Django Davidson is a fund manager at Hosking Partners. We discuss the nuances of capital cycle investing, the role of human behaviour in amplifying cycles, and Django’s thoughts on the unprecedented capital cycle we are currently living through.
Show notes:
[01:03] Django discusses his early career
[03:32] Formative lessons from the GFC
[05:20] The importance of independent thought
[07:44] The capital cycle framework
[09:23] How valuations and profits impact human agents
[12:38] The impact of interest rates on capital cycles
[15:09] Does the capital cycle framework work everywhere?
[17:44] Japan’s improving returns
[19:50] The importance of people and capital allocation
[21:19] The advantages of broad diversification
[23:57] Timing capital cycles and the risk of terminal decline
[27:51] Portfolio themes
[29:17] Navigating an extraordinary memory cycle
[33:02] The hyperscalers are in a race
[36:24] Views on growing AI demand
[39:11] Undersupply in mining and energy
[42:45] Death of the brand
[47:04] Stay broad and focus on business and industry analysis
