Spotting value in an uncertain climate
We aren’t in the business of forecasting and it has no place in our investment process which last year delivered investors in The Montgomery Fund returns of more than 19 per cent against the stock market returns of just 2.8 per cent inclusive of dividends. At the beginning of 2015 we thought there wasn’t a lot of value around and lower returns should be expected. Even though we were right about the market’s aggregate return, it didn’t prevent the generation of attractive returns for investors.
In this column published in the Herald Sun, Roger discusses aggregate returns and whether better value might emerge, along with some of the factors that suggest you may get a better bite of the cherry if you remain patient before adding to existing holdings.
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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.
Kelvin Ng
:
Hi Roger, patience may well be a good idea – Ray Dalio says risks are asymmetric on the downside:
http://www.ft.com/intl/cms/s/2/b41813dc-c028-11e5-846f-79b0e3d20eaf.html#axzz3yVm1S9u0
Kelvin
Rick Henniker
:
Gday Roger,
A while back you wrote an article about Warren Buffet and used the graph you referred to of corporate profits as a percentage of US GNP. What was the name of that article, or can you produce an updated version? Thanks
Roger Montgomery
:
Hi Rick,
Here’s a useful article on the subject: http://www.businessinsider.com/warren-buffett-on-profit-margins-1999-2014-3?IR=T
And here’s the article that article refers to: http://archive.fortune.com/magazines/fortune/fortune_archive/1999/11/22/269071/index.htm
And the graph is updated regularly at the ST Louis Federal reserve’s research site: https://research.stlouisfed.org/fred2/graph/?g=cSh