Here’s what you need to know today

• It seems we’re in global meeting season. Over the weekend, the 21 members of APEC (Asia-Pacific Economic Co-operation) met at a summit in Peru. Today (Monday), the G20 kicks off in Brazil. And all of this week, the UN Climate Conference COP29 continues in Azerbaijan. A big week of travel for world leaders including Anthony Albanese. (Reuters)
  
  

• The big talking point at APEC over the weekend was Trump as world leaders reaffirmed their belief in free trade. However, Chinese ‘chequebook diplomacy’ was also front-and-centre after Xi Jinping opened a new US$3.6 billion port in Peru before the two-day APEC summit. (ABC News)
  
  

• The battle between Australian private hospitals and health insurers over who should pay for rising medical costs has now been dropped at the government’s feet. Health insurers have asked government to approve a 6% rise to private health premiums, arguing if the government reject the proposal some funds will collapse or be forced to axe top hospital cover. Last year the government approved an average increase of 3%. (AFR)
  
  

• Elon Musk’s X (Twitter) has filed a lawsuit in California to stop the implementation of a law that would force social media platforms to remove “deceptive AI-generated content”. X claims that this California law violates Constitutional protections for free speech. (CBS News)
  
  

• Netflix took an interesting first step into broadcasting live sport as it hosted the Mike Tyson-Jake Paul fight over the weekend. It appears to have been a success with the streaming giant reporting 65 million households were watching concurrently as Paul (27 years old) beat Tyson (58). (ESPN)

What the…?

If you’re an American upset about the election result, then cruise company Villa Vie Residences has a deal for you. The company is offering a four-year long cruise they’re calling “Skip Forward” which will allow you to live on the cruise ship away from America from the length of the Trump Presidency.

The price tag for one person to have their own room for four years? $255,999. With a price like that, you’re going to need to keep your job, so some Democratic voters may be testing the limits of their company’s work-from-home policy. (Quartz)

Investing is a lifelong journey

Here’s what you can learn today.

This is an exerpt from our interview with Sorin Roibu, Porftolio Manager at Brandywine Global. You can listen to the full interview on YouTube, Apple, Spotify or wherever you listen to podcasts.

Bryce: The philosophy at Brandywine is consistently value, but with an adaptive approach; you include macro and a few other elements. So can you elaborate on that? How far do you stretch beyond the true value and what parts of it do you adapt?

Sorin: It's a great question. Let me first state that when we say stretch or adaptive, we're still true to the value. As I just said, we're looking to really understand the value of the business and buy below the intrinsic value. 

However, what I would say is that if you're still doing value investing, like Benjamin Graham was doing, it did it in 1930s, you're probably doing it wrong. 

The nuance here is that a hundred years have passed, the makeup of the economy is different, the makeup of the world is different. So you have to evolve with that. So the way we adapt our approach is to realise that today the economy is a lot less capital intensive than it used to be in the 1930s, less industrial, less manufacturing, it's a lot more capitalised businesses, technology names that grow without a lot of capital. Profitability is different too. 

So when we look at the world, we're trying to adapt and use the valuation tool that's appropriate for the opportunity, that's appropriate for the business environment that we're in, while still doing that basic valuation. We're looking at free cash flows, looking at balance sheet quality, the formulas, the math behind it is still the same, but realising that the competitive dynamic, the market backdrop, the economic backdrop is very different. 

So if you're just going to go there with a little measuring tape trying to measure price to book across the board, you're going to find that the output is not necessarily what you wanted because a lot of companies with book value is irrelevant. This is when we say adaptive, as in, hey, we're still going to do value invest, but we recognise that times change and we need to change with times and make sure that our skill and our approach is relevant and still leads to good outcomes.

Check out the full interview wherever you listen to podcasts, or watch our conversation with Sorin on YouTube:

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