Haven’t listened to the interview yet but I would suggest actions speak louder than words. I do worry that a lot of Jardine’s assets are at risk of long term disruption (cars, supermarkets, offices etc.). I don’t mean that on a 5 or even 10 year view, but I would not be surprised to see significant change in those industries over longer time horizons and I think management would be mad not to think about that, so the broad “old vs. new” economy construct doesn’t bother me. What matters is if they actually allocate capital well. The first move (Mandarin) feels like a good one to me. Like you my thesis had two legs: it’s cheap, and there’s optionality on new management unlocking value. At current prices my main worry is that the value isn’t so obvious any more. But I’ll have a listen and come back to you!
While I agree old vs new economy is not especially important if you can get a safe return, I do think it's significant to your investing character if the first thing you blurt out off the cuff is to want to get involved in the latest fad industry. I can't imagine any investor I admire having that response.
Yes, it's too simplistic for me to put it that way, but Baker and Witt had been talking about growth as a driver for several years and it's not hard for me to imagine the board being awed by a PE guy talking about all the deals he's done and how he evaluates every asset everyday blah blah
Thanks for that. You're right that Mandarin was a great decision and maybe I'm reading too much into some off-hand comments.
I did view the Mandarin move as a continuation of the thinking that saw Jardine Strategic bought out a few years ago, which would make Pan less of the architect, but could be wrong.
Thats why I sold. Bought at 8 times earnings but if we are at 13 times its then maybe better to switch to under earning new economy stocks in South East Asia, or cheaper boring stocks like First Pacific.
The geopoli constraint on growth isn’t reflected in the price IMHO. I’m out but broader pan Asia is the way forward.
On the CEO per se, the extended Jardine family has controlled it since the mid 1800s. They’re still calling the shots regardless of the CEO in power at any one time.
Haven’t listened to the interview yet but I would suggest actions speak louder than words. I do worry that a lot of Jardine’s assets are at risk of long term disruption (cars, supermarkets, offices etc.). I don’t mean that on a 5 or even 10 year view, but I would not be surprised to see significant change in those industries over longer time horizons and I think management would be mad not to think about that, so the broad “old vs. new” economy construct doesn’t bother me. What matters is if they actually allocate capital well. The first move (Mandarin) feels like a good one to me. Like you my thesis had two legs: it’s cheap, and there’s optionality on new management unlocking value. At current prices my main worry is that the value isn’t so obvious any more. But I’ll have a listen and come back to you!
While I agree old vs new economy is not especially important if you can get a safe return, I do think it's significant to your investing character if the first thing you blurt out off the cuff is to want to get involved in the latest fad industry. I can't imagine any investor I admire having that response.
Equally, I can’t really imagine him having been hired if that’s all he has to offer.
Yes, it's too simplistic for me to put it that way, but Baker and Witt had been talking about growth as a driver for several years and it's not hard for me to imagine the board being awed by a PE guy talking about all the deals he's done and how he evaluates every asset everyday blah blah
Agreed. I’ll certainly have a listen.
Thanks for that. You're right that Mandarin was a great decision and maybe I'm reading too much into some off-hand comments.
I did view the Mandarin move as a continuation of the thinking that saw Jardine Strategic bought out a few years ago, which would make Pan less of the architect, but could be wrong.
That could easily be the case.
Thats why I sold. Bought at 8 times earnings but if we are at 13 times its then maybe better to switch to under earning new economy stocks in South East Asia, or cheaper boring stocks like First Pacific.
Yes, respect your discipline my friend. Hopefully I can squeeze a little more juice out then join you in the next one.
Good thoughtful piece Guy.
The geopoli constraint on growth isn’t reflected in the price IMHO. I’m out but broader pan Asia is the way forward.
On the CEO per se, the extended Jardine family has controlled it since the mid 1800s. They’re still calling the shots regardless of the CEO in power at any one time.
Thanks Darren, yes more has to go right the higher the price goes and that's harder to judge here.
And I agree the power remains with the Keswicks who have made some good moves in the last few years.
Great take, thanks! Will look at those interviews.
Thanks Peter, let me know your thoughts.