 Ladies and gentlemen, boys and girls and children, ladies and gentlemen, you are now tuned into the Prince of Investment coming to you guys and girls live all the way from the beautiful city and state of Denver, Colorado via the also beautiful city and state of HALALULU Hawaii. If you haven't done so already, please go ahead and make sure you hit that like, subscribe, comment and share button. And as always, I don't have a lot of time and I definitely know you guys and girls don't have a lot of time so we could jump straight into it. Ladies and gentlemen, we got a very special topic with the also special guests as well. We're talking about the global investing market. When this came across my desk, I had to take it because I'm so used to talking about the everyday market that we know about here in America, you know, we're known for capitalism here in America. We're known about our market, the S&P 500, the NASDAQ, Dow and things like that. But there are other markets out there as well across the globe. Some of the markets I'm a little bit afraid to jump into because of, you know, things like political risk and maybe not knowing things like that. Ignorance is not an excuse to not get better at something. So today we got a very special guest. Let me give you a soft introduction of him. His name is Darren Eggerson. He's a veteran portfolio manager and he's the author of his new book that you guys and girls see and come up, The Global Investing, A Practical Guide to the World's Best Financial Opportunities, a book that I haven't had the opportunity to check out yet but I will be checking out myself. So Darren himself, he is the PM, which is, you know, an investment world, people call portfolio managers, you know, with some explicit purposes of value partners investment with the AUM, Assets on the Management, about $4.1 billion. He's out of Canada right now and he has, you know, he's done so much of the investment world across the globe. He's a subject matter expert in this. So what I further do, I know you guys and girls in the city and watch and hear me. So what I further do, let me bring on my guest today, Mr. Darren Eggerson. How you doing, Darren? Very well, Pritz. Thank you very much for having me on the show today. Okay. Thank you. Now for the people out there, I know I kind of touched on your background there. Can you tell people a little bit more about yourself and, you know, what do you do in your stance of history and investment world? Yeah, absolutely. I've been managing public equity funds or pools for well over 20 years now. Actually, the bulk of that was as a U.S. equity investor. I worked for an insurance company here in Canada and managed different pools of U.S. equity funds for, you know, close to 15 years. But about a decade ago, I got into the global equity space and, you know, as much as the U.S. is a fantastic place to invest, it is, and it always will be. There are, at different times, better opportunities available outside the U.S., outside North America. So that's something I'm really focused on right now and just happy to be here and be able to spread the word about global investment. Okay. Now you touched on the point that how great America is when it comes down to investing, you know, just been in the market cap and things like then. We've got a couple of things going on right now. This crazy thing called inflation that we're trying to get rid of. And then we got interest rates trying to get rid of it. You know, trying to get the inflation is trying to, the interest rates are trying to suppress the inflation at the same time, you know, back in 2020 during the global pandemic, when we saw, you know, we pumped trillions of dollars into our economy, stimulated the economy to avoid, you know, a depression for the most part. Now we have this inflation. We're trying to get rid of it. We're trying to, you know, but it's like two-pace. When she squeezes out of the tube, it's kind of hard to put it back. So what are your thought processes on the current economy of the inflation and, you know, the interest rates at the same time? Without a doubt, that's sort of a key headwind for the U.S. market. The amount of stimulus that was pumped into the system as a result of, first, the financial crisis, of course, later the pandemic really was unprecedented. And that's great. In the short term, it certainly propped up. I shouldn't say short term for the past decade. Plus, it's propped up corporate profits, corporate revenue, and the U.S. economy. It's been very effective at that. The problem, as you alluded to now, is inflation has become a problem. And in order to keep inflation under control, the central bank has to raise interest rates to bring cool economic growth. And that's a headwind going forward for the U.S. While you didn't have that happen in a lot of foreign economies, parts of Asia, Latin America, even, you know, Eastern Europe, they didn't have the funds available to pump into the system to help support the economy, help support corporate profits. That was the problem in the past. But going forward, they don't have that headwind of interest rates having to go up. And for the money, the liquidity that was pumped into the financial system, they're not having to worry about taking it out because they didn't put it in the first place. So for them, it's now on a relative basis. It's a tailwind for those. Very. Okay. Let me make sure I got this correct. You're saying, hey, America, you know, we print up all this money. We pumped it out in stimulus packages. We gave, you know, people checks. We gave businesses checks for the PPP loans. All these things we did to avoid a depression in a way. And you're saying other countries did not do that so that they don't have this inflation that's built into them. Am I, am I getting that correct? Yeah, exactly. You know, they didn't, they didn't have the resources that the U.S. has or other developed countries like Canada, Western European countries that were able to pump a lot of money into their system, financial system. They didn't have that available. So it was a drag for them or, you know, a headwind previously. But now they're not having to, to remove it from the financial system. So that going forward, that's going to be, you know, a relative headwind for the U.S. and other developed nations. Oh, that's a pretty good point there. When you look at the global, you know, here in America, we get so it's zoned into our economy. And hey, we're have the best economy. And, you know, this is us and nothing else is round about blah, that we don't look across the board because, you know, a lot of it is that, you know, you're just not aware, you know, you're just not aware of, hey, what's going on? How that economy works? And, you know, things like that. Now, what are some of these countries that you're saying, hey, you know, this isn't, you know, instead of having a headwind of an inflationary problem that this is now the tailwind because, hey, they didn't have the resources. It's almost like this book I read called The Power of Broke. It was like, hey, just, you know, are you being broke? Sometimes having too much money can cause you problems. You can have too many resources. When if you were just broke, a lot of things, you would be, you're more, and the whole concept is that you are more creative and you use more of your intuitions, you use more resources when you're broke versus sometimes when you have a lot of money and a lot of resources, you kind of overdo it and take too much. So now that this created a tailwind for some countries, what do you think are some of the countries that this is a tailwind for? What is your insight on that? Certainly a lot of developing nations, you know, people also refer to them as emerging markets, but, you know, that's really, I think that term is quite outdated. And if you look at, you know, a country like South Korea, for example, where Samsung is domiciled, you know, you look at the technology as being employed by these businesses and even the infrastructure that those cities have been built on, you know, its first world, you know, without a doubt, like this is very advanced technology. And so those countries, a lot of them are benefiting from much higher population growth than we're seeing in North America. For example, it's estimated that between now and 2060, North America will add 1.4 million people per year to their population. If you look outside North America, the number is 53 million. So today, the rest of the world, if you will, excluding Canada and the U.S., has 19 times the population and that gap is going to continue to grow going forward. So that population growth helps support economic growth and wealth creation. So right now, if you look outside North America, there are three times as many publicly traded companies that generate four times the corporate revenue. And it's easy to be complacent because we have such great businesses in North America. It's easy to lose sight of that fact, but the reality is those areas like Indonesia, South Korea, the Philippines, Vietnam, even Eastern Europe countries there and Africa, those offer some tremendous opportunities to invest in first-class businesses, like world-leading businesses in many cases. Okay. So when someone has this type of knowledge of saying, hey, we're going to do things better, get better, and things like that, what a retail investor, every day retail investor who's down an institutional level, do you think a retail investor have a chance for this or just mostly on the private equity alternative markets to be able to take advantage of the global markets? I absolutely think retail investors can take advantage of this. There's a number of ways to do it, and I always, I'm a big proponent of doing your homework, your due diligence if you will, and I think it's very important to know what you own and why you own it. Well, you know, to be able to spend the time to look at a business, try to look under the hood and understand why this company is doing well, I think is critical, and, you know, that obviously takes time and not everyone has the time to do that. So for those folks, you know, one way to go quote this is to find a pool, a mutual fund, if you will, that is looking at those businesses and buying good businesses at good prices from around the globe. I think that's one way, easy way to get exposure to these great opportunities. If you do have time and you can actually look at the companies and make sure that you are investing in high quality businesses, when I say that I'm typically referring to global industry leaders, like we're looking for, you know, the best companies in an industry or sector when you look at the entire global landscape. And so, you know, an example would be rather than just look at Oracle if you're looking at, you know, like a database management company, you could also look at SAP which is headquartered in Germany and it's a very, very good company. There's a lot of examples like that where rather than look at a domestic business, you could alone you could compare it to one of its global competitors and see which one is, you know, currently more favorable. And right now when you compare foreign businesses to the US, you know, broadly speaking, many of them are trading at substantial discounts. When you look at a forward-looking price-to-earnings ratio, for example, foreign markets are trading at roughly a 33% discount to the S&P 500 today. So that's great opportunity for you. If you know what businesses to look for, there's some great companies out there that are really world-class industry leaders that you can buy at significant discounts to their US peers. Okay. Now, sometimes I've been noticing, you know, you made a good point about saying, hey, take your American business and compare it to its global competitor because in American, we take Walmart compared to Target. We take Apple compared to Microsoft. You know, we kind of stay in our sectors and I'll go to that myself. But then saying, hey, what is the Apple in Europe? Let's compare the Apple in Europe and look at their finances. You know, the 10Qs and 10Ks to see, you know, do we see something here, you know? So the thing is, note, as of late, Warren Buffett has been making a lot of headway in Japan. What do you think about, you know, Warren Buffett jumping into that global market of jumping into fan? I think it's fantastic. You know, everyone knows Warren Buffett's a very astute investor and he's picked up on something that I think is a very, it's a terrific opportunity. Japan still has a reputation for being I think somewhat backward from a corporate governance perspective when there was a period, a prolonged period of you know, no corporate earnings growth. A lot of the mentality was that if you had a job working for a Japanese company, you were employed for life and it just made Japanese companies uncompetitive relative to a lot of their global peers and the Japanese government under Abe for a period of, you know, 10 or 12 years really tried to change that mentality and actually when you look at corporate earnings in Japan, they had the best improvement over that decade relative to major industries, major markets around the world. So in the pool I managed, Japan is the single largest country exposure. I don't have, right now it's purely international. I don't have any U.S. exposure at all in it. And the reason, the reason I dealt though is because we have other dedicated U.S. equity funds. So we wanted something that's complimentary. So it's not a reflection of the U.S. Okay, yeah, I was almost scared there for a second. I got scared in the city. It's like, do we have no, I'm like, oh my, but okay, okay, I got you. That's why I want to qualify that why Japan is the biggest weight. So if the U.S. was included in this pool, it would be the largest single weight at the country level. But again, we're trying to provide a complement to other securities, other pools that people hold. And so the way we're doing that is we're investing strictly outside of North America. And so Japan, you know, some of the trading companies I think is where Warren Buffett was focused on and we actually have an investment in one of those businesses as well. Japan, I mean, the companies are quite inexpensive. They're extremely well run. You know, company like Nintendo, for example, which I don't know if anyone has seen that the recent Super Mario's movie, but it broke records globally for an animated film and they are just starting to monetize their intellectual property. They have some of the best franchises in video games and they've really only just started to take advantage of that. So there's some great companies there that you know, I think Japan is a good story for the next, you know, several years at this rate. Okay, now one of the side effects of having these high interest rates, I know these interest rates in America will sleep for a while. Now that we are starting to wake up with inflation, one of the benefits of that has been, you know, we're seeing savings accounts and CDs and things like that more conservative investments start to turn around a nice return 5%. But as I look broadly, you know, I know Brazil is paying 14%, you know, other countries are paying, you know, double digits in the interest rates department and the bonds just for government bonds are now becoming more relevant again. What do you think about investing broadly in the bond market? Even though you take on that political risk, you know, right now we know tensions are kind of high with China and the United States and everybody's kind of picking size. How do you factor that into your global investing? It's a great question. You know, currency is usually how that plays out. It would, any geopolitical risk or event, social unrest or as we're seeing with Ukraine and Russia, political or military conflict, that usually hits the currency markets first. The way that I think about and then manage risk, geopolitical risk is I look at the sovereign credit reading of the country that the company is located in. So one thing I do is a very simple way to help protect yourself when you're investing globally is to only invest in countries that have sovereign credit readings of investment greater or better. And anyone can look this up. You can go on the S&P's website or other bond. S&P Global? There are others too. Any bond reading site typically has sovereign credit ratings as well for countries. So if you look at anything triple B minus or higher, then you look, you're relatively safe. These are countries that are deemed investment grade by the big US credit rating agencies. And so that sort of keeps you out of the most obvious trouble spots. Okay, so I give that you said, hey, first start with the bond rating. See what countries have the top investment grade bond ratings and then if they have on the up and up on the bond ratings, then you will look into making investments globally. Am I getting that correct? Okay, to kind of tie into that, will you look at some of the, what are some of the underlining dynamics of the world major global industries? Yeah, so that's another key thing for investors to understand, especially if you're a retail investor and you're doing this yourself. The financial markets are very much interconnected and play off of each other. So the bond market, watching the bond market is important to how the equity markets are going to to perform. Same with currencies. So for example, on the currency front you want to avoid investing in countries that have high levels of debt. That they may not be able to manage. So high levels of debt, high levels of inflation are sort of a warning sign for investors and I'm not talking about what we're seeing now in the US and Canada and Western Europe, but I'm not talking about five, six, seven percent inflation. I'm talking about much higher levels with much higher debt levels. That is where it becomes a concern. But the other thing is the bond market, the change in interest rates and the change in credit defaults. So as you see credit defaults start to pick up in the bond market. When you're looking at a bank, if banks start reporting higher and higher credit defaults or loan losses then that's something that typically will find its way into the equity market as well and is a sign of a coming out. Let me rephrase that. Keep an eye on the bond market and if you notice in the bond market if grays start to carry on more debt or the grays start to slip and you're seeing more people default on their loans then that is the indicator what's going to trickle its way into the equity market. I got that nugget there. Now I want to ask this question. How to construct a portfolio of global stocks that will help you to build wealth and protect it during times of stock market weaknesses? Really the key there is to buy good businesses and not overpay for them. You don't want to invest in a company where the industry is shrinking so you do want growth. You want some growth at the rate of GDP or better but you don't necessarily need to buy the fastest growing stocks especially if they're trading at very, very rich multiple. So when you think back to tech bubble and the tech boom and then the bubble back in the late 90s and then the early 2000s a lot of those stocks reached astronomical valuations and it took a very long time for many of them to recover. Some didn't some never made it through the tech bubble bursting in 01 and 02 but the key area think is to buy good businesses and don't overpay for them and they may not be the hot commodity of the time but they will create wealth for you and they will make you wealthy over time if you just stick to them and continue to add to them. When the market sells off the businesses you like are on sale and it's time to put more money to work so that first and foremost when stocks get cheap don't panic put more money to work and it will eventually come out in your favor. If you have a strong fundamental company you might have this book called the little book that beats the market Joel Greenblatt I think his name is and he always speaks about if you were right on the fundamentals the market would eventually reward you so you look at the fundamentals we you and I both know that the market doesn't trade off of this value the market trades off of what people are buying and selling now if you are sitting there you have a great company the fundamentals look great it's in a great sector at what point and let's say but it's not performing on the market you know it's fundamentals are performing with the market it's not performing at what point do you say man maybe I got this wrong or do you just hold on and ride into the rules follow yeah that's okay it's easy to buy stocks buy companies it's much much more difficult to know when to sell and I think you know it's a judgment call unfortunately but I think this is the one piece of advice I would give any investor think like a business owner if you own the entire company would you want to sell it that day at the current valuation or is it something that is going to work its way through and and you know you'll get through that and so to Joel Greenblatt's point you know if you're buying high quality businesses they have first of all a high quality management team that should be able to navigate through tough times and come out stronger on the other end not buying companies that have very high levels of debt you know you want some financial flexibility and when we get into carriers like we're in now rising interest rates that can become a problem for companies that have a lot of debt you know companies that are able to generate strong cash flow don't have a lot of debt have good management teams typically will be able to get through tougher times so that's if you think of it like a business owner you own the entire business would you sell it like if you spent a decade building you know a great manufacture of widgets whatever and suddenly you know we get into a recession your company you know is down you're not selling as much but you're pretty confident that you're going to survive then why would you sell it today at the lowest possible valuation when you know you can get through manage it and get through and see better times ahead so that that's not sure if that is a clear answer to your question but I would encourage people to really look at why is the company underperforming and if they think that it's something that it's going to work its way through or work its way out in time and just stick with it okay and this something fundamentally wrong with it something has changed and you think they're not going to be able to recover then you should sell it that was a very great nugget to like look at as a business owner say hey if you own uber for example you know I've always been hot on uber for now for a couple years and would you be selling it if you were you know the CEO you'd be trying to keep it but what two things don't actually get out of here what are your thoughts on this cryptocurrency you know it's a whole new sector that got birthed in the last decade global market what do you think you know you see any kind of you know kind of died off in the last year to know I was kind of talking about it but just year to date you kind of see any come back what do you think what are your thoughts my my perspective on it has been to trade carefully blockchain is great technology there's a lot of potential applications for blockchain which is what crypto as you know with what crypto is built on crypto currencies a little bit of a different thing though like if you think about it these cryptocurrency potentially competes with the currency like the US dollar and it's hard to believe that governments like the US government or British government or Japanese government are going to hand over control of the major currency or form of trade to something that they have really no control over there's really nothing of substance backing cryptocurrency other than the fact that people believe it's worth something there's no assets it's simply we agree to you know bitcoin is worth X dollars on a given day with businesses buying directly into a business that has assets and cash flow I think is a much safer long term investment for you and can create just as much wealth over a significant period of time okay now before we get out of here I want to bring up your book again global investing out in Hawaii if you can hear me here let's put his book cover up here again and the people who made it all the way down to this is end of his interview here global investing first two people to comment on YouTube Eric will be we will ship you a free copy from the show for Eric here global investing if you really like the show and you like hey I want to grab his book we will definitely ship it out to you so Eric before we get out of here is that anything you want to say if you can follow you to get more information what do you want to leave out there for the live audience and the audience that will catch the playback just encourage everyone to think globally when they invest whether you buy foreign businesses or not you're still the companies you invest in are still impacted and still compete with those companies so it's best to understand the global investment environment and the companies that are out there and I'd say you know do your own work and and just stick with it when times get tough just buy more alright Eric we definitely enjoy having you on would you come back on to the show I'd love to thank you thank you alright so much boys and girls and true to our ages and to the next video podcast cartoon or one of the most crazy you see me doing around the globe my name is Prince Dykes this is a Prince of Investment coming to you live from a beautiful city of state in different Colorado via Hololulu Hawaii and to the next time peace be safe I'm out and thank you