Weekly Thoughts 17 October 2014

While listening recently to the guys from Coronation, I found it interesting hearing about a Russian Company that they were buying in their Global Emerging Market Fund. This would be a fund specifically buying companies based in emerging market countries, Russia being such a country. It was a food retail company called Magnit, which is found in over 1860 cities and towns across the federal districts of Russia, focusing on the small to medium size town. They are opening 1000 stores a year and the entrepreneurial CEO and founder still owns 40% of the company. It is just interesting to hear statistics about different companies around the world, and this one, like many other companies, will continue to make money regardless of the Ukraine crisis or many other global issues.

We’ve recently seen a nice little drop in the markets – a bit of a global market correction caused by a few things. This helps those of us with debit orders or regular deposits going in to our investments, or those of you with excess income in your Marriott funds that is re-investing. We’re buying cheaper assets with that contribution, while the underlying companies are making just as much profit. Many of you have often heard me say that we need these times of price decline. Unless you are about to cash in an investment, you don’t always want markets to keep going up. I know it almost sounds wrong, but if you can buy good assets at a discount, then why desire to pay the higher price?