In this episode I'm joined by Rudi Filapek-Vandyck, the editor of FN Arena Investing Newsletter, to talk deep market insights, his All-Weather Model Portfolio and the strategies that have shaped his approach to investing in quality growth stocks. Rudi shared his journey, lessons learned, and why he’s challenging the traditional value investing narrative.
This conversation was based on a recent article from Rudi which you can download here.
Rudi’s investment philosophy was born out of curiosity during the Global Financial Crisis (GFC). He noticed that while many stocks plummeted by 70-80%, some barely flinched. This observation sparked a decade-long quest to identify high-quality companies that could weather market storms. His All-Weather Model Portfolio, now celebrating its 10th anniversary, is the result of that research. It’s a collection of companies that trade on higher multiples but deliver exceptional long-term returns, defying the conventional wisdom that you must buy quality companies when they are cheap.
One standout performer in Rudi’s portfolio is Technology One, which achieved a remarkable 1000% share price increase over the past decade—a true “ten-bagger.” Compare that to the broader market’s 46% capital gain (or 120-130% with dividends), and it’s clear why Rudi is grinning ear to ear. Other stars like Aristocrat Leisure, Xero, and NextDC have also significantly outperformed the market, often by multiples. Rudi’s not just chasing momentum; he’s identifying businesses with strong fundamentals, defensible market positions, and exposure to long-term growth trends like technology and data infrastructure.
Rudi argues that the market has changed since the GFC. Economic cycles are shorter and shallower, and technological disruption has created businesses with impenetrable moats and capital-light models. Companies like REA Group, ResMed, and WiseTech Global trade on high multiples not because they’re overpriced, but because they deliver consistent growth over decades. Rudi’s not afraid to call out the “value trap” of buying cheap stocks that stay cheap for a reason, like Aurizon Holdings or Lend Lease, which even Warren Buffett wouldn’t touch.
Our chat also touched on broader market shifts. Rudi believes technological change, increased liquidity from central banks, and evolving business models have fundamentally altered investing. High profit margins and valuations aren’t signs of a bubble but reflections of a new economic reality. He urges investors to rethink outdated metrics and focus on quality companies in growing sectors.
TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE
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EPISODE TRANSCRIPT
Rudi: I'm also the person who doesn't want to buy when everyone else is buy. I mean that doesn't seem to be the smartest thing to do either you want to feel good about yourself that you bought them on the dip or when they were selling off. And if you look at share prices, for example the Hub 24s, the Xeros, you go back over the past 10 years or so there have been times when those shares would go down by and 20% or so. I mean easily and clearly every single occasion they were buying opportunities instead of having the atttitude as an investor to go like see, I knew it, they were expensive in the first place. No, the attitude should have been uh, like finally I get my chance.
Phil: G'day and welcome back to Shares for Beginners. I'm Phil Muscatello. What's the weather like for your portfolio? Will it withstand tropical cyclones or founder in the shoals of harsh reality? Joining me today in his waterproof Sour Wester to talk about his All Weather model portfolio is Rudi Filapek-Vandyck. G Day Rudy.
Rudi: Well, thanks for granting me the opportunity.
Phil: Rudi is the editor of FN Arena Investing newsletter and the mind behind the FN arena vested equities All Weather um, model Portfolio. And Rudy had A recent article 10 Years of the All Weather Model Portfolio where he reflected on the standout performers, key lessons learned in the strategies that have shaped his to investing in quality growth stocks. Is that a fair summation?
Rudi: Yeah, I think so. I think uh, maybe the best background for listeners who are not familiar uh, with what I do is I'm old enough to remember the gfc, the grand financial crisis and for many people that's obviously a uh, uh, long time into the distance when the dinosaurs roamed to the earth and all of that. But at that point in time my curiosity was awake, awoken by the fact that some share prices didn't seem to fall while others went down by 70, 80% and more. And from that experience I dedicated my research in finding the better quality companies in the share market. And there are a few lessons to be learned from that. And that's obviously why I sometimes reflect back on the decade past and things like that because we were all ingrained in our, in our brain as investors that the best way to invest in the share market is you Buy beaten down share prices and that's the water tight way to superior investment returns. And every time I look back over my solar, in this case the past 10 years, that statement that is obviously has been put to the test and basically been proven wrong. The companies I select for my research and also in the portfolio are usually companies that are highly valued. They trade on much higher multiples than the average in the market. They usually described as being expensive and yet if you look back, they outperform the market and not just by by nose length, they outperform the market by multiples. And one of the proably the best example to quote here is one of my favorites, uh, Technology one. I basically had to order some champagne bottles this week because it marked my first 10 beggger in the portfolio. And for those who don't know what that means, that means that the share price has appreciated by 1000% over the past 10 years. The share market itself has done a little bit over, let's call it 46% each without dividends and 120ars 130ish including dividends. So the return over the past decade has been larger from dividends than it has been from share price appreciation on average or at the index level I should say. So you can see how the outperformance from a very strong performer like Technology one has been in comparison to basically the majority of the market. It's absolutely stunning. It's phenomenal. And the irony is that a lot of people will argue now, yeah, but that stock is just way too popular. It's way, it's way too expensive so to speak. Admittedly 10 years ago it wasn't on the same multiplesess today, but it was expensive between quotation marks 10 years ago. And the irony on top of that is that me being a happy shareholder, I wake up every morning with a smile on my face because I do have technology on on my portfolio and I still do not intend to sell it. So maybe these things should make a few people at the very least pay attention and wehi thinkk their are strategies in the market and maybe they should investigate why companies like a Technology one and obviously
00:05:00
Rudi: all the other ones that I follow closely why they are such great performers irrespective of the fact that they are not trading on very low multiples and they don't start off on very low multiples and obviously they, they have that a little of vecire.
Phil: So you're completely destroying the narrative of value investing here, aren't you? This is, I mean this is Something that I've noticed so many times when you go into a filter of stocks available, you uh, know based on various metrics and you look at this, here's a great company, here's a great uh, here's a great company. But they're trading on these huge multiples and you think, you know, you kind of get scared about investing in them. But often they are trading at those large multiples for a reason, aren't they?
Rudi: Yes, exactly. And you're right mean I'm probably the one who often makes a little bit fun out of your typical DY in the wool value investor because they think that you can possibly not buy these stocks that I own a portfolio. They and it's religion in the share market that you have to have.
Phil: They've been listening to Warren Buffett. They've been listening to Warren Buffet too much, haven't they?
Rudi: Well, no, here's the irony and it's funny that that you bring up Warren Buffet because I'm not neari necessarily anti Warren Buffett on uh, to the contrary. But one of the jokes and that that's, that's an observation that stands that I often make is you see thousands of people also from Australia, they traveld to the US each year and in the past day they want to see Charlie Munger and Warren Buffett for hours. Two old guys sitting, sitting on stage and talk and talk and talk. So they really idolize those guys and then they go home and then they buy stocks that those two guys would not even look at even if they were drunk to the gilds. And that's the irony is that Warmren Buffett would never ever buy stocks that so called value investors in the local market get stuck with. I mean the Horizon holdings, the HELs, the land leases and etc. They wouldn't give those stocks five seconds of their time. Yet everyone who idolizes Warren Buffett thinks they're doing the right thing by jumping on those stocks. The other observation to add of course and that also links in with the observation I just expressed but also with my own research is that while value investing worked pre GFC for prolonged times as we had normal cycles and we had uh, very strong cycles also because of China for commodity stocks. We haven't had those cycles after the GFC basically not anymore, since 2015. Ish. And then obviously the question is whether this is now a permanent phase where we no longer have a share market, no longer have a global economy that is equal to what we had in the 60s, 70s, 80s and 90s or whether we are going through something different. And on my observation, most value investors, they keep on relying on research that harks back a hundred years, 50 years, 40 years. But that research, of course, doesn't apply in the past 15 years. It hasn't worked all those things. And that's main. If I can draw a longer bow. Um, the reason why you now have fund managers like a perpetual and a, uh, platinum while they are in trouble and they can't basically unable to beat the market on active management, is I think they are still investing as if this is the 1970s and it isn't. And that's why they get stuck with Helios and they get stuck with Horizon holdings and the likes and those who own technology one Rea Group, resmed, csl, Car Group and the likes, Wysstack Zero, you name it. They have no problems in outperforming the share market and treating their investors with handsome returns year in, year out. And that, of course, is the challenge. Now for those who think that sitting on undervalued assets is the right way to Coastal, I mean, there are plenty of challenges. I'm not by any means promoting that we should all become momentum followers because a lot of those, uh, stocks I just mentioned, they are carried by positive momentum. And that's maybe one thing that needs to be emphasized as well. I'm not a shareholder in Wysteack today because the shares have had positive momentum for the past two or three years. I mean, I was there well before that. I mean, I'm just lucky in some cases that the stocks I own that they are being picked up by the broader market and ultimately end up in a positive momentum trail. Having said so, I also believe that sometimes you need to make your own luck in the share market. And one of the reasons, I firmly believe one of the reasons why the past 15 years
00:10:00
Rudi: is different from the decades before there is that we are going through this tremendous technological changes in society. And in my earlier research, I already have gone back to the 1920s and that's the period where I compare this period with the normal recipe of investing is that a company only has a limited amount of time. When it's going through a sharp acceleration in growth, it usually stops after a while. Either competition kicks in or the economy changes, etc, etter, etc. That's why value investing works, because famous quotes by Buffett, you never pay up for growth. But that is not true when you go through these tremendous technological changes, because those companies who enjoy the tailwinds of the technology, they can grow for years on end and it keeps on going. Okay. And this is also why for example stocks like a prometicus and a 0 and a y stack having already grown really really fast for for years on end, they are nowhere near still the end of the trajectory. It can be of course. I mean some of those companies, they come unstuck. I mean we had for a while we had for example we had a 2 milk growing very very strongly and then that story came to an end. We had uh, Ramsay Healthcare for a while doing very very well. And that story has now also come on stuck. So some companies still come on stuck in their growth path but there are plenty of companies out there that can do this for a decade and longer. I mean I remember coming to Australia and in those days mean those companies were smaller but they were already in those days known for fast grow trajectories. The likes of Cochlear and Resmat and Aristocrocrat in those days as well. Now if you fast forward two decades later, those companies are still growing very fast, they're still trading on high multiples and they've treated their shareholders really really well over those two decades. And again, with the exception of Cochlear which currently is not in my portfolio, the likes of ResMed and Aristocrat are in my portfolio. And I still intend to hold them for the next five to 10 years because I still believe that they can still achieve strong growth above average without the cyclicality that you will find in so many in 80%, 90% of the share market essentially. So yes, uh, I think my research and my approach, I think it puts things a little bit on its head and it's not necessarily that you want to buy everything that's expensive but I think at the very least investors need to understand that in many many cases a cheap looking stock is cheap for a reason and not always. Mean stocks obviously can look expensive for all the wrong reasons. But there are examples out there, plenty of them of companies that trade on above average multiples and they deserve to trade on above average multiples because not because they are expensive but because are they will deliver for many many years on end and for that reason they cannot be cheaply priced. That would be a contradict your in Terminus. As they said once upon a time in the Roman Empire.
Phil: What was that? Was that Latin?
Rudi: And yeah, that was the onee condition. Yes.
Phil: Well there's always circumstances as well and that can put all of us on the wrong footing. Are you confused about how to invest life Sherpa? Can ease the burden of having to decide for yourself. Head to lifeshhera.com.au to find out more. Liferpa Ah, Australia'most affordable online financial advice. Sorry, there was just so many questions that I had going through my head then and it was funny because I was going to mention one of those fund managers, one of those value fund managers that always talk about their story and how they've done it. So what do you think has fundamentally changed to investing? I mean you're kind of referring to that things have changed. Is it just technology that's changed it or something else underlying?
Rudi: Yes, well, yes, there is a combination of. Before we go there, let me, let me make one thing clear as well.
Phil: Please take, take over the interview.
Rudi: Reallyy. There you go. There's always room for value investing. Yeah, that all there always will be and that is because the share market never loses its stripes. The share market will always de rate companies out of fashion too far so they are too cheaply priced and it will always push popular momentum stocks too far, at least temporarily. So there's always. But I think you have to be really, really a specialist as a fund manager and, and there's only a limited number of
00:15:00
Rudi: those who can do that successfully and yes, and they will, they will do a good job at it. But for all others, and that includes you and me, we're more normal humans, we are very bad in this context in value investing. And there's a couple of reasons for that and one reason this technology is definitely very important. I sometimes wonder what this share market would look like without AI and some of the other technologies that have taken over in recent years. But there's also the fact that we are going through a period where central bankers inject way more liquidity in the system as we are uh, adjusted to in the past that has without any, any doubt that has had an impact on asset prices, on share markets, etc. The other thing also is that with the economic cycle, whether that now has completely disappeared or at the very least I think we're seeing different cycles. They are different from the past. If anything they seem to be more shallow and shorter and that makes it in itself makes it very difficult for cyclical businesses to really, really generate a lot of value for their shareholders. But before they know it, the cycle is already turning, which makes it for them really, really difficult. In a time when you had long elongated cycles in the 70s for example, it was m like the likes of BHP and Rio and Orica, uh, and you name it, it was much easier for them to have long elongated periods of very strong profits, very strong uh, dividends for shareholders as well and therefore share prices that would perform for a very long time. What I've noticed over the past two decades is the cycle comes in, it's very sharp, it's very brief and you breathe two times and it's over and those shares are again out of favor and uh, obviously with results that a lot of people are losing money in those sectors. The other thing also, which is I don't think is enough emphasized and people don't realize this enough is that businesses itself have changed dramatically and in a very simplistic format is that corporate profits are much higher these days. Modes around businesses are uh, almost impenetble. Pull double tongue. And what we also see is that where all businesses used to have a lot of capital locked in, in buildings, in machinery, you name it, modern day businesses are uh, what they call capital light. And that also means that the margins can be extraordinary. And so I always, I have learned to appreciate the fact that a lot of data that people are relying on these days, like the valuations of companies generally, the, the profit margins, uh, Ettera, I mean five, six, seven years ago, that used to scare the bejus out of people because people, oh, historically there's never been this high. So basically the implications always is that the market is running on fumes and sharemarkers have to come down. But what, and they still come around those, those charts and those tables. But what those people have to realize and luckily over the years what you see that more and more people are realizing this, that's not an indication that share markets are constantly in a bubble. That's an indication that the economy and businesses are changing and financial markets are changing with the economies and with the businesses. So that's the reason for example, why US equities now trading on historic multiples at historically high profit margins are uh, not necessarily going, going, come crashing down next month or by the end of the year or early next year. As a matter of fact the majority of people who follow the US market, they're almost convinced that the market in 12 months time will be higher on where it is today. And that is because you cannot simply rely on numbers that you, that you draw out from, from a hundred years ago and compared today's markets with, with markets back then. And I think also luckily or not, the research I started in 2008 really was done at the right time, I should say. I sort of preceded the early stages of all those changes happening. But it Definitely helped me to understand that there's more to the share market than apparently cheap and expensive, because cheap is often cheap for a reason and expensive is often not as expensive as it looks like. And that's because of course there's not a quote from Warren Buffett I can throw in here. It's that he basically has said in the past that there is no difference between growth investing and value investing because both elements are, uh, joined at the hip. And that's exactly what I think. What he understands
00:20:00
Rudi: as well is that a company on high multiples is only expensive if the growth that is assumed is not coming through. If that growth comes through, the sharep is not expensive at all.
Phil: Are we ready to talk about the All Weather portfolio?
Rudi: Is that what we started?
Phil: Well, I thought the plan was to talk about the All Weather portfolio, then to talk about the general philosophy, but no, we do love, we do love a bit of general philosophy on the podcast. Okay, so let's get back to but the. How did you've initially put together the All Weather model portfolio?
Rudi: Yeah, so in 2008 I started my research and I got really curious and I why do the majority of stocks fall by so much? And you have this selection of stocks that doesn't seem to be impacted as much. And that led me eventually to identifying that basically some companies are, uh, of a higher quality thanown others. And that's not simply the CEO, uh, or the board to sit there. It's usually the type of the business mean. I'm not a scholar of Buffett and Manga, but I do pick up some of their quotes because there's a lot of value in there. And one of the quotes I often use is I rather invest in a business that can be led by an idiot because sooner or later it will be led by an idiot. That's the type of business I like to identify. I mean, it's almost not that important who's at the helm. It's just a great business irrespective of what happens to interest rates, to what happens to the economic cycle and the business that can perform under all circumstances, or under most circumstances, I should say, because those businesses, they do exist, they can be identified. I've done it myself, I'm not the only one. Um, there are other people doing it as well. But when you, when you identify those high quality businesses, you realize a couple of things. One is that you can almost never get them cheaply because if they get cheaply priced, that's probably a sign that something is wrong somewhere. And that would Be the, for example, that would be the, the obvious mistake to make in jumping on, on Raey Healthcare when the sharep price was D rating on Domino's Pizza for example. That's a story that also came unraveling and you can also mention the likes of uh, A2 milk and the like. So while they are expensive, irony, irony they are good to have a portfolio because they perform as they become cheaper. They probably not the ones you should probably say goodbye to them because they will only become cheaper and cheaper and the share price goes course at some point goes really really low. But the experience I have and my resourviously suggested that, that you should not be afraid to own stocks like an REA group. And I mean I have an anecdote of Reier. I mean I remember when it was around $60 and just about everyone said like oh it's so expensive, it's like it's overpriced, you name it. Look at where the share price is today and that's basically what those companies signify is that they can look very expensive in the short term. But another example for example is uh, is Prom Medicus. Now people, people have been saying that you can't possibly buy that one at seventy dollar seventy at dollar one at hundred dollar at hundred, dollar three hundred. But it just keeps on going. And it doesn't mean that that story can't become unstuck. At some point it can, but it also means that what looks expensive is not by definition, it's not that expensive. And it all depends on what comes next. Now while you can argue that a company like Prometicus comes from nothing, that's a relatively easy way uh, to become successful. But what you see with companies like REA Group, Car Group Rest Cochlear, uh, and others is that they can do it for a decade, they can do it for a second decade, they can probably do it for a third decade. So clearly it's a combination of the business itself. It clearly has a, has a lead on the competition and a lead that can be defended and, and not that easily broken down by the competition. But it also has to be in the right sector. And that's also something I've come to appreciate over time. In the first 10, 15 years or so my research, well two of the companies that were in there were uh, Brambles and M M Cor as well and they performed well for prolonged time. But if you follow them long enough you also come to realize that their customer base can be quite cyclical and ultimately those companies cannot escape the fact that their customers can be quite cyclical. So that breaks down a little bit of the quality label that you can attach to those companies. They become more cyclical in the worst of times, but that's basically the long on the short of
00:25:00
Rudi: it. So you identify companies that are head and shoulders above the competition. They obviously mean, you hope that they're being led by a great management team and they have to be in a sector that in itself grows. And that's often the mistake that people make as well. A high quality company led by high quality management. But in a sector that is in decline, unfortunately, there's only so much they can do unless they're superhuman. That's maybe one of the things I don't really believe in, that CEOs can be superhuman. So I know that everyone has its own definitions of quality. And I often have a big smile on my face when I hear other people talking about the quality companies they own. And then I'll look at the companies and I go, yeah, right, that's going to last. But the companies I selected back in the first 10 years after the GFC, they've largely remained intact. If you have disappeared off the list like the likes of SK for example, and again, sometimes a company has, has an excellent 10 years, maybe an excellent 20 years, but then sometimes the growth story, it stops at some point. Then you simply have to acknowledge that I was lucky enough in 2014 that will already have quite a number of years in my research that I was approached and by people who said how about we put that research in a portfolio? And that's why that was, that was 10 years ago. And I've learned a lot because there's a difference between doing research and selecting companies and talking about it and, but then actually managing a portfolio, yeah, that's a little bit of a, of a higher degree. And that mean I still learn a lot from that. And 10 years later, of course it has, it has also meant that um, I'm even more convinced that there's a lot of value to be had in selecting high quality companies. What I often notice also because of the angle I have in my investing is that too many people are, are led by the share price. But uh, it's almost by. There is this saying in the market that everything has a price. I completely disagree with that. And I mean you offer me a nice turret on a plate and Even if it's 10 cents in a dollar, I will not buy. And, but for some people, of course it's, it's a different style of investing. I mean we also have to realize that a lot of people in the share market age just jump on and off in stocks and of course you can always do that. But that's not the style of investing that, that I've, I've been employing with the portfolio. I'm definitely a buy and hold investor. Buy and hold is by no means uh, dead or uh, out of fashion or whatever. You just have to pick the white stocks and you have to remain confident. And it doesn't mean that sometimes I skim some of the top and sometimes I uh, increase exposure or buy extra shares. You do all these things, of course. But buy and hold is when you have the right portfolio on the right stock. And portfolio is definitely something that is for people who not necessarily want to have all the adrenaline while they look at their portfolio. I like quiet and gentle and just things going along instead of having to jump on and off all the time.
Phil: The Riviera approach to investing.
Rudi: Yes, with a glass of wine or a glass of beer.
Phil: And that's track your investments like a pro share site is Investopedia's number one portfolio tracker for DIY investors. Simplifying your finances. Get four months free on an annual premium plan@sharesite.com sharesforbeginners. So from what I've seen in the article. And we'll put a link to the. Can we publish the article in the blog post as well just so listeners know that we were talking about. Get some more detail about.
Rudi: Yeah, why not? Yeah, why not?
Phil: Portfol.
Rudi: Yeah.
Phil: Okay. So seems like there were like two remarkable stocks. There was technology one he referred to an aristocrat Leisure. Then there were kind of middling ones. And these are quite good. High quality name, you know, as we say, high quality names on the share market that just basically didn't do very well. Then there's some dogs. Yeah, just run us through a little bit. Some of the stars and m the.
Rudi: Meeting middling and I think correct. I think I have to correct you here. Right. What, when, when you say. When you say there's two stars and the other ones were middling one. We have to realize that we're doing this from the portfolio's perspective. So from the market's perspective, the large majority of the stocks have all outperformed the market by multiples. Uh, like stocks that for example, that you've not just described as the meddling one they still did. Yes. Yeah. Middling one they still did four times a share mark over 10 years. Four times. Not 4% more or 40% more four times a multiple which is significant outperformance. It's just that I would not, not necessarily have chosen Aristocrat and Technology won
00:30:00
Rudi: as so far ahead of the rest. But they have both completely. The other thing also is zero actually has performed even better than those two. It's just that I didn't have zero in portfolio in the early days, they came later. But it just means that if you manage to pick the right, I mean one of the stocks that. Just to show you that what I told earlier about trends and about technology coming into the market. So one of the early buys I uh, added to the portfolio is Next TC and I still have up until today a lot of people who are very, very wary of going anywhere near that stock because A they don't understand it, B it's not profitable, it has a lot of debt and you name it. But it's, it's. That too is about understanding the company's business and understanding why that is, why is NextC loaded up with bedets and why doesn't it report a profit, et cetera, et cetera. And that is not comparing it to your normal technology business. I mean it's essentially in an infrastructure play, an emerging infrastructure player. And if you realize it's a quality business, it's, it's being led by, by management that knows what they're doing and they're carried by a megat trend. I mean just look at, at how life is changing over the, even in the past few years. I mean the, the amount of data we're all using, it's just, it's explosive. Uh, if you look at what lies ahead of us, self driving cars, more and more cloud usage, anything from your mobile phones to your laptops, you name it. I mean the usage of data and, and, and what the likes of Google, Apple and everything, what they, what they store about our behavior online that you just realize that there's, there will be need for companies like NextC and if they do the right thing, yeah, their growth should be explosive as well. That's exactly what has transpired. And I'm, I mean I know people look at me and think like ah, Rudy Min, very good. He picked uh, Technology one. But I'm actually more proud of myself that I picked Next TC when it was a young emerging listening on the stock exchange about to be added to the ASX 200 and I've owned it all this time through the D ratings and the upswings and the D ratings again and the upswings again and again. It's one of those stocks, I believe that's probably going to double at the very least, uh, in the years ahead from the current share price. And the current share price is already four times higher than when I started buying it. So when we say all the other stocks outside of aristret and technology1 mean if you look at the likes of hub24wstag0, I'm sure I'm forgetting a few. They've all done really, really well. And if people, when people ask me like when, how do you time you're buying and things, I mean, in practice I find it's more a case of human psychology. And someone like myself, I don't like to sell when everyone is selling because I'm so like for my feeling. I think I'm just adding to the selling pressure. And also it doesn't seem to be the, the smartest thing to do when everyone is running around without a head firmly screwed on their shoulders and then you're going toa sell some share.
Phil: Yes, I'm glad that, I'm glad that, I'm glad that you consider yourself a market whale that can affect the share price.
Rudi: I was, I wasn't saying that. And I'm definitely don't, don't, don't want to be owning any of those stocks where I am moving the market. But also I'ALSO I'm also the person who doesn't want to buy when everyone else is buying. I mean there doesn't seem to be the smartest thing to do either. So when most of those, maybe apart from the, from the very early beginnings of the portfolio, but most of the stocks I've bought and those companies I just mentioned, I usually buy them on the pullback. And, and that's, and that's also the, and again, there's a human psychology factor to that as well. You, you want to feel good about yourself that you bought them on the dip or when they were selling off. And if you look at share pricers, for example, the Hub 24s, the W Stack globals, the zeros, you go back over the past 10 years or so, there have been times when those shares would go down by, I don't know, 20% or so. I mean easily and clearly every single occasion they were buying opportunities instead of having the attitude as an investor to go like see, I knew it, they were expensive in the first place. No, the attitude should have been like, finally I get my chance. And that's obviously what I've done with the portfolio. Now I do realize that while, while we're talking about all the successes and, and the ways of doing this. There have been failures and there definitely have been failures and, and uh. And I'm never afraid to talk about them
00:35:00
Rudi: as well because we should all learn from them, including myself. And I've already mentioned a few. The Ramsey Healthcare was previously in my portfolio, previous in my research and. And then sometimes you just have to realize that that yeah, sometimes that story ends and even if you're a bit slow in taking that on board, you don't have to be there in the full DE rating all the way to the bottom. Mean you can, you can sell at some point. And that's basically what I've done as well really of the can.
Phil: If I can just interrupt on that point. Yes, I mean you regretted selling Primeticus too early. Um, definitely. But then what's the difference and how do identify the difference between a pro medicus that'll come back, pull back and go keep going further as opposed to a ResMed where something I. No, not ResMed. It wasn't ResMed. But was the one that you just.
Rudi: Said, uh, Ramsay Healthcare.
Phil: Ramsay.
Rudi: Ramsay.
Phil: Yeah, that was in some sort of structural decline.
Rudi: Yeah, that's, that's an easy one. And there's a very important lesson for me as well. I sold Prometicus because I got a little bit discomford by the fact that my portfolio consists of high multiple stocks predominantly and the bond market was going to smash all of them, which the bond market truly did. And I expected some of the stocks to fall further than they actually did. So I sold stocks like Prometicus and then they recovered much, much, much, much quicker than I anticipated. And as I earlier said, like then you get the human factor and then you just don't get a broad bas in hindsight. Early in the year when Trump, his shenanigans were pushing the share market into a downspin. I should have jumped on Premenicus back then. Golden chance, too slow, attention elsewhere, whatever, you name it. Mischance, definitely missed the opportunity. So the mistakes I've made over the years, most of them is more based on the fact that I temporarily believe the stock is proably a little bit getting a little bit hot on the colar here and I can probably buy it back cheaper later and that's in some cases not the case. And then obviously then you regret it. I mean that's just simple. The market, the market plays around with your mind and you made the wrong decision. You assumed that the market would pair it back and it didn't. The difference with Ramsey Healthcare and there have been some other examples as well, is that you come to the realization that that story basically is looking differently and the same was with mco, for example. That's when you realize that those golden years we've had, they look a lot less golden basically. Do I always make that decision? No. One of the biggest mistakes I've made in a few years is that I was a happy shareholder in IDP education. I took some money off. Then, uh, it started generating bad news. I kept a small proportion in the portfolio. Not much, but just enough to still be on board and, and expecting that if that story turns around I can buy more shares. So a. The good thing is I did not average down in the share price and I did not throw more money at it simply because the share price was cheaper. I think that's, that's a very flawed investment strategy and philosophy. That's a good thing I did. The not a good thing is I kept on holding on to the shares thinking that surely this is the bottom and the bad news and it's going to turn around because it's a good company and all of that. I completely underestimated that. The political landscape has turned against immigration and that basically affects student numbers internationally and basically for the time being has had a massive impact on idp even though it is most likely the better operator in that sector. And that also brings me back to what I said earlier. CEOs are human. A very good business turns into a much less good business when the sector itself is in decline and, and obviously they couldn't stop it. Now, um, I'm basically. I've sold out. I've missed this last la down. That's a good thing. Even though of course it was a small partner portfolio only it'still it still stings a bit. But I need to learn lessons from that just like anyone else. I mean you can't just hope for the better. I should have sold out earlier and read the and again, it's done by humans. We all make mistakes but that's essentially the long and the short of it. There's two stocks. There's probably three stocks currently. Ian portfolio which one would say objectively dev'performed now for a while. One is decadata, another one is Woolworth's and then is this CSL as well. I don't think any of the three will end up my next IDP education. I truly believe that's not the case. Sentiment in the market can be extreremely important in the short term. I think Sentiment to all three of them is very negative and has been for a while. But I do think underlying those businesses will get back on track. And that's basically
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Rudi: an assessment you have to make. And sometimes, unfortunately your timing is off or uh, things happen. Like for example in uh, CSL'case who would have known that they put an anti vaxxer in charge of the administration in the US which clearly increases the risk profile. All that. And that's why the share price is moving. I mean's, that's, there's a, there's a logic there. But I still haven't seen a strong reason why I should say goodbye to a share part that's arguably undervalued here. But those are the assessments you make. And one of the things I do as well is I can see the difference with a lot of people who are in the share market and their retail investors. And they only have, I don't know, maybe five, six, seven stocks in at which. And then they are so focused that each stock has to perform at, under all circumstances, at all times because they have no patience and they get scared. Having a portfolio. My Portfolio approximately has 20, 22 items in there. I'm also, for example, I'm a firm belief of having some gold always in the portfolio, which also is the case. So that's why I say items and not necessarily shares. But when you have 20 investments in portfolio you tend to look, and maybe there's sometimes a little bit of weakness as well in the case of IDP education, but you tend to look at it as a football team. And as long as you're winning games, uh, yes, maybe your defender on the right hasn't really played his best game in the last six games or so, but you believe that as a team you keep winning and, and he'll get it right. I mean that's how you see the portfolio as well. And so you can withstand the fact that that's, that's one third of your portfolio or maybe even more at some stages. It's not really shooting the lights out, but your portfolio as a whole is doing well. And that also gives you reason, um, to get up with a smile in the morning. But it should with little mistakes that creep in at the same time. Uh, you have to keep on paying attention to your garden, of course, and if there's some weeds in there, sometimes you, you have to act well.
Phil: This is the second episode in the row that we've had a football analogy. And when I say football it involves a foot and a ball and we Know what we're talking about here.
Rudi: You um, what we Europeans call football.
Phil: Wgball as we call in Australia.
Rudi: Yes, or I think you're not allowed to say it anym more.
Phil: I'm half Italian, I'm sure I can say that. I'm sure that Sushi mango have used that term once or twice so I'm still going to use it. So listeners who want to find out more, I mean I'm a big user of X and I think you're a big user of X formerly known as Twitter. People can follow you there as well because you lead some quite robust discussions there sometimes, don't you?
Rudi: Well yes, could you could say that. I mean someone like myself who sometimes dares to question the logic of buying cheap price stocks and dares to question why you should say goodbye to the likes of uh, the stocks I just mentioned, that's often irks people and it often uh, uh, attracts a lot of criticism and everything in between I should say. But by all means, I mean I m on X previous Twitter we as fn arena of course we, we have a website, we are web based business people can find us there. We are on Facebook with the business. I'm um, on LinkedIn and we might here and there add a few more things on social media. So we are a relatively small player in the market. We realize that we will never be the Microsoft of the Australian finance but then again just like some of those technology companies we have on the stock market, you can still do very, very well by carving out your niche and I think we, we've done that very well. I think with, with that arena we've carved out our niche and we, we relish in what we do and luckily we have an X amount of people that think that's worth paying for and paying attention to.
Phil: Okay, well good luck to your team. I hope the football team keeps on scoring consistently but not too aggressively. Thanks very much for joining me today. It's been great speaking again, really. We'll do it again soon. Okki, thanks for listening to Shares for Beginners. You can find more at ches for begin. Com. If you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.
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