Active Stock Portfolio Updates - March 2019

Intelligent Investor Equity Growth Portfolio

It’s not a coincidence that we’ve included Joe Rosenberg’s quote above about having an opinion at extremes. During the March quarter, the gap between the value of Growth and Value stocks in the US pipped the previous extreme at the height of the tech bubble in 1999. 

If the 9% fall in the ASX200 during the December quarter aimed to scare those taking excessive risks, then the market’s 10% return during the March quarter served to embarrass portfolios without uber-growth stocks...

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Intelligent Investor Equity Income Portfolio & ASX:INIF

Several individuals of varying credibility expect the property market has either bottomed already or will very soon. Economic forecasting is a mug’s game, but in the style of Oaktree founder Howard Marks, we’re focused on second level thinking i.e. searching beyond obvious first order effects for the dangers and opportunities in second and third order effects.

Housing markets are very slow moving, particularly given how long it can take to sell a home. Tony Pitt, chief executive and major shareholder of current holding 360 Capital, would love a large downturn to take advantage of distressed sellers. We would, too, as 360 Capital is flush with cash...

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InvestSMART Australian Small Companies Fund

During March, we added to online job classifieds business Seek. Its price-to-earnings ratio (PER) of ~30 would be lower were it not investing heavily to grow its Asian business.

Success, particularly in China, will rapidly bring down the PER. The recent announcement that former Commonwealth Bank chief Ian Narev will join Seek as chief of Asia helps make Seek’s large expansion more manageable for founder and CEO Andrew Bassat...

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InvestSMART Hybrid Income Portfolio

For the month of March, the total portfolio return was 1.41% and 1.49% for the three months. Since inception, the total return of the portfolio is 4.58%.

The improvement in hybrid prices was largely attributable to successful listing of both the NAB and Macquarie hybrid issues respectively, with both closing above issue price...

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