Hi everyone, it's been a while.
The global geopolitical order is clearly under strain. Ongoing conflicts, particularly in the Middle East, are beginning to spill over into the global economy. The implications are straightforward: rising energy prices, followed by higher food costs, and ultimately pressure on disposable income. As purchasing power weakens, business activity slows, driven by tighter margins and raw material constraints. Fiscal positions come under scrutiny, and negative headlines become more frequent.
And that's precisely why we are buyers.
Why We Buy When Others Don't
A simple principle guides us: when markets are depressed, assets are cheap. Today, fear is widespread. Pessimism is elevated, even among experienced investors. The combination of the MSCI announcement and geopolitical shocks has amplified the pain. But extrapolating short-term uncertainty into long-term pessimism about Indonesia does not make sense.
We view this as short-term dislocation, not structural deterioration.
Indonesia's Long-Term Trajectory
Indonesia's long-term trajectory remains intact:
- A large portion of the population is still underbanked or unbanked.
- Internet penetration and data consumption continue to rise.
- GDP per capita is steadily increasing, supporting higher disposable income.
- The country is moving toward greater food and energy self-sufficiency.
- Downstreaming of natural resources is driving value-added growth.
The list can go on, but the point is simple: there are always reasons to believe, and we choose to believe in them. Pessimism often sounds smart, supported by endless justifications. But in investing, it is optimism — grounded in reality — that ultimately wins, by proving those pessimistic narratives wrong. Our job is not to follow the consensus, but to be right.
Cash Is Not the Safe Option
Today, many feel comfortable holding large amounts of cash. They shouldn't. In times like this, when assets are depressed, cash becomes a poor long-term strategy. It generates no cash flow, offers no compounding, and steadily loses value over time. Holding cash in this environment is essentially a bet on perfect market timing — an assumption that one can re-enter at the right moment.
But markets don't reward hesitation. People wait for good news, yet by the time uncertainty fades, assets are no longer cheap. At the end of the day — our job is to do what's right, not what's comfortable.
"When everyone believes something is risky, their unwillingness to buy usually reduces its price to the point where it's not risky at all."
— Howard Marks