Independent thinking, sometimes contrarian, always value focused
The most successful marketing campaigns by the investment industry, those that draw in the most money, invariably highlight the latest ‘hot’ investment past performance. But those advertised high returns all too often point to a market that is close to peaking, and last year’s leader becomes next year’s loss leader. A prime example of this occurred in the spring of 2000, as around 80% of new money taken in by the US mutual fund industry poured into technology funds - just as the dot-com bubble was about to burst.
Similar to a buyer at an auction who finds little comfort in being surrounded by other buyers,
for they will only compete to bid prices upwards, we find little reassurance in following the crowd when making our investment decisions. Indeed, using the same analogy, we would view a crowded auction house as an opportunity to sell at over inflated prices.
The Aspire approach eschews the simple task of recognising yesterdays winners, in favour of identifying the winners of tomorrow, those we believe will feature in the investment industry’s future marketing campaigns.
This entails looking for the undervalued, under-analysed, or unpopular investments. But this
value driven, sometimes contrarian approach, mean our portfolios can look look different from the prevailing convention.
The leading exponent of this value-contrarian style of investing, and arguably the most successful investor ever, is Sir John Templeton. He started out with $10,000 of money borrowed from his boss, and turned a $40,000 profit by buying shares as the market panicked at the outset of World War II. Later in life, he made over $80 million betting against the dot-coms. As he advised: “If you want to have a better performance than the crowd, you must do things differently from the crowd.”