This week, we speak with Simon Hallett, Co-Chief Investment Officer at Harding Loevner, which manages about $72 billion dollars. The firm’s global equity portfolio’s has a remarkable track record, outperforming the MSCI ACWI by 250 bps annually since its 1989 inception.
Hallett discusses how the firm’s four metrics for portfolio companies — Competitive Advantage, Quality Management, Financial Strength, Sustainable Growth — can be made less “squishy” and quantitative.
He explains how behavioral finance has led the firm to restrict the freedom’s of their portfolio managers. As Co-CIO, the rules he creates has forced his portfolio managers to stick to a process that is devoid of emotional errors.
He also explains why he became the owner of the Plymouth Argyle Football Club, the League One team he grew up rooting for in his hometown of Plymouth, Devon, England. The team still plays at home park, the same location since 1901. Buying the team was a labor of love and “the worst investment anyone could ever make” but a way to give back to his hometown. He has renovated the stadium, and improved much of the surrounding area. He has explored ways to introduce a form of “Moneyball” for Soccer. Despite market efficiencies, there are inefficiencies on the edges of professional sports.
A long list of his favorite books are here; A transcript of our conversation is available here.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Paul Wraith, Chief Designer for Ford, and over the past several years, the Chief Designer for the new 2021 Ford Bronco.
Simon Hallett’s Favorite Books
The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing by Michael J. Mauboussin
Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin
More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael Mauboussin
American Prison: A Reporter’s Undercover Journey into the Business of Punishment by Shane Bauer
The Years of Lyndon Johnson: The Path to Power; Means of Ascent; Master of the Senate; The Passage of Power by Robert A. Caro
Winning Decisions: Getting It Right the First Time by J. Edward Russo and Paul J.H. Schoemaker
Expectations Investing: Reading Stock Prices for Better Returns by Alfred Rappaport and Michael Mauboussin
