The last few years have been great for stockmarket investors both here and abroad. Since the start of 2016 the ASX 200 Index is up almost 10% and the Dow Jones Index is up a whopping 37%. In just two years investors have enjoyed stellar returns on the back of a booming economy. With both markets in solid bull-run territory, all you had to do is pick the right bag of winners, sit back and watch your money grow in line with the market. But as most experienced investors will tell you, it’s easier said than done. For the average punter, wearing the stock picking hat is no easy game. The last two years may have you a little blind sighted into thinking you’re the next Warren Buffett, but it’s not that easy. Picking stocks in a bull market, isn’t so hard because everything goes up. Once the bull market is over that’s when the real skill is put to play. Not only does emotion and patience become an important factor, but being able to pick quality stocks with growing earnings and a positive outlook is what matters most. In saying that, a great way for investors to get a leg up in stock picking is to learn from the best. That is the investment gurus that consistently beat the market time and time again by selecting the right stocks at the right time. In this article, we’ll look at three of the greats, Geoff Wilson from Wilson Asset Management, Charlie Aitken from Aitken Investment Management and Anton Tagliaferro from Investors Mutual. We look at what each is holding. Legendary investor Geoff Wilson is the founder of Wilson Asset Management, an independently owned boutique investment manager established in 1997. He has well over 30 years experience in the stockpicking and was even ranked ranked No.1 by the American Institutional Clients. Wilsons manage five main listed investment companies: WAM Capital Limited (WAM), WAM Leaders (WLE), WAM Research Ltd (WAX), WAM Active Ltd (WAA) and WAM Microcap (WMI).
What is Geoff Wilson holding?
The last two months have seen markets trade with increased volatility and risk following higher interest rate and global trade concerns. WAM says the recent turbulence is more of a correction than anything, and investors should look to the media and retail sectors for opportunities. The digital media market looks to have matured and Free to Air TV is back. Advertises are beginning to switch back to free-to-air TV and radio advertising from Facebook and Youtube. One of its star stock picks is Nine Entertainment Co (NEC) because of its exposure to this growing thematic. WAM also likes the retail sector despite all the huff and puff about Amazon taking over. It has also selected Non B (NBL) as a company that is well placed to benefit from a sector that is like to surprise on the upside. Below are WAM’s 5 funds and their top 5 holdings in each fund. Below are WAM‘s holdings across their funds:
What is Charlie Aitken holding?
One of Australia‘s well known high profile investors is Charlie Aitken. Once a stockbroker now a fund manager, Aitken was better known for his newsletter ‘Ringing the Bell’ which he distributed to private clients. It was an sharemarket newsletter that voiced his opinion on stocks and economic themes. It garnered a cult like following and ws widely popular. He was also the MD of Bell Potter Wholesale. He began his career in 1993 on the floor of the Sydney Futures Exchange dealing futures for clients of Ord Minnett/Jardine Fleming. The influential daily stock market newsletter was originally called Under the Southern Cross. His experience in markets span well over 20 years and covered big ticket events like the raging bull markets to stock market crashes such as the Asian financial crisis, Dot.com burst, GFC and the end of the mining boom. He is considered by many as one of Australia’s greatest stock pickers. Aitken recently launched Aitken Investment Management and the AIM Global High Conviction Fund. The AIM Fund has a team of highly experienced portfolio managers, analysts, and traders to ensure the AIM Fund generates maximum portfolio leverage to both domestic and international high conviction investments. The fund is primarily invested in Asia (50%), Australia (29%), Europe (15%) with little exposure to Japan and US. Charlie Aitken has outlined three stock picks for 2018, Kidman Resources (KDR), CYBG Plc (CYB) and SpeedCast (SDA). AIM don’t disclose their portfolio holdings but they do have disclose their best stock ideas. Aitken is very bullish Aristocrat Leisure (ALL). He expects Aristocrat to have a bumper 2H18. The company is the world leader in software gaming and it operates in a highly lucrative market. Aitken’s second screaming buy is Wynn Macau listed on the Hong Kong exchange. It’s a big bet on Macau. With regulatory concerns abating, Macau is the only place in China you can gamble legally and Aitken thinks shares are cheap and there could be a 25% earnings growth upside. Aitken is also bullish Tencent, which is a leading provider of Internet value added services in China. It owns WeChat. It is a dominant business in China and recently knocked Facebook off the pedestal to become the fifth-largest company around the world in terms of market value. It has little to no competition and is an attractive investment.
What is Anton Tagliaferro holding?
Is the founder of Investors Mutual, who are an Australian based fund manager that solely invests in Australian equities. Tagliaferro began his career in 1981 with Deloitte in London. After arriving in Australia he set up Investors Mutual in 1988. The IML team applies a conservative quality and value-based investment style with a long-term focus. Tagliaferro had a 43% ownership of the fund manager which now sits at +20% of the business after selling some of his stake to Natixis a French group. In addition, Anton co- manages QV Equities Limited, a Listed Investment Company focused on the ex 20 sector. Assets under management sit around $9bn. The company has 7 funds which invest across the board.
So where is Tagliaferro invested?
In a recent article Tagliaferro says his funds are invested in resources related companies and defensive stocks such as Pact Group and Ansell. Banks are doing it tough and traditional sectors such as the telcos, supermarkets and gaming have been under threat but should be relatively safe. Overall the Australian sharemarket has lagged overseas markets but there are specific sectors that have outperformed, albeit at a higher risk. Resources being one of them. Tagliaferro says, that it will be some time before Australian interest rates rise, despite rising rates in the US, meaning stocks with good yields will be attractive to domestic investors. Tagliaferro likes stocks such as Spark Infrastructure (SKI) and Shopping Centres Australasia (SCP) because of their high yield. He also likes defensive stocks such as the Packaging sector. Below are some of IML‘s funds and their top 10 holdings.
In summary, while fund managers don‘t always get it right, it pays to keep an eye on the ones that do and see their reasoning for holding certain stocks. Copycat investing is a well known strategy that successful investors use by replicating the investment ideas of well known investors. If it works for fund managers, why not copy them?