Investment Trek Mid-Point

Lunt Capital’s Investment Trek has been a most remarkable learning experience.  It has far exceeded my expectations in providing a global, long-term perspective, in delivering timely analysis, and in adding to our extensive global network.  It will have a lasting impact on the way that we invest.  A good analogy would be the extensive process used to hire a new employee.  Studying the candidate’s resume is important, but sometimes the interview sheds a completely new light on the person.  Consider our Investment Trek as our interview of the world for your investment portfolios.  Seeing financial markets through local eyes has helped us to understand the key catalysts, triggers, challenges, and themes in each country.

I am thrilled that we are only at the half-way point on our Trek.  Ryan will embark on his leg of the trek over the next few days.  As a review, here are the cities visited so far: Tokyo, Seoul, Beijing, Mumbai, Paris, Normandy, London, Oxford, Tel Aviv, Jerusalem, Istanbul, Berlin, and Rio de Janeiro.  These 10 foreign countries include 3.27 billion people.  When including our home country of the U.S., the first half of our trek covered 8 of the top 10 economies in the world, and ten of the top 20 (ranked by purchasing power parity).  Israel is the world’s 56th largest economy, but despite its size it continues to be a focal point of the entire world.

We cannot express enough gratitude to the dozens of industry professionals in the U.S. and in all 10 countries that facilitated and participated in investment meetings.  Our tally of work tells the story.  We had 34 official meetings with government and industry experts.  These meetings included government central banks, stock exchanges, a think tank, a finance ministry, money managers, investment analysts, index providers, ETF firms, and economists.  We have had dozens more unofficial meetings, discussions, and meals with financial professionals and insightful people in every country.  We composed 50 written research reports from the road and collectively produced 28 video summaries of in-country meetings and analysis.  Our team in Utah produced extensive country reports and assembled economic and financial market statistics on all ten countries visited.  This is not intended to brag, but rather to highlight how seriously we take the mandate to provide thoughtful research and to effectively manage money in global strategies.

This volume and quality of work would be impossible without a fantastic team.  I have to specifically recognize Ryan Hessenthaler, Kevin Weidmer, Michelle Fry, Zac Napierski, Brennan Staheli, Lauryn Hessenthaler, and more than 10 research analysts.  I think that Ryan went weeks without sleeping!  When day and night were nearly opposite when I travelled to Asia, I would talk to Ryan before going to bed, and I would wake up the next day and Ryan would still be working!  We kept learning and incorporating the new knowledge from the Investment Trek, but the Lunt Capital team stayed completely focused on managing portfolios.  I continued my portfolio management and trading role from every stop.  Ryan and I continued to discuss, review and implement every trade and strategy together over this period.   Voice over IP allowed us to talk regularly at length.  I was able to answer many emails immediately and the others typically within hours.  We did not skip a beat—it is no exaggeration that I was able to follow markets on the road just as closely as if I was sitting in the Lunt Capital trading room.  I am proud of this remarkable group of people. 

I could not have circled the globe by myself.  My amazing family—Sydney, Joseph, Rebecca, and Camilla were the greatest travel companions imaginable.  Even my daughter Hannah, currently a missionary in Romania, was unwavering in her enthusiasm and support.  To a person, they were optimistic, adventurous, and adaptable.  They ate everything.  They pushed their way onto crowed public transportation at every stop.  I would go off to meetings, and they would fearlessly explore the city.  They wore eye masks and ear plugs so that I could talk and work late into the night in the same room.  Just as impressive, we did it with only carry-on luggage!  I was fortunate to have my parents, Larry and Sue, and my nephew Andrew join us in four of the cities.  Their insights and “can-do” attitude added immeasurably to the trip.  This type of adventure must pass along in the family DNA, as my father traveled around the world with his family in 1960 (Pan Am 1 flew around the world going West, and Pan Am 2 flew around the world going East—he went East). 

During the first half of the trek, we traveled more than 35,000 miles on 15 flights.  We trekked by plane, train, boat, tram, bus, van, taxi, and metro.  We survived the MERS outbreak while in Seoul, the monsoon rains in Mumbai, and the record heat in Berlin.  I will never forget being literally swallowed by a sea of people as they walked to a Friday Ramadan prayer in the Muslim Quarter of Jerusalem’s Old City.  We visited Tiananmen Square in Beijing only a few days after the 25th anniversary of the massacre.  We were in Oxford, England (not far from Runnymede) to commemorate the 800th anniversary of the Magna Carta.  We saw the excitement of Rio for the 2016 Summer Olympics, we spent a day on two continents in Istanbul, and we enjoyed an early morning in the world’s largest fish market in Tokyo.  I already miss the breakfast of French pastries that Paris offered.

Many have asked about specific investment insights from the first half of the Trek.  I will look forward to sharing additional, follow up observations about each country.  I also have put together some broad, “big picture” thoughts as I wrap up my portion of the travel.  You can plan on a report in the coming days, and this broad report will focus on five observations:

  1. The Economics of Good:  How traveling around the world makes one an optimist.
  2. Creating Growth and Attracting Investment: Cultural Diversity vs. Necessary Core Ingredients.
  3. Governments Matter: People respond to incentives (Policy, Politics, and Economics).
  4. The Global Village: English + Technology = Global Connectivity.
  5. Navigating the Fog & the Noise: Perspective from a Street View, a City View, and an Airplane View.
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Each item has a profound impact on long-term, global investing.  My travels have highlighted to me that the most important investment decisions are actually people decisions.  We are honored to have the opportunity to work with you.  We will work tirelessly to be worthy of your continued trust. 

You will find attached our quarterly “Manager’s Message,” which I wrote from Berlin on the Fourth of July.

Stay tuned…I’ll now pass the baton to Ryan!