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...
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...
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...
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...
Frequently Asked Questions about this Article…
The Intelligent Investor Equity Growth Portfolio is a collection of stocks focused on growth, aiming to capitalize on market trends and opportunities. It highlights the importance of having an opinion during market extremes, as seen during the March quarter when growth stocks outperformed.
The ASX200 experienced a 10% return during the March quarter, rebounding from a 9% fall in the previous December quarter. This performance highlighted the volatility and potential for growth in the market.
The Intelligent Investor Equity Income Portfolio focuses on generating income through investments, with a keen eye on second-level thinking to identify opportunities and risks beyond the obvious, especially in the slow-moving housing market.
360 Capital, led by Tony Pitt, is interested in a property market downturn because it would allow them to take advantage of distressed sellers. The company is well-positioned with cash reserves to capitalize on such opportunities.
In March, the InvestSMART Australian Small Companies Fund increased its investment in Seek, an online job classifieds business. This decision was influenced by Seek's growth potential in Asia and the appointment of Ian Narev as chief of Asia.
Seek is investing heavily in its Asian business to lower its price-to-earnings ratio. The appointment of Ian Narev, former Commonwealth Bank chief, as chief of Asia is expected to help manage this expansion effectively.
The InvestSMART Hybrid Income Portfolio achieved a total return of 1.41% in March and 1.49% over three months. Since its inception, the portfolio has returned 4.58%, with improvements attributed to successful hybrid listings by NAB and Macquarie.
The improvement in hybrid prices during March was largely due to the successful listing of NAB and Macquarie hybrid issues, both of which closed above their issue price, boosting the overall portfolio performance.
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