Meet the Managers - August 2018 Stephen Bennie, Partner - August 2019 Stephen Bennie - Heathcote Investment Partners
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Meet the Managers – August 2018
Stephen Bennie, Partner
August 2019
Stephen Bennie
Disclaimer
• This information is intended solely for the use of wholesale investors, as defined in the Financial Markets Conduct Act 2013
(New Zealand) and wholesale clients as defined in the Financial Advisers Act 2008. It is not for general public distribution. By
receiving this information you represent that you are a wholesale client.
• Past performance is not indicative of future performance. The value of an investment and the income from it can fall as well
as rise and you may not get back the amount originally invested. This information does not purport to be a comprehensive
statement or description of any markets or securities referred to within. Tax assumptions and reliefs depend upon an
investor’s particular circumstances and may change if those circumstances or the law change. Prospective investors should
not rely on this information and should make their own enquiries and evaluations they consider to be appropriate to
determine the suitability of any investment (including regarding their investment objectives, financial situation, and particular
needs) and should seek all necessary financial, legal, tax and investment advice. If you invest through a third party provider
you are advised to consult them directly as charges, performance and terms and conditions may differ materially.
• This information is not intended to be nor should it be construed as advice. This information is not a recommendation to sell
or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Any investment
application will be made solely on the basis of the information contained in the relevant fund's offer document (including all
relevant covering documents), which may contain investment restrictions. This information is intended as a summary only
and (if applicable) potential investors must read the relevant fund's offer document before investing.
• This information has been prepared using information from a variety of sources. The information is believed by Castle Point
to be correct but no warranty is made with respect to its completeness or accuracy. All opinions and estimates in this
information are subject to change without notice. Castle Point is not under any obligation to update this information to the
extent that it is or becomes out of date or incorrect. This information is confidential and must not be made available,
published or distributed to any third party without the prior written consent of Castle Point.
Investment Team
Richard Stubbs Stephen Bennie Jamie Young Gordon Sims
Portfolio
Portfolio Manager Portfolio Manager
Role Manager (5 Analyst
(equities) & Analyst (equities) & Analyst
Oceans) & Analyst
M.Com (Hons 1st) B.Com (Hons) MMath (1st Oxford) M.Finance
Education
B.Sci (Auckland) CFA CFA CFA
Industry
26 years 26 years 12 years 9 years
Experience
“I’d rather be lucky than smart”
Diane Gibb
3
Castle Point – what makes us different?
• Aligned
- invest in our funds alongside clients
• Focused
- all we do is manage money for our clients
• Long term
- many claim this but few truly are
4
Ranger Fund invests in Australasian equities
• NZX50 and ASX200 are irrelevant
• Client long term returns are all that matter
• All equity positions require 100% upside over 3 to
5 years
• We invest with a view to a significant increase in
earnings over this timeframe
• Default holding is cash
• Cash can be up to 100% if no equity opportunities,
currently 36%
5
This makes the Ranger Fund truly different
6Ranger Fund
How do you beat the market?
• First and foremost
• You don’t try to beat the share market
• Then what should you do?
• Pick some shares that go up and deliver a good return
• Academic studies show this is a reliable way to beat the market
• A study by Antti Petajisto in 2010 showed it is the only
approach that works
85 Approaches to trying to beat the market
9Why isn’t everyone a stock picker?
10Why isn’t everyone a stock picker?
• Because this can all too easily happen….
11Why isn’t everyone a stock picker?
• But this can happen too….
12What demonstrates Integrity?
• Fulfill your promises
• Be honest
• Be trustworthy
• Give credit where credit is due
• Be mindful and emotionally intuitive
• Be humble
• Be willing to admit you’re wrong
• Offer help when it’s needed
• Treat others with respect
• Be charitable
• Be patient
13Skill and Luck
• Appreciate the role good luck has played in any success
• Good outcomes are generally a mix of luck and skill
• Good outcomes rarely occur where luck is bad
• Understanding that avoids arrogance
• Are stock pickers just lucky?
• Professor Robert Wiseman is an expert in the field of luck
• He has concluded that you can make your own luck
14I should be so lucky
• Wiseman’s 4 Principles of Luck
1. Maximise your opportunities
2. Listen to your hunches
3. Expect good fortune
4. Turn bad luck to good
• And of course
• Touch wood
• Do not break mirrors
15Very Lucky trade
Seriously undercapitalised, sub scale business
+
Fat dollop of luck
=
+50% return
16No, its 100% skill
• Investment gods punish arrogance
• Complacency and overconfidence are cousins of arrogance
• Dreadful returns are just around the corner
• Neil Woodford would be a prime example
17No, its 100% skill
• Investment gods punish arrogance
• Complacency and overconfidence are cousins of arrogance
• Dreadful returns are just around the corner
• Neil Woodford would be a prime example
18Dangerous words to hear
• “Blue” and “Chip”
• Broad categorisations create trouble
• It leads to forgetting about the risks of owning equity
• “TINA”
• There Is No Alternative – to owning equities
• Sounds very dangerous to me
• Reminiscent of the “Nifty Fifty”
19Summary
• Studies show that stock pickers can beat the market
• No other approach works
• Good outcomes require an element of luck
• Visit all the trees in the orchard
• Be prepared to be different and take a risk
• Believe you will double your investment
• See the opportunity in a sell off
• You might find you beat the share market
20Email: Stephen.bennie@castlepointfunds.com
Mobile: +64 27 675 9995
Phone: +64 9 300 6060
PO Box 105889, Auckland 1143
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