Fund Positioning 02_10_2013

Fund Positioning 04_06_2013

Fund Update

Long Tail Asset Management Review_ 2011

USD / Debt / Gatekeepers

“How’s the market …. Is it grim enough for you yet?” Was the question my sister Michaela asked me yesterday on her way to the airport. The question made me smile; I thought it succinctly summed us up.    

The fund’s invested position is around 50%, consistent with our update in mid August. Our current bias is towards wanting to be more fully invested and ideally achieving this through identifying new ideas rather than increasing the investment in the existing names.

To this end, Nigel and I are heading overseas in a few weeks. We are seeing some infrastructure businesses in France and Italy and energy transportation and storage businesses in America. We have arranged some good meetings and hopefully we progress our thinking with regard to these companies; I am looking forward to the trip.

Domestically, we have started to pick through a group of the mature industrial companies whose share prices have significantly corrected. We perceive the lack of visibility and near term earnings risk as part of the opportunity. Our process aims to focus us on what unique insight do we think we have and what confirmation can we point to of this insight being realised. The confirmation is intended to hopefully reduce the number of value traps we end up investing in.

We expect day to day the unit price of the fund will be more volatile; this is attributable to the fund becoming more fully invested and the cost of downside protection increasing to a level we regard as being prohibitively expensive.

We like the environment and we like the investments the fund holds. We feel the volatility and general uncertainty gives us a window to build investments in businesses we want to own longer term.

Outliers … #2

If you live in NSW undoubtedly you will have noticed the impressive roller doors and shutters that have been erected through retail outlets statewide covering the display of cigarettes. These structures are evident in service stations, convenience stores, supermarkets and paper stands. I wasn’t conscious of what a privileged place cigarettes held in a retail shop layout, I presumed there were kept behind the counter to stop theft and reduce the risk of sales to minors, but now they are obscured I am finding myself increasingly aware of what a terrific position they held – well organised, central to view, located in a consistent position… oh yes and someone there to serve them to you.   

The initiative to cover cigarettes is disarmingly simple but I suspect it may prove highly effective.  I am not sure if there is a direct investment angle from this change – all that has come to mind so far is you would love the display space (and server) if you could somehow replace where cigarettes are currently located with your product and someone has also made good money from making and fitting the doors and shutters.

The post was prompted by this article in today’s Sydney Morning Herald. More detail on the restrictions and time frame placed on retailers can be found here link and a picture of what we are referring to is here. NSW Counter 

We thought this initiative was something that is interesting and unique occurring locally … essentially all that prompted the post.

Leveraging Tech: 4

Some friends were raving about the Kindle over Christmas, they saw it as a must have travel accessory due to the weight and space savings it gave them vs packing multiple books. I thought, that is a good idea – even better if I can save across a couple of annual reports and pdf files before I head out the door. I’ve bided my time waiting to see how the Apple i Pad lines up. Here is a link to some recent reviews + links to the more detailed articles if interested.  

i Pad Reviews

Hour well spent:

I enjoyed this; found the comments on the UK particularly interesting but thought there was a lot more to it as well.

Bloomberg Interview: Jim O’ Neill – Goldman Sachs