Old school investing to avoid disaster

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When it comes to global investments, having feet on the ground is far more beneficial than sitting behind a desk with a high speed internet connection.

That's according to Levitt Capital Management (LCM), a boutique wealth management firm that specialises in designing and managing global portfolios for wealthy families around the world.

Robert Levitt is not only the founder of LCM, but also the managing member, Chief Investment Officer, global strategist and portfolio manager. He is responsible for LCM’s strategic vision, research and trading decisions, and he takes his job very seriously.

Levitt’s approach to idea development involves complete immersion into countries, absorbing language, literature and integration with the local population. 

“I am not sure my approach is really unique, I think it is more the end of the way investing used to be before analysts got comfortable sitting on their desks with high speed internet connection,” he says.

This immersion helps Levitt to avoid the influence of other managers, and has also helped him steer clear of some potentially bad investments.

Last month while in Malaysia, he visited some property developers in Iskandar. The broker who arranged the meetings wanted to arrange a driver from Kuala Lumpur but in his usual fashion, Levitt preferred to take himself.

“Once I started to meet with the arranged companies, I could see that the foot traffic was much higher elsewhere, so I could quickly switch to visit, in this case, a Chinese company. I could go as a customer, not an investor used to first class service.

“I could feel the same sentiment a customer could. I also learned that the nearest fuel station to the property the broker wanted to take me to was 20 minutes away.”

The difference between studies and reality was shown again when Levitt met with Nielsen Research in Jakarta. During a conference at the Four Seasons Hotel, Nielsen explained to him that the hypermarkets of Jakarta were empty. The following week Levitt visited the hypermarkets and says shoppers were out in droves.

Malaysia and Indonesia are of particular interest to Levitt, because both economies are at a different stage of transformation.

“Malaysia represents a more advanced emerging market looking to break into a high income sphere. Indonesia represents a pure, young, emerging market with huge potential and huge problems.”

Levitt tries to see as much as he possibly can on the ground, and right now he has his eye on the movement out of recession for Europe and the huge growth in Japan.

“I am watching Japanese companies move into Indonesia, including its banks, and I am seeing Europe’s rebound, the biggest customer for China, correspond with large increases in the price of copper and iron ore.

“If China grows at 7.5%, Australia grows too. If Europe grows, then the connection with China and hence Australia will be happening now. We prefer to invest when the fruit is hanging low, not wait until the figures show up on the financial statements. By then, a large part of the move would have already been made.”