LWE - 27th Feb, 2021
The 15 stock portfolio
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
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.
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
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 150 episodes published - you can access all content on Livewire Markets, Spotify and Apple Podcasts.
Featuring
Bob Desmond,
Claremont Global
Bob is a seasoned investor in global markets and has been refining his quality growth process for more than 27 years. Zimbabwean born, Bob has lived and worked in Africa, the UK and Australia. He started his career with Anglo American and Fleming Martin in Africa, before joining Seilern Investment Management in London in 2002 as a Portfolio Manager and Head of Research. He joined Claremont Global in 2012 as Senior Research Analyst and in 2017 was appointed Head of Claremont Global and co-Portfolio Manager. He holds a BA in Politics and Economics from the University of West Australia and is a CFA charterholder.
........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.
More from The Rules of Investing
To catch-up on previous episodes of the Rules of Investing, click here.
- Christopher Joye: No margin for error for risk junkies craving rate cuts
- Why Ben Clark is taking profits on growth stocks (and where he's putting that money to work)
- The next 10 years in ETF growth could be dominated by this asset class
- Warryn Robertson's guide to picking the best infrastructure stocks on the ASX and abroad
1 contributor mentioned
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...
Comments
Comments
Sign In or Join Free to comment