Blackmores Runs Riot to Destroy My Short Portfolio
Almost three years ago I wrote a blog post titled 'Three Darling Stocks to Sell.' The three were McMillan Shakespeare, Flexigroup and Blackmores. I wasn't saying any of them were about to go bust, just putting forward the thesis that they were priced as better businesses than they were. The first two have significantly underperformed the market and justified my concerns. The third, however, has blown my short portfolio out of the water. Even if McMillan and Flexigroup had gone to zero, an equal weighted portfolio would still have returned in excess of 30%! I won't beat myself up too much. It was purely hypothetical and our real Australian Shares Fund has done exceptionally well over the period. But there are some lessons, and the biggest is to make sure your own personal biases don't get in the way of the big picture. My opinion is that vitamin supplements are a waste of time and money, but Blackmores aren't selling to me. Read more (VIEW LINK)
Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.