“Those who think, Present” ― Aayush Jain
It is that time of the quarter again for two reasons. The first is that the flood of corporate earnings results – from all around the world – has started and that means the next month or so is going to be very busy. Of course with great information flow comes potential great opportunity too with both shares that we already own and also names we are considering. For example during the last week or so, updates from IBM in the technology sector, Saga in the insurance/travel area and French-listed food retail behemoth Carrefour have all induced us to buy more shares in these names.
The second reason it is that time of the quarter again is that we have released a new Dynamic Opportunities Fund presentation document which you can access here.
Putting together a new presentation document always induces some introspection about what has gone well, has surprised, changed or even gone badly over the preceding few months. Interestingly one aspect that has not changed, since our last presentation in mid-January, were our six most compelling underlying stock selection themes which remain:
UK domestic equities – too much fear about Brexit;
Eurozone – Macron’s reforms & Merkel’s need for legacy create opportunity;
A bit more inflation – supportive of companies with pricing power;
Rotation – sector preferences will broaden beyond technology/growth;
Spin-offs – often leads to mis-pricing due to mis-perceptions;
Lower beta Asia – rudely left behind in the recent rally
What has certainly matured has been the number of stocks we have taken double digit percentage profits on since the inception of the Fund. Additionally adding in our exit of DixonsCarphone in the last few business days we are now up to sixteen names where we have achieved this. Seven months or so into the Fund’s life this feels broadly inline with out expectation that investment anomalies – assisted by events such as the quarterly earnings round – can take up to twelve months to play out.
With the economic backdrop continuing to change as bond yields edge up, global trade discussions remain fluid and central bank stimulus progressively wanes, our belief that a flexible, theme driven and individual stock focused Fund is a great complement for an investor’s overall portfolio.