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A Lot Has To Change Quickly For Republicans To Have A Chance in 2024

A Lot Has To Change Quickly For Republicans To Have A Chance in 2024

Authored by Matt Towery via RealClear Wire,

To be clear, I am writing…

Published

4 months ago

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A Lot Has To Change Quickly For Republicans To Have A Chance in 2024

Authored by Matt Towery via RealClear Wire,

To be clear, I am writing this as a pollster, not as a politician or partisan.

Here’s the bottom line. As it gets closer to the summer of 2023, I would rate the Democrats as more likely to again take/keep the White House. They might even hold on to the Senate and re-take the House.

This is a tough message to deliver to the Republican faithful at a time when inflation is way up, millions have crossed the border illegally, China and Russia both pose true threats to international stability, and crime has spiraled in many areas of the nation.

Sure, events and issues would seemingly favor the 2024 Republican nominee for president. But consider this. On Oct. 25, 2022, immediately following a Wall Street Journal poll showing Republicans up by two points in the “Generic ballot” midterm contest, my firm, InsiderAdvantage, also showed Republicans leading Democrats by four points, well within the WSJ poll’s margin of error. Sixteen national polls followed ours in the RealClearPolitics average with only two of the polls showing Democrats leading and one showed a tie. The other 13 polls had Republicans ahead. CNN had the same four-point advantage our survey showed. ABC News/Washington Post along with CBS News had the GOP with a two-point lead. NPR had it at a three-point GOP lead.

For whatever reason, only a few national pollsters chose to survey the battleground Senate contests in the last few weeks  of the 2022 midterms. Many of us who did, such as one of the most accurate over the past four cycles, Robert Cahaly of Trafalgar, showed Republican candidates in competitive states trending ahead, reflecting what the many national organizations were indicating in their generic ballot polls.

But the building “Red Wave” disappeared on Election Day. Sure, as pollsters we will be examining our data and weighting for the next cycle. But it may be that for Republicans, opinion surveys, whether suggesting a win or a loss, won’t matter. A loss is more likely regardless.

Why?

In part because there exists a not-so-subtle Democratic machine that goes far beyond politicians and now includes significant segments of corporations, media and “nonpartisan” governmental entities. Presidential and battleground Senate races are currently won at the slimmest of margins and Republicans face a system that now requires that their nominee blow past those margins on the crest of not just a possible “Red Wave” but riding a true “Red Tidal Wave.”

Only that massive “Red Tidal Wave” can carry a Republican back into the White House. Here’s a list of why such a GOP meltdown is possible again and the potential remedies for the party that, at present, seem unlikely to materialize in time to avert disaster for Republicans in 2024.

If a Tree Falls…

You know how this goes: If a tree falls in the woods and there is no one to hear it, does it make a sound?

In the political forest, the answer is no if the tree is Republican or conservative. This is by far and away the biggest obstacle Republicans face in having a fair chance of winning in 2024.

While Fox News remains the dominant cable news network, it cannot possibly serve to counterbalance the three broadcast news networks along with CNN and MSNBC. Even with Newsmax thrown into the mix, the “conservative” broadcast and online media, based on total viewership and readership, is overwhelmed day in and day out. Other than Rupert Murdoch, conservative-leaning financiers have either lacked the will or have been stymied at forming consortiums to purchase or challenge the “legacy” media. And Republican operatives seem hellbent on spending all their money in short-burst primary and general election cycles. They just assume that everyone knows their view of the news: that President Joe Biden is “cognitively challenged”; the economy is in decline; the border is flooded daily by undocumented immigrants; that crime is destroying the nation’s once great and revered cities; that the U.S. appears weak and unprepared for future aggressions by major foes. You get the point.

But the average voter doesn’t. Polls asking voters about issues provide conservatives with the appearance that their issues are important to voters as well as the foibles of Democrats. But most issue-oriented polling questionnaires assume that their respondents are aware and have an opinion on the matter. And respondents rarely want to confess that they haven’t a clue. Put that same respondent in an unaided survey where they must articulate the issues of the day and one will find that those opinions on most issues dissolve into a mishmash of general concepts and less definitive answers.

It seems that Republican leaders just assume that everyone else lives in the bubble they live in. But they don’t.

Most voters whose vote the GOP might otherwise win don’t much know about critical race theory, the consequences of mounting federal debt, or much of anything conservatives talk about amongst themselves or to their audiences.

Were it not for Twitter CEO Elon Musk, what little information conservatives manage to get out beyond their bubble would be shut down by the social media establishment.

Consider the following. On the day after news reports of an IRS whistleblower’s allegations of potential wrongdoing concerning the Department of Justice’s handling of the Hunter Biden investigation and the revelation that Secretary of State Antony Blinken allegedly requested a letter from members of the intelligence community to label the younger Biden’s laptop “a Russian Hoax,” the daily White House briefing was devoid of questions on the two issues.

Weeks later, when the House Oversight Committee presented financial records of members of President Biden’s family and their business associates receiving over $10 million from foreign corporations linked to China and Romania using a labyrinth of corporations, a massive tree fell. But virtually no one heard it.

The three “legacy” TV networks did not cover it in their news broadcasts and mostly ignored it on their websites. But taking the old “tree falls” to a new level, The New York Times decided to ignore the tree falling and instead proclaim renewed sturdiness and growth for the tree. Their headline: “House Republican Report Finds No Evidence of Wrongdoing by President Biden.”

The selective and slanted nature of news now often starts at its initial gathering point and continues in its final presentation to a busy public, most of whom grab their news from social media and news aggregations on their smartphone. Republicans and conservatives have missed the boat in educating voters in a non-controversial and balanced manner, about the true facts and news of the day.

And consider that conservatives are routinely labeled by the mainstream press with the pejorative phrase “far-right wing” while even the most “out there” liberals are labeled the more upbeat moniker of “progressives.” Republicans haven’t even been able to address the simple matter of the lexicon used in political battle.

No Check on the Checkers…

The business of “fact checking” arose with the same foundational financial and logistical support that brings “legacy” news to us. Have you noticed how journalists, and I mean top ones, are willing to use definitive terms like “lies” and “debunked” in their description of certain people and issues rather than the more cautionary and traditional terms like “disputed” and “alleged”? That’s because the fact checkers make definitive statements that allow journalists to definitively dismiss certain matters and embrace others. While the NewsGuards and PolitiFacts of the journalistic world were being incubated and lovingly made into “institutions,” there was no formidable effort made by those who long for a more balanced media to create credible and less politicized alternatives. And that’s a fact!

Add to that “fact” the amazing coincidence that AI has burst on the consumers of news and social media just in time for what might be the most critical presidential election cycle in American history. Now facts, figures, biographies, and narratives can be gathered, edited and selectively presented to consumers who have no idea who or how their AI database or algorithms were programed or written in the first place. If those wanting a more balanced media don’t fund their own legitimate and well-funded fact-checking organizations, an entire generation will become reliant on one-sided and often extremely biased groups claiming to be the ultimate arbiters of truth.

‘Existential’…

This is the most overused word of the last three years. Everything, it seems, is deemed “an existential threat” to the world. The philosopher Soren Kierkegaard must be rolling over in his grave at the endless use of his central concept.

So let me keep Kierkegaard spinning. The failure of the GOP to flood nursing homes, bingo halls, and mortuaries (OK, that one is a joke, of a sort) in search of voters willing to cast early ballots remains, as of today, unaddressed, And it really is an “existential threat” to the Republican leaders. They must come to understand that in our post-COVID era, the rules for who votes when and where, and under the aegis of “voter outreach,” has changed forever. Democrats know how to spend buckets of money to advance what could best be termed “selective democracy.” They know just how to bump against the line of what is allowed and what is not, should anyone with any authority and objectivity care.

The GOP has only months remaining to create armies and methods to match those efforts.

If the Shoe Fits…

Republicans must wear it. In recent years Republicans have suffered from a tenuous relationship with white suburban women and younger voters. They are being made to feel guilty in the classrooms, carpool lines or suburban tennis matches that they were born white or were provided opportunities while growing up. It translates as “Republicans are the racist party” by default.

When Roe v. Wade was overturned, some Republican leaders in various states decided to up the ante on abortion laws. It’s logical for Republicans, given their position on the matter, to advance protecting unborn lives. But to do so without a massive ad and public relations outreach campaign to those essential demographic groups to explain their legislation, creates a political shoe so tight that an elephant’s foot has no prayer of fitting. Hence, a contributing factor to the massive turnout and marginal losses for Republicans in many marginal contests in 2022.

It’s the same for the issue of gun control versus gun rights. If Republicans want to continue to support a broad interpretation of the Second Amendment, they need to educate a public overwhelmed by a media that does not.

How about a massive paid ad campaign exposing voters to statistics supporting the claim that in areas where everyone is “packing heat,” so to speak, gun violence drops? If that is indeed the case, don’t just say it on conservative-leaning cable news shows, prove it to the public in well-reasoned ads with real live statistics. Ditto for the value of armed security in every school. If the evidence exists to support those concepts, why is it not front and center in ads on popular TV shows and the web? Shucking and jiving through endless mass shootings isn’t working — and is costing the GOP with younger and suburban swing voters.

The Tooth Fairy vs. the Dentist and Periodontist…

Lord knows both parties know how to pander, but Republicans let their “fiscal responsibility” stand in the way.

Democrats under Joe Biden have been described as “the Tooth Fairy,” promising outrageously massive handouts to various demographic targets with no apparent way to pay for them. Meanwhile, the Republican counter to this Democratic approach is to serve as national dentist and periodontist. Incrementally trying to fight cavities and oral decay but with nothing new to offer voters. Ask yourself “Tooth Fairy or Dentist?” Most would choose the Tooth Fairy every time!

For the sake of argument, try this idea on for size, Republicans: Propose that the government eliminate all these programs you view as needless handouts, unappreciated foreign aid and government waste.

Put it all into the Social Security “trust fund” as a sort of “matching contribution” and give seniors a real live retirement that they can live on. Instead of raising the age requirement for benefits, lower it over time! And jack those payments way up while cutting out the “left-wing woke funding” you claim to despise in order help pay for it.

No one would ever expect that from the GOP. Yet that would consolidate (and could increase) for Republicans a senior base they began to lose during the pandemic, and which continues to be problematic. Based on exit polls of battleground Senate races, increasing the GOP share of the vote among those age 55 and over is the most likely way for Republicans to expand their vote and create a true “Red Tidal Wave.”

The choice between forgiving college loans of over-educated millennials who offer little potential for significant vote gains, versus an enhancement and expansion of benefits to more senior Americans of all backgrounds, would seem to be a no-brainer. And it would put to rest the constant Democrat go-to of last-minute ads warning seniors that “Republicans want to cut your benefits.”

How about a national bonus or additional tax credit program for police and firefighters across the nation? How else are we ever going to motivate the next generation to consider taking on these increasingly dangerous and thankless jobs?

The GOP has become the party of the working person, including those who have worked hard all their lives. Why not seal the deal by promising to reward those voters and taking resources away from programs that encourage the opposite? That is exactly how Democrats under Biden are seemingly operating. They arguably penalize those who work to have good credit by rewarding those who don’t. The Green New Deal makes the future far more expensive and impracticable on the average worker while searching for ways to transfer resources to others in the name of “energy and climate equity.”

Take from one group and give to another. Republicans better learn to do it big — and soon — or they will wither as a party.

It's likely, for the GOP I know, that the shoe won’t fit their agenda either. They will deem such ideas “unworkable and fiscally irresponsible.” As if the Democrats’ “Inflation Reduction Act” was?

A Better Class of Prisoner…

In the 1960s, one governor, when asked about the sorry conditions of his state prisons, responded by saying that what the state needed was “a better class of prisoners.” When it comes to Republican campaigns, a better class of prisoners might be called for. Or at least a truce among inmates. For decades Republican political operatives have approached one another as rival “political gangs,” more interested in capturing all the dollars from political donors and spending them through their associates and fellow “gang members,” than winning. “Diss me and my gang and we will cut funds off from your candidate.” We saw that same mentality prevail once again in 2022, and Republican candidates once again were the casualties of it.

Democrats take a different approach. They tend to work toward one common goal of winning. The spoils of victory are then rewarded after the votes are in and the political power has been gained. Of course, to be fair, Democrat “dark money” is more plentiful, and Republicans often must scrounge around for funds in order to compete.

A lot has to change in a short time period to give former President Trump or any other Republican nominee a sporting chance of winning in 2024. No GOP nominee, even Trump (who tends to pull more voters to the polls than other modern-day Republican nominees could have hoped for) cannot win if these substantial changes don’t start to take place, and rapidly.

If not, the elephant walk of 2024 could once again be one straight off the political cliff. But for this upcoming cycle, pollsters will likely be extra careful not to march off that cliff with them.

Tyler Durden Fri, 05/26/2023 - 21:40

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International

Fair and sustainable futures beyond mining

Mining brings huge social and environmental change to communities: landscapes, livelihoods and the social fabric evolve alongside the industry. But what…

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October 2, 2023

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Mining brings huge social and environmental change to communities: landscapes, livelihoods and the social fabric evolve alongside the industry. But what happens when the mines close? What problems face communities that lose their main employer and the very core of their identity and social networks? A research fellow at the University of Göttingen provides recommendations for governments to successfully navigate mining communities through their transition toward non-mining economies. Based on past experiences with industrial transitions, she suggests that a three-step approach centred around stakeholder collaboration could be the most effective way forward. This approach combines early planning, local-based solutions, and targeted investments aimed at fostering economic and workforce transformation. This comment article was published in Nature Energy.

Credit: Kamila Svobodova

Mining brings huge social and environmental change to communities: landscapes, livelihoods and the social fabric evolve alongside the industry. But what happens when the mines close? What problems face communities that lose their main employer and the very core of their identity and social networks? A research fellow at the University of Göttingen provides recommendations for governments to successfully navigate mining communities through their transition toward non-mining economies. Based on past experiences with industrial transitions, she suggests that a three-step approach centred around stakeholder collaboration could be the most effective way forward. This approach combines early planning, local-based solutions, and targeted investments aimed at fostering economic and workforce transformation. This comment article was published in Nature Energy.

 

Dr Kamila Svobodova, Marie Skłodowska-Curie Research Fellow at the University of Göttingen, argues that, in practice, governments struggle to truly engage mining communities in both legislation and action. Even the more successful, often deemed exemplary, transitions failed to follow the principles of open and just participation or invest enough time in the process. Early discussions about how the future will look following closure help to build trust and relationships with communities. A combination of bottom-up and top-down approaches engages people at all levels. This ensures that the local context is understood and targeted specifically. It also establishes networks for collaboration during the transition. Effective coordination of investments toward mining communities, including funding to implement measures to support workers, seed new industries, support innovations, and enhance essential services in urban centres, proved to be successful in the past.

 

“To ensure energy security, it’s essential for governments to recognize the profound transformation that residents of mining communities experience when they shift away from mining,” Svobodova explains. “Neglecting these communities, their inherent strength of mining identity and unity, could lead to social and economic instability, potentially affecting the overall national energy infrastructure.”

 

Moving toward closure and consequently away from mining is not an easy or short journey. “It is essential that governments recognize that the transition takes time, and persistence is essential for success,” says Svoboda. “They should openly communicate their strategies, ensuring communities and other stakeholders are well-informed and engaged. Building trust and providing guidance helps residents navigate the uncertainties associated with transitions. By embracing the three-step approach that centers around stakeholder engagement, governments can prioritize equitable and just outcomes when navigating mining transitions as part of their energy security strategies.”

 

Original publication: Svobodova, K., “Navigating community transitions away from mining,” Comment article in Nature Energy 2023. DOI: 10.1038/s41560-023-01359-9. Full text available here: https://rdcu.be/dnmU3 

 

Contact:

Dr Kamila Svobodova

University of Göttingen

Department of Agricultural Economics and Rural Development

Platz der Göttinger Sieben 5, 37073 Göttingen, Germany

kamila.svobodova@uni-goettingen.de

 

Journal

Nature Energy

DOI

10.1038/s41560-023-01359-9

Method of Research

Observational study

Subject of Research

Not applicable

Article Title

Navigating community transitions away from mining

Article Publication Date

29-Sep-2023

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Government

Turley: Four Biden Impeachment Articles & What The House Will Need To Prove

Turley: Four Biden Impeachment Articles & What The House Will Need To Prove

Authored by Jonathan Turley,

With the commencement of the…

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October 2, 2023

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Turley: Four Biden Impeachment Articles & What The House Will Need To Prove

Authored by Jonathan Turley,

With the commencement of the impeachment inquiry into the conduct of President Joe Biden, three House committees will now pursue key linkages between the president and the massive influence peddling operation run by his son Hunter and brother James.

The impeachment inquiry should allow the House to finally acquire long-sought records of Hunter, James, and Joe Biden, as well as to pursue witnesses involved in their dealings.

I testified this week at the first hearing of the impeachment inquiry on the constitutional standards and practices in moving forward in the investigation. In my view, there is ample justification for an impeachment inquiry. If these allegations are established, they would clearly constitute impeachable offenses. I listed ten of those facts in my testimony that alone were sufficient to move forward with this inquiry.

I was criticized by both the left and the right for the testimony. 

Steven Bannon and others were upset that I did not believe that the basis for impeachment had already been established in the first hearing of the inquiry.

Others were angry that I supported the House efforts to resolve these questions of public corruption.

Without prejudging that evidence, there are four obvious potential articles of impeachment that have been raised in recent disclosures and sworn statements:

  1. bribery,

  2. conspiracy,

  3. obstruction, and

  4. abuse of power.

Bribery is the second impeachable act listed under Article II. The allegation that the President received a bribe worth millions was documented on a FD-1023 form by a trusted FBI source who was paid a significant amount of money by the government. There remain many details that would have to be confirmed in order to turn such an allegation into an article of impeachment.

Yet three facts are now unassailable.

First, Biden has lied about key facts related to these foreign dealings, including false statements flagged by the Washington Post.

Second, the president was indeed the focus of a corrupt multimillion-dollar influence peddling scheme.

Third, Biden may have benefitted from this corruption through millions of dollars sent to his family as well as more direct benefit to Joe and Jill Biden.

What must be established is the President’s knowledge of or participation in this corrupt scheme. The House now has confirmed over 20 calls made to meetings and dinners with these foreign clients. It has confirmation of visits to the White House and dinners and events attended by Joe Biden. It also has confirmation of trips on Air Force II by Hunter to facilitate these deals, as well as payments where the President’s Delaware home address was used as late as 2019 for transfers from China.

The most serious allegations concern reported Washington calls or meetings by Hunter at the behest of these foreign figures. At least one of those calls concerned the removal or isolation of a Ukrainian prosecutor investigating Burisma, an energy company paying Hunter as a board member. A few days later, Biden withheld a billion dollars in an approved loan to Ukrainian in order to force the firing of the prosecutor.

The House will need to strengthen the nexus with the president in seeking firsthand accounts of these meetings, calls, and transfers.

However, there is one thing that the House does not have to do. While there are references to Joe Biden receiving money from Hunter and other benefits (including a proposed ten percent from one of these foreign deals), he has already been shown to have benefited from these transfers.

There is a false narrative being pushed by both politicians and pundits that there is no basis for an inquiry, let alone an impeachment, unless a direct payment or gift can be shown to Joe Biden. That would certainly strengthen the case politically, but it is not essential legally. Even in criminal cases subject to the highest standard, payments to family members can be treated as benefits to a principal actor. Direct benefits can further strengthen articles of impeachment, but they would not be a prerequisite for such an action.

For example, in Ryan v. United States, the Seventh Circuit U.S. Court of Appeals upheld the conviction of George Ryan, formerly Secretary of State and then governor of Illinois, partly on account of benefits paid to his family, including the hiring of a band at his daughter’s wedding and other “undisclosed financial benefits to him and his family and to his friends.” Criminal cases can indeed be built on a “stream of benefits” running to the politician in question, his family, or his friends.

That is also true of past impeachments. I served as lead counsel in the last judicial impeachment tried before the Senate. My client, Judge G. Thomas Porteous, had been impeached by the House for, among other things, benefits received by his children, including gifts related to a wedding.

One of the jurors in the trial was Sen. Robert Menendez (D-N.J.), who voted to convict and remove Porteous. Menendez is now charged with accepting gifts of vastly greater value in the recent corruption indictment.

The similarities between the Menendez and Biden controversies are noteworthy, in everything from the types of gifts to the counsel representing the accused.  The Menendez indictment includes conspiracy charges for honest services fraud, the use of office to serve personal rather the public interests. It also includes extortion under color of official right under 18 U.S.C. 1951. (The Hobbs Act allows for a charge of extortion without a threat of violence but rather the use of official authority.)

Courts have held that conspiracy charges do not require the defendant to be involved in all (or even most) aspects of the planning for a bribe or denial of honest services. Thus, a conspirator does not have to participate “in every overt act or know all the details to be charged as a member of the conspiracy.”

Menendez’s case shows that the Biden Administration is prosecuting individuals under the same type of public corruption that this impeachment inquiry is supposed to prove. The U.S. has long declared influence peddling to be a form of public corruption and signed international conventions to combat precisely this type of corruption around the world.

This impeachment inquiry is going forward. The House just issued subpoenas on Friday for the financial records of both Hunter and James Biden. The public could soon have answers to some of these questions. Madison called impeachment “indispensable…for defending the community” against such corruption. The inquiry itself is an assurance that, wherever this evidence may lead, the House can now follow.

Tyler Durden Mon, 10/02/2023 - 15:00

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International

How the Polen Capital Global Small and Mid Cap Fund finds under-explored high quality companies

In this video insight, I am joined by Rob Forker, the portfolio manager of the Polen Capital Global Small and Mid Cap Fund. We discuss Polen Capital’s…

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October 2, 2023

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In this video insight, I am joined by Rob Forker, the portfolio manager of the Polen Capital Global Small and Mid Cap Fund. We discuss Polen Capital’s strategy of selecting elite companies from a pool of 8000 global stocks based on their five guide rails. Rob also highlights Polen’s approach to investing across the growth spectrum, balancing slower-growing, stable companies like Cochlear with high-growth firms like Globant. Despite the challenging market conditions, Rob remains confident in their strategy, believing that earnings growth will ultimately drive long-term stock price appreciation.

Transcript:

David:

Hi I’m David Buckland, and welcome to this week’s video insight. Today, I’m being accompanied by Rob Forker. For those who don’t know, Rob is the portfolio manager of Polen Capital’s global small and mid-cap fund.

Rob, you have about 8000 stocks to choose from in the global space in the small to mid-cap area, and you have to go all the way down to try and get the best 35 stocks or approximately 35 stocks in the world. How do you do it?

Rob:

It’s a hard task, but one we enjoy doing. So, finding the best of the best is what we’re all about. We want to find the most elite companies we can find globally wherever they reside, Australia, continental Europe, America, Japan, wherever. The way we do it is we apply our proven five guardrails that we’ve been executing at Polen Capital for almost 35 years. Those are:

  1. Real organic revenue growth,
  2. High end or improving margins,
  3. High returns,
  4. Abundant cash flow,
  5. And a strong balance sheet.

And at the end of the day, what we’re looking for is companies that have strong earnings, have strong cash flow, and a fortress like balance sheet because those are quality companies that can be durable over the long term.

David:

And it’s interesting that out of your portfolio of, I think it’s 33 stocks at the moment, the average market capitalization is about 8.5 billion Australian dollars, which actually would put it in the top 60 on the ASX and be similar sized to something like Qantas (ASX: QAN) or Mirvac (ASX: MGR) so it’s interesting that, for Australians, that seems quite big, but by global standards, they’re still categorized as a small or medium sized type businesses.

Rob:

Yeah, no question, so we find companies of course globally, and small cap, mid cap is a bit of an art as to how you define it but what we believe is that the inefficiency of the asset class is clear. So, a typical company that we’re looking at in our class has 7 to 8 analysts. For reference, Apple has 55. And so, the beauty of what we do is that we’re looking at under explored companies that we believe have a secret sauce. Now it’s our job to figure out what that secret sauce is, but what we do, as an example, is look at the companies that have no self-side coverage. So, this is an opportunity and one that we relish in.

David:

That’s good. Now, one of the interesting graphs we get from Polen Capital is investing across the growth spectrum. On one side of the spectrum. You’ve got these very sexy, very high growth companies, but are earning money. And on the other side of the spectrum, a little bit more ballast in the portfolio. Can you just explain for the small mid cap global audience? Investing across the growth spectrum and how you think about it.

Rob:

Yeah, so on the safety side, these are to consumer staples companies or healthcare companies where they’re a lit little bit slower growing, low double digit earning. So, it’s still great, but slower going. Cochlear (ASX: COH) would be a great example, a fortress in market share and their constant research and development (R&D), typically grows earnings at 12-14 per cent.

On the far end, we call these growth companies, they typically grow earnings 30 – 40 per cent. An example would be Globant, which is an IT consulting firm at the forefront, of what they do. They’re basically a mini-Accenture. And so those type of companies are growing faster.

We want both because we appreciate the safety and the growth elements that can help you in bad times and give you outsized returns in good times.

David:

So, if we look at the fundamentals of the total portfolio let’s just sort of spend a minute or two on that.

Rob:

Absolutely so, when you put it all together, this is a portfolio that trades at roughly 25 times earnings on a 12-month basis.

We believe earnings growth is nearly 20 per cent per annum.

David:

For some years?

Rob:

Yeah, where we forecast out 5 years in our investment time horizon. We want to think and act like owners when looking at these great companies, and what they can do over the long term.

The balance sheet is nearly net cash, so no balance sheet risk to speak of. As I mentioned, strong cash flows. We want companies that self-fund, which is quite unique in this space. Many small cap managers own unprofitable companies where they’re betting that things will get great.

David:

Have to go back to the market for equity, on a regular basis.

Rob:

We don’t want to do that. We don’t want to buy what will be quality. We buy what’s proven to be quality today. And this is the beauty of the menu that we have of nearly 8000 companies. We can be choosy. We want to own elite companies.

David:

And I guess the elephant in the room Rob, we launched this in Australia although the fund out of America is actually, well, Boston where Rob’s based is actually a bit older than that, but we actually pick the timing to perfection in terms of the bigger the market, so October 2021. So, it’s coming around for its, it’s two year anniversary. It’s been a very, very rough ride for the early investors.

Yours truly as one of them.

Let’s just give it give it some context. It’s obviously been a very rough 24 months. Do you want to sort of just spend a few minutes on that?

Rob:

Yeah, and yours truly as well. So, I eat my own pudding, I’m an investor and my children are investors you know, I am betting on the success of this strategy as many of you are. The elephant in the room is that 2022 was bruising, just literally awful.

We weren’t certainly the only ones that had the bruising. This was a global phenomenon, particularly in small to mid caps. This year, what’s been surprising is the bounce back has not been there. The strategy is certainly not doing poorly, but it hasn’t had the type of returns that that many of the large cap strategies have had, small cap in general has been toward left behind. What we focus on is the fundamentals of the business.

We believe that earnings growth for our companies was 12 per cent last year. We believe that earnings growth will also be very strong closer to that 15 to 20 per cent level that I was talking about. And that’s what we are focused on. Price to earnings (P/E) multiples as Roger and many astute investors talk about, P/E multiples are confidence, they go up and down. But we believe over the long term that stock prices follow earnings growth, and that’s what we think will happen over the long term. But certainly, are, we didn’t want to start this way. And it would have been better had we not, but this is where we are in there in lies the opportunity.

David:

Alright. Ladies and gentlemen, that’s all we have time for this week. As many of you know, we’ve had a very, very good relationship with Polen Capital for about 2 and a half years now. Rob, Damon, and many members of the team come out pretty much on a 6 monthly basis. And, we have been blessed to partner with an organization of such great quality.

The Polen Capital Global Small and Mid-Cap Fund owns shares in Globant. This article was prepared 25 September 2023 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Globant, you should seek financial advice.

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