Investing in good quality companies will remain a sensible strategy

Discussion in 'Sharemarket News & Market Analysis' started by Ouga, 10th Apr, 2019.

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  1. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    An interesting article from IML today:

    Investing in good quality companies on the Australian stockmarket will remain a sensible strategy for the patient investor looking to build long-term wealth

    Investing in the Australian stockmarket exposes investors directly to the endeavours of Australian company management and the growth of the Australian economy, with an expanding economy generally leading to rising corporate profits.
    The Australian economy has grown steadily over the last 20 years and unlike many economies overseas has avoided any recessionary period. In fact, Australia hasn’t had an official recession since the severe downturn of 1991 – a period when unemployment jumped to over 11%.

    The generally good health of the Australian economy and low interest rates over the last two decades has helped underpin returns from the Australian sharemarket, which despite its ups and downs - as evidenced during the correction of 2001 and the global downturn of 2008 - has returned investors almost +9% per annum compounded, as measured by the ASX 300 Accumulation Index over this period.

    This return compares very favourably to the returns of other markets over the same period....


    Continued here: Investing in good quality companies on the Australian stockmarket will remain a sensible strategy for the patient investor looking to build long-term wealth
     
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  2. The Falcon

    The Falcon Well-Known Member

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    Gotta admit I’ve always had a soft spot for IML. They have always stuck to their guns, and have been among the most shareholder focussed managers with fair (for the time) fees and tax awareness. They listed QVE after mid caps had been on a massive tear and it’s been a bad story for shareholders since. Still holding a lot of cash so they are hanging tough which is what a value manager should do. Will be a lumpy ride but I’d expect a bounce back in coming years.
     
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  3. Snowball

    Snowball Well-Known Member

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    Thanks for the vote of confidence :D

    I’m still holding and happy with how they invest, even if the returns aren’t impressive thus far. The cash holding is actually harder to look at than I expected. Underperforming while resources are hot and small tech stocks are on 100+ times earnings is fine though.

    Hopefully the culture holds up after Anton leaves - the other guys like Simon and Hugh sound exactly like Anton so that’s comforting.

    It’s a funny thing - investing with a value manager takes commitment, patience and faith, and even then rewards are far from certain!
     
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  4. orangestreet

    orangestreet Well-Known Member

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    I think Anton is going to stay until 2023 at least at this stage. From memory, he has significant alignment due to his large shareholding within QVE (even after selling a million dollars worth or thereabouts a few years ago). Could be wrong, happy to be corrected.

    I like Simon Conn too. As long as they stick to the industrial value based mantra they espouse, I am a happy shareholder. Both Anton and Simon seem utterly impervious to hype and are not prone to hyperbole.

    Having said that, I don’t think I will ever have more than 5% of my total funds with them. It is one LIC that I keep a closer eye on than the others I hold.
     
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  5. Snowball

    Snowball Well-Known Member

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    Totally. I enjoyed the recent example of Wisetech being similar or higher market cap to 4-5 quality industrial businesses generating 7x more profits (something like that).

    Anton actually holds very little QVE, I think it’s a maybe $5m worth. Not much considering IML was sold for something like $500m. That could also be wrong though. But he may well have large investments in the managed funds he’s run since the start, don’t know. Hopefully he stays for longer but we’ll see, he may want to spend more time on that soccer club he owns lol.
     
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