HM1 Weekly Investor Update: 21 December

Hi everyone

Just when it looked like Australians were going to be able to have a relatively normal Christmas, another COVID outbreak, this time on Sydney's northern beaches, has put everyone's plans into jeopardy yet again. I hope everyone has learnt from the previous outbreaks that isolation is the best path to containment, and everyone is remaining updated on which public spots you may have visited now require either a test or self isolation. You can check for yourself right here. Please be vigilant.
 
As bad as COVID is in our own backyard, it is multiple times worse in Europe and the United States. My sympathies go out to the affected, wherever you are. This is not something that is just going to go away overnight. It seems people can't wait to see the clock strike midnight on Dec 31 quickly enough, as if 2021 is going to see a return to the good old days of pre-COVID. I'm sorry to say, but I just don't think that's going to happen. And what that means is that these habits we are forming during COVID will ingrain themselves in our future lives far more than you probably think. 
 
Fresh food home delivery, furniture buying online, click and collect, tele-medicine, video games - they're all here to stay. And I wrote about a couple of weeks ago, that really was the theme of our conference this year, both in the stocks recommended and the enthralling keynote presentation by Professor Galloway. The share price of Nintendo is up some 25% since the conference, while HelloFresh is now up almost 40%. Investors around the world are waking to the fact that these thematics are not just a 2020 fad, but rather what will most likely be the new world order. 
 
Fund performance for the week was flat, with strength in Bill.com, Nintendo and HelloFresh being offset by weakness in some of the tech stocks. The pre-tax NTA as at Friday night was $4.18; the post current tax NTA $3.97; and the post all tax NTA finished the week at $3.77. By way of comparison, these NTA's at the start of 2020 were $3.18; $3.07; and $2.98. Whilst we are pleased with the investment performance for 2020, that is now the rear mirror for us, and we remain focused on trying to deliver you, the shareholders, the best investment returns we can for the next year and years to come.

This will be my final update for 2020 (I'll be back writing in mid January) so I wish you all the best for a safe and Merry Christmas, cherish what you have, and set some goals for 2021! Listen to the Equity Mates and the Prof Galloway podcasts, enjoy some good books, and put your feet up!

 

Stay safe,

Rory Lucas
Chief Investment Officer
Hearts and Minds Investments Limited

 

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