Running money, we are always looking for the optimum time to buy. I thought we had that last week. Fear of inflation and rising bond yields brought a dark cloud over equity markets.
But it didn’t last long. Fear of inflation was worse than the reality. At least in the short to medium-term. And the markets are rising fast again on the belief in (and greed for) a sustainable recovery.
Well, inflation is a real risk. You can’t ease, print, repress the price of money in such a huge way for it not to be. Prices are going up everywhere. Your cash is worth less than it was. School fees at my son’s school were hiked 50% alone this year!
We have done our best to insulate our portfolio with value and dividend picks. And a focus on asset quality. You can see the benefits of this. Deriving strong returns from the recovery alongside an income yield you’d struggle to find anywhere else.
So, where to now?
My colleague and investment manager John Ling was asking this just the other day…
The top medium-term trends I see are growth in companies focused on food supply, energy generation (especially renewable), clean transport technology, housing supply, and banking/insurance (assuming rising interest rates). Any business at the cutting edge of these trends could do well.
And we are actively hunting for more for our portfolio.
Right now, we have just found a hidden property gem in Europe that ticks all our boxes.
It offers an impressive track record of strong revenue growth, fantastic margins, and a return on capital that’s impossible to ignore…
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