Kessler: Corporate Darwinism is alive and well

Rhett Kessler, Portfolio Manager at Pengana Capital, says a conservative strategy and having the nerve to invest in periods of weakness turned out to be the right strategy in 2015. Kessler says he is maintaining a defensive portfolio this year with nearly half of the companies falling into the boring ‘toilet paper and toothbrush’ category. However, some recent additions to the portfolio include second tier financial companies as well as some discretionary retailers. “Some examples are Credit Corp, SG Fleet and MacMillan Shakespeare. In discretionary retail we’ve got really big positions in RCG Group and the controversial JB Hi-FI.” Kessler adds a note of caution stating that disruption is rife and more importantly the strong are getting stronger and corporate Darwinism is alive and well in Australia.