Performance to 31 March 2013
Dear Value Investors,
Please find below our updated returns to the end of March. With many of the companies we have purchased at lower prices now reaching our intrinsic value estimates, and in some cases exceeding them, there is not a lot of activity at Montgomery. Indeed it seems investors would be well served to always be prepared.
We continue to be cautiously optimistic about the prospects for the businesses we own and look forward to reporting season when we expect some positive updates. We note many investors we have spoken with are holding off investing in the stock market until a ‘correction’ occurs. We hope they are right as we are relatively heavily weighted again in cash. The only problem of course is that experience has taught us that when everyone is holding cash on the sidelines, that cash, labelled as it is for additional investment, usually limits the extent of any sell off. Moreover the lack of any desire to sell existing holdings also limits the magnitude of any predicted sell off.
In other words, we are more optimistic than pessimistic and acknowledge that with few cheap high quality stocks available we require either 1) a sell off in prices, or 2) profit upgrades that lift valuations, before we can meaningfully invest.
If you are considering investing in The Montgomery Fund, speak to your advisor now. Perfect timing is highly desirable but rarely achieved.
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.
Pranshu
:
Hello Roger,
I read you book from cover to cover and I must say that it is one of the best books on investing ever written.
Thanks again!
James Kennedy
:
Congratulations mate on the hard-earned results. Also thanks so much for all the insight you’ve been providing, it’s been terrific; there are no other commentators like you (both a value investor and with skin in the game) in the Australian market.
Much appreciated buddy.
Roger Montgomery
:
Thanks for the encouraging words James!
Greg McLennan
:
I second James’s comment.
A 26.5% return over 7-and-a-bit months is good going in anyone’s books, even with the usual caveats about short term performance. I observe that the gap between TMF and the ASX300 has opened out again in the last month too.
James
:
When Buffett had a fund him gave all of the first 6% to investors and only kept a fee if an amount over that was earned. Does anyone know of a fund that offers a similar arrangement?
Roger Montgomery
:
Thats generous given equity dividend yields!
Yavuz Atasoy
:
I am happy that I made the decision to do my first investment in the montgomery private fund back in May 2012. I have not looked back since then.
Thanks to Roger and the team.
Yavuz
Roger Montgomery
:
Thanks you for those encouraging words Yavuz. We are delighted to be working for you.
Paul Audcent
:
I have alas five companies I have shares in which are still some 15% below what I paid for them even though I did not pay at the highest level. As soon as these five reach what I originally paid, I will sell them and add to my units in The Montgomery fund. I do so dislike loosing money on investments and meantime Rogers fund keeps rising! Decisions decisions.
Roger Montgomery
:
Thanks Paul,
On behalf of David Buckland, Russell Muldoon, Tim Kelley, Ben Macnevin and Madeleine Taylor (The Montgomery Investment Management Team), I thank you for your encouraging words.
Kelvin Ng
:
Hi Roger, I’m glad you’re relatively heavily weighted again in cash. See interesting piece backed up by solid data by John Hussman:
http://www.hussmanfunds.com/wmc/wmc130401.htm
On the flip side, the gold mining shares have been hammered and the charts of stocks like TRY and SLR have gone parabolic, to the downside (btw, great call on getting out of SLR earlier at substantially higher prices). But they’re now a buy at around yesterday’s closing prices.
Kind regards,
Kelvin
Simon Stewart
:
Hi Roger,
Why compare the Montgomery Private Fund performance to the S&P/ASX200 Industrials while the Montgomery Fund is compared to the S&P ASX 300? Is this a reflection of the spread of investments in each one?
Simon
Roger Montgomery
:
Yep.
Michael Donohue
:
Why is it that you benchmark the Montgomery Fund for retail investors against the S&P/ASX 300 Accumulation Index, but the Montgomery Private Fund for wholesale investors against the S&P/ASX 200 Industrials Accumulation Index?
Roger Montgomery
:
A reflection of the likely investees in each fund
Brian Aitken
:
Congratulations on the great performance of my funds. Thanks for your efforts. I’m trying to beat your results, but you’re currently well ahead.
Best regards
Roger Montgomery
:
Dear Brian,
On behalf of David Buckland, Russell Muldoon, Tim Kelley, Ben Macnevin and Madeleine Taylor (The Montgomery Investment Management Team), thank you for your very encouraging words.