Matthews Asia Snapshot
Satya Patel Has the Patience for Investing, and for America's Favorite Pastime
Week of 25 February 2019
Spotlight on Satya Patel, Matthews Asia Portfolio Manager
Portfolio Manager Satya Patel's fascination with money and markets began in childhood. We chat with him about his insights on investing.
You were drawn to the financial world at an early age. How did that develop?
I've always been fascinated with money and markets. My friends and I would make fictional bets on the stock market. I remember poring over our local paper (The Augusta Chronicle) to learn about stocks, and being hypercompetitive about it. I think that's when I started being value-conscious. I wouldn't say I'm personally a penny-pincher but I do always try to get a good bargain. My mother was a coupon clipper!
Your mother was also a commercial architect and your father was an engineer who owned some businesses on the side, right?
That's right. They both were immigrants and always had side businesses. These were small operations like electronics stores and mechanic shops. That's when I had it ingrained in me how cash-generative small, non-sexy businesses can be.
How did you settle into the fixed income side of the industry?
I knew I wanted to be an investor, but I lucked into the fixed income field. I guess our team probably lives up to its nerdy reputation because I really enjoy picking up a bond prospectus and diving in, going through it and reading the legalese.
We spend hours and hours drilling down and dissecting bonds to understand their characteristics. We spend a lot of time understanding the underlying corporate entities. What guarantees does a bond have? Even within a single company it can vary from bond to bond.
There are always new sets of challenges when it comes to credit, currencies and rates. Countries are always changing, the people are changing. The industries are evolving so much in Asia every year. They're different than the year before and you have to understand them and keep up with the risks and changes. On our team, you also need to be a jack of all trades. Until this year, we even executed our own trades.
In 2018, U.S. growth decoupled from global economies. Do you think the gap between the U.S. and the world can narrow and what will that mean for emerging market assets?
I do think we'll see a convergence in global growth over the course of the year. Last year, the U.S. really took off, partly on the back of tax cuts, while the rest of the world had slower growth than was expected. This year, growth in the U.S. should come back down to a more “normal” level, while the rest of the world keeps marching along. If this happens, the U.S. Federal Reserve will pause, or maybe even cut rates, and that could lead to a weak dollar and strength in emerging market assets across credit, currency and rates markets.
I understand you're an avid traveler and a big baseball fan. But you're less a baseball fan per se than you are an Atlanta Braves fan, is that right?
That's right. I'm obsessed with the Braves. I only watch the Braves, although I have played baseball (third base). I actually even played when I lived in London, and found it surprising how many people from around the world love the sport.
I realize that people who don't understand baseball may think it's a long, boring season, with 162 games in the regular season. But there are so many complexities. A win in the first game of the season is exactly the same as a win in the last game of the season. And at any given time, the teams are shedding players and cycling in new ones. When you look at a baseball roster, you need flexibility, and you've got to have balance. It's a bit like investing. You have a portfolio of players like you have a portfolio of stocks—and both require patience.
The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. Investment involves risk. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Past performance is no guarantee of future results. The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information.