DAVID WINTERS: Well, I think the West is going to come back. I think there will be an economic recovery. I think things will get better. Tomorrow will be a brighter day. But, you know, there's some real issues about how fast we can grow. And what's so exciting about Asia is you have three billion people, give or take, who want everything that we have. And they're willing to work really hard to get it. So part of our job at Wintergreen is to figure out what can we invest in that capitalizes on this economic, tectonic shift?
COSNUELO MACK: So is that a key factor that when you're looking at businesses to invest in, because you do invest in companies as businesses, not trading stocks. Is that a key factor in whether or not you invest with a company?
DAVID WINTERS: It's absolutely an important factor. It doesn't mean that we wouldn't invest in a company in Europe or the U.S. or Canada. But it's great to have some sort of global exposure. You know, first of all, to have multi-currency diversification and free cash flow really reduces your risk and creates more upside.
CONSUELO MACK: So the multi-currency aspect of that, how important is that?
DAVID WINTERS: Well, the dollar, the U.S. dollar, has got problems because, you know, we're borrowing a lot of money as a country. And so you really, as a dollar investor, and today almost everybody is in the U.S. is super overweight, the dollar, they need to diversify overseas. And so that's what we-- five years ago, we only were a third overseas. Today we're over two-thirds on a look-through basis.
CONSUELO MACK: Which is pretty phenomenal. So does that mean that the traditional Wintergreen fund or the traditional David Winters investment has changed dramatically as well over like the last five years? I mean are you investing in different kinds of companies than you would of, let's say, ten years ago?
DAVID WINTERS: I think because people, because stocks are low in general, we have the highest quality portfolio I've ever been associated with. So I'm more enthusiastic about what we're doing today than five, ten, 15 years ago.
CONSUELO MACK: So in stocks, well, that's another profound change. But people in the U.S. have actually been fleeing stocks. Is that a global phenomenon or is that just something that's happening here?
DAVID WINTERS: It's happened in the U.S., it's happened in Western Europe. There's not a culture in general in Asia of long-term investment. So you have people who are hiding in money market accounts, where they're getting, give or take, ten basis points because they feel safe. Yet they can get good yields in super high-quality companies but they're not interested. And so you know, the collective emotion--
CONSUELO MACK: The zeitgeist as we call it.
DAVID WINTERS: --right, was you know, a couple of years ago was, you know, "Go buy the Internet." And you know, if you bought the right couple of stocks, you did great. But in general, you know, people all went in one direction. And now you have the vast bulk of participants and investors, they're on the side lines. They've given up. They're not interested in business.
CONSUELO MACK: Does that concern you? Or is that just, you just look at it and say, "That's the reality and it's an opportunity?â
DAVID WINTERS: I think it's a wild opportunity because at some point, people will wake up and they'll feel better. And they'll buy equities again. It's always happened. You know, you go back to '73, '74. You go back to the 30s. And so, you know, people will shift. But meanwhile, those of us who are investing, Wintergreen, we're in there with both feet.
CONSUELO MACK: You know, it's so interesting, David, because if you talk to a lot of other people right, they would say "Stocks failed us in the financial crisis." And, you know, people got hurt in a lot of different asset classes. But stocks, in particular, it's now being talked as the risk asset. And, therefore, instead, where you're focusing on stocks, everyone else seems to be focusing on alternative investments. So what about the alternative investments? I mean, don't you think having been through what we've just been through in the last couple of years, that, in fact, that you're being less risky, that you're being smarter to more broadly diversify rather than be in those ârisk assetsâ that are called stocks?
DAVID WINTERS: Well, it depends on what stocks you owned. But if you own really good companies, we call it the trifecta- a company with good or improving economics, management that's working, hopefully for the shareholders at a low price. You take the risk out. Stocks are going to go up and down. They always have. And this idea that you can take fluctuations out, it's hard. But ultimately, the richest people in the world, whether it be in the Forbes 400 list, or whatever list, they all owned a business or a series of businesses. And the fact that people aren't interested in equities, you know, as a contrarian and as a value investor, you can buy into big liquid, really good companies at 50% discounts to asset value.
CONSUELO MACK: So give me a couple of examples and I know if I look at some of your largest holdings, for instance, what kind of exemplifies the kind of discounts and the value that you're talking about?
DAVID WINTERS: Well, just one that, you know, pops to mind is Anglo American is a mining company run by a woman named Cynthia Carroll. She's brilliant and she's a geologist by background and she's turned the company into a safety culture, an efficiency culture. And I think the stock's very cheap. And you know, I think there's a mineral rush going on. And if you see what's going on with China and other countries, there's this rush to secure long-term assets. BHP. Bid for potash. Potash is used in fertilizer. If you want to feed three billion people better, you got to have potash. And that's what going on.
CONSUELO MACK: So Anglo American, because that's a South-African based company, right? Still.
