Inside the Rope with David Clark Ep 79: John Hempton - Where to from here?
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Nov 9, 2020 John Hempton, the fund manager and founder of Bronte Capital, returns to discuss the lessons learned from the COVID-19 pandemic. He reflects on initial miscalculations and the unpredictable nature of human behavior in investment strategies. The conversation shifts to value investing's challenges, particularly in light of technological changes, and recent insights into tobacco investments, examining risks and potential opportunities. Hempton's candid views on market dynamics and the socio-economic factors influencing investments offer a fascinating perspective on navigating today's economy.
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Human Behavior in Pandemics
- John Hempton's pandemic model worked until people became aware of the pandemic and changed their behavior.
- Human response, unlike animal response, factors risk/reward, causing R0 to approach 1 regardless of mortality.
Economic Impact Variation
- The pandemic's economic impact varies based on social safety nets and individual circumstances.
- Different regions and industries will experience varying levels of recovery based on local conditions and reliance on tourism.
Bronte Capital's Portfolio Strategy
- Bronte Capital's portfolio remains largely unchanged, focused on high-quality long-term holdings and diverse short positions.
- They are increasingly exploring value stocks, seeking businesses with long-term relevance despite the sector's underperformance.