Thoughts from a Recent Trip to Turkey

By Retz Reeves, CFA

June 12th we boarded the first of several planes that would carry us to Istanbul, Turkey.

“Istanbul! Are you crazy?” my friends decried. “Citizens are protesting, activists are occupying Taksim Square, police are spraying tear gas!”

I have survived ash clouds in Europe, transit strikes in Spain, abandonment in Mumbai and earthquakes and typhoons in Japan. A little protesting doesn’t scare me – plus my husband and I were embarking on a non-refundable cruise with friends through the islands of Turkey and Greece.

Even though this was a long-awaited vacation, I couldn’t help but slip on my analyst hat to better gauge the situation – it was serious but not as scary as the headlines had made out. Against the backdrop of a country searching for a livable medium between secular and religious leanings, citizens were protesting and police mobilizing in certain locales; but elsewhere, life went on. Immigration authorities collected their $20 per person (exact change please), cabbies complained about the traffic and tourists dodged raindrops and carpet salesman to visit the Blue Mosque and the Grand Bazaar. Maybe during next year’s elections the city won’t be so calm, but as we left Istanbul to enjoy the history, scenery and cuisine on the islands, I was glad I had read the news but searched for the truth. It’s an old analyst’s trick.

I remained vigilant through Rome, Greece and eventually London. Guides gave a mixed review of the tourist trade – one said the amount of visitors had declined, another said that more were coming and staying longer. The morning streets of Santorini seemed less crowded than our previous visit, but they got busier and the wait for the Fira-to-port funicular stretched to an hour by early evening. Our friends stayed on for an extra day in Athens – they reported a delightful dinner but their comments indicated a deterioration in the local economy; many shops in the city were shuttered.

My outlook for the sputtering European economy was confirmed by our semi-full flight from Greece and the disconcerting vibes of London. On these pre-Wimbledon days the entry lines to Madame Tussauds looked hours long, although waiting to view the Crown Jewels at the Tower of London took much less time. Plenty of tourists and locals were willing to shell out 28 pounds (circa $42) just to ENTER the Taste of London at Regents Park, but the Starbucks on Piccadilly was closed as was my favorite wine store on Curzon. Across the street, a well- known food retailer sported a broken cash register and was so understaffed a customer abandoned their purchase and left empty-handed. London seemed more confused than my visit two years ago! My viewpoint was reinforced; European economies are still functioning but moving ahead only in fits and starts – no rising tide will lift all boats – and one should be very selective when looking for opportunities.

On our second night in London, we enjoyed a dinner with a friend and respected analyst. In 2010 she struck out on her own to start a boutique firm providing in-depth research to institutional investors, industry executives and consultants. Encouragingly, she has found a receptive market, reaffirming my belief that smart investors look beyond market noise to find the true drivers of value for their portfolios.

I kept this philosophy in mind as we boarded our final trans-Atlantic flight and slipped my analyst hat under the seat in front of me – it’s always good to be prepared.

About Retz Reeves

Portfolio Manager of the Frigate and Treasure Harbor Folios.
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