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In 2002, I was a junior analyst for an emerging market fund, and my boss sent me to meet Jiangxi Copper - at the time China’s biggest listed copper company. It was an investor lunch, which was great for me. I was not paid that well, and these lunches were always held at grand old places in the City. I always made sure to have the full three courses and the bread. Company meetings was how I stayed well fed in my early days.
At the time, I thought a Chinese copper company sounded pretty good to me. China was industrialising, and mining stocks were doing well. The meeting was relatively well attended with 20 fund managers and analysts. I was by far the most junior person there. The presentation did not go well. The management’s English was not great, and the presentation was a PowerPoint where Excel spreadsheets had just been dropped in without any formatting. It looked like a child had put it together.
As I sat at the lunch, various fund managers asked questions. One was very forcefully bearish on China. She very clearly compared China to the South East Asia before the Asian Financial Crisis. In particular she was bearish on the level of investment in China was going to be unsustainable. I remember her clearly stating she would never invest in such a company. I went from thinking it looked interesting, to wondering if I was just a sucker being lured into a bad company. In any event, Jiangxi Copper rose over 500% from that point.
