“ Life is not a bowl full of cherries, there’s good and bad stuff“
Fuzzy Zoeller (American professional golfer)
Fuzzy Zoeller does not always say wise things, but his quote above is on the money. Slack Investor takes the good with the bad.
The trampoline effect of stinkers becoming nuggets in consecutive years reared again, with REA making the transition this year. Also, Nuggets … might end on the Stinker pile the year after. Slack Investor puts more emphasis on growth over a multi-year period, but compiles the yearly Nuggets and Stinkers list …. because its fun!
Growth stocks (usually high Return on Equity (ROE >15%), as with other stocks, often have cycles of price – bouts of overvaluation followed by a period of undervaluation.
The percentage yearly returns quoted in this post include costs (brokerage) but, the returns are before tax. This raw figure can then be compared with other investment returns. I use the incredibly useful Market Screener to analyze the financial data from each company and extract the predicted 2o25 Price/Earnings (PE) Ratio, Dividend Yield, and Return on Equity (ROE), on the companies below. This excellent site allows free access (up to a daily limit) to their analyst’s data, on the financials tab for each stock, once you register with an email address.
Slack Investor Stinkers – FY 2023
Financial year 2023 was a welcome recovery in the technology sectors. All of Slack Investors followed markets Australia, the UK and the US having gains over the financial year 2023. However, Slack Investor is always ready for lessons in humility and still managed to pick up a few stinkers along the way.
Integral Diagnostics (IDX) -19% (Sold Oct 2022)
(IDX – 2025: PE 18, Yield 3.8%, ROE 10%) Integral Diagnostics provides medical imaging services at a number of urban and regional locations in Australia and New Zealand. This company was also one of my stinkers last year (FY2022 -39%) The sinking feeling that I got during my monthly chart reviews was just too much … and I finally gave into that negative energy in October 2022 – and sold. This, unfortunately, turned out to be the bottom of the market – and IDX has made a modest recovery since.
Computershare (CPU) -18% (Sold May 2023)
(CPU– 2025: PE 16, Yield 3.8%, ROE 29%) Computershare is well known to owners of some Australian shares as they run the registry for many Australian companies. It started as an Australian technology business in 1978 and since has become a major global player in financial services. Slack Investor just bought at a bad time … and I sold in May 2023 to make another share purchase. CPU seems to be a solid global business though – Will look at buying this one again.
Dicker Data (DDR) -18% (Still held)
(DDR – 2025: PE 14, Yield 6.8%, ROE 42%) Dicker Data is the only Australian owned and ASX-listed major IT provider. It is a hardware, software and cloud distributor for most of the well known US IT companies (Microsoft, Cisco, HP, etc). The business is projected to continue to grow and, as the share price seems to have “bottomed out”, Slack Investor will continue to hold on because of the companies excellent projected PE, Yield, and ROE.
BetaShares Asia Technology Tigers ETF -7% (Sold Sep 2022)
(ASIA – 2023: PE 17, Yield 2.6%,) Growth in Asia … What could go wrong! Plenty it seems. These “technology tigers” that make up this ETF have been part of a global selloff of tech-related shares in Asia since 2021 as many US investors take flight from the China market due to US/China tensions.
This company was also one of my stinkers last year (FY2022 -33%) and was “on watch” during my monthly chart reviews. Sadly, the pain became too much and I unloaded near the bottom of the market again … and, it has since made a modest recovery. I have maintained at least some exposure to the Asian tech sector with with Vanguard FTSE Asia ex Japan ETF (VGE.ASX).
Slack Investor Nuggets – FY 2023
Nuggets made a comeback this Financial Year. Slack Investor continues to invest in high Return on Equity (ROE) companies with a track record of increasing earnings, Companies with these qualities sometimes behave as “golden nuggets”.
Technology One (TNE) +48%
(TNE – 2025: PE 37, Yield 1.5%, ROE 34%) This Software as a Service (SaaS) and consulting company continues to be profitable. This great business was also a nugget last year (+17%). A high 2025 PE of 37 (Expensive) is a little scary but, if the high Returns on Equity (34%) remain, on balance, this is OK. I found this company through the writings of Rudi Filapek-Vandyck – a great Australian Investor and writer, when he talks, Slack Investor listens.
Altium (ALU) +40%
(ALU – 2025: PE 34, Yield 2.3%, ROE 32%) Altium is an Australian based developer and seller of computer software for the design of electronic products worldwide. It focuses on electronics design systems for 3D printed circuit board (PCB) design. Slack Investor has part-owned this business since 2009 and has enjoyed the increasing value that ALU has created. This sector is very now … and remains a favourite of Slack Investor.
CarSales.com (CAR) +37%
(CAR – 2025: PE 28, Yield 3.0%, ROE 10%) CarSales.com is the go to for selling cars, boats and other vehicles. It does, in an efficient way, what the classified ads used to do. I have noticed that the Return on Equity is dropping (Now 10%) and will keep this company on watch – but I cant argue with the recent price rises.
BetaShare NASDAQ 100 ETF (NDQ) +36%
(NDQ – 2023: PE 26, Yield 1.0%) Exposure to the powerhouse of US Tech companies with the simplicity of an ASX ETF. Management fees are reasonable at 0.48% – Slack Investor remains a fan.
Pro Medicus (PME) +36%
(PME – 2025: PE 78, Yield 0.6%, ROE 46%) Pro Medicus is a developer and supplier of healthcare imaging software and services to hospitals and diagnostic imaging groups. Slack Investor actually met the CEO and co-founder of Pro Medicus, Dr Sam Hupert, at an investment seminar last year. His modesty, US foothold, and debt-free approach to expanding his business impressed me – I’m obviously glad I bought in – but the very high PE ratio (+78) is worrying – expensive.
REA Group (REA) +30%
(REA – 2025: PE 39, Yield 1.5%, ROE 29%) Like Carsales.com, REA has dominated the space left by the old newspaper classifieds in selling real estate in Australia. REA has expanded into India and other global locations. A high PE ratio (39) but while projected Return on Equity (ROE) remains high (29%), this is OK.
VanEck Wide Moat ETF (MOAT) +30%
(MOAT – 2023: PE 19, Yield 2.6%,) The Wide Moat ETF run by VanEck is a rules-based selection of “attractively priced US companies with sustainable competitive advantages” Sounds good doesn’t it. The management expense ratio of 0.49% is OK for such curated US exposure.
Slack Investor Total SMSF performance – FY 2023 and July 2023 end of Month Update
After a difficult 2022, FY 2023 is described by J. P. Morgan as being “kinder to balanced portfolios”. True That! The growth stocks that were punished last year bounced back strongly. In the Australian superannuation scene, the median growth fund (61 to 80% in growth assets) returned +9.2% for FY 2023. The ASX 200 chart shows a gradual climb for the financial year.
After a tough FY 2022, the FY 2023 Slack Investor preliminary total SMSF performance looks like returning to form and coming in at around +18%. The 5-yr performance is a more useful benchmark to me – as it takes out the bouncing around of yearly returns. At the end of FY 2023, the Slack Portfolio has a compounding 5-yr annual return of around 10%.
The new financial year started of positively for Slack Investor markets. The ASX 200 + 2.9%; FTSE 100 +2.2%; and S&P 500 +3.1%. He remains IN for all index positions.
All Index pages (ASX Index, UK Index, US Index) and charts have been updated to reflect the monthly changes.
Mr Slack,
we bows down to you! 18% in the last year and ~ 10% over the last five years. Well done!
I’ve just looked into my spreadsheets and come up with 13.8% and 9.7% respectively – “could improve” seems apt. Over the last five years, I’ve worked through being almost exclusively in ETFs, to dabbling on the side and then in the main, to dissolving positions as I’ve expected declining performance, or exposure redundancy.
I expect I’ll be reverting to larger cores with small satellites to satisfy my need to experiment. I almost certainly would’ve been better off overall not changing a thing from 5 years ago, but there’s an education in there somewhere!
A question. I’ve held Hearts and Minds (HM1) for almost three years being ever so impressed with the Sohn Conference line-up, free advisory and donations to medical research. Today I’m sitting on a 50% drawdown, a 20%+ NTA discount and murmurings of it perhaps following this years US recovery. Is it just time or is there an obvious event that will bring that NTA back into alignment?
Cheers Trevor
Hey Trevor … sorry for late reply. Your numbers sound pretty good. There is a lot to be said for ordinary folk taking a disciplined interest in their investments. I know what you mean about the need to experiment – I think a good investor likes to tinker a bit. Sometimes it works! No regrets or retributions though. It is all part of the fun.
Had a brief look at HM1, the chart looks like it has reached a bit of a floor at around 0.8 book value – I assume that this is worked out on the share prices of HM1 underlying assets. HM1 are involved in a pretty tricky area … there is a lot that can happen between great medical ideas and companies turning a profit. My limited experience with innovative medical products has been pretty patchy. These days I usually wait for the underlying companies to start making a profit before I part with slack funds – I miss out on the big profits, but the losses hurt me more. This is not advice, but if I owned the stock, the current chart tells me to hang in there for a while, most of the pain seems to have been endured – Let’s see what happens! Cheers, Slack Investor.