Laura Geritz, Founder of Rondure Global Advisors, discusses the benefits of investing in undervalued stocks outside the US. She shares her unique lifestyle, learning machine mindset, and the risks and rewards of Chinese and Japanese stocks. Also, she emphasizes the importance of a global perspective, understanding cultural nuances, and finding peace through resilience and intentional disconnection.
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Quick takeaways
Laura Geritz recommends allocating more money to undervalued stocks outside the US.
Talented women quitting the investment business is a significant issue that needs attention.
Foreign stocks may be overdue for a powerful rebound, presenting potential investment opportunities.
Laura Geritz employs a meticulous investment process, focusing on quality and value-oriented investing.
It is crucial to slow down, conduct deeper research, and focus on what really matters in investing.
Deep dives
Laura Gerrits' Unusual Journey and Investment Approach
Laura Gerrits, the founder and CEO of Rondial Global Advisors, has led an unconventional life as an investor. Growing up in the American Midwest, she has become a seasoned international investor, traveling extensively and studying various markets. Gerrits has built a competitive advantage through her relentless research and voracious reading. She emphasizes the importance of continuous learning and the value of boots-on-the-ground research. Gerrits believes that now is an interesting time to consider investing in foreign stocks, as emerging markets have been out of favor and undervalued for many years.
Focusing on Quality and Value-Oriented Investing
Gerrits emphasizes the importance of focusing on quality and value-oriented investing. She looks for companies that can grow thoughtfully over time and exhibit good capital allocation practices. Gerrits believes that companies with strong fundamentals and good balance sheets can weather the macroeconomic landscape and provide attractive investment opportunities. She also highlights the significance of considering risk management and prioritizing clients' interests when making investment decisions.
The Potential Shift in Emerging Markets
The podcast episode discusses the potential shift in emerging markets. Gerrits points out that emerging markets have experienced significant underperformance compared to large US tech stocks in recent years. However, cyclical pendulum swings suggest that trends can reverse, and emerging markets may present interesting investment opportunities. Gerrits highlights the importance of timing and staying informed about market dynamics. She believes that undervalued foreign stocks, coupled with a potential reversal in market cycles, make it a compelling time to consider investing more heavily in emerging markets.
Gerrits' Investment Process and Focus on Conservative Companies
Gerrits employs a meticulous investment process that involves screening around 70,000 companies. She seeks out conservative companies with strong balance sheets, good capital allocation practices, and sustainable competitive advantages. Gerrits focuses on businesses that are undervalued in relation to their quality, and she emphasizes the importance of bottom-up analysis. In markets that are out of favor or facing challenges, Gerrits looks for companies that can survive and thrive over the long term. She prioritizes quality and value-oriented investing to navigate potential risks and generate attractive returns.
Investment Approach Based on Balance Sheets and Cash Flow
The speaker emphasizes the importance of starting with the balance sheet when analyzing companies. They look for reasonable leverage and improving debt levels. They also consider the cash flow and how the company uses it, whether it's for growth, dividends, or share buybacks. Additionally, they focus on the company's margins and whether it has a history of stable or durable growth.
The Value of Travel and Nesting in Different Countries
The speaker discusses their extensive travel experiences and how it helps them gain insights into different cultures and markets. They emphasize the importance of respecting local cultures and approaching companies on their own terms. The speaker spends significant time in various countries, staying in different cities for extended periods to better understand their business environments. They believe that intentional disconnection from technology and immersing oneself in a peaceful environment conducive to thinking and reading is crucial for generating unique investment ideas.
Selective Use of Technology and Tuning out Noise
The speaker highlights their deliberate approach to technology use, leveraging sophisticated tools for efficient analysis and modeling. They consciously avoid being constantly bombarded with news and trading updates, preferring to focus on longer-term thinking. They filter out distracting emails, tune out mainstream financial media unless they spot insightful interviews, and limit their exposure to social media, considering its usefulness in reaching a wider audience with their content.
The Importance of Focusing on Deep Research and Thinking
Laura Garretz emphasizes the value of slowing down to conduct deeper research and thinking. She believes that reading and exploring various topics outside of investing helps to cultivate a deeper understanding of businesses and what makes a great company. By studying craftsman, Zen cooking, and other areas of Japanese culture, Garretz has gained insights into enduring businesses and the environment of investing. This approach allows her to prioritize deep research and focus on what really matters in investing.
The Art of Subtraction and Prioritizing What Matters
Garretz discusses the importance of subtracting complexity in life and focusing on what truly adds value. She talks about the need to carefully prioritize and eliminate distractions, embracing the art of subtraction. By reducing complexity, she ensures that her time is spent on activities she loves, such as reading, analyzing stocks, and writing. Garretz emphasizes the significance of being intentional with time and being content in the present moment, rather than constantly fixating on the future. She also highlights the value of mindfulness practices, such as meditation, and the ability to endure difficult times in the investment industry.
In this episode, William Green chats with Laura Geritz, founder of Rondure Global Advisors, which scours the globe in search of high-quality companies trading at attractive prices in places like India, China, Japan, Thailand, Taiwan, Turkey, Brazil, & Mexico. Here, Laura makes the case for allocating more money to undervalued stocks outside the US. She also discusses her unusual lifestyle, which is built around relentless travel, voracious reading, & abundant time to think.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
08:15 - How Laura Geritz earned the nickname “Money Bags.”
09:41 - How she broke into the investment industry by living in Japan.
12:55 - How she was shaped by the frugal, unflashy culture of rural Kansas.
22:57 - What she learned from her mentor & partner, Robert Gardiner.
30:14 - Why so many talented women quit the investment business.
36:54 - Why she believes many investors are taking too much risk.
38:56 - Why foreign stocks may be overdue for a powerful rebound.
41:20 - How she weighs the risks & rewards of Chinese stocks.
52:26 - How she screens 70,000 stocks to identify great businesses.
1:03:36 - What foreign investors don’t understand about Japanese companies.
1:11:51 - How to become a continuous learning machine.
1:25:38 - How Laura handles adversity when her investing style is out of favor.
1:32:06 - Why she maintains a remarkably uncluttered calendar.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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