CIO Insights - 30 August

Hi everyone
 
For the golf fans out there, I hope you watched the enthralling finish to the BMW Championship this morning – where after 72 holes Mr Stoic (Patrick Cantlay) battled Mr Showman (Bryson Dechambeau) for six extra play-off holes, sinking putt after putt to finally lift the trophy upon darkness setting in. Go the Stoics!
 
As we hit month end tomorrow, today's update will be short and sharp. You have hopefully seen we released our Annual Report for the year ended 30 June 2021. If not, here it is. I don’t need to talk about performance, or dividends, as that’s all been reported plenty of times already. What I did want to mention was that the only time we show our entire portfolio holdings is in the Annual Report! So, if you want to see what we held on June 30, and remember, it will have changed slightly since then, then now is the time to look. You know the conference stocks, because I’ve commented and reported on them many times already. The remainder of the holdings is the core portfolio as it was in June. If you compare the holdings to our previous Annual Report portfolio disclosures, you can get an idea of how much the portfolio changes year by year (not too much) and how the longer held core stocks have performed (pretty well). Note also that stocks like Yeahka Limited and Slack Technologies, which were conference stock recommendations in November 2020, don’t appear at all, as they were disposed of before June 30. There are also some risk metrics we have prepared (thanks to Zenith Investment Partners) which I’m sure will be of interest to some of you out there.
 
Talking of conference stocks, we have a new top performer from the 2020 batch: Bill. com. This was pitched by Babak Poushanchi from Cota Capital in San Francisco, who we have been lucky enough to have pitch at our last three conferences. His first two pitches were DocuSign (DOCU. NAS) in 2018 and Smartsheet (SMAR. NAS) in 2019, both of which produced fantastic 12 month returns, and indeed, have kept on delivering to those who held onto them. Well, Bill. com, which provides cloud-based software to digitise back-office financial operations for SME’s, reported on Friday night, and was up a further 29%, to now have increased in value by almost 190% since November 2020. This is the beauty of the Sohn Hearts & Minds Conference – you get to hear about stocks that in many cases you won’t have even considered investing in, let alone heard of, from men and women like Babak, who are absolute best of breed investors. Of course, not every recommendation will bear such fruit, but supersized gains like this, and Tesla last year, sure help cover the few that don’t come to fruition in the 12-month investment window our conference managers have.
 
On that note, we hope to be able to give some more details on the 2021 conference very soon – we are finalising our speaker list, and as usual, will have a mix of returning and new speakers giving us their highest conviction investment ideas. Stay tuned and in the meantime, save the date: Friday 3 December 2021!
 
Finally, another sad Vale – not many of you will know Bill Sidwell, 101 years young. He was Australia’s top ranked tennis player in the 1940’s, winning the 1949 US Open Doubles championship with John Bromwich, had a world top 10 ranking, and he was a top golfer, playing off scratch for many years, not to mention a WW2 war hero as well. He was a member of my golf club, was my father's regular playing partner for the last 20 or so years, and I had the privilege of playing many games with him, and indeed learning from him every time. A witty man, he was perhaps the most competitive person I have ever played with or against, even when he was 100!!
Vale Bill, we’ll miss you mate.

Stay safe,

Rory Lucas
Chief Investment Officer
Hearts and Minds Investments Limited

Reminder: these are simply my general views and should not be taken as investment advice

 

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DISCLAIMER: This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220). In preparing this document the investment objectives, financial situation or particular needs of an individual have not been considered. You should not rely on the opinions, advice, recommendations and other information contained in this publication alone. This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Past performance is not a reliable indicator of future performance. This document may not be reproduced or copies circulated without prior authority from Hearts and Minds Investments Limited.