Posted on February 9, 2021 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
The market is about 200 points away from 7000. That was the level almost exactly a year ago. We may agree with it, or be shocked at how that’s possible, but that’s what we have in front of us.
The longest uptrend streak since August 2020.
The ASX VIX (volatility index) had inched over 15 last month, but has now settled back under 15.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Source: marketindex.com.au
More updates on the market and folio / watchlist companies for members follow.
Posted on February 9, 2021 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
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Posted on January 18, 2021 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
The ASX VIX (volatility index) started week 3 under 15, but with the volatility in the US bound to have some effect on the ASX, we ended Thursday (28th Jan) almost at 16.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Purchase entries and Watchlist updates for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Travel & Aviation
“While it’s good news that domestic travel is coming back strongly, international travel will remain largely off the cards until vaccines are rolled out.”
“It’s also unclear what the economic recovery will look like. So while we expect 2021 to be a lot better than 2020, we’ll be a long way off the kind of trading conditions we enjoyed in 2019.”
Alan Joyce, CEO, Qantas
“We have pushed forward with a few projects that take advantage of the empty terminals, like a refresh of our international retail precinct”
Geoff Culbert, CEO, Sydney Airport
“I am fairly pessimistic. Very pessimistic for travel and tourism.”
Graham Turner, Flight Centre
Local Economy
“This year we’ve seen business, government, environmental groups, unions and the broader community co-operate as never before,” she said.
“If we can keep this level of co-operation going, we can start to solve some of the big issues we’ve struggled with for decades and position Australia to emerge stronger for the future.”
“Sensible micro-economic reforms have the potential to pay dividends for future generations.”
Jennifer Westacott, CEO, Business Council of Australia
“The Treasurer has laid out a strong framework to pay down public debt by focusing on growing the economy through productivity-boosting reforms.”
“Sensible micro-economic reforms have the potential to pay dividends for future generations.”
Steve Johnson, CEO, Suncorp
“We also expect that the first half of next year may be the toughest economically, and so even though the outlook is very positive, we need to be prepared for a range of different scenarios”
Matt Comyn, CEO, Commbank
“As employment here continues to pick up and exceed expectations, we should see household spending increase and confidence return, which benefits the domestic economy”
“However, uncertainties exist, and we have seen how quickly outbreaks can take hold.
“Some sectors will inevitably do it tough until all restrictions are removed, or the threat remains of restrictions being reinstated, including interstate and international travel.
“We still have challenges to address in boosting investment and productivity, which I hope federal and state governments will now turn their attention to.”
Scott, Wesfarmers
Mining & Metals
“Lynas is one of only a few Australian companies whose sales are 100 per cent outside Australia”
“We are already seeing demand coming back in key markets as a result of the huge stimulus provided by governments globally, with many using this opportunity to address key policy areas.
“Some key areas include investing in resilient and diverse supply chains, investing in advanced manufacturing capability, and investing in product categories that respond to sustainability challenges. All these policy areas are good for our business.”
Amanda Lacaze CEO, Lynas Corp
Strategy in January and beyond
One of our strategies and themes this year is to accumulate and increase our positions in our existing company holdings as corrections play out.
We’ve made 3 purchases in existing companies in Week 3 and another purchase in Week 4.
Posted on January 15, 2021 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
The ASX VIX (volatility index) continues to remain just under 15.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Source: marketindex.com.au
Purchase entries for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Travel & Leisure
“The number of cars out on the road, and the congestion, has come back real quick”
Darryl Abotomey, CEO, Bapcor Ltd
“I think the China market is the biggest global opportunity in the entire [mountain resort] industry and all the moves that we make for the company strategically are oriented around making sure that we can get benefit from that trend”
“I think we’re seeing very strong demand for resort properties and a lot of transactions, in many ways probably the strongest demand we’ve seen since 2008 or 2007 and I think, people are looking for opportunities to be critically outside of many of the big cities because of COVID”
Rob Katz, CEO, Vail Resorts Inc
Aviation
“It’s going to be super competitive [in the market] because we’re all rebuilding the market [after COVID-19]. It will never have been cheaper to travel in this country”
Jane Hrdlicka, CEO, Virgin Australia Airlines
Automotive
“We’re seeing rising steel prices in the U.S. and EMEA due to supply and demand imbalance. This has been caused by faster auto production recovery than anticipated and supply stock replenishment, which is currently outpacing industry steel supply levels as blast furnaces restart”
Peter Watson, CEO, Greif Inc [multinational industrial packaging company]
Technology
“The way we work will never be the same again and it’s great to see how the PC [personal computer] has experienced a tremendous revival as the computing workhorse…paper to digital transformation is only accelerating, and every business process is going digital because every business is now a digital business”
Shantanu Narayen, CEO, Adobe Inc
“I almost feel bad saying, maybe it [COVID] helped ultimately because many of our customers have realized the importance of using technology to deal with their customers, their employees, and their suppliers”
Safra Catz, CEO, Oracle Corporation
Healthcare
“Even regulated industries that have traditionally been slower to embrace digital have certainly picked up the pace this year. We have industries like healthcare that are transforming, whether it’s through personalised medicine, telehealth and new ways, frankly, to engage patients”
Shantanu Narayen, CEO, Adobe Inc
“I think this horrible COVID thing will shrink to insignificance in a year. They will get vaccines out so fast it will make your head spin. I watched the death of polio to vaccines too”
Charlie Munger, Vice Chairman, Berkshire Hathaway
Media & Advertising
“Ooh [Media Ltd] is well positioned to leverage the ongoing recovery in audience growth and advertiser sentiment which is becoming increasingly evident”
Brendon Cook, CEO, Ooh Media Ltd
“The media agency market spend, as measured by SMI [Standard Media Index], reached a low point for the year in May 2020 and has improved considerably since that time with November data showing a return to growth after 26 months”
Market Announcement, WPP AU NZ Ltd
Retail
“With the inflections that we’ve seen this year through COVID with guests [our customers] living a more active, healthy life and looking for more versatility in their apparel clothing, I think that all bodes well for the addressable market”
Calvin McDonald, CEO, lululemon athletica inc.
“I still think brick-and-mortar is not going to go away”
Craig Jelinek, CEO, Costco Corporation
Global Economy
“We’re in a global recession, that will most likely for the most part continue in 2021”
Mark Schneider, CEO, Nestlé S. A.
Equity & Financial Markets
“We are mindful that very low interest rates result in further asset appreciation; however, in the near term the risk of not stimulating the economy is greater”
Shemara Wikramanayake, CEO, Macquarie Group Ltd
“There’s a lot of retail participation in a bunch of these IPOs. I do think we’re at a moment in time where there’s a lot of euphoria. I personally am concerned about that. I don’t think in the long run that’s healthy”
David Solomon, CEO, Goldman Sachs Inc
“Financial markets are telling us that the growth and inflation outlook is benign, which supports governments’ capacity to acquire more debt for the foreseeable future, as long as interest rates are lower than trend growth, the cost of servicing the debt will fall as a proportion of GDP, and the debt burden will fall as growth picks up”
Peter King, CEO, Westpac Banking Corporation
Commercial & Industrial Property
“There’s no comeback on warehouses. There’s been record activity level in them throughout the COVID period for the most part. Same with data centres, they are super strong”
“You’ll see lots of people returning to the office. We think 80%-plus of that occupancy, if not more, will come back”
Bob Sulentic, CEO, CBRE Group
Residential Property
“This recovery in housing prices looks set to continue into 2021, so it will be important for housing supply to resume a steady pace given expectation of borders reopening and migration steadily resuming in the next one to two years. Imbalances in supply/demand will exacerbate house prices, resulting in affordability pressures potentially becoming a widespread issue again in the not too distant future”
Susan Lloyd-Hurwitz, CEO, Mirvac Group
“We are currently posting record lending volumes through our network”
Posted on January 7, 2021 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
The XJO (ASX200) didn’t quite get to 7,000 in December 2020. In fact we haven’t broken 6800 yet.
The start of 2021 so far seems to have 6,700 as a key level.
There is a touch of certainty again right now in global markets, amidst:
Some protests in the US around Presidential election confirmation
Private acknowledgement from Trump that he has lost and formal results to be certified next week
Vaccine rollouts with mixed success
Talks for further stimulus and infrastructure spending
The ASX VIX (volatility index) is slightly up from the 13s to 14.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Watchlist and portfolio updates for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Media, Advertising & Entertainment
“I think that the demand [for gaming consoles] has been unbelievable…and we don’t see any end of that in sight. So certainly, these are fabulous pieces of technology. The demand is terrific for it”
George Sherman, CEO, GameStop Corp [world’s largest video game/entertainment software retailer]
“The global footprint for mobile [gamers] is vast. You’re talking about 2.5 billion gamers and growing, with some of the fastest growth happening in Asia and emerging markets”
Frank Gibeau, CEO, Zynga Inc [NASDAQ listed social/mobile game developer]
“We do not believe it [the streaming market] is a winner-takes-all market. We believe there’s a place for a number of streaming services to be successful”
Bob Bakish, CEO, ViacomCBS Inc [multinational film, TV & media conglomerate]
Food & Beverage
“We do expect, and I think retailers would agree that a sustained view of in-home eating, whether that is because people are more slowly returning to normal life or the fact that more people are going to be working from home or this dynamic of more in-home socialisation which has been driving certain segments of snacking at a very aggressive rate”
Mark Clouse, CEO, Campbell Soup Company
“I think some of those changes to consumer behaviour are as a result of cooking more meals at home. There are still a lot of people, even with restrictions lifted, working from home, which means lunches and breakfasts and other meals are made at home and it is likely to carry on”
Jeff Adams, CEO, Metcash Ltd
Travel & Leisure
“Consumers are dying to travel, their banking points, [credit card] attrition is at an all-time low”
“We’re seeing an increase in our consumer travel bookings, not necessarily in our corporate bookings”
Steve Squeri, CEO, American Express Company
“I can’t stress highly enough the demand for business travel. Now that borders have reopened, we’ve had a number of clients calling to say ‘we’ve got a lot of work to do before Christmas, seeing customers, seeing suppliers”
“In a sense, you could say the near-term has gotten a little bit worse because the virus statistics have gotten worse, but the medium and long-term has gotten a little bit better because the optimism around a vaccine is that much stronger”
Arne Sorenson, CEO, Marriott International
Property
“While the rate of return to CBD offices in Sydney has stepped up, it is still less than half. Melbourne is starting its journey out of lockdown, while the return in other CBDs has stalled well below their pre-COVID levels”
Ken Morrison, CEO, Property Council of Australia
Payments & Lending
“It is really pleasing to see the vast majority of our customers who accessed the banking relief package resuming repayments”
George Frazis, CEO, Bank of Queensland Ltd
“Every single factor we use to set [loan loss] reserves has gotten better this quarter [versus] last quarter”
Brian Moynihan, CEO, Bank of America Merrill Lynch
“There’s no question that things are better than people thought a few months ago”
Jamie Dimon, CEO, JP Morgan Chase & Co
Financial Markets
“We’re definitely seeing clients rethinking strategic asset allocation to satisfy return targets. We’re clearly seeing a search for yield with increasing allocations to both private markets and high-risk fixed income assets”
“We are definitely seeing an increased awareness and incorporating ESG [environmental, social & governance] resilience can have a material financial impact on portfolios, and I think we’re really at the beginning stages of a long-term reallocation of existing capital into sustainable strategies. But more importantly, real growth coming from new capital into these strategies”
Gary Shedlin, CFO, BlackRock Inc [world’s largest asset manager]
Energy & Resources
“We believe that natural gas will continue to play an important role in providing energy and thereby supporting the further development of lower carbon, but intermittent renewable energy generation”
Scott Wyatt, CEO, Viva Energy Group Ltd
Miscellaneous
“Our customers with new pets [puppies & kittens] are up nearly 40% on a year over year comparative basis. That is huge”
Sumit Singh, CEO, Chewy Inc [world’s largest online pet retailer]
“While the pandemic has been a challenge for many small businesses, it’s also spurred what The Economist Magazine calls a once-in-a-generation surge in start-ups. We expect that small businesses will lead the recovery just as they did after the Great Recession in 2009”
Kirk Simpson, CEO, Wave Accounting [subsidiary of H&R Block Inc]
Industrials
“I think we’re really kind of at an inflection point right now where we’re seeing demand move [for equipment & machinery]. We would say there’s still a long runway of replacement demand as you look at the age of the fleet and those sorts of things, so we think we’re a ways off mid-cycle let alone peak”
Posted on December 17, 2020 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
After a steady rise. the market seems to be quieter and sluggish heading into the Christmas holiday period. That suits most ASX investors just fine, especially with the US markets flat overall. It’s like T20 season on the markets is over for now and we’re in the middle overs of a one-day game.
Key Market Headlines
The FDA has been busy, saying that Moderna’s coronavirus vaccine is “safe and highly effective”, market is anticipating approval by end of the week
FDA also approves first COVID home testing kit that can be purchased without a prescription
Pfizer’s vaccine is being deployed across US hospitals
Australian unemployment rate out this morning, down to 6.8% from 7%
Resources have been doing well. Oil up 0.4%. Base metals mainly stronger. Iron ore up 0.8%.
The ASX VIX (volatility index) is holding under 15.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Watchlist, portfolio updates and purchase entries for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Retail & Ecommerce
“What we have seen as physical retail opens up, this has not had a cannibalising impact on the online channels. It is additive to what is already a tide that has risen online”
Nick Molnar, Co-CEO, Afterpay Ltd
“As we look ahead to post-COVID, we do believe that a lot of the e-commerce gains will stick, and we’ll continue to grow off of a higher base and the reasons why we believe that is convenience is habit forming”
“I think the other trend that we believe is significant here [for e-commerce] is entrepreneurship, in times of tough economic climates, we know that business formation generally increases”
Amy Shapero, CFO, Shopify Inc
Domestic Economy
“We’ve been through some seven years of drought where most of those economies in the Australian bush have struggled to keep afloat, and now with the good harvest and the good tourism, there is money coming back into communities”
Peter Langley, CEO, FedEx’s Australasia
Domestic Property
“The market is improving and there is one reason for that: there is a lot of money at very low rates of interest. That’s the only reason. There is always demand, and there is always insufficient supply. That is still the case. What’s changed is cheap money in great abundance”
Harry Triguboff, CEO Meriton
Energy & Resources
“We’re not an electricity company so we’re not going to make a big announcement about going into renewables. Why? Because I don’t see much money in it, No 1. And No 2 it’s already a very, very crowded space. Electricity markets and retail markets are very crowded. We will continue to operate in fuels”
Kevin Gallagher, CEO, Santos Ltd
Food, Beverage & Hospitality
“There’s absolutely no doubt in my mind that it’s going to take a very long time to recover to 100% of bars and restaurants that were open before the pandemic. I think that’s a long-haul – if we ever get back to that place”
Gavin Hattersley, CEO, Molson Coors Beverage Company
Telecommunications
“Structural shifts are stripping profitability out of the sector: The NBN, growth of the tier-two MVNO [mobile virtual network operator] market, and the OTT [over-the-top/streaming] providers, who contribute little, if anything, to the infrastructure they rely on, yet drive increased usage and continued investment for telecommunications providers”
Kelly Bayer Rosmarin, CEO, Singtel Optus Pty Ltd
Technology
“Over the next decade, technology spending as a percentage of GDP is projected to double”
“I think we definitely are going to have real structural change [with technology adoption] so when we remove the pandemic constraints, I don’t think we just go back to the way things were in the beginning of 2020 or late 2019”
Satya Nadella, CEO, Microsoft Corporation
“We believe the explosion of devices, applications and data at the edge [computing] will continue to drive demand for secure connectivity, cloud computing capabilities and analytics, especially in a post-COVID world”
Antonio Neri, CEO, Hewlett Packard Enterprise Company
Social Media
“When we think about what drives people to Twitter, we think about the events and topics that are happening in the world”
Ned Segal, CFO, Twitter Inc
Automotive
“It’s very much [a] truck first recovery so far”
Mark Smith, CFO, Cummins Inc [global engine manufacturer]
“I think overall the automotive industry is going to have a strong fourth quarter, and I do believe it’s going to be a strong 2021. I think the industry is in a sweet spot right now”
Mark Fields, Former CEO, Ford Motor Company
“Labour shortages have become increasingly the concern since we restarted our operations in Q3”
Doug DelGrosso, CEO, Adient plc [world’s largest automotive seat manufacturer]
Transport & Logistics
“We have the weekly normal flights, but we’ve had to top them [up] with additional flights because there has been so much volume coming into Australia and it has been difficult to get the volume in”
Peter Langley, CEO, FedEx’s Australasia
Travel & Leisure
“There’s been a rush of bookings as each border restriction lifted, showing that there’s plenty of latent travel demand across both leisure and business sectors”
Alan Joyce, CEO, Qantas Airways Ltd
Environmental, Social & Governance (ESG)
“If we’ve got customers today that aren’t thinking about climate change, haven’t considered it in terms of their operations, what the risks are and what they should do about it, that’s a pretty big red flag to me that these are not good customers in the way they think about other issues”
Posted on December 14, 2020 Warning: Undefined variable $byline in /home/u850523449/domains/tandhcricket.com.au/public_html/wp-content/themes/tabarruk/inc/template-tags.php on line 60
We have an on-going discussion on our premium forum about mid-term and short-term strategies, whether it’s something that’s possible or worth doing.
I think about and discuss it with Fahd from time to time. He has some experience with this and so did his father. Fahd and his portfolio team, in previous jobs, did some active investing while managing very large portfolios, where its best to trim positions, sell and lock in some profits etc. as things change in the markets Particularly because, with larger amounts of capital, you can’t just buy small and micro cap companies without causing huge volatility and spikes in prices, which defeats the purpose of buying low and holding.
Anyway, I have tried a short to mid term approach a few times in the past with some success, however the cons have always been enough to deter me from exploring it again seriously; namely:
Time needed to spend in front of the screen monitoring charts for entries and exits (4 hours per day minimum)
Tax implications with full capital gains counted as income to be taxed
Time / admin needed to track and lodge tax returns with so many trades
When I compare returns from short-term approaches with our returns from longer term investing through compounding, which takes way less day-to-day time and effort, it just makes it a no-brainer that it suits us better.
Not to mention, we wouldn’t be able to dedicate time to Tabarruk and members if we spent half a day or more trying to day-trade.
That being said, for the right investor, with the right mindset, time and risk tolerance, it could be worth trying.
Case in point, my recent performance in the Strawman Classic, an 8-week virtual ASX stock picking competition. It finished last week, and I places 5th out of over 2,000 contestants. Fahd placed 34th.
Here is a run down of some of my thoughts from our experience and the strategy I used.
I am a fan of virtual portfolios and game based investing like the ASX game and Strawman Classic, especially for new investors and children to learn the basics and try things.
In my video interview with the founder of strawman.com, Andrew Page, he mentioned how I’d been part of the platform since June 2020. I didn’t know there would be a competition and was just playing around with the website and discussion format while researching features and premium forum plans for Tabarruk.
Strawman had a few constraints:
A 20% maximum limit on any one company, i.e. out of a 100k, no more than 20k could be invested in any one company.
Trading in the competition was not real-time. Any trades entered during market hours were matched and executed on the closing price of the company on that day. So any day-trading or intra-day trades was not possible.
The winner would be the portfolio with the highest %age returns in 8 weeks (not $ value)
I bought a few companies with the $100,000 virtual money and forgot about it until an email arrived announcing the competition. I discussed it with Fahd, and we both thought why not attempt to try a slightly different strategy in the game and see what would happen. Fahd made an account for himself too. Fahd decided to go with a more mining and rare earth focus, I decided to stay fluid and mix the best of what sectors were in focus, like mining, biotech companies with binary milestones coming up etc.
We thought, at the very least we’d learn something, find some new companies, write or make a video about our experience.
The 8 week strategy we used was along these lines:
Pick companies based on our normal framework including some from watchlist and pre-watchlist
Shortlist to companies that had milestones expected in the next 8 weeks
I couldn’t screen for 100% shariah compliance in all companies, but used Islamicly for a 1st pass
I couldn’t spend the time to fully research all companies and picked some outliers that matched 1,2,3
Every week, I reviewed the sectors and companies that came into focus
I cut losers if their milestones had passed without growth
I swapped out losers with new companies or increased positions in my winners
A rundown and highlights of the 8 week period follows:
Before the competition began on October 19th, my 20k ADN holding had already grown and become about 25% of my folio.
Week 1,2 and 3
The first few weeks, some tech stocks dominated and set up the leaderboard.
Both Fahd and I ranked in the top 75 out of 2000 plus contestants.
Week 4 and 5
ADN and IBX both had positive announcements causing huge growth
I added a little MEP to my portfolio, which also followed ADN
I moved into 3rd place along with 3 other contestants who held ADN and MEP
Week 6
ADN and MEP kept gaining, IBX gained too
MSB has a positive announcement and surged 10%
I moved to 2nd place about 9% behind 1st place
Week 7
ADN and MEP started correcting, IBX held steady
MSB had another positive announcement
I attempted some swing trades with partial success
The UN reclassified Cannabis, US bill passed to decriminalise marijuana, and a cannabis company CPH, got new orders for their produce and in the span of 6 trading days, rose 1000%, 10 bags. The sector in general pumped.
I saw the sector start to pump, knew which companies looked ready to run, but obviously chose not to go there.
Instead, I cut my non-performers and loss makers (including MEP) to pull out $14k and bought DVL, Dorsavi, a biotech motion analysis wearable tech product manufacturer with contracts and evaluations pending.
Week 8 – Final 5 days of trading
The entire top 6 from the leaderboard of which most of us had ADN and MEP had shifter down to be replaced by a new top 5, all of whom held CPH, top 2 contestants with 200% and 180% returns.
I dropped down to 11th place with 51% returns
ADN, MEP and IBX all made slow gains
MSB held steady
With 3 days left, DVL announced an evaluation agreement with Medtronic, one of the largest medtech companies in the world.
The market realised the next day, DVL rising 100%
With 1 day left in the competition here’s how things stand:
I am ranked 4th with 71.7% returns
1st place is 161.7% returns, followed by 129.6% for 2nd place and 80.8% for 3rd place
All of the top 3 contestants have CPH and other cannabis stocks in their folios.
My portfolio in the game as of 10th Dec 2020
Things I did in game, that I’d rarely do for real
Go ‘all in’, i.e. deploy all capital available to me
Sell entire holdings of good companies for tiny amounts of profit
Cut good companies just because they were not performing each week
Regardless of the outcome tomorrow, I’m humbled and proud to have not only featured in an interview on ausbiz, but also place high on a leaderboard where we could ‘compete’ and compare ourselves to peers, all while sticking to our principles and tailored strategy. Fahd ays that I have well and truly lived up to the title of being the best halal and ethical investor in the competition, and if it weren’t for the pot sector and CPH pump, I’d have most likely won.
I think he’s a touch biased 😉. The high risk, not fully researched, binary event dependent biotech companies, could have backfired on me. I mean, the two biotechs IBX and DVL didn’t even make it to our real watchlist or folios at Tabarruk. We may look into them a bit in our premium webinars and dig deeper if there’s serious long term potential.
To conclude, I see this performance in the competition, more as validation when we started Tabarruk, how we compared our past performance to similar players in the market and found that we were genuinely beating not just them and the market but other analysts, funds and investment gurus too. We felt confident that we were the best in our niche.
My starting portfolio value was $182,000. My ending portfolio value after 8 weeks was $307,000. Total profit of $125,000. Total profit percentage was just short of 70%.
Side note on taxes in the real world
If this was the real world, assuming a yearly salary of $100,000, to realize my 8-week profit of almost 70% in full, I would’ve closed all my positions, and have all my capital gains counted as income, to be taxed $74,347, meaning I would take home about $50,000.
If I’d closed my positions, keeping all the other percentages the same, I would have only half of the profit counted as capital gains, meaning taxes would be $47,622, so I’d take home $78,000.
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A streak of 7 days in the green for the ASX. The market has 7,000 in its sights. Will we test it before the year ends?
There is more certainty in the market, amidst progress in vaccine related news and the political / election volatility subsiding for now.
The ASX VIX (volatility index) is under 15 and heading to pre-covid levels.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish) • Normal readings suggest a slight bullish bias • Low readings indicate low volatility (bullish) and strong investor confidence.
Watchlist and portfolio updates for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Banking & Payments
“The virus has been very interesting for payments. On one hand, it’s suppressing cash usage as people are worried about germs being spread via currency and so more people, even for small ticket items where they might have used cash in the past, are looking to use a debit card or a credit card”
Albert Kelly, CEO, Visa Inc
Technology
“With 5G, data driven insights, automation and embedded intelligence, we will see an explosion of edge computing [computing done at the location it is needed] in smart cities, transportation, factories, hospitals and schools around the world”
Jeff Clarke, COO, Dell Technologies Inc
Tourism & Leisure
“If you look at the leisure industry, that is airline, hotel, gambling…All those industry specialists are saying that it will take three years and more to recover, then [based on this] we believe that maybe the surge that we had this summer will be a bit reduced. But we have a pretty good runway in front of us”
José Boisjoli, CEO, Bombardier Recreational Products Inc [owner of Sea-Doo, Ski-Doo & other RV brands]
“I do think the [luggage] marketplace will be disrupted. I do think there’ll be smaller plays in the industry that struggle to come out of this. But it will remain competitive and remain fragmented”
Kyle Gendreau, CEO, Samsonite International SA
“Travel in 2021 and beyond will be a much more considerate exercise than it has ever been before”
Luis Cabrera, CEO, Lonely Planet
Workplace & Employment
“I think all of us, as business leaders, have realised that perhaps we had people taking trips that might not have been necessary, or we sent too many people on a trip, or we sent somebody to give a presentation for an hour and a half and sent them around the world, and that cost money and it cost time, which is money, and now realize that, boy, a lot of that stuff can be done on any one of these video platforms that work darned well”
Albert Kelly, CEO, Visa Inc
“I do believe there will be more change in the next two years than in the last 10 years…Almost every company on the planet is and will have to reimagine their business. Quite simply, different work needs to get done and work needs to get done differently” Gary Burnison, CEO, Korn Ferry Inc
“Printing volumes continue to be significantly below where they were before the pandemic” Enrique Lores, CEO, HP Inc
Agriculture
“Australia has been in a strong moment of rebuilding [cattle] herds. Australia, overall production of beef in Q3 was 30% below last year. Just to give you a perspective, 30% is a big, big reduction…since last year, and even more this year, probably the best conditions for grass in Australia in many, many decades. So, it came from extreme [drought] to another extreme now, so that’s why the [cattle] retention has been so strong in Australia”
Andre Nogueira, CEO, JBS USA [world’s largest beef producer]
“In the coming period we need to be prepared for ongoing uncertainty in terms of access to the Chinese market”
Hugh Killen, CEO, Australian Agricultural Company [AACo] Ltd
Residential Property
“I don’t think the housing market is a risk anymore. I mean we’ve substantially upgraded our forecast in and around housing versus where we were in May and even in August”
Matt Comyn, Chief Executive, Commonwealth Bank of Australia Ltd
Building & Construction
“We’re anticipating this post-COVID retail environment [where] the nesting effect of the DIY starts to minimize over time”
Marvin Ellison, CEO, Lowe’s Companies [world’s 2nd largest hardware chain]
Manufacturing
“We are starting to see strength in our [aluminium] markets. We gave a view at the beginning of the fourth quarter that was somewhat uncertain around the value-added products markets globally. We are starting to see the value-added products markets strengthen globally”
William Oplinger, CFO, Alcoa Inc [global aluminium manufacturer]
“We’ve observed in the last month very strong dynamics in the market for hydrogen technologies, at least say which we have not seen before being this strong”
Martina Merz, CEO, Thyssenkrupp AG [multinational chemical, steel & elevator manufacturer]
Transport & Logistics
“Building on the V-shaped recovery in the September quarter, we continue to see consistent improvement in terms of mobility and miles driven, and this bodes well for the replacement demand of tyres, both in terms of passenger vehicles as well as truck and bus”
Sean Keohane, CEO, Cabot Corporation [multinational chemicals company/supplier of chemicals for tyre industry]
Consumer Goods
“I think in the label industry in general, because this pandemic has increased at-home purchases, so if you are in the label business, I don’t think it’s been a stressful time…you wouldn’t say it’s been a bad time for consumer packaged goods companies”
Geoffrey Martin, CEO, CCL Industries Inc [world’s largest diversified label company & banknote maker]
Retail
“Fundamentally it seems like the consumer is relatively strong”
Katrina O’Connell, CEO, GAP Clothing Inc
“It doesn’t look like the economy is going to be anything other than very strong in the immediate future”
Gerry Harvey, Chairman, Harvey Norman Holdings Ltd
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With the Australian economy recovering at a steady pace, ahead of many other parts of the world, the interest in global investors looking to invest in Australia is surging.
So, how do regular investors, like us, living outside Australia, or with family and friends interested in investing in Australian company shares?
All you need is:
any online broker
ability to fund the broker account by bank transfer or card
lists Australian Securities Exchange (ASX) equities / stock
Here are some options for that we know of, and members are using around the world, in places like India, Sri Lanka, United Kingdom, South Africa, USA, Pakistan, UAE, Malaysia, Indonesia, Singapore and other countries.
A lot of these options, for non-Australian residents, would not be able to link a CHESS / HIN to the individual as they would not have a Tax File Number. They would instead hold the shares on your behalf, giving you the legal ownership of them through their holding entity. Because of this, users can’t take part in dividend reinvestment plans.
You can also find more brokers using a broker comparison website like brokerchooser.com
