Fatty1's positions

[fatty1]

Hi,
I'm Fatty1

Here are some of my current positions and reasoning.

Non-bubbled property
Reasoning for German Reits
- Typically high yield i.e. 5% to 10% esp relative to low cash rate which is negative
- German market is non-bubbled  - see Economist App http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
- Ageing population and population decline is an issue and immigration policy is not always that easy
- Low proportion of home owners as rent has been fairly stable
- Japan Reits have earthquake risk
- Call option on the Euro breakup (I don’t get this)
Execution:
- DRG.UN  - Dream Global Reit listed in Canada (1b market cap)
o Analysis page: http://seekingalpha.com/article/3765336-dream-global-investing-now-mostly-german-office-real-estate-10-percent-yield?page=2
- Directly in German Reits / Japan Reits
o Need to check tax laws
o Problems with language translation if there are corporate actions?
- Privately managed funds
o Don’t know of any
- IFEU ETF listed in US
o UK 33% France 20% Germany 20% - More diversified

Managed Funds
Pros:
- Can get manager to execute the stock picking and analysis (micro) while you choose the macro idea
- Good managers can outperform benchmark i.e. is it possible to make money from relative value. I’ve already seen in practice how this is possible.
Cons:
- Fees are more expensive in the low interest rate environment esp. the 2/20 hedge fund model
- Pretty weak performance in hedge funds in 2016
- Survivorship bias can the appearance of ‘good track records’, as poorly performing funds will shut down.
- Big data techniques and technology may reduce the ‘edge’ over time.
Execution:
- Long short funds (market neutral)
- Small cap fund
o More ‘edge’ here from managers as stocks  are not as well researched
- Names
o Platinum, Magellan, Perpetual
o Forager Funds, Auscap, Regal
ASX ETF
Description:
- Basically just a listed fund (Exchange Traded Fund)
- Premise is that passive management beats active management (tied to academic theory)
Execution
- VAS, ASX300, 15bps management fee
- STW, ASX200, 19bps management fee

Agriculture
Reasoning:
- Hedge against inflation
- China’s emerging middle class may spike demands in healthy and quality consumables
- China’s transformation in a consumer based economy
- China’s economic slowdown is also worrying though
- Reference: The One Hour China Book states there are 6 megatrends in China
o Urbanisation
o Manufacturing Scale
o Rising Chinese Consumers
o Money and lots of it
o The Brainpower Behemoth
o The Chinese Internet
- Current examples are Bellamy’s and A2
- Cons: drought risk
Execution:
- No idea, just tried a market cap and value based approach

Health Care
Reasoning:
- Ageing population
- Biotech is growing
Execution:
- Some Listed stocks on ASX already trading at quite high multiples of earnings
- Little expertise here
Cash

Gold
Reasoning:
- A big idea amongst many large hedge funds at the moment
- Gold is a currency i.e. historically paper money is backed by gold.
- 5 year decline against most other currencies
Execution:
- GLD ETF, 40bps expense ratio, physical backed
- GDX – Gold Miners ETF
- Specific gold companies – no expertise here