FFM podcast ep9: A battle royale for June; the psychology behind value and growth investors; Richemont’s runway
The value versus growth debate has been a common theme across the Fantasy Fund Manager podcast, hosted by BizNews' Stuart Lowman. Corion Capital's Garreth Montano and Cuan Sauter from Moneybetter look behind the lens at the psychology and personality traits driving a value or growth investor. And on the subject of growth, Richemont is put under the microscope, a share that recently went through consolidation but continues to shine despite the cost-of-living crisis. There's also a tough match-up for June's top spot as 0.27% separates the top two (at the time of the podcast recording). Remember to make your picks each week by the market open on Monday to have a chance to win any of the prizes up for grabs, be sure to have those picks in to take part in July's competition. And invite your friends. Register at www.fantasyfundmanager.co.za—thanks to our platinum sponsors Sharenet, Terebinth Capital, ClucasGray Asset Management, and Money Better. Remember to subscribe to the podcast so you don't miss an episode.
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Welcome to another episode of The Fantasy Fund Manager podcast hosted by Stuart Lowman from Biznews, joined by Garreth Montano from Corion Capital. In today's episode, we dive into the ongoing six-month Fantasy Fund Manager competition, highlighting the current leaders and the challenges of navigating the dynamic global market. We also discuss the value versus growth investment strategy debate and explore the impact of personality traits on investment decisions.
The Fantasy Fund Manager competition
As the second month of the Fantasy Fund Manager competition concludes, we look at the current frontrunners. Anthony leads the June pack with a 10.55% increase, closely followed by Jesse Morgan at 10.28% (when recording the podcast). Garreth expresses his delight in seeing one of their colleagues at the top but also reflects on the market's challenging conditions influenced by political and geopolitical factors, particularly emphasising the significant impact of currency movements.
The impact on office dynamics
The Fantasy Fund Manager competition has created a vibrant atmosphere in the workplace, attracting a diverse range of participants, from active traders to those less involved in trading. Cuan Sauter highlights the expectation that trading desk members would dominate the leaderboard, adding a competitive element to the office dynamics.
Value vs growth strategy
The value versus growth investment strategy has been a recurring topic since the onset of COVID-19. Garreth explains how growth stocks dominated during a period of low-interest rates. However, the recent rise in inflation and interest rates has shifted the focus to the value approach. The decision between value and growth depends on individual preferences, risk perception, and factors related to behavioural finance.
The influence of personality traits
Cuan Sauter delves into the financial profiling functionality within the MoneyBetter platform, shedding light on how investors perceive themselves and their investment decisions. He shares his experience, realising that his actions align more with a value-based approach, despite initially identifying as a growth investor. This third-party perspective from financial profiling helps investors gain unbiased insights into their investment preferences.
The changing investment landscape
Garreth discusses how higher interest rates reshape the investment landscape, underscoring the increased importance of valuing growth companies. Investors could afford to wait for future earnings growth in a low-interest rate environment. However, with rising interest rates, the opportunity cost of holding such companies becomes more apparent. Garreth suggests that while there may be expensive mega-cap tech stocks, there are also undervalued opportunities in other companies.
Diversifying beyond equities
The discussion shifts to the significance of diversification in a high-interest-rate environment. Garreth emphasises the need to consider asset classes beyond equities and bonds, highlighting the potential of balanced portfolios, including yielding assets and companies with good dividend yields.
Richemont: A growth stock in demand
Richemont, renowned for its luxury goods and high-value brands, is a popular pick in the Fantasy Fund Manager competition. Cuan Sauter highlights the company's impressive financial performance, record-breaking sales, and ability to thrive despite rising living costs. The expanding middle and upper classes in countries like China and India significantly contribute to Richemont's success.
Pro tip for Fantasy Fund Managers
The guest shares valuable tips for Fantasy Fund Manager players. Cuan Sauter advises against making impulsive decisions based on short-term performance, urging players to focus on consistency and consider long-term prospects. Stuart and Garreth acknowledge the challenges of the competition's weekly and monthly focus but emphasise the enjoyment and learning opportunities it provides.
Conclusion
In this episode of The Fantasy Fund Manager podcast, we explored the ongoing competition, discussed investment strategies, and analysed the impact of personality traits on investment decisions. The dynamic nature of the global market poses challenges, but with the right approach and a diversified mindset, participants can navigate the competition successfully. Stay tuned for future episodes as we delve into the exciting world of fantasy fund management.