Chief Investment Officer, Steve Johnson, sums up the crazy week on the markets following news of a Covid-19 vaccine and how this has impacted the Forager portfolios.
Hi everyone and welcome, it’s Steve Johnson here, Chief Investment Officer at Forager Funds and I’m sitting here at the end of a very long week in the Forager offices. There’s a lot of US conferences going on this week and we’re stuck here in Sydney rather than in New York and that’s making for some very late nights, and it’s not just conferences keeping us up. It’s been a crazy week on financial markets as well.
You might not notice much in terms of overall market movements but underlying that there’s been some very significant changes going on out there particularly around the US election and a recovery in value stocks and a reversal in some of the money piling into momentum and growth stocks out there.
In fact, I saw an email this morning, I think it was another one of those financial markets, one in 10 trillion year events, if you base it just on the statistics the moves were that violent. Both of our portfolios have done quite well through this environment as they have done over the past year and as I’ve been saying, ad nauseum, market volatility is good for us, we want to see a lot of it.
The value parts of our portfolios (or more the things that have been left behind over the past 12 months) have been working particularly well over the past week and we’ve had some of our better quality businesses reporting some great results as well in our international fund.
We had Farfetch out this morning with some fantastic results. That’s on the back of a big deal with Alibaba earlier in the week and Celsius, which is an energy drinks company that you might have read a bit about over the past 12 months or so, reported some revenue growth that is absolutely shooting the lights out and a very strong share price performance there as well.
We’re really keen to see some of those cheap value stocks that we own perform over the coming years. We want to see that in terms of operational performance profits and dividends as well but any sort of pullback in this growthy end of the market is going to be good for opportunities as well. There are some fantastic businesses out there and we want to own them, as we’ve seen with some of the results this week. The outcomes and the share price moves when you get those things right can be sensational so hopefully we get a pullback in some of those great businesses as well and an opportunity to add them into our portfolios. But also great to see some of the businesses that have been around for a long time and which we’ve got long-term confidence in producing some great results as well.
So it’s been an interesting week. Our monthly reports for both funds are out, make sure you jump on the website and download them and keep up to date with our performance. I’ll be back next week and try and get someone from the team to come along if they’ve had some sleep by then. Thanks for tuning in.
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Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.