Australians often approach overseas investing with trepidation. But they shouldn’t, as investing in the world’s best businesses can be much less risky than investing in a concentrated local portfolio of highly cyclical banks and resources companies. Companies can also boast higher returns on capital, more predictable earnings, superior market positions and management with longer growth runways as they increase their competitive advantages around the globe. Choose your shares correctly, and it’s like always investing with the wind at your back.
The aim of this report is to explain how we invest your money safely and profitably by sticking to a logical, repeatable and disciplined process that’s based on valuing the world’s best franchises.
Research shows that (on average) investors earn 2–5% less than the fund they invest in, as they buy and sell at the worst possible times rather than simply sitting tight or investing more when markets overreact to bad news that eventually passes. To paraphrase Rudyard Kipling, having confidence in your process is what allows you to keep your head while others are losing theirs.
Ours is a conservative, long-term value approach that’s endured for almost a century. It’s the art and science of buying individual shares for less than they’re worth. To have confidence in this approach you must accept that no investment strategy will work all the time. Unlike life, it’s not the journey that counts in investing it’s the destination. We want to compound our returns as fast as possible without taking unnecessary risks, as it’s impossible for your portfolio to compound at high rates of return when it’s repeatedly held back by bad choices.