Lex Hall: What sort of opportunities—we were talking about big companies—what are you seeing in smaller companies?

Hamish Douglass: Well, we tend to invest in big companies. So, we're managing nearly $100 billion. We don't tend to get in to small investments. We like investments with competitive advantages, as well, maybe different opportunities. Obviously, tech's been an area that's been very constructive. We've got quite a lot of consumer staples, more people are eating at home, Nestle’s results and PepsiCo's results have been fabulous. People have been washing their hands more; we own Reckitt Benckiser and their sales have been sort of 13% per annum through this period. So, there are certainly winners that are occurring here, both in technology and in sort of consumption businesses. We've got benefits from lower interest rates happening here.

But there are losers, in the real estate world we don't own, but you know, do you want to own shopping centers in this world? There's been an acceleration to ecommerce. And we don't think that acceleration is going to go away. So, it's going to challenge what you can charge in rents in physical retail, because physical retailing is less valuable in the future. What is all this work from home and these flexibilities going to mean to office buildings? That we do not know the answer of. 

Travel, travel is something we're spending a lot of work on, we haven't invested there. But there are a lot of travel-related stocks, that of people moving around the world, it could be payments, it could be airlines, it could be aircraft manufacturers, it could be online travel companies, software companies in this space. There is a broad spectrum of companies that are very, very leveraged to travel. American Express would be a good business. You look their volumes are down 20%, largely because people are not travelling. And when people start travelling again, their earnings should come back very, very rapidly. But there is a question in large business: how much of large business are going to stop their employees travelling in the future because of Zooming, doing it on video conference? That we don't know the answer to. But that is a very interesting area, particularly as we're going through a second wave of pandemic, these stocks are under pressure. And if you take a longer-term view, that could be an interesting area that isn't being valued by the market at the moment, I'm not giving any specific stock advice. And we haven't made any investments because we don't know all the answers yet.

So, you know, there's a lot of different things going on market. Some things are cheap, and they deserve to be (treated), just because some share price has gone down. Some of it may be telling you something; and there are other things that have gone down just because of uncertainty and they may be good places to invest and others that have gone up. People may go ‘they're expensive, I'm not going to buy them’, it could be that their businesses are accelerating because of what's going on, and they're not overvalued. So just looking at the share price doesn't tell you whether it's a good buy or not.

Hall: How long Hamish would you suggest people stay in the Magellan Global Fund to get the value add at a minimum.

Douglass: Well, we really talk about an economic cycle being seven years, you know, we really think that people should have a longer-term perspective, sort of that five- to seven-year period would be our view of the economic cycle. And I wouldn't say just in relation to Magellan, I would say almost any equity investment people should be taking a five to seven-year view. And if you're taking a five to seven view, largely what's occurring now in this pandemic and what's happening in the US election are largely irrelevant issues.