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Cuffelinks Newsletter Edition 273

  •   28 September 2018
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This week, many of Australia's leading money managers from different sectors reveal trends they are watching at the moment.

Successful investors who can explain their checklist in a few words are a revelation compared with the complexity of much investment advice. Here are three succinct explanations on what to look for when investing:

Paul Little AO, businessman, investor and former Managing Director of Toll Holdings:

"The management team. The thematic that the company operates within. The addressable revenue. Their sustainable point of difference. The five-year plan. The balance sheet and cash flow forecasts."

Mohnish Pabrai, Indian-born entrepreneur, value investor and author:

"The single biggest reason why investments don’t work out for investors is leverage. The second biggest reason has to do with a misunderstanding of the comparative advantage of the moat. Then you get to management and ownership and other issues. The three really big things are leverage, moats and management, probably in that order."

Seth Klarman, American billionaire hedge fund manager and CEO of the Blaupost Group:

"Of course, diversification is for us only the starting point for risk reduction. Solid fundamental research, emphasis on catalysts, value discipline, preference for tangible assets, hedged short selling, market put options and other strategies combine to create an overall portfolio safety net that we believe is second to none."

And unconventional advice from Warren Buffett's sidekick, Charlie Munger, on tiredness:

"We didn’t know, when we started out, this modern psychological evidence to the effect that you shouldn’t make a lot of important decisions when you’re tired ... I cannot remember an important decision that Warren has made when he was tired."

What are professional investors thinking about?

From leading local investors: Chris Stott reports on his recent attendance at one of Asia's largest investment conferences, Christopher Joye explains the FX hedge return you probably did not realise you were receiving, Alex Pollak and Anshu Sharma argue there's plenty of momentum remaining in leading tech stocks, Brett Gillespie warns that the Trump trade wars and his brinkmanship demand great investor vigilance and Jonathan Rochford shows what cash really really should be - and your super fund probably doesn't know.

And one of our market's most influential executives, the Chair of IFM InvestorsGarry Weaven, gives his vision for superannuation and the future focus of its investments.

Two important warnings: Assyat David says we are overlooking a vital third phase of retirement planning, while Mark Ellem shares his personal experiences borrowing for an SMSF. Every major bank is now out of this market, with CBA withdrawing from October, Westpac last July, NAB in 2015 and ANZ has never liked it. There are still many second-tier participants, but with senior executives losing their jobs as a result of the Royal Commission, banks are playing it safe on many parts of their strategies.

This week's White Paper from UBS examines global pension systems worldwide and compares them to Australia's. We have a lot to be grateful for in our superannuation system.

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

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