DAVID WINTERS: London based with substantial South African and Brazilian assets.
CONSUELO MACK: And so South Africa sounds to me, out of my ignorance about South Africa, sounds high risk, and I'm sure that that's an important factor too, is where a company does business. But you've overcome that hurdle and decided that South Africa is okay in Anglo American case?
DAVID WINTERS: South Africa, it's a developing economy. And all-developing economies and developed economies have their problems. But you know, I think Anglo's cheap enough that it compensates for that risk.
CONSUELO MACK: These high quality companies, I mean one of your themes as well talking about Anglo American again, is that you've got, you own some commodity companies. And I know Canadian Natural Resources has been another long-term holding of yours. And so the attraction of that as well, is there a theme there?
DAVID WINTERS: Yes. One of the problems is you got all these people who want what we have. There are not big pools of oil being found. I mean there are little pools. There's lots of oil off of Brazil. But you got to drill really, really deep to get it. And CNQ has, Canadian Natural Resources, has these vast resources. And we think it trades at a discount to asset value, it has great management. And it's cheap. And it's in Canada! And Canada is one of the best countries in the world. You've got rule of law. You've got a market system. We have a free trade agreement. And it's a wonderful place. I love Canada.
CONSUELO MACK: You know, the Canadian currency, does that have something to do with it as well? The Canadian dollar? Is that, again, a way of diversifying out of the U.S. dollar?
DAVID WINTERS: Well, this again goes back to our original question about markets. You know, it wasn't that long ago that Canada had some serious problems. And so they addressed them over time. They paid down debt. They ran the country better and what's happened? Their currency has gone to 98 cents. And some of it is our currency has gone down. But a lot of it has to do with how well Canada's been run. And also that they have all this oil. And potash.
CONSUELO MACK: All the things that we need to run the world. Yeah.
DAVID WINTERS: And it's a free society.
CONSUELO MACK: So the rule of law, is that another factor that you look at before you invest in a company?
DAVID WINTERS: Yes. Yes. We really want to be invested in a country that has a backdrop of respect for laws with respect to shareholders. And that, you know, it's your money, you've invested it. Whatever your nationality, we're going to treat you fairly.
CONSUELO MACK: How does the U.S. match up with that definition?
DAVID WINTERS: We have our challenges. I mean the U.S. is ultimately still, you know, a wonderful country to be an investor. We do have, you know, a very good legal system. But, you know, the last number, the last decade's been tough here. And so I think, you know, we need to improve our record with regards to how we treat shareholders and bond holders.
CONSUELO MACK: If you look at the regulatory reform, the Dodd Frank Bill that's just been passed, and again, there's 2,000 some odd pages of it. Do you feel that that is impacting the U.S. investment environment in a positive or negative way? Or what impact do you think it's going to have?
DAVID WINTERS: You know, I don't love regulation. You know, ultimately I think it's hard to regulate good behavior. I think that we're in a very difficult spot now. And we've got to get through this debt liquidation and we've also got to get some enthusiasm going in the country. And it'll happen. But, you know, our view is today the best opportunities are not in the U.S.
CONSUELO MACK: So it's interesting. So there's a negative and a positive side to this glass half full-glass half empty. So is, actually when I look at the 65% of the Wintergreen Fund invested in non-U.S. companies, is that really a vote against the U.S. as much as it's a vote for the other areas you're investing in? Because there certainly have to be some terrific U.S. companies that do business here that are also undervalued because most of the big cap companies are.
DAVID WINTERS: Sure. I think the U.S. is great. You know, it's just the question of, our job is to find the best opportunity for our shareholders, the best risk reward. And today, that's overseas. You know, the next time we sit down, whenever it may be, it could have changed. And that's why we wrote the prospectus to give us that flexibility, Consuelo, because you don't know what the world is going to, what opportunities are going to be there. I think the U.S. is going to come back big time. It’s just right now, there's better opportunities overseas.
CONSUELO MACK: And how important is the emerging market exposure when you're looking at a company's strategy as opposed to, you know, because when we talk global, we could also be talking about Europe or whatever. But you're really, are you really focusing on companies that benefit from emerging market growth?
DAVID WINTERS: I think that you want emerging markets. You just don't want to overpay for it. It's like anything. And today because there's such values everywhere, you know, you really you'd prefer, I'd love to have emerging market exposure. Nestle, ten years ago, was 25%. Now it's 35%. They hope in ten years it'll be 45%. But, you know, it's not priced as an emerging market stock.
CONSUELO MACK: Because those are pretty pricey now. Right? A lot of emerging market stocks.
DAVID WINTERS: Yes. Because generally they're thin markets, and, you know, the money rushes in, it rushes out. And you've got again, be a bit of a contrarian and a value investor. You got to buy when people don't want to.
CONSUELO MACK: Jardine Matheson is another one of your kind of holdings that you and I have talked about before. So tell us about Jardine Matheson and why that still has appeal.
