Rollover has read lots of interesting lines from fund manager commentators, but rarely has witnessed one of them conjuring up that ill-fated Zeppelin, the Hindenburg, to drive home a point.
So he tips his cap to Schroders senior portfolio manager, Australian Smaller Companies, Matthew Booker, who exampled the explosive and somewhat unexpected demise of the Hindenburg as validation of “avoiding losers rather than picking winners”.
Rollover was so impressed by Booker’s analysis, that he feels Super Review’s readers should be allowed to share: “the moral of the story here is that our mantra of avoiding losers (rather than picking winners) is appealing given the high dispersion of returns exhibited by index constituents, invariably though companies we believe are essentially safe (full of inert helium) can on the rare occasion be chock full of combustible hydrogen. We found this out in October when one of our smaller positions, a mining contractor (“Oh the humanity!”) suffered a similar fate to the Hindenburg.
Hot air, you ask? Very likely.
