Growth Professionals … and June 2025 – End of Month Update

Slack Investor has a healthy regard for those who make a living based upon their performance. It is a general financial wisdom that, if you are following large companies, you will very probably be better off in the long term with passive index funds.

Percentage of active funds that underperform (orange) over a 15-yr period – Spiva

However, some active boutique stock pickers may have an advantage when it comes to smaller international companies. In this category, 33.65% of active funds are able to outperform over a 15-yr period.

Slack Investor is currently backing his own abilities on the stock picking front. But, there will come a time when I lack the ability or inclination to do the (admittedly limited) research work. Also, there are some Slack Investor readers who would like to outsource this task.

Hyperion Global Growth Companies Fund ETF (ASX: HYGG)

I don’t follow individual companies in overseas markets that closely – but there are those that do – and do it very well.

Hyperion are Brisbane-based and started this managed fund back in 2014. They have also offered access as a listed ETF on the ASX since 2021. The ETF would be the way that I would buy it.

HYGG is not a low-cost fund as it has a Management Expense Ratio of 0.70% and an outperformance fee of 20% against benchmarks. The ETF, to date, has not paid a dividend. However, in this case, it seems that the managers are offering good value net of fees.

Growth of the Hyperion Global Growth Companies Fund after fees and costs have been extracted since 2014 – Hyperion

One-year performance (2024 May +47.3%) is impressive. However, Slack Investor is after the real grafters who can produce impressive results over the long-term. Hyperion is establishing a case for consideration.

5 and 10 year Performance of HYGG – net of fees – Hyperion

The advantage of an active fund manager is that they can be nimble and take advantage of any opportunities that the Hyperion analysts discover.

Holdings% Portfolio Weight1-Year ReturnForward P/E
Tesla Inc12.2965.9166.67
ServiceNow Inc9.4234.1660.98
Microsoft Corp7.9510.7333.11
Palantir Technologies Inc Ordinary Shares – Class A7.65498.55263.16
ASML Holding NV ADR7.15-20.8128.74
Spotify Technology SA7.1143.2671.43
Amazon.com Inc712.1433.67
Block Inc Class A5.722.8817.73
Meta Platforms Inc Class A4.6141.928.65

Table of the top holdings of HYGG, their portfolio weight, 1-yr return, and forward PE at May 2025.

When it is time to really ‘get on the couch’, Slack Investor would take a look at these blokes to invest his money. This Hyperion crowd seem to know what they are doing.

June 2025 – End of Month Update

The financial year closes and the Australian, UK and US markets are all in positive territory for the financial year.

Slack Investor remains IN for all followed markets. The ASX 200 (+1.3%) and FTSE 100 (-0.1%) moved modestly. It is a continuation of good times in the US with the S&P 500 rising 5.0%. Are our American friends delusional in an expensive US market? Or, is Slack Investor missing something.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

Tax Issues

The Tax Collector (1883) – Samuel Edmund Waller

OK … the certainties are death and taxes … Right, that’s fine. But, at least there is some discretion over taxes. Who knew that it is quite an interesting subject. The rate which a country levels its business tax can have a profound effect on its economy.

Slack Investor is in Ireland at the moment and, can’t help reflecting on the role of tax incentives and the incredible effect on the Irish economy of the establishment of a Special Economic Zone in Dublin in 1987.

The transformation was accelerated when Ireland’s standard corporate tax rate was reduced from 40% to 12.5% (phased in from 1996 to 2003). – wikipedia.org

It should be noted that Australia’s corporate tax rate is 30%, and in the US, 21%. Because of the Irish tax changes, this made Ireland a ‘Tax Haven’ and a wave of international companies set up entities in Ireland. These include Apple, Alphabet, Facebook, Microsoft, Oracle and Pfizer.

Multinationals move $16bn from Australia to tax havens each year – From theguardian.com

There are all sorts of complicated tax minimization strategies with exotic names such as the Bottom of the Harbour, the Double Irish, the Dutch Sandwich, etc. Tax authorities are always trying to shut these down, but fighting a tough uphill battle.

The simplest way that multinationals minimize tax is to shift profits from a high corporate tax country to a low taxing country. This is usually done by charging the Australian branch exorbitant licensing or management fees from the parent company.

Microsoft, which took $6.3 billion from Australian customers during fiscal 2021-22, told the ATO that 93.6 per cent of that was not taxable (due to charging a licence fee and shifting profits to Ireland! – edit Slack Investor) – ultimately paying just $120.28 million, for an effective tax rate of 1.9 per cent of gross profits. – From Information Age

Australia is attempting to fight back with new Tax Transparency Laws that will make companies disclose their transactions on a country basis. There is also an Australian/OECD push to enforce a 15% global minimum tax in the countries where revenue is earned.

Slack Investor applauds these efforts but the multinational accountants are cunning bastards!

The Tax Mix

The image below shows, on a country basis, what the percentage of total tax receipts can be attributed to: Personal/Individual Income, (Dark Blue), Corporate Income (Green), Social Insurance Taxes (Gold), Property Taxes (Light Blue), Consumption Taxes (Black), and Other (Brown).

Click for better resolution – From Tax Foundation report 2024

It is clear that, if Australia wishes a tax structure closer to the OECD average, it has to reduce Personal and Corporate Tax and increase Social Insurance taxes (these taxes are specific to a future benefit (e.g. Pension, Disability, etc). Also, in order to make our tax system more sustainable, a priority must be to increase consumption taxes from the relatively low rate of 10%.

Both major parties must work together to achieve tax reform. I sincerely hope that this can happen. But, it will take a group of politicians with a long term view. Good luck with that!

Australian Super – Division 296 revisited

While on the subject of tax, Slack Investor will have one last rip on the proposed new superannuation tax. There has been lots of media about the Australian Government proposed, seemingly inevitable, new super tax. On the legislative agenda is a Division 296 tax on superannuation balances over $3m. Slack Investor has already had a spray about this. Slack Investor knows that there is a need to tax those with big super balances.

There should be incentives to provide for your own retirement but agrees with the Government, that once you have enough money to fund your retirement, all concessions must start to taper off. Slack Investor objects to the design of the proposed tax, it is to be applied to unrealized gains and the caps are to be not indexed.

There is already an indexed cap on the tax-free Pension accounts of $2m (2025). In the eyes of Slack Investor, this amount is plenty for a comfortable retirement. If your pension fund earns just 5%, this is an annual income of $100K. Any extra super can go in your Accumulation account which is currently taxed concessionally at 15%.

The problem is, that there are some super accounts with huge balances that are taking advantage of this Government generosity.

The 2020-2021 data reveals the number of Australians with super balances over $50 million has increased to 135 people – From ABC News.

A Better Way

How about we forget about this silly unrealized gain business and we keep the current $2m (indexed) restrictions in place for the pension accounts to provide for a good retirement income. To raise revenue, the Government should introduce higher taxes on any actual gains in super balances left over in the Accumulation account for super balances over $3m (Indexed). These taxes could be between 15% and 30%.

This would raise some money without the complications of unrealized gains. Everyone should be happy!

Slack Greetings from Galway, Ireland

ASX Paperwork Breakthrough – and May 2025 – End of Month Update

Back in 2021, Slack Investor wrote about the enormous amount of wasted paper generated by the Australian Stock Exchange (ASX) with their CHESS Holding Statements – which they have insisted must be mailed to my address. My feelings expressed in ASX Paper … I’m Drowning! still hold true.

Examples of the reams of CHESS holding statements that have cluttered my mailbox for years

I have never had a dispute with my broker about how many shares I own in a company … and, I am sure, that by waving a paper CHESS Holding Statement that I couldn’t dispute a logged transaction or a contract note. But, in an unexpected (due to very low expectations!) breakthrough from the ASX, they have finally opted for the possibility of a non-postal way of receiving your CHESS Holding Statement. But, of course, they have had to make the transition complicated.

Years ago, when Slack Investor first tried to get his holding statements electronically, he was told on the phone by the ASX that ‘it was impossible’ as they do not hold email addresses – just postal addresses for each holding! Hence the reliance on the postal service.

The ‘Opting IN’ process to get Chess Holding Statements electronically

First thing: Contact your broker

To get this started. you must contact your broker – who, is also your CHESS sponsor for your shares and ETF’s. In Slack Investors case, he has two Australian brokers: SelfWealth and Commsec. Each of them have to be informed – as each CHESS sponsor will have their own HIN for your holdings.

For SelfWealth, they have a link to explain proceedings. For Commsec, there is also a link to show the necessary steps. Slack Investor had to login then navigate to Portfolio / Holdings / View or Edit Account Details. Then elect to receive statements electronically.

In both cases, once you have opted in, you will receive multiple notifications from the ASX. A printed notification mailed to your postal address will confirm the change.

The CHESS statements Portal

There will also be an ASX CHESS Statements Portal registration email – where you will have to establish a username and password plus, an email confirming a change to communication preferences.

Phew … but it’s worth it! Slack Investor suggests you start this process now.

Once your email is registered with the ASX, future holding statements should be emailed. Slack Investor doesn’t even want that – the Broker tally of his shares is fine with him. Slack Investor’s preferred way of interaction will be through the CHESS statements login page – where you can view (or download) your statements.

May 2025 – End of month update

Slack Investor remains IN for Australian index shares, the recently bought US Index S&P 500 and, the FTSE 100.

May has been a good month for UK, US and the Australian Index.

The S&P 500 (+6.1%), the ASX 200 up 3.8% and, the FTSE 100 up 3.3% as the endless tariff fiasco unfolds .

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Stick to Your Knitting

Harvard Art Museum

Slack Investor Market Timing Experiment brings no joy

Slack Investor is aware that there are some people who state that they can ‘time the market’. Marcus Padley, and others, offer such a service to their subscribers.

Slack Investor doesn’t dispute Padley’s claims and has admiration for those who can perform this amazing feat. However, he is convinced that, without following daily, or even hourly, fluctuations in the markets, that this stuff is best left to professionals. The market swings are just getting a little too rapid, short-term and meaningless.

As the result of the China/USA trade talks, the US will lower tariffs from 145% to 30%, while China’s tariffs on US goods will drop to 10% from 125%. This caused the S&P 500 to surge and create enough momentum to trigger the 11-week Directional Movement System (DMS). Slack Investor uses the change in slope of the DMS in his market timing experiment to determine a BUY signal.

S&P 500 Weekly Chart – Incredible Charts. Full chart and commentary on US Index page

Slack Investor’s market timing is below par on the US market and, he will be glad when his 25-yr index experiment, with this small part of his portfolio (<2%), will be over in 2029. On current figures, his market timing for the US Index is 18% behind the ‘Buy and Hold’ strategy. Not very good!

Slack Investor should stick to his strengths

It’s time to stick to things that Slack Investor has been good at. For example, finding profitable and growing companies – that are not too expensive.

In the ongoing examination of my portfolio, Slack Investor has resolved to slowly concentrate the companies that he owns so that they are at the upper end of profitability, growth and affordability. This means a bit of weeding on the companies with a low Slack Factor and, a bit of buying on those with a high Slack Factor.

In the past few weeks, he sold his positions in Macquarie Group (MQG) and Cochlear (COH). Both are solid companies but, they were either, getting too expensive – or slowing down in growth. Both had a relatively low Slack Factor.

To decide what to buy, Slack Investor got off the couch and went to the  Market Screener site to gather information on the companies where he would like to increase his holdings.

NameSymbolPE (2027)ROE (2027)EPS GROWTH (3-YR AV)SLACK FACTOR
Telix PharmaTLX23275059
Supply NetworkSNL31381822
CodanCDA22232021
MegaportMP158186420
Pro MedicusPME130533615
XRF ScientificXRF17181314
CSLCSL19181414
CochlearCOH3425139
Macquarie GroupMQG171296

Where, PE (2027) is the forecast P/E Ratio for 2027; ROE (2027) is the forecast ROE for 2027); EPS Growth is the forecast EPSG for the next three years (EPSG AV). The Slack Factor is a combination of these metrics using the formula defined in previous posts.

The standouts, with a high Slack Factor, were TLX, SNL, CDA and MP1. MP1 is a newcomer to the Slack Portfolio and hasn’t got much of a track record yet. SNL is a great growing company but is already over 10% of the Slack Portfolio. That leaves TLX and CDA. I bought more of both of these to build up their positions in the portfolio.

Keep knitting.

Mining for ideas – and April 2025 End of Month Update

Museo – Deep Down In A West Virginia Coal Mine

Mining for coal must have been a tough gig back in 1909. Slack Investor has had it far sweeter in his mining for good companies that have been beaten up by the recent Trump escapades. Sadly, in these lower price times, he is fully invested. But, even after a beating, it doesn’t stop him thinking about possible future investments. Sometimes the best ideas come from other people.

Quality at a Discount

Livewire is a financial newsletter that offers free subscriptions and Slack Investor is a keen reader. Livewire depends on contributors from the financial industry and is always worth a look. An article by Tom Stelzer of Bell Potter caught his eye on April 8, 2025.

Tom seems like an astute fellow and his methods for sifting through stocks rang a bell with Slack Investor. Similar to Slack Investor he combines growth, profitability and P/E Ratio to come up with a stock list – in an organized way. Slack Investor might argue that the method is not quite as elegant as his Slack Factor analysis, However, Bell Potter do have a standard screen for ‘quality at a discount’ – and this seems far less effort.

(Tom) assesses their potential for growth, earnings momentum and looks for stocks with notable P/E compression over the last few weeks to produce a list of 20 quality mid and large-cap companies that are well-positioned and likely undervalued – Tom Stelzer, Bell Potter

Slack Investor notes that 9 of the 20 stocks presented are currently in the Slack Portfolio. The above tables were just the first sort. Tom then looked hard for those quality companies that were not overpriced. The Post 12MF PE column (12-month future P/E ratio) was used here.

Bell Potter came up with four companies that they consider good buys after the recent slump – they are listed in the table below. Slack Investor has also provided a further screen by calculating the Slack Factor for each of the companies.

The ingredients in the Slack Factor were obtained from Market Screener. Where ROE is the forecast ROE (ROE 2027), EPSG is the forecast EPSG for the next three years (EPSG AV) and, PE Ratio is the forecast PE Ratio (PE 2027). The Slack Factor is then calculated – a high Slack Factor is usually good news.

CompanySymbolSlack Factor
Telix Pharmaceuticals ASX: TLX52
REA Group ASX: REA34
Aristocrat LeisureASX: ALL14
ResmedASX: RMD12

Of the 4 recommended Bell Potter stocks. The Slack Factor indicates that TLX and REA are the standout buys for Slack Investor – at the moment.

April 2025 – End of month update

Slack Investor is OUT of the US Index (S&P 500)! He sold his small US Index holding on Monday 07 April, 2025 at 5048. After the rebound, the latest monthly chart indicates this might have been a mistake – and reinforces his belief that Slack Investor has no great skill in timing the market. The 25-yr market timing experiment will continue till 2029. Slack Investor remains IN for Australian index shares, and the FTSE 100 as, at the end of the month, they were above their stop losses.

Slack Investor has never been a huge fan of the ‘American Way’ but did hold an admiration for their ingenuity and general work ethic. I have never seen such wilful destruction of American international standing in such a short time. As well, Trump’s capricious economic policies have the S&P 500 all over the place. The US Index recovered its losses and rose 10.3% since its 10.0% slump early April. Trump is 100 days in … 1461 to go.

For the ASX 200 (+3.6%) and the FTSE 100 (-1.0%), it has also been a wild month.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Market Value – April 2025 Update

Slack Investor is enjoying the relative calm in the markets over these past couple of days. It is a good time to update the charts for the Cyclically Adjusted Price to Earnings ratios (CAPE). He first started using CAPE as a ‘value’ tool in September 2021 and, the most recent post on Market Value was for the end of December 2024. That feels like such a long time ago – pre-Donald 2.0. The markets have been on quite a ride since then.

There is some good research that links CAPE to long-term returns … and future returns are what gets Slack Investor excited. The predictive skill of the Schiller CAPE is not very good over 1-yr and 5-yr periods. However, it does show some skill for periods of 10 years and longer.

Shiller P/E and S&P 500 10-year annualised forward returns from 1983. There is a clear relationship between higher CAPE and lower expected 10-yr returns for the S&P 500. Data valid as of 31 December 2023 – Investco

Research Affiliates

For the following charts, Slack Investor uses monthly CAPE data from Barclays, the 40-yr mean is calculated and plotted together with the latest CAPE values – estimated up until 14 April 2025. A ‘fair value’ zone is created in green where the CAPE is within one standard deviation of the mean (average) – click images for better resolution.

ASX 200 CAPE Value – 3% above long-term av.

ASX CAPE values – estimated up until April 14 2025

FTSE 100 CAPE Value – 10% below long-term av.

UK CAPE values – estimated up until April 14 2025

S&P 500 CAPE Value – 32% above long-term av.

US CAPE values – estimated up until April 14 2025

Market value and Market Timing Experiment

The ASX 200 and the FTSE 100 are both within 10% of their 40-yr CAPE average. When within the green ‘fair value’ range, Slack Investor has patience and he will be assessing these charts at the end of the month.

The US index chart was, and still is, above the ‘fair value’ range and Slack investor had the S&P 500 on a weekly check. Last week it plunged below the stop loss and Slack Investor sold. These are early days in the Trump 2.0 experience – given current form, there will be more surprises.

The US Index is just a small part of the Slack Portfolio (1.6%). The bulk of his portfolio is currently riding the market roller coaster – patiently in search of long-term returns.

Market Timing Experiment – Update

Apologies for intruding into your inbox. I like to keep the Slack Investor blog folly to twice a month. But these are unusual times.

The Slack Investor Market Timing Experiment

Slack Investor started his ‘index-timing’ strategy in 2004 with the ASX Index, UK Index, US Index. An earlier version of Slack Investor thought that by monitoring the market at weekly and monthly intervals and setting ‘stop losses’ to know when to sell the index. To know when to buy, he used a momentum indicator called the Directional Movement Index.

Although, there was some initial success over the ‘buy and hold’ strategy, the benefits work out to be quite small on a yearly basis. For example, for the Australian Index there is a 1.2% p.a. outperformance for Slack market timing strategy over ‘buy and hold’.

These relatively small gains would have probably been offset by earned share dividends if I was using the alternative ‘buy and hold’ strategy. Market timing works well when there are sustained periods of bull and bear markets and the changes between the two are not too rapid. The short transitions and the speed of market fluctuations in the last 20 years has forced a bit of a rethink on Slack Investor’s timing the markets strategy.

Instead of monitoring the markets monthly, he has been looking for weekly changes as well. He is also taking the current market value and recent trends into account. Slack Investor is a man of routine and he has now decided to keep the experiment going for 25 years (till 2029). After this, he will probably go for the more appropriate Slack Investor method of doing nothing and adopting a ‘buy and hold’ technique for index funds (ASX Index, UK Index, US Index).

US Index – Slack Investor is OUT

Monthly chart S&P 500 up until Friday April 4 2023 – incrediblecharts.com

At the end of the past week, Slack Investor conducted a review of the Index charts and noted that the US Index price has slipped below the stop loss (thick red line). As the trend is still downward, and the market is overvalued (see below), it is time to get out. As part of this experiment, I will sell my small holding of S&P 500 Index tomorrow and update the US Index page.

US CAPE values – up till the end of March 2025 showing the index is still overvalued (at March 31). The CAPE ratio is above the green zone.

What about the rest of the Slack Portfolio?

Deep down, Slack Investor doesn’t believe he is very good at timing the markets. The bulk of the Slack Portfolio (97%) is not in index funds, but in growth companies – that are taking a bit of a beating at the moment. That’s what the stock market does in times of uncertainty.

Mostly, Slack Investor will be doing nothing. He will try and distract himself from the self-destructing behaviour of Trump. I cannot remember a time where the whole world was so united in its resolve against the USA. Slack Investor knows that good times (and prices) will return. Slack Investor has his Stable Income Portfolio if he needs cash.

The worst thing to do, from a long-term wealth perspective, is to convert shares to cash in a down market – Slack Investor (and other wise investors!)

On the back burner is my project to sell some of the Slack Investor owned companies with a relatively low Slack Factor – and invest more in those with a high Slack Factor.

The Slack Factor – March 2025 End of Month Update

A WordPress AI generated weird image that reassuringly does not make any physical sense.

Reporting Season

During February, most companies report on their progress up to the end of December. There is a similar reporting season in August for the period up to 30 June. Once all the analyst projections for future earnings are in, it is a good time to update the state of play for companies in the Slack Portfolio.

It took a while for Slack Investor to understand that a company could come in with a great report on the business and still, the price of the shares might go down. This is because reporting season is all about expectations. If a company was expecting an increase in earnings of 22% – and they ‘only’ achieved 20%, the share price is likely to get knocked down on the announcement.

As the Slack Portfolio consists of mostly growing stocks with a relatively high Price to Earnings Ratio. The growing stocks usually have high prices as the company’s growth is priced in. These stocks can get punished severely when an earnings target is missed – price falls of 10-20% are not uncommon. But, it is long term results that really count and Slack Investor is willing to endure any short-term pain for a growing company. This period of ‘Trumpenomics’ is an example of such a time.

Slack Investor uses the excellent Market Screener site (requires email registration) to get information from the Financials tab for each company. Analyst information is not available for ETF’s so, only data on the individual companies that are in the Portfolio is gathered.

In the table below, information is listed for the forecast P/E Ratio (PE 2027), the forecast Return on Equity (ROE 2027), the forecast Earnings Per Share Growth (EPSG 2025) (EPSG 2026) (EPSG 2027) and the average of the three Earnings Per Share Growth figures (EPSG AV). There is some fudging of the figures as some of the forecast EPSG figures were unavailable. Also, for some of the companies that are new to profit, their EPSG figures are skewed – I have limited the EPSG (AV) to a maximum of 50. I have ranked the companies in order according to their Slack Factor.

The Slack Factor

What is the Slack Factor? It is well known that Slack Investor likes

  • Profitability – measured in terms of the forecast Return on Equity – ROE 2027
  • Growth – measured as the average forecast Earnings Per Share Growth – EPSG (AV) for the three years 2025, 2026 and 2027.

It is well known that Slack Investor does not like

  • High Price to Earnings Ratios – measured in terms of the forecast Return on Equity – PE 2027. Sometimes, great companies are just too expensive.
ROE is the forecast ROE (ROE 2027), EPSG is the forecast EPSG for the next three years (EPSG AV) and, PE Ratio is the forecast PE Ratio (PE 2027).

So, things he likes go on the top line and the things that he doesn’t like go on the bottom line. This reduces a lot of the complicated information in Slack Investor’s tiny brain to one number. He has made no attempt to scale (normalise) each input into the Slack Factor. It is just a simple way to rank companies with qualities that he thinks are good. The bigger the number, the more likely the company has attributes that Slack Investor likes – profitability, growth and a price tag that is not too expensive. With these traits … surely good things are more likely to happen?

The fast growing Telix Pharmaceuticals (TLX) is a company that Slack Investor is a fan of, and it has a high Slack Factor of 52. The growth dullard Commonwealth Bank (CBA) has a Slack Factor of only 3 – and, is of no interest to Slack Investor.

NameSymbolPE 2027ROE 2027EPSG 2025EPSG 2026EPSG 2027EPSG (AV)SLACK FACTOR
Telix PharmaceuticalsTLX252623070305052
REA GroupREA40329811174234
CodanCDA19232023182025
Alphabet (US)GOOGL15251214161423
Supply NetworkSNL29382314151723
MegaportMP15019-9160405019
Pro MedicusPME115534042303717
WiseTech GlobalWTC42203238343517
Technology OneTNE48341820191913
CSLCSL20181215161413
Goodman GroupGMG1811 34122012
Coles GroupCOL1832-2175712
RPM HoldingsRUL38181025402512
XRF ScientificXRF20181711111312
CAR GroupCAR28153518122212
ResMedRMD2023910111012
WesfarmersWES24333139811
Nick ScaliNCK1529-282914510
CochlearCOH342515716139
Macquarie GroupMQG15136188119
Botanix PharmaBOTNotRanked–NotEnoughInfo

Over the next quarter, I will try and sell some of the Slack Investor owned companies with a relatively low Slack Factor – and invest more in those with a high Slack Factor. For homework, using Market Screener, try to work out the Slack Factor for some of the companies in your own portfolio.

March 2025 – End of Month Update

The current ‘Trump Slump’ in stock prices can be attributed to the largest upheaval to global trade since the Second World War – Thanks Donald! All followed markets fell this month. The ASX 200 down 4.0%, the FTSE 100 down 2.6%, and the S&P 500 down 5.8%. For now, each Index remains above their stop losses. Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

Slack Investor took the opportunity to tighten up his stop loss values for the FTSE 100 and the ASX 200. On the UK Index chart below, by drawing a black wavy line under the monthly minimum values, it can be seen that some new ‘higher lows’ have been established. It made sense to move up the stop loss to the most recent ‘higher low’.

Monthly price chart for the FTSE 100 – incrediblecharts.com

All Index pages and charts  have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

Trumpenomics … Be Brave!

The talented David Rowe shows ‘Me the People’ Donald Trump and his entourage re-enacting George Washington’s crossing the Delaware – Australian Financial Review

Because I can’t resist David Rowe images of Donald, in the above cartoon he is shown leading the way – his loyal band of grifters, scammers, chancers and influencers are happily along for the ride. Slack Investor still finds it hard to believe that Trump has been elected again by the US people. This ‘second coming’, and all its associated upheaval and chaos, has been going on for less than two months!

‘The stock market is going to be great’ – Donald Trump – Investor Conference, February 19, 2025 – Rollcall.com 

Perhaps I am selling Donald a bit short here, and Slack Investor hasn’t given his ‘genius’ policies the chance to work through in the long term. Although, picking a trade war with Canada, Mexico and China (and now, the rest of the world!) may not be seen by history as one of Trump’s ‘genius’ moves. Tariffs make imported products more expensive than domestic ones and might make sense in a limited way if you are trying to encourage local production. However, they inhibit trade and make goods more expensive. Virtually all economists think that the US tariffs will be bad for America – and for the world. So far, it is certainly bad for the stock market.

This is not a political blog, but Trump’s anti-science and chainsaw approach to cutting government departments seems random and very short-sighted. Also, Trump’s treatment of Ukraine using standover tactics on mineral deals, his commitment to the rich getting richer, his rejection of international treaties, and his ‘negotiating’ a Ukraine surrender on Russian terms – are all just appalling acts to Slack Investor.

What to do in times of Market Crisis?

Slack Investor would love to have some cash reserves while prices are low, however he is in retirement mode and fully invested. There might be some tinkering with the portfolio but, he will do mostly nothing. Slack Investor has his Stable Income Portfolio if he needs cash. If there is a need to sell any stocks, he will be buying other stocks in the same market. The worst thing to do, from a long-term wealth perspective, is to convert shares to cash in a down market.

Individuals who cannot master their emotions are ill-suited to profit from the investment process. – Benjamin Graham, Legendary Investor and Author

Despite the Trump administration commitment to ‘Alternative Facts’. Slack Investor is guided by some established facts.

  • The stock market is the best asset class for long-term returns above inflation. See the Vanguard 2024 30-Yr chart or Long Term Returns. This is the premium game in town for non-business owners to increasing wealth.
  • The stock market is volatile. There will always be the swings between the market being overpriced, or underpriced, due to the news of the day. After a correction/crash, the market has always recovered to new highs. This happened after: Gulf Wars, Israel/Ukraine/Gaza invasions, terrorist attacks, GFC, COVID-19, etc. Trumpenomics is just one of those things that will affect the market in a temporary fashion.
  • On average, the sharemarket falls by:
    • 5% – about 3 times a year
    • 10% – about once a year
    • 20% – every 3-5 years.
  • Timing the market is just too hard (for Slack Investor). I have a long-term experiment going where I try to time the market in a methodical way using the ASX Index, the UK Index and the US Index. After 20 years, Slack Investor is either marginally ahead, or marginally behind, the markets. In all cases, in hindsight, he would have been better to buy and hold – and collect the dividends throughout.

There is still a need to constantly review your portfolio

‘I don’t think people understand there’s 100% correlation with what happens to a company’s earnings over several years and what happens to the stock.’ – Peter Lynch, Legendary Investor, Slack Hero

In view of Peter Lynch’s wisdom, as the Australian reporting season is over for the first half of FY 2025 (up to the end of December 2024). I will do a review of my current holdings next blog to ensure that they are still, mostly, growing earnings companies.

Just a few of Trump’s quotes to mull on from shortlist.com. The Clown Prince Donald always has a lot to say …

‘I look very much forward to showing my financials, because they are huge.’ – TIME, 14/4/11

‘My fingers are long and beautiful, as, it has been well documented, are various other parts of my body.’ – New York Post, 2011

‘The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive’ – Twitter, 19/10/15

‘There are those that say they have never seen the Queen have a better time, a more animated time.’ – 7/05/2019

‘What you’re seeing and what you’re reading is not what’s happening’ – 24/7/2018

‘[Kim Jong-Un] speaks and his people sit up at attention. I want my people to do the same.’ – Fox & Friends, 15/6/18

‘Sorry losers and haters, but my IQ is one of the highest – and you all know it! Please don’t feel so stupid or insecure, it’s not your fault’ – Twitter, 9/5/13

GOLD … Not for Slack Investor – and February 2025 – End of Month Update

Goldfinger, the Bond film from 1964, portrays a scene where a woman is covered in gold and dies from ‘skin suffocation’. Slack Investor notes that gold has had a good recent run and hopes that those involved with gold continue to prosper.

Is Gold Good?

A lot of people think so – and, it has performed well lately.

The price of gold exceeded US$2,900 an ounce last week for the first time. Since October 2023, it has risen by more than US$1,000 an ounce. The price is three times higher than it was a decade ago. – Tom Stevenson, Fidelity – Livewire, February 2025

Gold does well as a hedge against inflation and, in times of uncertainty. The chart over the past 10 years looks pretty good.

From Stockspot – Why you should consider gold in your super

Gold is also rare and, besides its valued use in jewellery and ornaments, it is an essential industrial metal for computers, communications equipment, spacecraft, and jet aircraft engines.

All of the gold discovered thus far would fit in a cube that is 23 meters wide on every side. – U.S. Geological Survey

Chris Bryki from Stockspot argues that every investment portfolio should contain gold to even out portfolio performance in uncertain times. Stockspot have even increased their gold exposure, through the GlobalX GOLD ETF, to above 12% in their very successful personalised investment and super funds.

There is no doubt that gold has been successful during market crashes in the past – and it will decrease your portfolio volatility. But, usually, it can also drag the portfolio down when times are good in the markets. Unusually, since 2023, gold has increased greatly at the same time that stock markets have also done well. Something weird is going on!

Gold makes sense for investors that sleep better at night knowing that at least some part of their portfolio is going up during times of market stress. Gold might also help to avoid selling your investments during a downturn – when the shares are undervalued! You could sell the gold for income during a market crash.

Slack Investor has his own plan for these down times – the Stable Income pile.

Does Gold appeal to Slack Investor as an investment?

Firstly, gold would not get a guernsey in his Stable Income pile as it does not produce any income by itself.

Only a Goldsmith Knows the Value of Gold – Old Turkish Proverb

Despite the sound arguments for gold, Slack Investor just can’t bring himself to put gold in the Slack Portfolio – the Investment pile. The big problem he has, is that Slack Investor has no idea whether the current price for gold is a fair reflection of its value – it has had a big run lately – is it overvalued? At least when he is buying stocks, he can have a look at the company’s earnings and get an idea of whether the company is cheap, or expensive, by comparing its projected price to earnings (P/E) ratio.

This is Slack Investor’s difficulty with all non-income producing assets – these include precious metals, artworks and even cryptocurrency – there is no way to determine their actual value. The price of these speculative assets is only defined by what the next person will pay for them. So, none of these types of assets will appear in the Slack Investment Portfolio.

Slack Investor will continue to take his chances with stocks that are growing, predicted to grow further, and producing income. His investment portfolio will be more volatile for not having gold – but, it is the long-term performance that counts the most with Slack Investor.

Slack Investor hopes to never draw down on his investments in the lean years when his stocks are undervalued. He has his Stable Income pile (currently 22% of total retirement funds) to get him through the periods when his Investment pile might go negative. The Stable Income fund target is to earn a little above the inflation rate. The Slack Investment fund has more ambitious goals and the pursuit of growing stocks (without gold) might have more ups and downs – but, so far it’s working!

5-yr Return10-yr Return15-yr Return
13.4%15.7%14.8%
Slack Investment Portfolio long-term annual compounding average returns. Pre-tax annual average returns till the end FY24.

February 2025 – End of month update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

February has continued well for the UK Index, the FTSE 100 is up 1.6 %.

The S&P 500 (-1.4%) has had a bit of a pull back and the ASX 200 is down 4.2%, erasing its January gains.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).