“We will find better opportunities if we are able to look everywhere rather than just one nation.”
– Sir John Templeton
June 17, 2025 — I visit Stockholm several times a year, since we have several investments in companies headquartered there. Fortunately, it is a pleasant city to visit. Easy to get around. Everyone speaks English. And it’s pretty with all the water around. It’s also home to many winning companies.
One study by Jenga (2023) found Sweden produced 20 companies that returned over 1,000% in the last decade. That was about 4.5% of the total population of such outperformers, even though Sweden represents only 1.5% of the global capitalization.
Sweden beat out much larger markets such as the UK, South Korea, Taiwan and Canada – all of which had markets at least 2x that of Sweden’s. In terms of number of outperformers, Sweden was 5th, beaten only by giants: US, India, China and Japan.
It’s good fishing there, in other words.
We’ve owned Lifco since 2021. On our average cost of 206 SEK, we’re up 86% on the stock, excluding dividends. It is worth pointing out that we had to sit through a 45% drop shortly after I bought it.
If you focused on the business, though, you would never have guessed the stock took such a dive. Earnings per share have increased every year we’ve owned it. In fact, earnings per share doubled over that time frame. (The share price hit 409 earlier this year, at which time we were up almost double, thus exactly matching the increase in earnings per share. Stock prices follow the fundamentals, eventually.)
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Lifco has many qualities I like, one of which is that there is plenty of skin in the game. The Swedish industrialist Carl Bennett owns half of the shares. I met him on my latest trip, at the Grand Hotel. He was gracious and humble; you’d never know he was a billionaire. I admire what he built in Lifco.
Lifco owns 257 operating companies operating in 34 countries. These businesses do everything from dental supply to industrial components. It’s steady, diversified and thoughtfully organized.
It’s an excellent business. One way to see this is to look at Return on Capital Employed (ROCE). Lifco reports its ROCE to investors every quarter. It consistently earns around a 20% ROCE. Take a look at this chart, which shows the last ten years.
At Berkshire Hathaway’s 2007 Shareholder meeting, Charlie Munger said:
“Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you’re not going to make much different than a 6% return—even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you’ll end up with a fine result.”
This is one of my favorite Munger quotes. It encapsulates why the underlying returns of the business are so important. High returns on capital manifest themselves in growing earnings and cash flow per share.
You can sleep well at night owning businesses like this. The stock prices will bounce around as stock prices do. But as long as the business continues to perform, there is nothing to do but hold on. Stock prices will invariably follow, though hardly in a straight line.
Lifco is one of several such companies in Sweden, all with similar structures and track records. Others include Lagercrantz, Addtech and Indutrade. As I say, there is good fishing in Sweden, home to many winners.
Chris Mayer,
Woodlock House & Grey Swan
P.S. from Addison: Chris and I have a solid relationship dating back decades. I’m not surprised to find him excited about investing in Sweden. As his publisher, we traveled together on many of the excursions Mr. Mayer writes about in his travel & investment book The World Right Side Up, including Dubai, Mumbai, Sao Paolo, Bogota, Buenos Aires… and the Pacific coast of Nicaragua.
During our missions, we adapted ourselves quite nicely to absurdistan – the state of being cooped up in otherwise luxury accommodations while flying around the globe.
We’ll be catching up with Chris on Grey Swan Live! Thursday, June 19, 2025 at 11 a.m. EST.
Among other topics, we’ll get a rundown of his investment strategy at Woodlock House, a “family” office founded to solve one problem: “How to invest our family wealth without turning it over to Wall Street and to people who do not have ‘skin in the game’?”
Chris’ insights after a career of global travel and investment are quite entertaining. They have to be if you’re stuck on a 787 jumbo jet from New York to Doha, Qatar, while en route to Mumbai, India. There’s a lot of free time for meandering conversations about all kinds of things: family, history, philosophy… and investing, too.
If you’re a paid reader, please join us on Thursday, June 19, at 11 a.m. EST, as we catch up on the happenings at Woodlock House and gather Chris’ latest thoughts on the global investment landscape during the second Trump administration’s “chaos.”
P.P.S. Back in February, you may recall I visited my friend Ronan McMahon at Playa Del Carmen in Mexico. Ronan is the founder of Real Estate Trend Alert – RETA – a group that finds the best investment opportunities in international real estate, from city living to beachfront condos in the Caribbean.
Ronan’s deal goes live tomorrow, but you can review the Cap Cana deal here. It may be just the kind of overseas dream home you’ve envisioned for your retirement – or for your next real estate investment.
Meanwhile, our Portfolio Director, Andrew Packer, will be attending the Rule Investment Symposium in Boca Raton FL, July 7-11, 2025. Click here to view the stellar speaker line up and learn how you can attend yourself.
Your thoughts? Please send them here: addison@greyswanfraternity.com
