Q: Can you highlight key developments in non-US markets in 2024 — and areas that have surprised you positively or negatively?
Krishna Mohanraj, CFA
I think what's interesting is that there is a difference that we're seeing between the top-down view and the bottom-up view. Top-down, we are seeing a ton of daily volatility market by market. I mean, there is not a week without a headline that causes some market to fall double digits internationally or that causes some sub-sector, whether it's mining stocks or luxury good stocks, pharma companies moving up plus or minus 5% to 10%. And we are not just talking about Mexico or Bolivia, some of the smaller emerging frontier markets. We are talking about big developed markets. We've seen big moves this year in China, in France; we saw a big selloff in Japan in Q3 and in India right after the elections in June.
And then the most recent one, South Korea, both the market and the currency down big just last week. The reasons are obvious. We've seen major political change with elections in many markets. We have ongoing wars, a regime collapse in the Middle East just this weekend. And then the big, big elephant in the room is China. The world is, I would say, struggling to digest the China model. We've always known that China has had a lopsided economy totally dependent on investments and exports. Now as exports slow down and investments slow down, the Chinese consumer is not going to be able to pick up the slack and support that economy, right? And it looks like Chinese leadership has come to that conclusion and are simply going to keep pushing cheap products everywhere they can. Now that's not an easy thing for the world to digest. It impacts economies; it impacts jobs, and social structures everywhere.
So, I'm not really surprised that globally, we're seeing all this volatility. So that's sort of a flavor of the top-down, and I'm sure we'll talk more about this, but the bottom-up view is very different. And despite all of what we are seeing in the top-down, we are able to find interesting businesses that are not directly in the line of fire of some of these big macro concerns. And that's allowing us to build a portfolio of very differentiated stocks.
In fact, just in the last quarter, we've added five new ideas to the portfolio, and I'd say the most interesting thing is that there's no common theme across them. These are all individual, unique businesses, different sectors, and different geographies. If you just run through our buy list, right? What have we bought so far: a global insurance brokerage business, a McDonald's franchiser in Latin America, a French company that does wastewater energy management, an asset management platform in Europe and the Mexican stock exchange operator, each one very unlike the other.
See for us this divergence between the volatility you're seeing top-down but good business prospects that you're seeing when you look bottom-up. That's what makes this interesting. It's a great time to be a stock picker in these international markets.