James Fletcher: We're sitting there
at a Japanese restaurant and I kind of
just showed him my rough presentation
materials, showed him the performance,
showed him the process, and he,
he looks at me and he goes, James,
it's, you know, great performance.
Great.
It, it looks like you have
a best in class process.
I want to invest and I wanna seed it, but
the reason I wanna seed it is because of
you, because I want back you as a person.
And you know, that's people, back people.
And that was kind of a light bulb moment
that yes, everything else has to be
good, but it's really about the person.
Stacy Havener: Hey, my
name is Stacy Havener.
I'm obsessed with startups,
stories, and sales.
Storytelling has fueled my
success as a female founder in the
Toughest Boys Club, wall Street.
I've raised over 8 billion that
has led to 30 billion in follow-on
assets for investment boutiques,
you could say, against the ads.
Yeah, underst.
I share stories of the people behind
the portfolios while teaching you
how to use story to shape outcomes.
It's real talk here, money,
authenticity, growth, setbacks, sales
and marketing are all topics we discuss.
Think of this as the capital
raising class you wish you had
in college mixed with happy hour.
Pull up a seat, grab your notebook,
and get ready to be inspired
and challenged while you learn.
This is the Billion
Dollar Backstory podcast.
People spend so much time
talking about what they do.
It's a natural question
when we meet someone new.
So what do you do?
But it's not the whole story.
What you do isn't nearly as
important as who you serve, how
you help who you are, and why you
do what you do in the first place.
If you want people to choose you as
their guide, they need to know you.
They need to like you, they need
to trust you, and in order to
do that, they need to see you.
Your prospects and clients
are the heroes of the story.
You are the guide.
My guest today does a fabulous job of
using the power of story to let us see him
as a guide, but my goodness, I ended this
conversation also seeing him as a hero.
James Fletcher is the founder
and portfolio manager of
ETHOS Investment Management.
The firm is relatively
new, but the team isn't.
James is an experienced emerging
markets portfolio manager with a
strong history of alpha generation
and top quartile performance.
Most recently, he was the director
and senior portfolio manager of
the EM Smid Cap Fund at a P G Asset
Management, where he managed a billion
dollar portfolio, one of the largest
EM SMID cap funds in the world.
From 2013 to 2016, James was the lead
portfolio manager at Kane Anderson Rudnick
EM Small Cap Fund, ticker V I E S X.
Previously, he was a senior analyst
at Westwood Global Investments.
He's also the founder of the Global
Nonprofit Young Investor Society,
which we'll talk about today, and
has an undergrad degree from B Y U.
He's fluent in Portuguese and
proficient in Spanish, and has
lived in Brazil and Hong Kong.
I hope his story inspires you,
not only as someone you should
know, follow, and hopefully meet.
I also hope it inspires you to do work
that matters to the people you serve.
Lean into a mission and
lead with authenticity.
I spend a lot of time talking about that.
Today's episode is a masterclass.
In being about it, I am honored to
introduce you to my friend James Fletcher.
Let's dive.
James, thank you so much
for being here today.
This is a true pleasure for me.
We're friends and we always have such
great chats, and so this is like,
I can't wait to let people be a fly
on the wall in our conversation.
So thank you so
James Fletcher: much.
Well, thank you, Stacy, and I just
have so much admiration for you
and what you do for our industry.
It's just such an honor.
And congrats on the podcast.
I mean, congrats on the
Stacy Havener: lot.
Oh, thank you.
So excited for you.
Oh, I appreciate it.
It's a journey for.
And an adventure.
And speaking of journeys and adventures,
that's actually where I wanna start.
I would love, you know, this is
a, a podcast about storytelling.
This is a podcast about the
people behind the portfolios.
Yeah.
And this is also my favorite part.
So I'd love for you to
tell us your backstory.
And you can start wherever you want.
Because a lot of times some of
the transformation for people
starts early and kind of weaves
its way through their career.
Yeah,
James Fletcher: I'd love to.
In a nutshell, I've been doing
emerging market equities for 18
years, but really I'd say my journey
started, um, when I was nine years
old, uh, sitting on my grandpa's lap.
He was a famous scientist actually,
but his passion in his hobby on the
side was stock market investing and he.
Pulled me on his lap and showed me
the Wall Street Journal and he went
through his investment accounts and we
would kind of do this every Saturday.
He would show me the stocks he was
buying and why he was buying it.
And ever since that day, I've just had
this love, this passion for investing.
When I was in high school, I read Warren
Buffett for the first time, and really
probably like a lot of fun managers,
it just flipped my world upside down.
You know, quotes like Be greedy
when others are fearful and
fearful when others are greedy.
And the value of a B or good
companies is better to buy a wonderful
company at a fair price than a
fair company, a wonderful price.
It just resonated so much and I
just fell in love with investing.
But I say really the arc of
my trajectory changed a lot.
When I 19 years old, I served a a
church service mission in Brazil.
Okay.
Actually similar to another
of your podcast guests?
Yes.
Wellby, who served in the Philippines.
And it was just a transformational
experience for me.
I fell in love with the Brazilian
people and fell in love with really
other cultures and other people and
languages, and so I came back to
college and had this love of investing,
but also then had this love for
developing countries and just said, you
know, my dream would be to invest in
Brazil and get to use my Portuguese.
I got hired, um, which at hindsight was
extremely fortunate at a fund in Boston
called Westwood Global Investments, which,
um, went on to be one of the leading
investment funds in emerging markets.
I started as a Latin American analyst
and then started covering Asian stocks
and then Eastern Europe and Africa.
We were a small team at the time,
um, just managing $200 million.
It was really a buffet style
approach of concentrated investing.
A lot of due diligence on management
teams focused on quality businesses,
and that fund grew to 10 billion.
We were one of the top, oh my gosh, funds
over the period we launched em Small Cap,
and I'd say that was another pivot for
me where I just fell in love with small.
Oftentimes family owned businesses that
are maybe billion dollar businesses
that are growing to 10 billion.
And so we launched EM Small
cap that was successful.
Then I was hired at Kane Anderson
Rudnick, uh, based in Los
Angeles, a 40 billion EM or asset
management fund, and I launched em.
Small cap for them, became
a portfolio manager.
A couple years later, a PPG
Asset Management, which was
Netherlands largest pension.
600 billion euros and
assets that they manage.
Asked if I would spearhead launching em
small cap for them, and then a year and
a half ago launched Ethos Investment
Management after a successful track
record with a p g asset management.
And ever since those days, those early
days, um, being part of a boutique,
being part of a small team Yeah.
And seeing how successful that
was, that was always the dream.
And so when I got seed investors and
was able to launch ETHOS Investment
Management, Really, it's just that
combination of my love for people, my
love for emerging markets, and just
that being part of an independently
owned, aligned, mission oriented fund.
Um, love that brings us
to where we are today.
Stacy Havener: Wow.
And you know what's so
interesting about it?
As you were talking, there's obviously
such an amazing thread on your
experience in Brazil and kind of
falling in love with emerging markets.
Yeah.
But I also love the thread.
You were launching these
strategies in funds.
Mm-hmm.
Inside of, you know, much
bigger organizations.
Yes.
So, yes.
Now here you are as a founder and as an
entrepreneur, I wanna talk about that.
But you've had a little bit of tastes
of that along the way because you
were launching things inside these
larger asset management structures,
which exactly probably felt.
Entrepreneurial, I'm imagining.
Yeah.
James Fletcher: Yeah.
I think I was born an entrepreneur.
I love building things.
Yeah.
I love the excitement that comes
from it and creating something
out of nothing and being part of
teams and seeing that success.
Yes.
It's just fun.
I mean, it's exciting.
It's so fun and, uh, we'll talk
about Young Investors Society
later, but starting the founding
a nonprofit and building that was.
Exciting as well.
I think the world is great.
It's abundant.
There's lots of opportunities
and so yeah, being able to build
and create is something that's
always just been exciting for me.
Stacy Havener: Same for me.
It is.
There's nothing like it.
And especially in the early days,
which you're living right now.
I mean, it's super challenging.
Yeah.
The hardest part of the whole thing.
Yep.
But it's also so rewarding, so fun.
It's so.
And now I have a question
about your grandfather.
I love that part of the story.
Yeah.
So being a scientist.
Yeah.
Did he sort of buy into the fundamental
research or was he more quantitative?
Like, I'm just curious what his.
Because science, obviously being so black
and white, was there something there from
him that you think you've carried forward?
James Fletcher: Yeah, good question.
He was very much, um, long term, um,
innovative companies and management teams.
Okay.
My grandpa was actually the.
President of NASA twice during
the seventies and eighties.
Oh my goodness.
Um, and, and all of his
brothers were all scientists.
So the Fletcher family is a
very, um, science led family.
The fact that I sold out and
am focused on, on, on invest.
In finance is, uh, maybe a disappointment
to the Fletcher, but you know, his
philosophy, I think shaped mine as well.
It was very focused on, yeah, what are
the products, the innovations that are
gonna be successful 10, 20 years in the
future, and how can we invest behind it?
Stacy Havener: Wow.
That is super fascinating.
So you're sort of the rebel of the
family over here in the investment space?
Yes.
I'm a, yes.
I love it.
Of Rebels.
Ok.
So let's stay with this a little
bit because I think too, you've
seen a lot of different things.
I love the Westwood connection
because that was led by a
woman, if I, yeah, exactly.
Yes.
So the, and one of the pioneers.
Mm-hmm.
Um, really in this space.
When you envision, like what
does success look like for you?
So you've set out to build ethos and
it doesn't just have to be monetary.
I think that's something I
really want people to understand.
Like success isn't just about
numbers and dollar signs.
Yeah.
Success is more than that.
So for you, what does success look
James Fletcher: like?
You mentioned diversity, so
maybe start there like mm-hmm.
Like our mission is threefold.
We want to build a world
that's more equitable, healthy,
and prosperous for all.
And we're investing in a world
in emerging markets, which is
85% of the world's population.
And so, All of what we do, the way we
engage companies, the type of companies
we invest in, the way we build a team
internally, the way we give back through
charitable giving is all with the focus.
That diversity and having more minorities
is part of the conversation is critical.
Mm-hmm.
And helping health and wellness
and benefit of society is what
leads to long-term growth and
prosperity in all of its forms.
So engagement in governance,
engagement, improv.
Profit structures.
So yeah, I mean, I've been blessed, as
you mentioned, to work with some amazing
female portfolio managers in my career
and from my perspective in emerging
markets, it's having diversity of team
members from Korea and India and China.
Absolutely, yes, Brazil.
And I'm just such a believer in diversity.
Different mindsets and really, I
think through investing we can,
you know, make a difference.
And then through ethos, like we
intend to deliver great returns for
clients, which we have in the past.
And, um, through these returns, we
want to basically leave a legacy that.
You don't have to be short term, you
don't have to only focus on profits
that the investing game, I think like
Warren Buffett taught sort of quality
and long term adds to investment returns.
My legacy is, I want to add another
portion to that, is that company
culture also adds to investment returns.
So when we combine, Quality
long-term and company cultures and
have a positive impact on society.
I think many in the industry
would say, ah, you're gonna
have to sacrifice returns.
That's gonna hurt long-term performance.
The legacy I wanna leave is that,
no, this is actually gonna lead
to long-term outperformance.
And so that's the legacy that
Stacy Havener: we wanna leave.
I love it.
It's a myth and a lot of people, I
think exactly carry that with them.
That bias.
E s G, or you know, social responsibility
that you have to sacrifice performance.
So you're a MythBuster.
Not only are you a rebel,
but you're a MythBuster.
So I love it.
It's funny cuz I wanted
to ask you a question.
Well, I have a question for you
later that talks about legacy.
So we're gonna come back to
it and you'll have to see if
you wanna elaborate on that.
And so you probably hit on it here.
But one of the things I really
find critical to a good.
Is uniqueness.
And I think it's something we struggle
with in the asset management space.
You mentioned company culture.
I think it's an issue
at the company level.
It's also an issue for us as humans.
Yeah.
Because we wanna blend in.
Yeah.
And so when someone asks us what.
Makes you different.
We tend to go to things
that everybody else says.
Mm-hmm.
I, I often say to people, you
know, if you're, if you're writing
your website, for example Yeah.
And you read the copy on your
website and you could insert any
asset management firm's name.
Yeah.
In that particular sentence,
it's not a good enough sentence
because it's not specific to you.
So I share that with you to really kind
of empower you to share with us what makes
you different, what's unique about Ethos?
James Fletcher: Yeah.
Yeah.
So as you mentioned, um, there's
thousands of funds out there.
What I've seen though, is the reality
is there's few funds that do what
we do, so highly concentrated.
Extensive due diligence, a
differentiated focus on quality.
And then I would add a differentiated
focus on long-term company cultures,
long-term governance, and long-term
SG factors within a portfolio.
So I attend, um, add investor conferences
within the majority of our industry.
And so much of the questions
are focused on, yeah, quarterly
earnings and you know, one outlook.
Our conversations with companies and the
due diligence is way different, right?
So it's very strategic, very long term.
We're partnered with the owners
of the business over the long run,
and companies appreciate this.
It's a different perspective than
they get from most investors.
As, as you know, when you do a discounted
cash flow model, 75% of the value of
any business comes after year five.
Yet, so much of our industry is
focused on next quarter, next year,
and they're adding a hundred stocks
to the portfolio to try and time the
right cycle over the next quarter.
For us, it's so much about
that year five to year 30, what
does the business look like?
What do the people look like?
What does the culture look like?
And so that approach, it just
changes how you do due diligence.
It changes how you engage with a company
and how you build that long-term relat.
Stacy Havener: Wow.
I love.
Also, I feel like you need,
do you know Paul Black?
Yeah.
Oh yeah, yeah, yeah.
That's one of their, they, you know,
this company culture like you, I,
I hear lots of people talk about
what they do as investment managers.
Yeah.
And I literally have only
heard company culture from two
people in my entire career.
Yeah.
Paul Black.
Yeah.
And you, yeah.
And I think it changes
the conversation you have.
The companies that you're doing due
diligence on, it also changes the
conversation you have with investors.
Exactly.
Exactly.
And so I love that you're digging into
a different side and that focus on what
happens after year five is very different.
And I think that will change the
conversation you have with your investors
as well, because you're taking everybody
out of the weeds and sort of saying like,
let's pick our heads up here Exactly.
And look around and have a longer
outlook, which everyone thinks they have.
But do they really, if they're
focused on quarterly, Performance.
James Fletcher: Yeah.
With everything else in in our
life, it's, you're constantly
learning, you're constantly adding.
For me, it was probably about 2015,
2016, I read a paper by Alex Edmonds.
So he was at London School of
Economics and basically his.
Paper looked at the hundred best
companies to work for by glass.com, and
it just took those hundred every year
and it created a portfolio of those best
companies to work for rated by employees.
And that portfolio outperformed the
market by three and a half percent
alpha over the past 50 years.
And he shows that, you know, and, and
we're, we're looking so much for sources
of Alpha and here I thought there's no
way that just Glassdoor ratings could
be a predictor of, of long-term alpha.
And the more work we did on it,
the more we realized that company
culture is just something that, wow.
Is this.
Undiscovered gem of outperformance.
If you find those Googles and those
Starbucks of the world early on
with that unique, powerful company
culture, it's a predictor of returns.
It's a predictor of revenue,
growth of profit growth.
And so ever since that day, like we've
developed scorecards and we analyze, um,
different factors and metrics from the.
Actually Paul at Wsam is a good
friend of mine and, and we sort of,
yes, through, you know, that process
of, of analyzing from the outside.
And I'd say I am all about finding
inefficiency in what is a very
competitive, efficient markets.
So that's why we're focused
on emerging markets.
We're focused on small cap, but what
we've found is company cultures as
well is difficult to analyze, but it's
a powerful predictor of long-term.
Stacy Havener: That is so cool.
I love that.
And to me it also sort of ties in,
you know, being the storyteller
in the room here, you know
that culture, it's their story.
It's their story.
And I love what you said
about the small cap EM space.
A lot of those businesses
being family owned.
Yeah.
You know, here in the US we don't
see that as much, but certainly
in Europe and in other countries,
family owned businesses are still.
Thriving.
Yeah, they're a real thing.
Exactly.
And there's a lot of nuance and I
would imagine, I'm not a portfolio
manager, but a lot of differences
in analyzing a company like that
than one that's here in the states.
Sort of focused on quarterly earnings.
Exactly.
Super cool.
Thank you for sharing that.
I love that.
And I am here, I am the first one buying
the ticket to the Paul Black James
Fletcher Road Show on company culture.
I am so here.
I'm gonna ask you one more
question about the biz.
Yeah.
Because I think there's a perception,
maybe not so much in em, but I'd
be curious to your thoughts that
boutiques are at a disadvantage.
Hmm.
For instance, if I wanted to play devil's
advocate here, I might say, sure, James.
Like it's really great
that this is what you do.
You're in Utah, and there are companies
who cover emerging markets, who have
feet on the ground and all these things.
Like, there's a lot of things I could
say that maybe put you at a disadvantage.
Yeah.
And how do you respond to that?
Yeah.
James Fletcher: So, you know,
emerging markets, I mean, just
as a, as in a nutshell, right?
Emerging markets is 85%
of the world's population.
It accounts for 60% of the world's G D P.
And yet it's only on average
6% of investors' allocation.
So relative to the economic
footprint, em is way, way
underinvested by most institutional
investors and retail investors.
So it's a unique asset class and, and
these are growing economies, by the way.
EM is gonna grow six times faster than
developed markets this year in 2023.
Developed markets are going through
recessionary cycles and a lot of countries
in EM are still growing strongly.
So, Operating at a, at a low base
where you can grow from relative
to me, it requires a lot of travel.
So I travel to 12 yeah.
Countries a year.
We meet with three to 400
management teams a year.
I've lived in Brazil, I've li,
I just got back from Hong Kong
where we lived for five years.
And was traveling to mainland China, you
know, every month in Korea and India.
It does require a lot of extra attention.
Um, it's not that I could just start
an EM fund based in Salt Lake, it's
that I've had 18 years of on the ground
building relationships knowing companies.
That being said, there's
a lot of opportunities.
These are growing markets.
It's inefficient.
The indices are terrible.
Right.
They're very focused on just
a few large cap companies.
Yeah.
And then a lot of it's so true banks and
oil companies and materials companies.
And so the reality is it's low hanging
fruit for, for active investors.
And then what we think sets
us apart is our approach.
It's a private equity style approach.
We do two to three months of due diligence
before investing in emerging markets.
Governance is a huge risk.
Fraud is a risk, regulatory, political
risk, and so we're interviewing
customers, former employees.
Channel checks, um, talking to
the owners of businesses, so I'd
say even more so important than
developed markets in emerging markets.
Those channel checks, that
due diligence is crucial.
And yeah, but you find businesses
that are at a low stage where
you can invest for the growth.
I mean, one of the companies that
comes to mind, we invested in a company
in India called Varoon Beverages.
So like we were talking about, this
is a family run business, the GY
family and the market leader of Pepsi
bottling and Pepsi distribution in.
Company iPod in in 2016.
Uria family was well regarded at the time.
Just so you have an idea, India was
at seven liters per capita of soft
drink consumption compared to the
global average of 92 liters per year.
Oh, so so you see opportunity for them to
10 x their penetration of soft drinks and.
What we found out from Verum
beverages was that they were a
premier partner of Pepsi globally,
so they were growing double digits.
Pepsi was giving them
more and more territories.
We interviewed Pepsi employees and
they're like, oh man, the Uria family.
They are our best executors
of bottling in the world.
Amazing efficiency.
Wow.
And, um, after that it's,
I mean, not a no brainin.
But these opportunities
are, are fantastic.
So over that period, Varun has gone
from 40% of India bottling to now 86%.
As Pepsi's given them
more and more territories.
Their core volumes have
grown 18% per year.
They've improved profitability.
Revenues have gone up.
Four x profit's gone up six x
and the stock price has gone
up 10 x over that period.
And you say, you know, how
can you find a 10 bagger?
But then looking back, it's pretty easy.
I mean, Pepsi's giving them
territories, the penetration is so low
and, and people are improving their
purchasing habits and uh, they have
these iconic brands of Gatorade and
Pepsi and Seven Up and Mountain Dew.
And so we're excited.
What a great story.
Stacy Havener: Find these ideas.
That's so cool.
And you know, I think going back
to the question, Being a boutique.
And by the way, I wanna come
back to your travel too.
Yeah.
But going back to the question
about being a boutique, I think
also what's interesting for you,
you mentioned you're concentrated.
Yeah.
So how many holdings do you have?
So we
James Fletcher: have 30 to
50 stocks in the portfolio.
It's about 40, 40 stocks right now.
So it's, but our top
10 is nearly 40% of our
Stacy Havener: portfolio.
Okay.
And what's your turnover?
James Fletcher: Turnover's low.
So it's 20% per year.
Yeah.
And it's, so when we say we're
long-term investors, 20% turnover
is on average, we're holding
companies for five to 10 years.
So,
Stacy Havener: exactly.
So again, if we're responding to
the people who say, oh, here you are
in Salt Lake, and you know, there
are other companies who have people
all over the globe, you know, I
think what's interesting is you're
not trying to find hundreds and
hundreds of companies to invest in.
Exactly.
You're really looking for the gems
that fit exactly your criteria.
You're not turning over the portfolio.
Often.
Mm-hmm.
You're using this private equity
approach, so it's not like you need to
go find, you know, a gaggle of companies
to throw in this portfolio every year.
Exactly.
And I think that lends itself to being
more specialist, more specialized
and, and having a smaller team.
So that was great and that
story was, was awesome.
Exactly by the way.
And I wanna come back to, I love your
LinkedIn posts where you show, it's kind
of like from the road and you'll, it'll
be a picture of you wherever you are and
you do like these really cool breakdowns
of what's happening in the country.
I love those.
Yeah, so I'm also a plus one on more of
those posts because I think it's so great
to feel like we're with you on the trip.
Well, thanks Stacy.
Um,
James Fletcher: yeah, my,
Stacy Havener: my, so if you
don't follow James, you have to,
James Fletcher: my post in India
two months ago was, um, yeah,
viewed over a hundred thousand
times, but it was forwarded to
President Modi cuz I had talked
about India's made in, made in India.
Push for manufacturing in India,
and it was forwarded to moti who
complimented it and said, oh, how
great it is that institutional investor
is, is complimenting our policy.
So yeah, I mean the power of
social media these days, wow.
I think is, is critical.
Stacy Havener: Why don't
we stay with that then?
Because, okay.
It's something I I talk about a lot, which
is the industry, especially our industry,
but maybe it's all industries really.
There's a, a bias, I think, to
sort of playing down the people.
Mm.
And playing up other parts of process
maybe, or really highlighting performance.
Right.
Yeah.
So it's kind of not
people first in general.
Yeah.
And in my experience working with
boutiques and helping them grow,
especially early adopter investors.
Really do put people first.
And there's been studies that qualitative
due diligence is as important, if not more
important than quantitative due diligence.
And that's from the
standpoint of the allocator.
Yeah.
So Kaya did a, a fabulous study on that.
So when we take all of that, and then we
try to square it with the fact that here
are these portfolio managers and people
in the industry who aren't willing to.
Step up and say, here's who I
am, here's why I do what I do.
Here's who I am as a person.
It's challenging.
And I think your post in
India really speaks to that.
Like people want to see it.
They want to know you.
Yeah.
Before they choose you.
Yeah.
And so how have you been able to
deal with that kind of getting
in touch with your authenticity?
As a portfolio
James Fletcher: manager.
Yeah.
So I'm blown away sometimes at the
reception that I'll get traveling to
a country, putting up a short positive
post about what I see going on.
I'm, I'm blown away at the reception.
I think our industry is hungry
for authenticity, for real stories
and, you know, getting away from
sort of the cliches or just just
the marketing or compliance.
Yeah.
Wording that you're supposed to say.
I think our industry's
hungry for authenticity.
Maybe just a story of founding the ethos.
I, I think, um, this resonates with,
with, with your mantras as well.
Um, when I was putting out some feelers
to get seed capital to launch my own fund
and really pursue, you know, my long-term
dream, I was, I met with this successful
private equity, uh, group out of Japan.
And I had known one of the managing
directors, and we went to lunch.
We're sitting there at a Japanese
restaurant and I kind of just
showed him my rough presentation
materials, showed him the performance,
showed him the process, and he,
he looks at me and he goes, James,
it's, you know, great performance.
Great.
It, it looks like you have
a best in class process.
I want to invest and I wanna seed it, but
the reason I wanna seed it is because of
you, because I want back you as a person.
And you know, that's people, back people.
And that was kind of a light bulb
moment that yes, everything else has
to be good, but it's really about
the person, especially when you're
launching a fund and when you're, you're
early and you're building a business
and there's so many balls in the air.
You're really backing a person.
And so I've never forgotten that.
And I think that just stays in my mind
is that investors are gonna back people.
And it's important to be authentic.
It's important to, you know, do
what you say you're gonna do.
And it's important, I think
to have a, just cause to have
a mission, to have a, yeah.
You know, something behind it.
And I think that
resonates in our industry.
Stacy Havener: I.
That story.
I mean, I could just, I could just
start, you know, doing the Running Man.
I mean, I love that story.
That is such a phenomenal story, and I
think it's true to, and I appreciate that
you shared it because it's easy when we're
sitting there getting ready for a pitch.
Yeah.
To tell ourselves.
Okay.
What the investor wants to hear is
this, like we tell ourselves what
they wanna hear and we're not, right.
Yeah.
Yep.
And how great that that person said to
you, you know, this is all awesome, but I
just want you to know it's not the reason.
Yeah.
Yeah.
And I hope you keep that with you, even as
you meet with investors, fund investors,
or strategy investors, and as you grow,
because I think it's a universal truth
that people do business with people.
Every industry.
Yep.
Even this one.
Yep.
Yep.
So I love that you shared that.
Gosh, that is so good.
Let's talk about Young Investors Society.
Okay.
I have been lucky to be involved
a little bit here and there and
yeah, we had fun, didn't we?
Yeah.
Um, I tried to keep it fun.
And just tell us, as a founder, as an
entrepreneur, why did you start this
and sort of what's the why behind it?
Yeah.
James Fletcher: So, uh, young
Investors Society in a nutshell,
it's, uh, becoming the CFA Institute
for high School aged students.
We're now in 1,750
schools in 70 countries.
It's focused on high school aged kids,
learning about the stock market, but also
personal finance and financial literacy.
Yeah, I mean, the story behind it
is started with a letter really.
I was volunteering at SMAs,
the stock market game, and they
had investment professionals.
We were living in LA at the time.
I was a scout master, so I
enjoyed working with youth and.
I was volunteering at high schools, just
doing, uh, guest, uh, speaker assignments.
And I went into Roy Ball Academy,
which is in inner city Los
Angeles, very low income community.
99% of the kids were Hispanic.
And I walked into that classroom and said,
all right, let's talk about investing.
What's in your portfolio?
Your, you know, stock
market game portfolio.
They said, well, because the stock market
game is trying to beat your classmates
and, you know, a simulated stock
market performance over three months.
Okay.
And, you know, so they were saying we're
invested in triple leverage ETF and loss
making, biotech company, and basically
taking as much risk as you possibly
can in a, in a simulated portfolio.
And you know, I, every time I'd
have to go, whoa, whoa, whoa
guys, this isn't investing, right?
Investing.
What company do you want to be
the owner of in 10 years and why?
What makes that a good business?
Mm-hmm.
Why would you want to be the owner of it?
That day, um, you know, to
those Roy Ball students, I said,
you know, I invest in Mexico.
I invest in Latin America.
Here's some companies I've invested in.
Our industry's looking for diversity.
We're looking for different
cultures, different languages.
I talked about how I had had had an
analyst that was from Mexico, and I got
a number of letters after that visit.
But one of the letters was from
a young man named Edgar, and
he wrote me and he said, Mr.
Fletcher, thank you for
visiting my class before.
He said, you probably won't believe it,
but that 45 minutes has changed my life.
And he said, he said, no adult.
Has ever shown that they cared
before and visited my class.
And, um, he said, I now
want to go to college.
I now wanna pursue a degree in finance.
And that phrase, uh, that Edgar said, no
adult has shown that they cared before.
Just would not leave my head.
And uh, I went to someone from
Merrill Lynch that was retiring.
I went to someone from Harvard Business
School and I said, let's create a
program that teaches investing the
right way, teaches long-term fundamental
investing, and let's be a bridge between
kids like Edgar and our industry and
financial professionals that care.
And so, I founded Young Investor Society.
We kind of modeled it after the CFA
Institute where they do the stock research
competition as their flagship event.
And that rewards, uh, analysis
and presentation rather than
short term stock performance.
That year I had, um, I had a
group of teens that would come
over to my house every Wednesday.
They'd sit around my dining
room table and I would.
I would just teach them about
PE ratios and discounting cash
flows and industry analysis.
And then at the end of the
class, you know, I'd say, okay,
what worked, what didn't work?
And they'd be like, yeah, this is boring.
And at the end of that, at the
end of that year, we had developed
lessons and, and content.
We did a stock pitch competition.
We had six schools participate that
first year, and then it just caught fire.
Stacy.
I mean, the next year we grew
to 50 schools and then, yeah,
now seven years later, we're at
1,700 schools and 70 countries.
C f a institute's been
a great partner for us.
Um, and we've had, you know, banks
and financial institutions that
have, have really backed it and
amazing volunteers like me Wow.
And so many others.
But it always goes back to that
story of Edgar and being that bridge
between adults that care and kids
that Edgar, that, that don't see
that bridge to college in the future.
Stacy Havener: I wasn't ready for that.
I mean, I was not ready for that.
That was an amazing story.
I can only imagine That is
just unbelievably powerful and
I hope you kept the letter.
I did.
Yep, I did.
Yeah.
I mean that is priceless.
Now, if people wanted to get involved,
so if I'm listening to this and I'm
like, oh my gosh, that is amazing.
I would love to get involved,
or I know a school in.
Community that would benefit from this?
Can they and how do they do that?
Yeah,
James Fletcher: so there's lots of ways.
I mean, you can go to Y is young investor
society.org and you can volunteer.
You can sign up as a volunteer.
The reality is we have two full-time
staff, but we're really run by volunteers.
Volunteers do stock pitch judging.
They do investment symposium speaking.
So cool.
They mentor access schools.
I mean like, like we talked about, the
whole goal is to be a bridge between our
investment community and kids like Edgar.
Or you can reach out to
me directly on LinkedIn.
I'm, I'm active on LinkedIn and.
We have hundreds and hundreds of
volunteers that speak at a school, that
help out at schools that judge, and
yeah, it's just an amazing experience.
It's an amazing bridge.
So I would be personally
grateful for anyone that hears
this and wants to get involved.
Stacy Havener: Oh, that is so inspiring.
I love that story.
Um, okay, I wanna end
with one more question.
Yes.
Going back to entrepreneurship and then
I wanna do a really fun round with you.
Okay, good.
So I've got some kind of fast questions,
but my last or bigger question, Is just
about this entrepreneurial journey, and
I mean, you have had actually many Yeah.
Entrepreneurial journeys as I've
learned in this conversation.
Yeah.
I mean, including young investors Society.
Yeah.
Feel free to take it beyond ethos, just
in all your experience as an entrepreneur.
What have been some of the biggest
challenges or biggest positive surprises
that if someone's sitting here saying,
I want to do my own thing or launch my
own firm, whether that's a financial
advisory firm or a fund company, or even
a, a nonprofit, what advice do you have?
James Fletcher: That's a great question.
So I remember in the 2008 financial
crisis, Westwood Global, talking to one
of the partners there, going through
sort of the market turmoil and asking
him, you know, what it was like to be an
entrepreneur through this difficult time.
And he said, it's by far the
best decision I've ever made.
And if people knew the fulfillment
and the upside potential from
being an entrepreneur, then many,
many more people would do it.
And so I never forgot that
and always said, yeah, at
some point, that's the goal.
And I would say that is.
Absolutely true.
So one of the positive surprises for
me, both on Young Investor Society
and ethos, is yes, it's a lot of work.
Yes, yes.
It's incredibly difficult.
Yes, you have a thousand balls
in the air that you're judging.
Yes.
It never goes as fast as
you'd like it to or as easy.
Oh, preach.
You know?
Yeah.
But it is so much more fulfilling
than you would imagine, and
that's just the reality.
Yeah.
And so like we built young
investor society and ethos around.
A mission, a vision, a just cause
that we really believed, we built
it around a gap in the market that
was not being filled both in, you
know, serving teenagers and investing
long-term quality in emerging markets.
And honestly, I've been
surprised at how many people have
rallied around it, the support.
Young investor site, it blows me away
that we're in 71 countries and I'm getting
emails from, you know, kids around the
world that it's changing their life.
And volunteers, you know, we've met
Mark Cuban twice, and Damon John, and so
many portfolio managers just, wow, just
volunteer their time because they care.
And same thing for ethos.
I mean, everyone said raising money
is so difficult and operations is
so difficult, but I think when you.
Authenticity and adjust
cause and emission behind it.
It's been incredibly fulfilling.
Yeah, I'd say that's the biggest
surprise, actually, is that Yes, is
how fulfilling and enjoyable it is.
Despite the stress, despite the hard
work, despite the late nights, it's
just been incredibly fulfilling.
Stacy Havener: And I think that
is so good because you need that.
Yeah.
You need that to carry you
through those late nights.
Exactly.
And those long hours and the, you know,
all the balls in the air that you're
juggling that crash down on your head.
By the way, don't forget that part.
Yes.
Right.
And so if you don't have the fulfillment
and if you don't have the why Yeah.
And if you're not having fun Yeah.
Yeah.
Then don't do it.
Yeah.
Then it's not aligned yet.
Yeah.
That was amazing.
So, I'm not even going to I, okay.
I am gonna share with you where this comes
from, but I know you're not gonna know it.
Okay.
Because I feel like whenever
I share this, people are like,
I don't remember that show.
Okay.
So I'm dating myself here, but there
was a show way back when, not a Netflix
show on an actual cable television show.
Yeah.
Called Inside the Actor Studio.
James Lipton was the host.
He was a professor.
I think it was like SUNY purchase.
It was very kind of cottagey
and random, but he would bring
actors into his classroom.
I mean, it would literally be, the
set was like a class of students.
Yeah.
It would be James Lipton sitting with,
you know, an actor and he would ask them
questions about their career and it was
just this wonderful, authentic, convers.
And at the end of every show, I'm
telling you way more than I planned
on telling you at this point.
Yeah.
At the end of every conversation,
he would end with his version
of Bruce's questionnaire.
Hmm.
And the idea of this questionnaire
is like, there's certain questions
you can ask somebody that help you
understand who they are as a person.
So I've kind of put together a little
bit from the Bruce questionnaire,
which is rather long, a little bit
from James Lipton's questionnaire to
come up with some questions that help
us know James Fletcher even more.
Okay.
Very good.
Okay.
Are you ready?
We're nervous?
Yep.
But ready?
Okay.
Don't be nervous.
It's gonna be fun.
I hope it's fun.
Okay.
What book inspires you?
We're starting with an easy one, I hope.
What book inspires you?
James Fletcher: Uh, how will
you measure your life by Clayton
Christensen has been transformed for me.
What
Stacy Havener: a book.
If people haven't read that book, get it.
Yeah, that is fabulous.
Okay.
Now you mentioned a lot of
different places you've lived,
so this is gonna be interesting.
What place inspires you?
James Fletcher: Yeah, I have lived and
traveled a lot, but I'd say my happy place
is just sitting on my deck, watching the
sun go down, thinking about companies
in the markets with my kids around me.
I think that's
Stacy Havener: Aw.
That's a wonderful picture and
I can relate to that because
I think when you travel Yeah.
Home takes on a whole different Exactly.
Level of value, doesn't it?
Exactly.
Yeah.
Absolutely.
Okay, so we talked about when you,
you and Paul Black go on tour.
Mm-hmm.
I'm the first fan that buys a ticket.
So let's go back to that vision.
Here you are, you're, it's
just you though, you're
walking out onto this stage.
Okay.
At some big stadium.
What is your walkout anthem?
What song do they play
as James takes the stage?
Ooh,
James Fletcher: good question.
I've always liked, uh, the Tom Petty song.
I won't back down, so we'll, we'll
call, we'll call that, we'll call
that the classic rock anthem.
Stacy Havener: I love it.
That's, that's perfect.
It would be cool if I could like
play that on the podcast, but I
definitely can't, but we'll, Okay.
What profession, other than your
own, would you like to attempt?
I'd say
James Fletcher: probably
teacher or scientist.
Stacy Havener: I was wondering
if you were gonna say scientist.
Your whole family is cheering
right now, so, so that,
okay.
What profession would you not like to.
James Fletcher: Uh, how
about Instagram influencer?
We talked about social media, but I
wouldn't wanna have that as a profession.
Stacy Havener: Oh my gosh.
That is a great answer.
James Fletcher: And I, I actually say
that in some seriousness because my, my
sister is, is an Instagram influencer.
Oh, so
Stacy Havener: you know, the
behind the scenes, the followers.
James Fletcher: Yeah.
She travels around the world for a
living, but it is so much work, so
tedious, so fickle that, um, it'd
be a tough, it'd be a tough career.
Stacy Havener: Wow.
So that's an inside scoop for
anybody that thinks they wanna
be an Instagram influencer.
It's not all it's cracked up to be.
You heard it here first.
Okay.
And last, what do you want people to say
about you after you've retired or left the
James Fletcher: industry?
Oh, you know, I think just very simply
that I had an impact for good on
the world and on people one by one.
Stacy Havener: I think they will.
I think they will say that.
I think you already are.
Hope so.
Thanks, Stacy.
It's really been such a pleasure
to spend time with you today.
I hope everyone enjoyed this
conversation as much as I have in James.
Thank you for your time and
your candor and your stories.
Thank you, Stacy.
Just epic.
It's an honor.
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purposes only and should not be relied
upon as a basis for investment decisions.
The information is not an offer,
solicitation, or recommendation of any
of the funds, services, or products,
or to adopt any investment strategy.
Investment values may fluctuate
and past performance is not a
guide to future performance.
All opinions expressed
James Fletcher: by guests on
Stacy Havener: the show are solely
their own opinion and do not
necessarily reflect those at their firm.
Manager's appearance on the show does
not constitute an endorsement by Stacey
Haner or Haven or Capital Partners.