Do not fear the US election and whether Trump or Clinton wins

25 Sept 2016

 

Dear Fellow Investor,

 

Do not fear the US election and whether Trump or Clinton wins  

 

We profit no matter who wins even if there is a correction. We are value investors and carefully select our companies to withstand shocks, volatility, panic attacks and the fear promoting hyper media.

 

We are not gamblers watching every  price move, or CNBC/ Bloomberg  viewers who intensely focus on the latest news or talking head Federal Reserve banker who professes to know the future of interest rates or currencies.

 

We deal in simple easy to understand businesses with good managers who watch the bottom line.  We collect our dividendS. We sleep at night. We grow our capital.

 

In the current environment stability and predictability are what grows our wealth. 

 

I recently bought a Singapore bakery- QAF for our managed accounts.

Disclosure: This is not a recommendation and I take no responsibility for your dealings in this share. I currently hold this share.  

PE of QAF at the current price is 13.1. Dividend yield is 4.1 % . They have grown their earnings consistently and have a wide network of established destributers for their bakery products. They have a strong established brand – Gardena.

 

They have recently bought into a pig venture in Australia which   will diversify their product line.

As long as Singaporeans eat bread and bakery products, QAF should continue to prosper.

With this kind of company it makes no difference if Trump or Clinton prevail in the upcoming November  election.

  

From the chairman of QAF in their 2015 annual report:

 

Dear Shareholders, I am pleased to report that despite the challenges of a softening global economy caused by the deepening slowdown in China, sluggish economic growth in the Asia-Pacific region, and the adverse impact of a strengthening US dollar, our family of brands proved resilient and was able to deliver healthy contributions to profits in all our major business segments. For the financial year ended 31 December 2015, the Board is pleased to recommend a final dividend of 4 cents per share.

 

We focus on only a few businesses and do our best to understand them. We visit the company, talk with the management, carefully review their financials and buy during periods of uncertainty, pessimism and fear. As Warren Buffet would say it gives us a margin of safety. 

 

If there is a panic market reaction because of the US election we would bring out our hit list of selected companies  and choose a bargain. We buy with confidence and reason;  not sell because of emotion, fear and panic.

 

We do keep some cash in reserve to exploit  developing opportunities.  

Last week one of our clients left a pair of high end glasses in my office in Phillip Capital Mgt. If you wish to claim please contact me at 012 685 1207.


Phillips Fame system to access your account is down so if you want your current statement I am happy to What App t to you.

Invest well and grow your wealth,

Bill