Geography

The country of origin of a company is important because it provides the stability needed for safe and profitable investments. We only invest in companies located in the three countries with the most trustworthy economies and societies:  Switzerland, United States and the Netherlands - SUN countries*. These are the only three world economies that combine a high level of trust with a high level of knowledge. By trust we mean there is a strong moral code that allows strong companies to thrive, such as low levels of corruption, and high levels of political stability. Not coincidentally, these three are among the very few major world economies that have never defaulted on payments of government debt (The Netherlands delayed payments of interests once, when it was under French governance in 1812). These countries are also the three with the highest pension reserves and which generally score the highest in surveys on human development, happiness, gender equality, top level education and freedom.

 

Footnote: *The one exception in the portfolio is L'Oreal, which is French. However, Nestlé, which is Swiss, holds a major stake in the company. Not surprisingly, L'Oréal has all characteristics of a solid Swiss company: stable management an outstanding financial record and a huge moat.