While in Toronto last week, I spent some time with Christine Montgomery and Cathy Alsop from Edinburgh Partners (EP). One of the reasons Christine and Cathy were in town was to present to a group of clients and other investors interested in the Steadyhand story. They also did a formal fund review with Chris and I, recorded a podcast (coming soon), and in my opinion at least, Christine did a bang-up job in an interview on BNN.

A few things come to mind after spending time with Christine and Cathy:

  • Nice people come from Scotland...especially if they’re originally from Ireland.
  • I can never go back. When I get immersed in the Edinburgh Partners way, I just can’t imagine owning 100-200 stocks in my foreign equity portfolio ever again. 30-40 stocks provide ample diversification and they all count in the performance.
  • Long term in a short-term world. Lots of managers talk about ‘out time-framing’ other investors, but few have a specific strategy for doing it. EP’s approach is built around an estimate of the 5-year price/earnings ratio of each stock. The EP managers consider other factors, but this 5-year discipline gives their approach a backbone.
  • What do you really think? Like Steadyhand, EP isn’t afraid to be transparent. In the course of one day, Christine told us they screwed up on Countrywide Financial. At the evening presentation, she used a chart on Irish Life to demonstrate their investment approach, even though the stock has been weak in recent months. She was always open about what the team was currently agonizing over (banks, banks, housing stocks, banks).
  • EP is a tough place to climb the corporate ladder...at least on the investment side. Their team is made up of 10 experienced managers. No juniors in sight. While you can’t tell by looking at Christine, they have all been through the wars. Fortunately, they are a ‘young’ veteran team. While our beloved Canucks don’t have a first line, EP only has first liners.

Global equity markets have been a tough place to invest in over the last couple of months, but my time with Cathy and Christine reinforced my belief that we’ve chosen one of Scotland’s finest exports to manage our Global fund. And when the markets are a little shaky, you can always turn to Scotland’s more well-known export, a well-aged single malt, to help calm the nerves.