3 crispin odey presentation
TRANSCRIPT
For professional investors only and should not be relied upon by retail clients
What is the future of Global Investing
International Strategy
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Political change
An end to cheap labour?
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Low cost production brings down inflation
Source: Haver Analytics
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Bond yields falling. Stockmarket falters after 2000
Source: Haver Analytics and Bloomberg
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But housing takes over from equities to provide the growth
Source: Haver Analytics
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The problem
Interest rates
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All this changed
9Source: Haver Analytics
Because asset bubbles were over
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Policy needed to change
• Wages to rise faster than inflation
• Inflation to be higher than interest rates
• Northern Rock era begins.
Happiness turns to gloom...
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This is the problem
Source: Haver Analytics
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UK – very much getting it right
2010 2011 2012?*
GNP +6% +4% +11%
Inflation +5% +5% +11%
Wage growth +1.8% +1% +8%
Cost of living +3.2% +4% +3%
Interest rates 0.5% 0.5% 7%
Wage inflation in developing economies
+20% +20% +20%
*Estimated
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How long can this go on for?
Source: Haver Analytics
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In this environment Germany is booming
Source: Haver Analytics
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No surprise
Source: Haver Analytics & OECD
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Infineon – A perfect example
5 years ago
Now
Source: Bloomberg
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Sky Deutschland
Current EPG New EPG
Old (per H/H)ZFD License €120 Cable €260 Satellite €300 Total €680
New (per H/H)Internet access €200 Satellite €400
Total €600
Source: Bloomberg
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In August 2010
Market Cap €600mCash €500mH/H Subscribers 2mRevenues €1bn
New technology, new products, across media, new content.• 6m households by 2016• €2.4bn revenues• €500m EBIT• Market cap (1.04.2011) €1.7bn
Sky Deutschland
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The Apple Model
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This is an environment in which stock pickers should thrive
Source: Haver Analytics
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Our focus
• Growth companies that benefit from sales inflation but can control cost inflation (BSkyB, Sky Deutschland)
• Capital goods companies that offer labour savings (Schneider, Rolls Royce)
• Businesses that can reprice quickly and regularly (Avis Europe)
• Banks that benefit as LIBID spread returns and companies need expensive working capital (Barclays)
• General & Life insurers who benefit as interest rates rise (L&G)
• Beneficiaries of rising food prices (Diageo, Bongrain)
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Important information
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For professional investors only and should not be relied upon by retail clients.
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Contacts
Institutional investors UK Continental Client ServicesGlobal Asia Europe
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Alison Thompson Sarah [email protected] [email protected]
+44 (20) 7208-1485 +44 (20) 7208-1432
Odey Asset Management LLP12 Upper Grosvenor Street, London W1K 2ND
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