The 15 stock portfolio

The Rules of Investing

Livewire Markets

Most equity investors would advocate holding a highly diversified portfolio of 20 to 50 stocks, looking to reduce risk and bring returns closer to that of the index. But this approach misses a key fact, according to Bob Desmond from Evans & Partners International Fund* - volatility is not the same thing as risk. Instead, Bob prefers to own a concentrated portfolio of just 10-15 stocks, which allows him to focus on the best ideas.

"Good ideas are so rare that if you find a good idea, you should really concentrate your capital in it."

In this episode of The Rules of Investing, we discuss investing during high inflation and some of the unexpected challenges this throws up, where he sees pockets of excess and where he's finding opportunities in equities, and why he thinks tech stocks still offer attractive returns.

Topics discussed:

  • 2:08 - Bob's experience investing during the Zimbabwean period of hyperinflation
  • 5:12 - Looking at the impacts of inflation on the financial metrics of companies
  • 7:55 - The influence of alarmists in the West
  • 12:00- The difficulty of finding income streams for retirees
  • 13:15 - Investing experiences and lessons from Africa 
  • 16:30 - Being sensible when it comes to portfolio concentration
  • 19:48 - What is good management and how does the average investor get a gauge on this?
  • 30:50 - Value vs growth - where does Bob's approach lie?
  • 32:30 - What upside is there in Big Tech?
  • 38:36 - Stock idea: A sustainable, consistent earner over the extreme long-term 
  • 41:53 - Bob answers our 3 favourite questions

Reading recommendation

  • Benjamin Graham - The Intelligent Investor. Available on Amazon, Booktopia, or your local bookshop.

High conviction investing

Evans and Partners International Fund* is a high conviction portfolio of value-creating businesses at reasonable prices. They consider themselves true stock-pickers and look to avoid owning businesses that depend on a benign or favourable economic environment. Find out more by clicking 'contact' below, or visit their website for more information.

*Evans & Partners International Fund has since been rebranded to Claremont Global.

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The Rules of Investing
Livewire Markets

The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

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