Rudi’s View: February Trepidation

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Feb 07 2024

In this week's Weekly Insights (the first in 2024):

-All-Weather Model Portfolio
-Rudi Unplugged
-February Trepidation

By Rudi Filapek-Vandyck, Editor

Weekly Insights returns with a bang this week, so too much material forces me to publish this week's update in two separate parts.

The story below is best read in conjunction with the Part Two follow-up which will be published on the website on Thursday, zooming in on potential winners and losers in February, alongside best ideas, conviction calls and strategy preferences.

As per always, I hope you'll enjoy it and are able to use the input to your personal advantage.

All-Weather Model Portfolio

On occasion, we receive questions about the All-Weather Model Portfolio and it's probably but a fair assessment we can do a better job with updating and communicating all things relating to the portfolio.

The performance last year was nothing to be sniffed at (up more than 20%) which goes to show a cautious approach to share market risks does not have to go hand-in-hand with a disappointing outcome.

Over the December-January holidays, we updated late last year's portfolio review with the key 2023 performance numbers:

The All-Weather Model Portfolio's performance as per January 31st:

For those as yet not familiar: the All-Weather Model Portfolio is run in the form of self-managed accounts (SMAs) on the Dash financial platform in cooperation with Queensland-based Vested Equities. Stock selections are based upon my personal research into all-weather performers on the ASX.

Paying subscribers have 24/7 access to a dedicated section:

Note: the All-Weather Model Portfolio does not own all stocks mentioned, but only circa 20 of them. Most inclusions are kept for elongated periods (as it should given the nature of the companies involved).

Rudi Unplugged

One new initiative this year will be your chance to ask questions ahead of online video recordings during which I shall answer as many questions as possible.

The idea has been suggested a number of times by subscribers and we're finally ready to execute on it.

We should see the first Rudi Unplugged video session in mid-March, after the dust has settled for the February results season. So keep your note blocks ready!

I shall remind you in time.

February Trepidation

Every reporting season has its own background and characteristics and this year's investor dilemma yet again consists of positive sentiment led by general belief interest rates and bond yields will fall this year.

This is a positive for equities generally, but economies and corporate profits are not in an upgrade cycle just yet.

Some three months ago, global equities looked relatively "cheap" but a double-digit percentage rally into late January without much of an uptick in earnings forecasts has pushed up price-earnings multiples above longer-term averages, and that's usually when the investor community starts getting cold feet.

We have been here before. Both February and August last year had been preceded by firm rallies, only for share prices to deflate again when corporate profits did not justify the multiples at which markets were trading.

Maybe it's no coincidence local share market moves have become noticeably more volatile in February?

The past five trading days each have seen the ASX200 move by 0.90% or more, of which only two sessions in positive direction. The problem with macro-inspired market rallies is that, eventually, company fundamentals need to catch up, or else the share price will (by weakening).

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