Monthly, we update our wholesale investors on what’s happening in the market. Running what’s probably the only late-night trading desk from New Zealand, we’re well-positioned to feel the pulse of the market’s direction.
A lot can happen in a month. Especially when you’re 99.
In October’s update, I mentioned Warren Buffett and Charlie Munger’s foray into Japan.
I also mentioned: ‘There remains an open window to deploy. A window that could soon reveal some great value once the fog clears.’
When the market turns, the value gets realised fast. That’s what we’ve seen this month.
First, that hero of mine, the elder of those two investors passed away this week.
The Investor’s Podcast Network summed up Charlie’s extraordinarily resilient life:
‘At 31, he was virtually broke, divorced, and burying his 9-year-old son, who had just died of leukaemia. At 52, he developed cataracts, and a failed surgery left him blind in one eye. Yet Munger kept forging ahead, helping Buffett turn Berkshire into a $784 billion powerhouse.’
My favourite of his legendary quotes:
‘All intelligent investing is value investing, acquiring more than you are paying for. You must value the business in order to value the stock.’
On that value — the market is finally realising…
A new heat in the market. Will it last? Source: Image by Sergei Tokmakov from Pixabay
We’re seeing a dramatic turn and perhaps the Santa Rally that was missing last year.
One reason for the new risk hunger is the now record balances in money market funds. According to the Investment Company Institute, these sit at $5.7 trillion.
While many of these funds will be receiving interest rates of up to 5% on call, you have to ask why so much money is sitting on the sidelines?
Well, that may not be for too much longer as these on call rates might be set to soften.
Central banks in the US and Europe have moved from tightening to holding rates. That’s working and inflation is well down — though the ship still needs steadying here in NZ.
Eurozone inflation sunk to 2.4% last night, closing in on the 2% target.
Although no central bank appears to be talking cuts yet — wisely, slowed-up economies might need impetus in the medium-term.
Hence a lot more money may flow into the market and push into stocks that offer growth and favourable yields.
It’s a good time to board in my view. There is still value in debt-fearing sectors, particularly real estate.
Will the heat rage on next month? If so, we’ll hope for a bit of sell-off in January for a chance to capture more value.
Managed Account performance*
For the month of November 2023, we were up 8.79% across the composite portfolio (total aggregate return across all portfolios following the strategy).
Our MSCI EAFE benchmark was up 7.21%.
This brings our return for the 11 months of this year to date (1 January to 30 November, 2023) to 13.19%.
Our average annualised return since inception is 14.86% p.a.
Please see our performance chart for more details.
Regards,
Simon Angelo
Editor, Wealth Morning
*Past performance is not an indicator for future performance. Your actual portfolio will differ from the composite portfolio mentioned. The information contained in this document does not constitute an offer to sell or a solicitation to buy an investment, nor should it be construed as investment advice. Wealth Morning Managed Accounts are available to Eligible Investors and Wholesale Investors (not to Retail Investors) as defined in the Financial Markets Conduct Act (2013).
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The post Portfolio Update: November 2023 — Boarding Now appeared first on Global Opportunities Beyond the Radar.
