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Merry Christmas from Montgomery

Merry Christmas from Montgomery

Thank you for your support in 2013 and for all of your wonderful contributions and insights.

I am delighted to finish the year having maintained Montgomery’s outperformance across all portfolios.

Of course it won’t always be the case and indeed the last six months has tested the resolve of any investor who chooses not to jump in and buy low quality businesses simply because they look cheap.

A study we conducted on the performance of various quality companies since July 1, 2013 revealed the single worst performing quality score, as measured by median excess return, was A1! And the best? Any C-rating. C1 to C5, it didn’t matter, you were better off in low quality companies as they rallied. Better off, that is, if short-term share price performance is all you care about.

So as you pause and reflect over the break on the year that was and the year that might be, we hope you will think carefully about whether you are going to throw caution to the wind and jump in with those who are willing to trade quality for momentum.

I am pleased to report that we won’t be switching boats mid stream and despite the recent strength in the share prices of lower quality issues, all Montgomery portfolios have maintained a quality bias and meaningful outperformance.

The Montgomery Fund‘s initial investors (the fund was launched 17 August 2012) have received a return of 36.04% after all fees to November 30, 2013. Over the same period, the ASX 300 Accumulation Index increased 29.00%. While the Fund has delivered 7.04% of outperformance, it is over a short time frame and our focus remains firmly on the long-term performance prospects for our businesses.

We would of course be delighted to welcome you as an investor and work for you in The Montgomery Fund. All the documents you require are at www.montinvest.com/tmf but Christmas is best left spent with your family and friends.

Do keep us in mind however when you return from your break.

The Montgomery [Private] Fund (MPF), for investors such as self managed superfund investors with $1.0 million or more, will celebrate its three year anniversary the night before Christmas Eve. Again, I am very pleased with the early performance. To 30 November 2013, the MPF recorded a total return of 39.17% after all fees, assuming initial investors had reinvested their distributions. Over the same period, the ASX 200 Industrials Accumulation Index grew by 15.32%.

I am also delighted that Skaffold’s global reach continues with investors from Sydney and Singapore joining those from the US and Saudi Arabia in a global effort to locate quality and value.

I am very proud that Skaffold Global can make that job of navigating the fundamentals of globally familiar companies so much simpler, especially for Aussie investors who believe the currency may weaken even further.

I will return in late January and while I take my annual leave our team will continue to publish comments here at the blog from January 6, 2014, post a few new videos of their own, reply to your emails and take your calls. It’s business as usual.

In the meantime, may your Christmas be filled with the love of family and friends and I look forward to corresponding with you again in 2014.

With each passing year I remain enthralled by Michelangelo Merisi da Caravaggio’s work. He is one of my favourite Baroque artists and his treatment and representation of light was as extraordinary for its time as it remains spellbinding today. Each Christmas I post a message along with an image of his 1609 work The Adoration. But this year, as secularism seeks to remove Christ from the celebration of his own birthday – with politically correct but non-substantive phrases like Happy Holidays, Happy Festive Season and the worst one of all, Happy Xmas, – I think Caravaggio’s 1602 painting The Incredulity of St. Thomas is more apt.


Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. The mother of Jesus, Mary, “treasured up all these things and pondered them in her heart” (Lk 2:19). It seems you have too Roger! I especially like ‘The Incredulity’ at this time of the year as it ties the birth to the resurrection. Christmas blessings and peace to you and your family, and all those associated here who take the time to ‘ponder’.
    Thanks for the outstanding work you and your team have done for us!

  2. Hi Roger

    Thank you very much for the expert advices from yourself and your team during the,year. I have watched most of your videos and the commentaries and found them very interesting and expanding my knowledge.

    Though not 100% agreed with your advices / opinion (probably 90%), I really found they are very useful in this complex and ever changing investment environment.

    Thanks Roger and hope you have a Merry Christmas and a Happy New Year.

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