“I continue to see virtually every day more evidence that we're not going to have the huge concentration of wealth and power in just 5, 10 companies that it looked two to three years ago.”
David Halpert is the founder, portfolio manager, and chief investment officer of Prince Street Capital, a specialist emerging and frontier market asset management firm based in New York and Singapore. With 30 years of experience researching and investing in the developing world, David coined the term ‘Digital Decolonization’ – a new paradigm for assessing investments in emerging and frontier markets, unveiling the concept in a 2019 white paper.
Mark Matthews is Head of Research Asia Pacific for Bank Julius Baer & Co. Ltd., an appointment he has held since June 2011. His research coverage comprises single stock, sector and select country analysis. In addition, he is a member of the bank’s investment committee, which determines asset allocation recommendations to clients.
It seemed possible we were headed towards a world where cross-border technology companies would reign supreme across the globe, instead we’re seeing a digital decolonization. Companies like Facebook, Google and Amazon seemed positioned to capture the global market. This trend now appears undercut by the emergence of regional technology companies that have quickly risen into massive institutions worth billions. “There is a sense really all over the world, including in the United States, that cross border technology companies playing such a big role in people's lives, whether their financial lives or their social and political lives, is problematic.”
Companies like Reliance Industries in India have attracted massive investment from the largest American corporations. In Poland, an Amazon-like e-commerce company Allegro is now worth $24 billion. Expect companies like these to continue to pop up and grow quickly in the era of digital decolonization.
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SPEAKERS
David Halpert
Founder, Portfolio Manager & Chief Investment Officer
Prince Street Capital
Mark Matthews
Head of Research, Asia Pacific
Julius Baer
EPISODE TRANSCRIPT
John Darsie: (00:12)
Hello, everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global Thought Leadership Forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series that we launched during this work from home period with leading investors, creators and thinkers. And what we're trying to do during the SALT Talk series is replicate the type of experience that we provide at our global conference series, the SALT conference. And that is really to provide a window into the minds of subject matter experts, as well as to provide a platform for what we think are big ideas that are shaping the future. And none of our talks fully encompass our entire mission, as well as I think our talk today will encompass that mission.
John Darsie: (00:58)
We're very excited to welcome David Halpert and Mark Matthews to SALT Talks. And the focus of today's conversation is going to be on digital decolonization, which is a term and a concept that we'll get into more depth and during the talk. But it's a fascinating term that was coined by David, who is the founder of printery Capital Management. So, David Halpert, the founder, Portfolio Manager, and Chief Investment Officer for Prince Street, which is a specialist emerging and frontier market asset management firm, based in New York and Singapore. And I believe David is coming to us today from one of his homes in Bali. So we're very excited about that. With 30 years of experience researching investing in the developing world, David coined the term that I mentioned previously digital decolonization, which is a new paradigm for assessing investments in emerging and frontier markets.
John Darsie: (01:48)
He then build the concept in 2019 in a brilliant white paper that I encourage you to go check out, and we'll talk about it more on today's talk. Prior to founding printery in 2001, David managed a long only emerging markets portfolio at Zesiger Capital Group and worked in Indonesia as an equity research analyst. Mark Matthews our other guest today, is the head of research for Asia Pacific at Julius Baer, an appointment he's had since June of 2011. His research coverage comprises single stock sector, and select country analysis. In addition, he is a member of the banks Investment Committee, which determines asset allocation recommendations to all of its clients.
John Darsie: (02:29)
Mark has held senior positions managing the research and equity sales functions at financial institutions, including ING Baring Securities, Standard & Poor's, and Merrill Lynch in Asia. A reminder if you have any questions for David or Mark during today's talk, you can enter them in the Q&A box at the bottom of your video screen on Zoom. And hosting today's interview is Anthony Scaramucci, the Founder and Managing Partner of skybridge capital, a global alternative investment firm. Anthony is also the chairman of SALT. And with that, I'll turn it over to Anthony for the interview.
Anthony Scaramucci: (03:01)
Well, John, thank you. And it's a great honor to have you both on, I don't know if you've seen any of these before. But Mark and David, we'd like to start with the non Wikipedia question. So what can we learn about you guys that we wouldn't necessarily learn from Wikipedia? We're doing a Google search, why don't we start with you, Mark. Tell us, something about yourself that got you started and why you ended up doing what you're doing for career?
Mark Matthews: (03:31)
There's no Wikipedia for me anyway. So I'll just tell you, I guess the thing that you're looking for at least what pops in my head is most people come out to Asia, I've been in Asia for 31 years, to make money. And I didn't I came out here because my father was a professor of religious studies, and he specialized in Buddhism and Hinduism. And so from a very young age, I just had Asian bug. And I still do I think it's the most interesting place in the world. And there's actually no place I'd rather be.
Anthony Scaramucci: (04:10)
Before I go to David, tell us why. Tell us for people that... I agree with you actually, I love coming to Asia, I love being a part of that culture. But for Americans that have not had that experience, Tell us why you feel that way.
Mark Matthews: (04:25)
Oh, that's a tough one. I think it's just so exotic. I think, that's what turns me on. It's just a very exotic place. And the other thing I would say that pops into my mind is vibrancy. There's just so much going on. I guess you can get that in Manhattan, but you get that big time in cities like Jakarta and Bangkok-
Anthony Scaramucci: (04:50)
You can't get that in Manhattan anymore. I mean, I'm in my office today and it is a workday and you could blow a cannonball down that street not hurt anybody, unfortunately but, maybe it'll change again. Well, David good. I'm David, I'm loving the outfit By the way, you get the most exotically dress of the four of us on this SALT Talk. So tell us a little bit about your ventures and tell us where you are right now, tell us where you're located.
David Halpert: (05:23)
So I'm currently at the Bali Purnat Center of The Arts, which is the art center that my wife built here about 15 years ago. And which we use as a concert space and a conference space during normal times. At the moment, with COVID crisis, of course, there's essentially no tourism in Bali. So I'm here in part for morale in the island, because people have been worried about their jobs, unfortunately. But it's been a great time to be here, because there's obviously no traffic, and we're able to really enjoy Bali the way it used to be.
David Halpert: (06:16)
I came to Asia around the same time Mark did, essentially looking for a career opportunities, and it served me very well, continuously. And I've gotten to participate as an investor and as an analyst in some of the most dramatic wealth creation over the last 20, 30 years, this happened anywhere. Interestingly, of course, there's been a lot of questions about whether Asia is now done, either because of the breakdown in globalization from World Trade, or because of the US, China problems. And clearly Singapore, Indonesia they're having a recession this year. But I've been impressed as I look around Indonesia, by how much opportunity still there is for growth and improvement in people's lives and improvement in the efficiencies of things like transportation and manufacturing. So I'm really quite optimistic for the future here.
Anthony Scaramucci: (07:24)
So you've developed this new paradigm that you're calling, the markets are calling digital decolonization. So for those of us on this SALT talk, that don't really know what that means, and I actually think it's a fascinating perspective on what's happening in the world right now, what's happening, likely, in the post COVID world, tell us what digital decolonization is, and tell us what the investment opportunity is as a result of it.
David Halpert: (07:53)
So for Americans, the most dramatic example of digital decolonization would be the banning of TikTok. And India banned TikTok a few weeks before the US moved to ban TikTok. But, there is a sense really all over the world, including in the United States, that cross border technology companies playing such a big role in people's lives, whether their financial lives or their social and political lives, is problematic. And I don't know whether it's going to be as absolute as banning and blocking and all the stuff that's currently under discussion or it's going to be in more subtle mechanisms such as, preferential logistical support to the local e-commerce company against the foreign e-commerce company. But I continue to see virtually every day more evidence that we're not going to have the huge concentration of wealth and power in just 5, 10 companies that it looked two three years ago as if we might have.
David Halpert: (09:08)
And if you look at what's happened with Reliance Industries in India, where RGO has now attracted investments from Facebook, Google, and potentially soon the Amazon. I think that's a classic example of the digital decolonization movement where, financial investment is enabling the development of a local Indian, e-commerce, social networking, financial services powerhouse. And even more recently than that, three days ago, on the Warsaw stock exchange in Poland, you saw the IPO of Allegro which is an $11 billion company and in three days that stock has doubled. And Allegro is kind of Amazon of Poland. But that in Poland, which is not that big a country and not that big economy, you can already have a $24 billion e-commerce company. I mean, that tells me that we are going to see my 1.5 trillion target in terms of digital decolonization market cap over the next 5, 10 years.
Anthony Scaramucci: (10:25)
So basically, there are companies that are around the world that are similar to these five companies. But they are indigenous, if you will, to that local area that are going to be magnificent. So let me ask David, how do those companies create commerce? Will it be globalized, like the American companies? Or will it be local markets? David, how do you envision that?
David Halpert: (10:58)
So, I mean, I'm here in Indonesia, and I can speak most immediately to what I see on the street here. But I believe it's largely the same as what you would experience in Poland or experience in Argentina or experience in India. The big global multinationals, whether Chinese or American, don't really serve the local customer, as well as a local company can. They don't stock the same local range of products in their e-commerce offerings, they don't provide as deep a catalog of local language film, they don't teach the online learning program to the local education exam. And so it's a break down in this aggressive digital globalization that we saw really from around 2009 to around 2016. And, of course, there are going to be many things that are going to be completely globalized, whether it's 5G technology or GSM technology or Android or whatever, there will be many things that will be shared across markets. But I don't think it will be as concentrated in just a couple of companies as was previously expected.
Anthony Scaramucci: (12:33)
So Mark, how would you invest that Julius Baer in what David is talking about? This future vision for world technological commerce.
Mark Matthews: (12:48)
Well, what I try to do is to get David's funds on our platform, because he's a very good fund manager. But the other thing, obviously, you can do is find these companies yourself. And David, basically was talking about a few like one recent IPO in Poland. The problem right now in the emerging markets, excluding China, is that if you're lucky, each country has one, or maybe two. India is a good case in point, I mean, India is by emerging market standards, a massive market. There's really only one new economy, stock, which is Reliance Industries. So, what you could do is build a basket of those local champions pick one in every country, you got one in Argentina, you got one in Poland, you got one in India and you can probably add about a dozen on top of that and other emerging markets.
Mark Matthews: (13:48)
But problem is that not all of them will be good so, I think really, this is a very special and want to say, this concept is just in its fruition. And actually, it's David's concept. And so apart from him, I don't really think there is any vehicle to go into this. Then you're left with building a basket by yourself and probably getting some rotten apples in there.
Anthony Scaramucci: (14:21)
So David, sometimes there's a push back in the US, and this is primarily probably born from federal reserve interest rate policy is that, the emerging markets have an appeal. They seem like they are going to be the arc of future growth, but yet they never get to the expectations that people set on them here in North America, and so what's different about this, this time?
David Halpert: (14:51)
Well, I can talk about that at some length, but for example, Argentina has been a big disappointment as you know, and lots of people have lost lots of money in stocks and even more so in bonds in Argentina. But if you bought Mercado Libre 10 years ago, and you sold it today, you made more than 10 times your money in US dollars. So the tech thing seems to be so powerful that it overwhelms the macro problems of the country and that's even borne out in the price action of the NASDAQ stocks in the US. The US economy is in deep trouble, yet NASDAQ's close to an all time high. So I think investors at the moment at least are willing to look through the short term, macro economic disappointment of emerging or developed markets toward this future. Now, maybe these investors are wrong. It's a different subject, but this thing so far has worked really well.
David Halpert: (15:56)
Now, I would also say to the fact that emerging markets continue to disappoint. I think emerging markets on average disappoint, but several emerging markets have actually exceeded people's expectations over the longer term. So China and Taiwan both have proven to be remarkably successful economies over the long term, and are now basically developed countries. And there have been others smaller examples around the world, Poland has done very well, where a long term investor has made a lot of money even in the old economy companies. So it's not that bad. But yes, on average lending money to the government, Argentina is a very risky decision.
Anthony Scaramucci: (16:46)
Yeah, well, they've devalued seven times in the last 20 years. I think that's one of the issues that gets people worried. Mark, what's your take? Explain to our American listeners right now, the opportunity in India and China, how you see the world over there? And what are Americans missing that may not be traveling as much as the two of you?
Mark Matthews: (17:10)
So I think what I'd begin by saying is that, the emerging markets, and that includes Asia, have been a tremendous opportunity cost in aggregate over the last 10 years. So when you just look at the recent history of these markets, you would say, why would I bother because China for example, MSCI China, dollars, including dividends, has given you annual return of 7% over the last 10 years. S&P is twice that. And there I would say that just like in America, every decade is different in terms of the performance of sectors and you'll find that there's massive rotation and stocks that go to the top of the S&P 500. Every single decade they're different. I think in the emerging markets, the next 10 years will be that way, too. In fact, I know it will, because 10 years ago, 80% of the MSCI China index was what you'd call old economy companies. So banks, oil and gas, materials, petrochemicals, that kind of stuff.
Mark Matthews: (18:27)
And what happened was in 2018, New Economy companies like technology, telecommunications, healthcare, they surpassed the old economy stocks in their weighting in the index, and today they're about 70% and old economy are about 30%. So that intuitively means companies with much higher returns on equity and much higher earnings growth. And if you just look at the Shiller PE, which I'm sure you know, Anthony provides you a really long term, it's been quite a reliable indicator for long term performance 10 year performance, it's inferring about 9% per year for China over the coming 10 years. And by the way, it's inferring based on today's ratio for the US, 4% per year for the US.
Mark Matthews: (19:20)
So I think that's what I want to say and I also want to say that right now, there's only kind of one new economy stock in each of the emerging markets outside China. But that won't be the case, three, four or five years from now. And a lot of these countries their markets will mature into, I think, much more sophisticated, interesting markets as far as the major composites are concerned. Largely because in the old days, if you wanted to be Successful as a technology person, you basically had to go to Silicon Valley. And today you don't, you can stay in India, you can stay in Thailand, there's a lot to do on the ground in all of these countries.
Anthony Scaramucci: (20:17)
It's a fascinating time because Americans feel like they're looking inward, at least the political leadership. And so David, let me ask you this, political saber rattling, ongoing trade tensions, whether it's a Trump second administration or a first Biden administration, what do you think the role of US geopolitics is, in terms of how it's going to affect the outside world? Or will it not have any impact on the outside world?
David Halpert: (20:52)
So, Anthony of course, this is a huge question and a still pretty unclear in either of the outcomes. But I would tell you, what I see in my companies is that they are preparing for the supply chain to split anyway. So Taiwan semiconductor recently announced a $12 billion investment into a state of the art manufacturing facility in Phoenix, Arizona, and I believe that will be the single largest foreign manufacturing investment in the United States announced during the Trump administration. That investment is being undertaken with a plan to begin production in 2025. So they are looking through this current era in history and saying, we still need to have a huge fat in the US. So that tells me that that company at least thinks the supply chain is splitting. And many of the other manufacturing companies that I talk to, are signaling to greater or lesser extent that this is their base case.
David Halpert: (22:07)
So, companies that depend on cross, transpacific shipment of complicated manufacturing chains, I think, have to adjust to this new reality.
Anthony Scaramucci: (22:23)
In hindsight, and this is sort of a question for both of you, in hindsight, would America had been better off, ratifying and signing the TPP, the Trans Pacific Partnership?
David Halpert: (22:37)
What do you think? Mark's Canadian.
Mark Matthews: (22:45)
I feel that one of Donald Trump's legacies, will be that he started a process that was long overdue of... It's such a tough thing to just say in a sentence, but I'm sure you know what I mean. There was a very lopsided relationship whereby China was charging far higher tariffs on imports from the US than in reverse. Those were tariffs that dated from when it entered the World Trade Organization in 2001. And it was up less than a $3 trillion economy and people were very poor. And it was in need of adjustment. And the TPP, I guess, is a sort of tangent for that. But, the idea, I think that the US let too much leave the country, my humble opinion, is correct. And therefore, some kind of rebalancing was overdue and it's happening. David, why don't you take over.
David Halpert: (23:59)
So the irony of it is that the TPP, was actually quite a sophisticated document. And it was a more sophisticated document than, for example, NAFTA, which was written before a lot of changes in the economy. I think TPP, in retrospect, would have served the interests of the United States quite well. I think the US Canada Mexico agreement that this administration, negotiated in which Canada seems on track to ratifying, is probably a better agreement than what NAFTA was. I like requiring that Mexican auto factories pay $16 an hour, I think that's a very reasonable request. But the TPP was... Very few people have actually read the TPP and I have. And it was a sophisticated, subtle, 21st century document. But politically, it just wasn't viable and that's... I listened to Condoleezza Rice, talking at a J.P. Morgan conference a couple of days ago. And she had an interesting term, she said, "The American people are tired." And whether she's right or not, and whether they should be tired or not, I think that is increasingly becoming consensus in Washington about globalization and about the military expansion around the world and the free trade culture.
David Halpert: (25:55)
So... You take a billion dollars, and you build a factory in Phoenix, Arizona, and you've solved that problem. If you're Samsung, you already have a factory, you just increase the size of the factory that you have. If you're Huawei, you probably are not building a factory in the United States, you're probably planning your distribution to focus on the markets where you're going to be welcome, which include Indonesia. I'm not encouraging Indonesian entrepreneurs to plan a big export push at this point, I think that we need to look again at the domestic market here, the domestic market in India, the domestic market in Asia, which is still ludicrously underdeveloped.
Anthony Scaramucci: (26:49)
So when you when you lay out that macro backdrop, and again, this would be a question for both of you. How do you feel about the US dollar right now directionally? Where do you think the US dollar will go over the next five to 10 years?
Mark Matthews: (27:05)
Why don't I try that first. Now, the thing is that if we're just talking about the dollar index, two thirds of that is the euro. And on a five year view, I feel I'd much rather have my money in dollars than euros. Because I see Europe in bigger trouble. I see persistent malaise in their society, which percolates through into their economy, and an economy, which is so export oriented anyway, that it's sort of naturally structured to demand a weaker currency. And no really strong leadership coming up after Angela Merkel, unless Macron can somehow take over as the leader of Europe, and I know the Germans don't going to let them do that.
Mark Matthews: (27:50)
So anyway, if we're just talking about the dollar index, I would be perfectly happy owning the dollar index. But if we're talking about different crosses, then I guess the one I'll just mentioned, and then I'll pass it over to David would be the dollar renminbi. And I think the renminbi will appreciate. They just relaxed some reserve requirement ratios on onshore forex trading a couple days ago, because it had appreciated 7%, since May was a bit too fast for them. But I think that they're focusing internally, the new catchphrase is interloop or there's a variety of different ways you can translate it, but essentially means weaning ourselves off of imports from overseas, and developing our domestic economy more. And I think they will welcome over time a stronger renminbi.
Mark Matthews: (28:57)
They've done a lot to get into the footsie Russell global bond index, recently, for example, which will naturally cause a lot of money to go into China just to achieve benchmark status in that index. And I believe that a lot more people are going to be buying Chinese stocks over the next five years too, I think it's rising to core status in global portfolios. It was always sort of a tactical thing before. So that's what I think and David over to you.
David Halpert: (29:33)
I'm a big fan of haircuts as a way to measure currency competitiveness. And I would say one of the most expensive places in the world to get a haircut right now is Geneva. And Europe in general still feels quite expensive at one euro 20, I think. But getting a haircut in Shanghai or getting a haircut in Singapore, or getting a haircut in Indonesia is much, much cheaper. So on a long term basis, there still is a lot of structural undervaluation in the currencies in Asia in particular, to a lesser extent, in Latin America. And that suggests to me that while the Fed and all that can cause another round of evaluations if necessary, there is a long term value story for diversifying out of the US dollar. Europe would not necessarily be my first stop.
Anthony Scaramucci: (30:39)
Well, guys, I'm going to turn it over to John, because we have a ton of questions coming up in the queue, which I think are fascinating. So John Darsie, take it away.
John Darsie: (30:50)
Yeah. We have several follow up questions about the digital decolonization theme. Going back to digdec, which is the shorthand for digital decolonization. Is that a strategy just for technology companies? How does it factor in the service sector? Or what's the investable universe in terms of innovation as part of that digital decolonization theme?
David Halpert: (31:15)
John, thank you for that question. I should have been clear at the beginning. Digital decolonization is not limited just to the technology sector. The data revolution, the digital revolution, is currently impacting almost every aspect of economic life. Whether from the wearables manufacturing sector, or the services like financial services, travel services, education services, the power sector, the infrastructure sector, all of these are sectors where data and more sophisticated use of technology and innovation are increasing productivity and providing better services to customers at better prices.
David Halpert: (32:10)
So we view this revolution as not limited to any one sector. And indeed too much in the NASDAQ, the NASDAQ stuff has done great this year, it did great last year. But too much of that may not be the ideal way to express this idea of going forward. I'm particularly interested right now with the energy transition, which I continue to see gaining momentum right around the world. And that is much less hype than the e-commerce space, for example and there's still a lot of opportunity. Do you know? For here in Southeast Asia, only 2% of the electricity grids are renewable?
John Darsie: (32:55)
Wow.
David Halpert: (32:57)
And just growing that out, is going to create a huge opportunity in distributed power and power tech related investments in this part of the world.
John Darsie: (33:13)
Mark, I have a different question for you from the audience. And it goes back to your comments about the trade relationship between the United States and Asia and I think some of this digital decolonization, and David, you can correct me if I'm wrong is driven by the fact that there's increasing nationalism from a commercial perspective. So, do you think a closed United States, which I think the horse is sort of out of the barn in terms of the United States and the popularity of policies that are trying to bring manufacturing home and restore working class jobs in the United States. Do you think a more closed United States is a catalyst for increasing performance of assets in emerging markets, especially around this digital decolonization theme?
Mark Matthews: (33:56)
I'm not sure there's a direct link, although intuitively, there should be. Simply because I don't know... I mean, I guess what you mean is if the United States closes itself off, and therefore you would expect it to be a much less appealing place to invest in relative terms, the rest of the world would be more attractive, I guess I see that. But what I would just say is, by the way, the trade war, and the digital economy are very separate things. Services are counted in these trade balances. And when you're talking about America, cutting itself off or turning inward, I still believe that there isn't should be a place for manufacturing in America.
Mark Matthews: (34:58)
I'm in Singapore, which is a country with I think of much greater per capita GDP than the United States. And it's very expensive place, but the government still make sure that manufacturing is around 20% of GDP. Because not everybody can be a barista at Starbucks or a computer programmer at Google, there have to be jobs for other people. And I think there's a balance that governments need to seek between providing those kind of jobs and still remaining an open economy, and every country will have a different line to walk. But just to summarize, I do think that America's right actually to develop an economic policy that focuses on its middle class instead of multinational companies profits. And I think, at the same time, it can remain open, particularly as its service sector companies are really the giants in the world. So that would be my answer to you.
John Darsie: (36:09)
I want to finish with a pretty broad question. And we had a speaker at SALT, our Abu Dhabi conference last December named Parag Khanna, who you might be familiar with. He's a prolific author on topics related mainly to Asia. His most recent-
David Halpert: (36:23)
He lives in Singapore, so we've both met him. But-
John Darsie: (36:27)
He'll definitely be near the top of our list for SALT Bali 2022, which will teach to the people on this call right now. But, he wrote a book called The Future Is Asian, I found both his book and his speech at SALT, extremely compelling talking about the demographic shifts, and the economic shifts that are taking place that make Asia so compelling as an investment destination. So, I want to talk about emerging markets with a focus on Asia. What are first of all risks to that thesis? What are the positives that are maybe, that exists in these emerging markets in Asia that aren't talked about or valued highly enough? And in general what's your outlook for those markets over the next five to 10 years?
John Darsie: (37:09)
We talked about how they've sort of underperformed if you paint with a broad brush over the last decade. But, what's your outlook over the 5, 10 year time horizon? We'll start with David, and then we'll go to Mark.
David Halpert: (37:22)
So China's riding high if you notice price action after the US presidential debate on September 29, the Chinese stock market went straight up. So it's pretty clear that in the short term, at least, China's going to be doing well out of the dysfunction in the United States. Medium term, however, I think China is getting a bit tired, it's already quite wealthy, their labor costs continues to move up. As the currency appreciates, they're losing competitiveness, again to other markets, like Vietnam, and Bangladesh, which are getting some of these low end labor intensive manufacturing jobs away from China.
David Halpert: (38:10)
So I think select opportunities in China are still going to be great for the next 10 and 20 years. But, China Inc, per se, I'm not that excited. India is a different story. Its much earlier stage and most things. It is proving somewhat competitive in manufacturing, I would argue Bangladesh and Vietnam are more competitive. But there's just a huge amount of inefficiency in the Indian system, whether the agricultural system, the manufacturing system, transportation system, etc. financial system. So, I rationalizing India alone is a great 10, 20 year project. And Indonesia, is doing somewhere in between the two countries, but also just rationalizing Indonesia probably keep people busy here for 10, 20 years, even if the US shuts up completely.
Mark Matthews: (39:11)
So my-
John Darsie: (39:12)
Answer the same question if you would.
Mark Matthews: (39:15)
Sure. First off, what I would say, John, as you said, the demographics are great. Well, for some countries, they are but not for China. In fact, by the end of this century, China's population will be half of India, and the US combined. And I think even right now, the average Chinese is about the same age as the average American. But 10 years from now, 20 years from now, the average Chinese will be about, I think, 45 to 50. And the average American will still be about 35, somewhere around there. So anyway, that's besides the point. I said to Anthony in the beginning that I love it here, I still do after 31 years. But one comment I would make is a cultural one. I think that the societies here, I guess I'm speaking more about East Asian societies. In other words, Japan, Korea, China, Vietnam, but you could probably also throw in Thailand and a couple of others as well. They're very communitarian, is that a word? They don't really allow people to stand up and be wild and crazy and frankly, even where I'm from Canada, we can't be as wild and crazy as people in America either, we're much more communitarian, I hope that's the word.
Mark Matthews: (40:40)
And I think that really allows the geniuses to blossom when they do have the ability to come up with their crazy ideas and-
John Darsie: (40:51)
And express themselves.
Mark Matthews: (40:53)
Yeah, so I think that's something that's lacking here culturally. And it does put a break on innovation and creativity. And so that would be my comment, John.
John Darsie: (41:09)
Yeah, I mean, it's very interesting you say that. Anthony gave a talk to the US China Business Council. And he made that exact point, that free expression and the ability to use your creative muscles is a huge reason why the United States is such a home for entrepreneurship and innovation. We have one more audience question I want to ask to you, David, before we let you go. What are different types of digdec companies? Give us some examples across the spectrum of digital decolonization. And what does the IPO calendar look like in these emerging markets? And how does it reflect the growth of this digital decolonization theme?
David Halpert: (41:44)
So the IPO calendar looks great. Again, we just had Allegro in Poland on Monday. It already doubled and created $12 billion of input Mehta market cap in the last three days. We got a Kazakhstan deal coming up next week. We've got Ant Financial which is going to be a $30 billion transaction. So there's tons of things going on the IPO calendar. But, in terms of different kinds of companies technology, healthcare, power tech, edutech, FinTech are the five verticals we tend to be focused on right now. But I would expect all sorts of different applications of data science and etc, over the next 10 and 20 years. Or even less than five or 10 years. So I see a ton of opportunity in this. And as I said-
John Darsie: (42:42)
We're very excited from a SALT perspective, from a SkyBridge perspective to work with Prince Street, work with Julius Baer, and continue to dig into the opportunities that exist in emerging markets. It's not a monolith, there's different opportunities in different locations, for sure. And as you said, if you are able to pick the right companies, there's great opportunity, no matter how emerging markets as an asset class perform over the next five to 10 years. So thank you so much, David and Mark, for joining us on this SALT Talk. We look forward to revisiting these themes maybe in a few months, if there's a change in American presidential administration, as well, to see how that affects things. But, thank you so much for joining us, Anthony, you have a final word?
Anthony Scaramucci: (43:22)
Just so you guys know, John's trying to get out the Bali in the worst possible way so much so that he wants to do a SALT conference, David, right where you're sitting.
John Darsie: (43:33)
What's not to like? All these beautiful, there's a great burgeoning tech scene in Bali as well. And I think it fits in well with that theme.
Anthony Scaramucci: (43:41)
We're super excited about your future, gentlemen and the future of the world. And we're looking forward to learning more about digital decolonization. Thank you so much for joining us today.
David Halpert: (43:53)
Thank you guys. Mark, sleep well, and I really appreciate your taking the time to do this first.
Mark Matthews: (44:00)
I'm just honored that I could be here. Thank you.
David Halpert: (44:03)
See you all in Bali in 2022. Bye.
Anthony Scaramucci: (44:06)
Amen.
John Darsie: (44:07)
Hopefully sooner.