The Capital Cycle Podcast Barbarous Relics
11 snips
Nov 26, 2025 In a deep dive with Laura Fyfe, an Emerging Markets analyst at Marathon Asset Management, listeners explore the shifting landscape of capital cycles and investment opportunities. Laura highlights the pitfalls of overspending in tech, particularly among Chinese giants, and emphasizes the appeal of emerging market stocks with low capital intensity. She shares insights on promising new holdings like China Resources Land and Millicom, all while contrasting their cash flow potential against the hype surrounding hyperscalers and AI investments.
AI Snips
Chapters
Transcript
Episode notes
Emerging Markets' Capital Cycle Problem
- Emerging markets often suffer from damaging capital cycles driven by overinvestment in commodities and real estate.
- Laura Fyfe emphasizes that curtailed Chinese investment has been a key driver of past EM underperformance.
Avoid Status-Driven CapEx
- Avoid 'keeping up with the Joneses' in investing by not chasing firms that are increasing capital intensity for status.
- Instead, seek companies in industries with falling capital and competitive intensity where underinvestment creates opportunity.
Chinese Tech Spending Bubble Example
- Laura recounts how Chinese internet giants were richly rewarded in 2020 for heavy spending, which later backfired.
- She notes that 60% of their market value had disappeared by 2023 versus the 2020 peak.