Letters to the editor

Subscribers write in to get answers about our LIC coverage, video content and the value in 'value investing'.

Different strokes

I miss the ongoing active weekly reporting from the Eureka Model portfolios (a smaller package of businesses as opposed to the Intelligent Investor portfolios list) and in particular the LIC service weekly update which did not focus on 'new buys' each week but was focusing on a more longer term and smaller number of concentrated investments.

Looking forward to a higher level of differentiation between the two reports. 

-Rudy

Editor's note: Thanks very much for your feedback! Now that we've integrated Intelligent Investor's stock calls with the Eureka website you will start to see the different types of content on offer from both with the Intelligent Investor model portfolios to replace Eureka's original growth- and income-first models. Meanwhile, our LIC coverage will continue on the Eureka website, with the next update up next Monday. 

You might enjoy the interview below between Mitchell Sneddon and Ron Hodge, managing director of the InvestSMART Group. They discuss the goals of the overall InvestSMART business and how Intelligent Investor and Eureka Report fit together: 

More video, please

 I am really missing video content on Eureka Report, and as someone who subscribed for this kind of thing I'm wondering  'where is it now?'

-Ben

Editor's note: Stay tuned on this! Having recently relocated offices we are in the process of setting up a new film studio. We'll have more details on this soon and are looking forward to delivering audiovisual content to the Eureka Report audience in the near future. 

Value proposition

I think the concept of value investing sound good but has limitations. Value is not a static thing it changes daily and can change in a minute if, for example, the Reserve Bank raises interest rates when a rise was not anticipated by the markets.

I liken it to driving down the road, using the rear vision mirrors and hoping that there are not too many significant bends in the road.

The problem is the basis of the values is using historical information, trying to make adjustments for perceived changes in the business fortunes since that information was announced. Also, the lack of quarterly reporting and token adherence to continuous disclosure rules, the value investor’s task is very ‘hit and miss’.

Past history is no assurance of future results and even the fund managers say so. Often the first inkling that a business is not performing in line with trend expectations is when the share price starts to move away from a previous trend for no publicly known reason.

So value investing sounds straightforward yet is anything but.

-Keith

Editor's note: Hi Keith, thanks for your email! Of course no investing philosophy is entirely straightforward. The team at Intelligent Investor believe in this philosophy and it has contributed to their ability to beat the index over the past 15 years. Analyst Jon Mills is delivering a weekly piece that explains and interrogates this approach to investing. Click here to read his piece this week.