Jong recently traveled to the UK with his family over Easter. And because he can never stop thinking about investing, below he describes how a trip that started out as a soccer fan’s pilgrimage to his favorite team’s home stadium became quite applicable to the work he does at City Different, our Global team, and our clients.
I recently traveled to the UK with my family. We visited London, Liverpool, Edinburgh, Oxford, Cambridge, and Bath. It was quite an intense trip over 12 days, especially with a 3-year-old!
Our Investments in Action
Walking the streets of the UK, it was hard to ignore the presence of one of our holdings’ delivery trucks. From the busiest streets in London to the narrowest alleys in Cambridge (and no, not the Boston one), Amazon keeps delivering for its customers and shareholders.
Amazon Prime Video ads were all over the famous double-decker buses, a reminder that the same movie can be shown over and over across the world (speaking to the importance of economies of scale in a business). This was a good reminder that many of our US-domiciled companies are global in nature; even if the US economy wobbles, they will continue working hard internationally and bringing back profits from overseas.
Unlike in the US, where we can’t do without our cars, in the UK, traveling by train is the default option when moving between cities. This frees you up to be more observant when you’re not focusing on the road. And while my family was wowed by the sheep grazing on rolling pastures, I was more taken aback by the power stations we passed by [which naturally reminded me of our investment positions in Talen Energy (nuclear power station in the US) and Cameco (Canadian uranium producer)].
Like the US, nuclear remains a critical power source in the UK; it generates ~15% of stable electricity for homes, businesses, and factories. The 3.2 gigawatt Hinkley Point C nuclear power station in the UK should open in 2031, adding more demand to the uranium market.
While trains are great for scenery, sometimes you just want to save time; incredibly, you can get air tickets between Edinburgh and London on Ryan Air (one of our CDI Global holdings) for less than $25 in Europe! This is a reminder that business continues to boom for Ryan Air, largely because they provide a service to their customers at the absolute lowest cost.
On Being Patient
For those who know me well, I’m a huge Liverpool Football Club fan. This trip began with the goal of me finally watching the team play in person for the first time (I’ve been a Red for 25 years at this point).
We won the English Premier League in 2020 for the first time in 30+ years (and 20 years of my support). Things are still going strong (in fact, we just wrapped up a 20th league title a week ago, putting us back level with our arch nemesis, Manchester United, for total league trophies).
Talk about long holding periods and commitments! It’s also how we invest here at City Different. We’re patient so long as our companies perform according to our expectations; we wait patiently for our investment theses to play out. If the fundamentals remain strong and the valuation reasonable, we will continue to hold these companies if we believe doing so will pay off in the long run.
The late great investor Charlie Munger liked to say that you have to fish where the fish are. That quote always reminds me of our philosophy for CDI’s Global strategy… so my family and I went fishing and caught some!
We still like our two investment themes: global energy transition and tech-enabled consumer-facing companies (e.g., global e-commerce). We continue to look for opportunities within both categories because we think they are fruitful, and we will go back in full force to find more attractive investment opportunities for our clients whenever they present themselves!
IMPORTANT DISCLOSURES
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