. So these you know, I've debated this because I do hold a lot of these companies in my portfolio and people say, well, if you hold these large-cap companies, then you look like an ETF. And I have two responses to that. One is I have the same. There is some overlap between the stocks that I own and what. You would own in a market cap ETF, but I generally own way more so like, for example, if Alibaba was a five percent wait, I've had up to 14 percent of the portfolio in it. Or if Reliance's I think it's one percent, maybe two percent. Wait, now I'll have about five percent in it. So part of it is, is if you like these large-cap companies, you can invest in them even more than you would in a passive. But I think that the bigger thing to your question is that so we will say there is one fund who's one of my competitors, and they don't buy any of those big ones because they're like, I don't wanna look like an ETF. I'm just buying forget about market cap rates. I'm just buying the companies that I like. But my response to that is that these companies got to be the biggest market cap companies in Asia in the world because they're the best. So why would you run an Asia fund where you're purposely not buying the best companies like that? That is completely insane to me. So I don't the short answer to questions, I don't have a problem with market cap based. And I think we actually did a lot of analysis of this before we started the fund and made the decision to focus on large caps in Asia and emerging markets. Your risk return on small caps is very bad because you have higher liquidity risk. By definition, you have way higher ESG risk and you generally don't get the returns. And so for me, cap is a better risk reward. And if that means that you're more market cap weighted, so be it. [00:54:12][150.6]

ALEC RENEHAN: [00:54:12] Yeah, and it feels like the conversation. We've just had a lot of the highest growth. Companies aren't listing as small caps. Yes. Going on a public journey to becoming these large monsters they list as the biggest companies on the index. [00:54:26][14.0]

MARRY MANNING: [00:54:27] Yeah, absolutely. [00:54:27][0.3]

ALEC RENEHAN: [00:54:28] So, Mary, we want to thank you for joining us today. I reckon we could have done another couple of hours talking about some of these countries or those countries we didn't even touch that are in your in your remit. So we'll have to get you back. But before then, if people want to read more about what you've done or follow you online, is there anywhere in particular they should be going, any social media you're particularly active on? [00:54:53][24.9]

MARRY MANNING: [00:54:54] Yeah, absolutely. But you can always go to the website that has all the information on the funds. And I do write a lot and obviously write a monthly for for all the funds that I have. So that's one area I feel free to contact me on LinkedIn. I'm happy to chat and be in contact with people on LinkedIn. [00:55:08][14.4]

ALEC RENEHAN: [00:55:09] Nice. So we do like to end these interviews with the same three questions, so we'll get stuck into those. The first one is, do you have any books that you consider must reads? [00:55:20][11.0]

MARRY MANNING: [00:55:21] OK, so I thought about this a lot because you sent me the questions like, do I want to sound like an anti intellectual on their show? So I'll be honest with you. And I know that you have the thing on your website that's like books that you're recommending. Yeah. So I purposely try not to read books about investing. And do you know the reason why is because so like to use an exercise example. So I do lots of different things. I swim every morning, I run, I do yoga, I do palletize. And it's, you know, that diversification and cross training is really nice. And I feel like for my brain, like I wake up in the middle of the night to check my and my aides are trading. And then the first thing I do when I wake up is check out the doors closed or how they're trading when I get up. And then I get in the car and I listen to podcasts or I listen to Bloomberg, they break and they spend all day thinking about equity markets. And then I go home and give my kids dinner. And if I, like, snuggle up with a book about investing like that, just that's just terrible. So I think like my brain, similar to like doing yoga, Pilates is running in swimming like your brain is other things. So I read a ton of fiction which my husband gives me a terrible time for. And he's like, there's so many interesting things going on in the world. Why would you read things that are made up? But anyways, I read a lot of fiction. I read a lot of historical fiction that takes place in Asia. So you sort of learning about history at the same time and. Yeah. So no, I don't have any books to read then. [00:56:34][72.6]

ALEC RENEHAN: [00:56:34] It's fine. [00:56:34][0.2]

MARRY MANNING: [00:56:35] The short answer is fine. [00:56:36][1.6]

ALEC RENEHAN: [00:56:38] The next question which were trialing this year in 60 seconds or less, what's the best company you've ever come across [00:56:45][7.0]

MARRY MANNING: [00:56:46] HDFC, which is Indian financial. And the reason is it has it ticks every single box I think is the best one financial in the entire world. If you look at their cost income ratio, if you look at the way that they manage their NPLs, if you look at the stability of the management team, if you look at, you know, sort of every single metric that people would use to identify a quality company in the world, it takes all those boxes. And then you have the added benefit of, you know, it's a mortgage company in a country that has nine percent mortgage penetration. So we can continue to be an amazing company for 50 years from now. So that's what I'd say. [00:57:22][36.5]

ALEC RENEHAN: [00:57:23] Well, company I've never heard of. Yeah, I'm really glad we're out of this question and we're getting some really good answers. Yeah. And so then final question. If you think back to earlier in your career when you were at that lunch with Howard Marks or meeting George Soros for the first time or just starting out in your career, what advice would you give for your to your younger self? [00:57:46][23.1]

MARRY MANNING: [00:57:47] So it's a very good question. The first thing I would do is, is not actually give myself advice, but I would congratulate myself on taking risks, because when I was younger, I took some crazy risks, as I think back, like what on earth was a. So I'll give you an example, so as an investment banker in New York and I want some international experience before I went to business school, because you have international experience, you have a much higher chance of getting into a good business school. So Salomon Brothers at the time were like, well, why don't you work in our Moscow office? So, you know, that's a bit random. It was like the late 1990s. I don't speak Russian. OK, so that was an option. And then there was another investment bank that was in Azerbaijan. And yeah, they had a headquarters in Baku and they were like, oh, why don't you come work for us? And I thought, my parents, are going to absolutely freak if I say I'm moving to Azerbaijan. So I told the Azerbaijan one first and they were like, they did completely freak. And they said, oh, I actually have this other opportunity in Moscow. I'm like, oh, definitely go to Moscow. And it seemed like a much better option. But, you know, I did some random things that I like. I went to China and worked for China, even though I don't speak Mandarin and I spent a year living in Africa. And so I think for people when you're younger for like take risks because it's a great time to do it. So, like now, you know, I have two kids and my husband and I both have our careers established. It's not like we're packing up and moving to Azerbaijan any time soon. So when the first thing I'd say is like, well done for taking risks, because the older you get, the harder it gets to do that. The second thing to my younger self, I started investing a lot earlier. So we were talking before the show that, you know, I have a 14-year-old son and he has started investing and he's already learned things which I wasn't learning until I was in my 20s. And I think the sooner you do it, the better off you are. I think, you know, I know you guys have had a relationship with Sophie and Maddie in terms of you're in good company. And I think that that sort of, you know, particularly for women, because of the investment gap, if you don't start investing early, can be absolutely huge by the time you're ready to retire. So that would be my main advice to my younger self is to start investing sooner because you learn you learn something every time you make an investment. And the more you the earlier you start, the more you learn more. [00:59:49][121.9]

BRYCE LESKE: [00:59:49] It's crazy. The amount of experts that come on and have that is their piece of advice is just get started as soon as possible. Yeah, exactly. Mary, thank you very much. It's been a truly fascinating conversation. As Alex said, plenty more to unpack, so we'll definitely have to get you back on it at some point to continue the discussion. But appreciate your time. I know there was a lot of value that our audience would have taken from that. So thank you for your time today. Great. [01:00:14][24.1]

MARRY MANNING: [01:00:14] Thank you so much for having me. It was a pleasure. Thank you. [01:00:16][1.7]

DISCLAIMER: [01:00:17] Equity means investing podcast is a product of equity, makes media all information in this podcast is for education and entertainment purposes only. [01:00:24][7.3]

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