Pendo believes that investing is a social science and is therefore ever evolving. Rigid screening guidelines and strict parameters are destined to fail as markets change. We believe that the current time is a time of change, and that the risks historically associated with international investing have been significantly reduced. We also believe that diversifying one’s investments from the US economy, currency, and GDP decline is more important now than ever, and that International investing is no longer a diversification as a hedge; it is a diversification as a necessity.
HISTORICAL RISKS
• Political instability
• Lack of transparency
• Inconsistent accounting standards
• Currency risk
• Inflation risk
• Competitive disadvantage
CURRENT SOLUTIONS
• Even the few remaining authoritarian/totalitarian regimes, i.e. China, are embracing their own version of capitalism, without the ‘impediments’ of democracy
• Increasingly stringent disclosure requirements required of publicly traded companies, often surpassing US requirements
• International Financial Reporting Standards (IFRS) conversion in progress and completed in many countries around the world
• United States is facing years of massive debt-level caused inflation and dollar devaluation versus other world currencies
• Countries (such as Brazil), which historically were dependent on foreign capital leading to unstable currency and inflation, have now accumulated cash reserves that they can use to stabilize their currencies
• International alliances such as the EU, and countries such as China operating more centrally, create huge economies of scale/competitive advantage versus the US
CURRENCY RISK/DIVERSIFICATION
Pendo's international investments are primarily in businesses that conduct the majority, if not all, of their business in their own country and in their own currency. Since these companies receive their revenue in their local currency, their earnings increase when the dollar depreciates.
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HISTORICAL RISKS
• Political instability
• Lack of transparency
• Inconsistent accounting standards
• Currency risk
• Inflation risk
• Competitive disadvantage
CURRENT SOLUTIONS
• Even the few remaining authoritarian/totalitarian regimes, i.e. China, are embracing their own version of capitalism, without the ‘impediments’ of democracy
• Increasingly stringent disclosure requirements required of publicly traded companies, often surpassing US requirements
• International Financial Reporting Standards (IFRS) conversion in progress and completed in many countries around the world
• United States is facing years of massive debt-level caused inflation and dollar devaluation versus other world currencies
• Countries (such as Brazil), which historically were dependent on foreign capital leading to unstable currency and inflation, have now accumulated cash reserves that they can use to stabilize their currencies
• International alliances such as the EU, and countries such as China operating more centrally, create huge economies of scale/competitive advantage versus the US
CURRENCY RISK/DIVERSIFICATION
Pendo's international investments are primarily in businesses that conduct the majority, if not all, of their business in their own country and in their own currency. Since these companies receive their revenue in their local currency, their earnings increase when the dollar depreciates.
MORE >
