Buy and Hold | Slack Investor

Slack Portfolio Surgery – February 2026 End of Month Update

Robert Liston operating. Painting by Ernest Board of Bristol (1877-1934) – Wikimedia Commons

The leg amputation depicted above was supposedly done in under 30 seconds. Dr Liston not only managed to kill the patient (Sepsis), but one of his assistants (Sepsis) – and also one of the audience (shock). A 300% mortality rate! Slack Investor hopes for a better outcome after some recent portfolio surgery.

SaaS-pocalypse

The ‘SaaS-pocalypse’, a trending term to describe the recent and dramatic sell-off in global Software-as-a-Service (SaaS) shares, is based on the idea that AI becomes so advanced that software becomes redundant. _{– The Guardian}

Slack Investor went into a bit of detail last post on the sell off in tech and healthcare stocks due to the release of AI tools such as Claude. This wasn’t just some tale in a distant land, the ‘SaaS-pocalypse’ was having a very direct affect on the Slack Portfolio.

ASX200 biggest falls since August 2025 (Data as of 4/2/2026) – Livewire

Is this really a disaster for the Slack Portfolio? Slack Investor prides himself on getting things ‘mostly right’. However, this 2026 Financial Year has been testing – it seems that he has been getting things ‘mostly wrong’! However, Slack Investor knows that only long-term results count.

It is certainly a setback, as Slack Investor has attached himself to 5 of these ‘Biggest Fall’ ASX companies set out above. Some remedial action is required.

Slack Investor has been in this game long enough to not panic. He has however given the Slack Portfolio a ‘very hard look’ and has been gradually building up his cash position by selling companies that have not a convincing story to tell in these frothy times – particularly those with an extended PE Ratio. Future incomes may not be enough to justify their expense (high PE Ratio). He is mindful that the recent sell-off might be overdone in some cases.

But the companies being indiscriminately sold are often those whose actual protection was never in the codebase to begin with. The durable moats live outside the software entirely, in proprietary data rights, regulatory licences, institutional relationships, deep workflow embedding, and sustained frontier research. None of these can be prompt-engineered into existence. – Mark Gardner, MPC Markets –Livewire

Since his last published quarterly portfolio, Slack Investor has reduced his exposure to the US market (Sold NVDA, NDQ, JNDQ) and sold off some of his more speculative holdings (TLX, MP1 and CXL). His cash position is healthy and waiting for some future opportunities. His Stable Income pile plus Slack Portfolio dividends are enough for living expenses and holidays. Slack Investor should never be forced into a sale of his stocks.

Rules of thumb when bad things happen

Slack Investor has general rules of thumb for when stock prices have a fall of 20%. These questions must be asked.

Has something fundamentally changed with the company? Such as sustained falling earnings, new competitors, etc.
After running the numbers for predicted PE Ratio, predicted ROE and predicted growth. Would Slack Investor buy this company at the current price?

As well, for SaaS stocks, Slack Investor has another question.

Does the company produce proprietary software and embedded relationships with its clients that would provide a durable moat?

These three questions were enough for me to hang on to my battered software-based stocks TNE, CAR, REA, and WTC – and hope for a recovery.

February 2026 – End of Month Update

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

Despite the turbulence in the Slack Portfolio, it was a good month for the ASX 200 (+3.7%). The FTSE 100 is in record territory with 6.7% February growth. A well deserved rest for the US markets (S&P 500: -0.9%).

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

Ride that Horse! – October 2025 End of Month Update

Slack Investor reads a lot of finance news each week. Sadly, there now seems to be a portion of the finance news that seems to come from AI sources. However, there is still a lot of good stuff by real people – and he came across an excellent article by Carl Capolingua that had some great investor truths that apply to the current market.

A disciplined investor doesn’t fight the market – they respect it. They accept the market is responsible for their investing outcomes, win, lose or draw. They also accept that they have absolutely no control over the market or the outcomes it delivers. _{– Carl Capolingua, Livewire Markets}

The original article focuses on the difficulty of letting go of investments that have shown a loss. Slack Investor is still searching for this zen state and has written about his own troubles with selling stocks that have had a sudden fall. However, the quote above sums up ‘the bargain’ that Slack Investor has made with stocks and their volatility. I don’t know when the next correction (or worse!) is coming … but I know it’s coming.

World Markets are Expensive at the Moment

Although Slack Investor collects his own data on relative market value using CAPE numbers, the remarkable Ashley Owen has produced a great graphic showing the relative size of the world markets and how expensive they are at the moment in terms of PE and Yield. Clearly, the US market looks over ripe and any corrections here will historically influence all other markets.

World markets plotted by PE Ratio and Yield – From the very erudite Ashley Owen of Owen Analytics

Short-term Returns are Volatile

The chart below shows that the S&P 500 returns for a calendar year are all over the place, but if you just hung on, and didn’t sell the S&P 500 when times were tough, you would be rewarded with an average annual return of 12.2% over 30 years. Not Bad. Australian shares have returned an average yearly gain of 11.5% from 1900 to 2020.

Yearly Returns of the S&P 500 (green columns) and 15-yr rolling returns (blue line) – From T. RowePrice

What to do when the Correction comes

‘If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.‘ _{– Vanguard founder – John C. Bogle}

Slack Investor has had no real luck in timing the markets – despite a disciplined 21-yr project trying to do this. There are those that can, Marcus Padley and his investment team have gone to 100% cash and reported this on 21 October 2025. Slack Investor hasn’t the knowledge, or gumption, to confidently predict market exits and entries – and yet, has done OK in the investing business without too much angst.

Slack Investor knows that for an ordinary person, the stock market is the place with best long-term returns with minimal transaction costs. The bargain – to accept volatility in return for long-term gains – is accepted.

He has his stable income pile to keep the dogs from the door.
He tinkers with his Investment Portfolio of predominantly growth shares, but mostly he leaves it alone.
He will not sell his shares after a correction and convert to cash.
He has elevated his cash position slightly (6% cash, 94% invested) in case some bargains come up post-correction.

These are choppy times and there is an uncertain near-term future – situation normal in the stock market. Some of his portfolio (e.g. CSL, WTC, TLX) have had big falls lately. However, Slack Investor has had a look at future revenue predictions and has not completely given up on these stocks. Though, CSL is losing its shine as a growth company in Slack Investor terms.

He will keep riding that stock market horse … and push to the forefront of his mind the pleasant times at the rodeo bar with his cowboy mates … reflecting on our glorious achievements.

October 2025 – End of Month Update

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

The S&P 500 (+2.3%) and the FTSE 100 (+3.9%) have continued their strong monthly growth. Slack Investor is pleased to stay on board but there he remains nervous about the US markets. For the ASX 200, (+0.4%) a flat month with plenty of volatility.

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

CSL – Is Slack Investor flogging a dead horse? – September 2025 End of Month Update

Apologies to all readers who may have jumped on the CSL train in the past 5 years due to Slack Investor continually ‘bigging up’ this grand old stock. He has always been impressed with companies that spend a good portion of their profits in Research and Development.

‘CSL have committed to spending 10% of global revenue on R&D for new and existing products.’ _– _Livewire

Slack Investor has been a holder of this company since the ‘good old days’ (before 2020). But has occasionally topped up when the price dipped below $300. So, he does share some of the recent pain.

The latest price slump was on the back of the FY 2025 results and the announcement that one of CSL’s components, CSL Seqirus, was to be demerged. The markets were not that impressed with the planned restructure and slowing growth momentum.

However, some sectors of the business are doing well. CSL Behring and CSL Vifor reported strong growth.

This CSL horse should have some good riding ahead

The 2025 AGM indicated that management were taking the knife to costs and staff in a restructure of the business that is underpinned by the Seqirus spinoff and $500 million in pre-tax savings.

‘Despite all the headwinds from competition and regulatory price cuts, they’re (CSL) still growing double digit. I think that’s a pretty good business.‘ _{Daniel Moore – IML, reported in Livewire}

When nervous … Slack Investor will always go back to the numbers. Market Screener – Finance Tab for CSL supplies some of the answers. The Income chart looks healthy.

Income (Black) and projected income (Striped Grey) for CSL – Market Screener

Looking at the projected PE, ROE and growth from Market Screener – future predictions look OK.

Perhaps the big growth days of CSL are in the past due to the more competitive environment in some sectors of the business. However, Slack Investor is a long-term investor in CSL and happy to hold. He would buy more – if CSL wasn’t already 8.1% of portfolio.

September 2025 – End of Month Update

Another wild month. The S&P 500 (+3.5%) and the FTSE 100 (+1.8%) remain in all time high territory. The ASX 200 sputtering and down 1.4% for the month.

Slack Investor remains IN for all markets.

The recent strength of the US market has pushed the closing monthly value to more than 15% above my old stop loss. I adjusted the stop loss upwards to a new ‘higher low’ of 6212 for the S&P 500.

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

The quarterly updates showing the current holdings and cash position of the Slack Portfolio have also been completed.

Hubris

noun

pride or arrogance
(in Greek tragedy) an excess of ambition, pride, etc, ultimately causing the transgressor’s ruin.

Slack Investor possesses all the human frailties – try as he might, even after decades of investing, some of these failings will occasionally surface. Recently flushed with pride with his good performance figures for the past 15 years, he let a few stock plunges go too far – on the mistaken premise that the market will quickly correct itself to reinforce Slack Investor’s view of the world.

A bit of history here … Slack Investor is disciplined in his investing in many ways. However, a trait that he struggles to shake is the sin of hubris. So convinced is Slack Investor of his magnificent stock picking abilities – he sometimes will persuade his inner self that, after a stock price fall, the ‘market’ has got this one wrong! He was so happy while his healthcare stock prices were going up that he brushed aside the unmistakable signs of decline over the past 6 months.

Slack Investor waded into Telix Pharma last year on the strength of its very impressive projected growth figures which led to a very high Slack Factor score. What he didn’t account for is the huge effect of any regulatory problems on potential growth. During reporting season, just the suggestion of problems with the regulators causes great panic.

The Telix share price plunged 18.8% on the day after the company revealed it had run into a snag with the United States Food and Drug Administration (FDA). _{– From Motley Fool, reporting on just one of the TLX shocks that has led to a 30% stock price drop in August 2025.}

With hindsight, Slack Investor wishes he had acted more quickly with his stop loss levels, but the falls were so dramatic that only the day traders would be able to get out with some dignity. Slack Investor is not a day trader and looks at his stocks weekly.

What to do about Telix now?

The FDA concerns with TLX were about some future products in the pipeline and the actual 2025 reporting season results were quite good – hopefully, all the bad news is already priced in! It is time to rationally have another look at the stock to decide whether to dump TLX and look for other opportunities. I go to the Market Screener Finance tab for TLX.

Slack Investor first looks at the Income/Projected Income chart to ensure that the income over the past few years and the projected income are showing a rising trend. The next chart down is the Balance sheet. He is looking for debt levels that are well covered by sales. No red flags here.

He then collects a few numbers. PE levels at 170 (December 2024) are frighteningly high … but, if the projected sales growth comes to fruition, the predicted 2027 PE Ratio is a more comforting 21.

A look further down the financial page reveals the predicted profitability (ROE). The forecast ROE for 2027 is a healthy 21.53%. Further down on the page is the predicted Earnings Per Share (EPS). Slack Investor is interested in how these earnings are predicted to grow. For 2025, 2026 and 2027, the forecast EPS growth is 26.04%, 97% and 91.62%

All Charts and Data from Market Screener

Combining all this data together with other healthcare stocks in my portfolio that had big falls over the past few months helps me determine whether to hold onto these stocks – or not!

*Where*, PE (2027/28) is the forecast P/E Ratio for 2027/28; ROE (2027/28) is the forecast ROE for 2027/2028); 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.*

Lessons?

‘Markets can remain irrational longer than you can remain solvent‘ _{– John Maynard Keynes}

There is no doubt that Slack Investor should have parked his hubris and let his healthcare stocks go at a much earlier stage in their decline – but for all sorts of human reasons, Slack Investor has found this very hard to do.

However, we are here now … and what should he do? Would he buy these stocks now at the current price? Given these forecast growth figures above … probably! So, for now, I’m being patient and hanging on.

Healthcare stocks often seem to have heroic growth estimates that are easily thwarted for regulatory reasons or the efficacy of competing products. These forecast growth figures can distort simple measures like the Slack Factor.

Mental note to Slack Investor … weather this crisis … and then, reduce exposure to speculative healthcare stocks.

Bogleheads and Vanguard Annual Chart – August 2025 End of Month Update

Slack Investor Hero John ‘Jack’ Bogle with a fitting ‘HOLD’ mantra.

Bogleheads and Vanguard

Slack Investor has paid tribute to the contribution that Jack Bogle has made to the investing world. He started Vanguard Investments in 1974. Bogle’s philosophy wasn’t about trying to beat the index and charging high costs – instead, he would offer a low-cost alternative fund based on the US index. Mr Bogle’s pioneering work with these low-cost funds has led to the popular low-cost Exchange Traded Funds (ETF’s) that proliferate today. Astonishingly, there are now more ETF’s listed in the US (4300) than actual companies (4200).

Slack Investor can well remember the days when a fund manager would charge you 4% of your capital for entry and then lift a further 2-3% in annual fees for the privilege of investing your money – that was not the ‘good old days’.

‘Bogleheads’ are a group of mainly US followers of Jack Bogle’s philosophy and they strive for long-term growth through low-cost, diversified index funds while minimizing fees. They are generally ‘Buy and Hold’ investors. One of their strategies is the three-fund portfolio – where investing is simplified into three low-cost funds – one for the local share market, one for international shares and one for bonds. For the US, the conservative recommended proportions are, your age defines the % in Bonds and the remainder percentage is split so that roughly 20% is in international equities.

In Australia, such a portfolio is a little more complicated as you need to cover yourself for currency risk – and hedge your international exposure for any fluctuations in the Australian dollar. Exposure to emerging markets is also recommended as a diversifier of risk. A Bogleheads type of portfolio is possible using 5 Vanguard funds.

AUD based equities	VAS (MER: 0.07%)	(Australian equities)
	VGAD (MER: 0.21%)	(Developed world ex-Australia equities – hedged to AUD)
Non-AUD based equities	VGS (MER: 0.18%)	(Developed world ex-Australia equities)
	VGE (MER: 0.48%)	(Emerging Markets)
Bonds	VAF (MER: 0.10%)	(Aggregate bond fund)

The 5 ETF’s for an Australian Bogleheads portfolio. Management Expense Ratios (MER) ar shown for each ETF. For a younger person, Australian Bogleheads suggest proportions VAS: 20%, VGAD: 20%, VGS: 40%, VGE: 10% and VAF: 10% – From Passive Investing Australia.

Slack Investor can see the attraction that Bogleheads have in passive investing and, when he loses his mojo, will opt for a more simplified Boglehead-approved passive exposure to growth and cash/bond assets. Stockspot also offer diversified portfolios using just 5 ETF’s – with excellent performance so far.

Vanguard Financial Year Total Returns for major asset classes

Every August, Vanguard produces a summary brochure focusing on the last 30 years of finance data. It is a reminder that the top performing asset class for each year (green) is seldom the top performer the year after. A lesson in diversification.

Extract from the FY 2025 Vanguard Index Chart Brochure showing the total returns for each asset class for the financial years since 1996. Top performing asset class for the year is highlighted in green and the worst in pink.

Vanguard Annual Chart

It is now time for Slack Investor’s favourite chart – a succinct demonstration of long-term investing. The essence of successful investing is to be invested at least somewhere in appreciating assets – and then, let time do its work. Below is an extract from the Vanguard 2025 long-term investing chart. The numbers on the right are the results of investing $10,000 in the Index funds of the indicated asset classes for 30 years.

Extract from the 2025 Vanguard Index chart (Just the 2007-2025 portion is shown) – the dollar values on the right are the results of investing $10,000 in index funds in each asset class for 30 years (since July 1995). *– Check out the full 30-year glory of the* Vanguard 2025.PDF chart *– Click image for the whole 30-yr chart.*

August 2025 – End of Month Update

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

The S&P 500 (+1.9%) continues its progress. Slack Investor is pleased to go with the flow but remains nervous for the US markets. For the ASX 200 (+2.6%) and the FTSE 100 (+0.6%), also some monthly gains.

The latest reporting season has brought a few shocks to the Slack Portfolio. Big falls in Botanix (BOT), Telix Pharma (TLX), and CSL. Not so worried about CSL, but looking to reduce holdings in the less established companies (BOT, TLX) when things settle down. Next blog, Slack investor will go into detail how he is dealing with a few sudden drops in individual stocks.

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

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}

Slack Investor Report Card Part 2 … and Financial Year 2024

This continues the series of judgement – on a few calls by Slack Investor in recent blogs. The good and the bad are presented – to illustrate that you don’t have to get everything right to be a successful investor.

15/01/2023 & 15/05/2023 –Nuns Know Best & Alignment

I tried to make the case that the ASX 200 was both undervalued and showing signs of momentum in the charts. At the the publishing dates, the ASX 200 was trading at 7328 and 7267. At 30/06/24, it is 7767, up 5.9 % and 6.8%. In the meantime, the US S&P 500, which Slack Investor thought was overvalued at the time, is up 32% for the same period. Could do better, Slack Investor – 5/10

01/07/2023 – Advice for a young man

I went through a whittling down process for a few stocks that might be suitable for my nephew who was just starting out on his investing journey. I wanted to gather a basket of well known, growing companies that were not outrageously over priced- I generally don’t like the predicted P/E Ratio to get above 40 when I’m buying, as this indicates the current price of the company is 40 times its predicted earnings (expensive) . The yield (dividend) is not that important to a young investor, it is the total growth that counts.

Looking at the figures, even Slack Investor is surprised with the success of his suggestions after only 12 months – an average 1-yr growth of +34.2%.

Again, Coles Group (COL) is the only dud. Despite COL having a high Return on Equity (ROE), I should have considered the competitive retail environment, its lack of history of growth and how it was spending most of its profits – returning to shareholders as dividends, rather than growing the business.

I hope that my nephew took this advice and is now a convert to stocks as a way to make your money grow. A top effort Slack Investor 9/10; Nephew ?/10

15/09/2023 – Buying Shares the Slack Way

I went through the Slack investor buying process and I had to narrow things down to the one new share that I would buy at the time with a limited amount of funds. I selected Computershare (CPU). In hindsight, I should have trusted my gut here – I have never liked their confusing website! At the the publishing date, CPU was trading at $25.85. At 30/06/24, it is $26.34, up 1.8%. I had sold out of this stock, at a loss, 5 months after I bought it as I didn’t like the way that the chart was heading. A dud trade Slack Investor – 1/10

15/10/2023 – Alphabet … Google It

Slack Investor went a bit in depth here as to why Alphabet (NASDAQ : GOOGL) was such a major portion of his portfolio. At the the publishing date, GOOGL was trading at $137.36 USD. At 30/06/24, it is $182.15 USD, up 35%, A good trade Slack Investor, is this all your own work? – 9/10.

15/05/2024 – Slack Investor vs Centrelink

I am delighted to report that Centrelink have sent me a Commonwealth Seniors’ Health Card (CSHC). I have yet to make use of it … but I am excited that my perseverance with the forms (with the help of very generous new annual income limit rules) has paid off. You really tried hard here Slack Investor 8/10; Centrelink 3/10 – The application process is confusing and tedious. The turn around time for the application was about 2 months – but, I don’t blame the workers at Centrelink here – there has been chronic underfunding in staff and processes for years.

Financial Year 2024

A quick review of how the Slack followed markets fared in FY 2024 – pretty well I might say!

ASX 200

After a solid 2023, FY 2024 could be described as a slow start – but big finish. In raw figures the Australian Index rose 7.8 %. When accumulated dividends are re-invested, the ASX 200 Net Total Return, the yearly returns are more impressive, up 12.2%.

FTSE 100

This bad boy has shown great improvement. The UK Index rose 8.4 %. When accumulated dividends are re-invested, the FTSE 100 Total Return was up 11.4%.

S&P 500

That crazy country, the mighty US of A, has done it again. the US Index rose 22.7 %. When accumulated dividends are re-invested, the S&P 500 Total Return was up a mighty 24.2%.

Altium (ALU)- Thanks, so sad to see you go … and March 2024 – End of Month Update

Renesas CEO Hidetoshi Shibata (left) and Altium CEO Aram Mirkazemi (right) firming up the takeover deal – From Business News Australia.

It is with very mixed feelings that Slack investor reports on the likely takeover of Altium (ALU) – one of his major holdings (16.6% of total Portfolio) – by the Japanese Renesas Electronics Corporation.

Renesas will acquire all outstanding shares of Altium for a cash price of A$68.50 per share, representing a total equity value of approximately A$9.1 billion
Altium Press Release – February 15, 2024

Although this represents a tidy profit, as I first bought into Altium about 10 years ago when they were trading at $3.30, I will be genuinely sad to stop being a shareholder of this wonderful company. I envisaged holding Altium shares for a very, very, long time!

Slack Investor’s 10-yr journey as an Altium shareholder – Monthly price chart from incrediblecharts.com – click chart for better resolution

Why I originally bought into Altium?

Let’s get this straight, Slack Investor is no stock picking genius. My portion of profitable sold shares is only about 55%. That is, I have made losses on 45% of them – it is not that impressive! – but my overall performance results are good. This is because I follow the Peter Lynch philosophy – where you try to stay in the stocks that are performing well and “weed out” the stocks that are not doing well.

“Some stocks go up 20-30 percent – and they get rid of it and hold onto the dogs. And it’s sort of like watering the weeds and cutting out the flowers. You want to let the winners run.”
Peter Lynch – Legendary Investor and Fund Manager. From 1977 until 1990, he ran the Magellan fund where he averaged a 29.2% annual return for those years.

Slack Investor is always on the lookout for growth companies … and Altium poked up its head and looked at me in 2014 from one of the financial sites that I read. The next step is a bit of independent research. My “go to” here is the most excellent Market Screener site. I went through my usual process for buying and checked the Market Screener/Financials tab for a reasonable projected Price/Earnings ratio, an established record of improvement in earnings, and a forecast Return on Equity (ROE) above 15%. Altium stood out here with no debt and a ROE of between 35 and 50. This company was growing!

After my initial purchase, I bought more parcels of ALU over the next two years as the shares continued to grow and their outlook projections were confirmed.

The Altium Story

Altium is an Australian-based software company that provides electronics design software to circuit-board engineers. These circuit boards are in every bit of technology that we own.

By the time Slack Investor had woken up to the Altium story, Aram Mirkazemi was the established CEO of Altium Limited. He came to Australia from Iran as a refugee in the 1980’s after a 6-month stint in a refugee camp in Pakistan. He did not speak English. After gaining qualifications in IT and engineering, he met Nick Martin, the founder of Altium, at a soccer game and Nick offered him a job. After an eventual falling out, Aram left to start his own software company. When Nick steeped down as CEO, Aram returned to Altium with a vision to make Altium a world player in printed circuit board design.

… in order to be able to change the way the electronics industry works you need to be able to standardise on one platform, like the graphics industry did with Photoshop or Microsoft’s dominance of the operating system and productivity tools market.

After several years of growth and gaining market share. The Altium board rejected an offer of $38.50 per share from Autodesk Inc back in June 2021 as they thought that the offer ‘significantly undervalues’ the companies prospects. The 2024 Renesas offer is yet to be approved by shareholders, but it seems that all the significant players are already “on board”. The offer A$68.50 per share in cash. represents a premium of approximately 34% to the pre-offer price.

All I can say is, it has been an honour to be part-owner (shareholder) of this great company – Thank you Aram and his team. I will be selling part of my holding this tax year (to spread the capital gain over two tax years) and wait for the cash offer to come through in 2025 for the remainder.

March 2024 – End of Month Update

More Happy Days in the stock market. As the troubled world marches on, all Slack Investor followed markets rose this month. The ASX 200 up 2.6%, the FTSE 100 up 4.2%, and the S&P 500 up 3.1%,

Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

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.

2023 – Hope You Were Strapped In … and January 2024 – End of Month Update

Slack Investor usually just assesses stock market returns at the end of the financial year. However, calendar year 2023 was some ride.

The 2023 ASX 200 Chart

For the 2023 calendar year, the ASX 200 Index started at 7020, and ended up at 7590 – a 12-mth increase of about 8% – but, on the way, it fell to a year low of 6751 – a temporary fall of 3.8%.

Of course, If you did not look at the charts daily, these fluctuations would mean nothing. If you ony looked at the Australian Index at yearly intervals, 2023 would probably bring some joy. As well as the overall 8% gain for the year, when you include dividends, the ASX 200 Index total return for calendar year 2023 was 12.2%. The ASX “All Ordinaries” Index (Tracking Australia’s largest 500 listed companies) had a total return of 13.0%.

Slack Investor will again emphasize the joy of investing and mostly doing nothing – and trying to focus on longer term returns. One of the best summary charts I have seen for a while that shows calendar year returns has just been updated and published by Ashley Owen. Ashley uses the “All Ordinaries” Index rather than the ASX 200 Index- as there is more historical data available for comparison.

Total ASX “All Ordinaries” calendar year returns – with the the last 5 years highlighted – From Ashley Owen – Owen Analytics – (Click to Enlarge)

The first thing that jumps out in this chart is the amount of “Green” positive years vs the “Red” negative years. In 78% of calendar years, ASX Index returns are positive. The overall average total return since 1900 for the Australian “All Ordinaries” Index is 11.7%.

Inflation has been the topic of the day lately and Owen has kindly provided his calendar year chart in terms of Real Returns for the All Ordinaries Index – The total return minus the inflation rate (Consumer Price Index (CPI)). A certain amount of cash is worth holding to for liquidity – so that you can avoid selling stocks in a market downturn. Although cash can iron out some of the stock market fluctuations, being invested in cash is not a protection from inflation.

Total ASX “All Ordinaries” calendar year “Real” (minus inflation) returns – with the the last 5 years highlighted – From Ashley Owen – Owen Analytics – (Click to Enlarge)

Adjusted for cpi increases, the overall average “Real” total return since 1900 for the Australian “All Ordinaries” Index is 7.9%. Slack Investor is willing to put up with the volatility of share markets for an average “after inflation” return like this.

For financial independence and as a hedge against inflation, it is important to own growth assets – such as the Australian Share market. Sure, there will be the occasional negative annual returns ahead … but let’s not worry about this while the Australian stock market is rising. Long-term overall results are the important thing.

January 2024 – End of Month Update

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

After a big Christmas Rally, things have settled down a bit with modest gains for the ASX 200 (+1.2%) and the S&P 500(+1.6%). The FTSE 100 had a small fall ( -1.3%)

It was time to adjust the stop loss for the S&P 500 as the current value is over 15% greater than the stop loss. Slack Investor has long believed the US market is overvalued and, while enjoying the journey, is happy to have his stop loss a little tighter. It is difficult to do the adjustment on the monthly chart, so I had a look at the weekly chart for the S&P 500 below. I am looking for a dip in the chart that represents a “Higher low”. The new stop loss now stands at 4682 – only 3% below the current value.

Extract from the S&P 500 weekly chart – From Incrediblecharts.com

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

Looking Forward Looking Back … and November 2023 – End of Month Update

Usually not much of a country and Western Fan, but Slack Investor is quite taken with this video of Slim Dusty in his rendition of Looking Forward Looking Back – where two Australian Music Legends (Don Walker and Slim Dusty) combine to make this beautiful Australian song. Slim must have been about 73 when this song was recorded in the year 2000.

Making sense of what I’ve seen
All the love we’ve had between
You and I, along the track
Looking forward, looking back
Looking Forward Looking Back – Don Walker (composer) (1951 – ) & Slim Dusty (vocals) (1924 – 2003)

This song is bitter-sweet to me as it was played at a good friend’s funeral … and I always get a little sad .. but then, I think of the good times I shared with my friend. My friend was also a keen investor and, I’m sure he wouldn’t mind me using this song to launch this post. It is a song of reflection … with a reminder to look forward as well.

Slack Five-Year Individual Share Performance

Though Slack Investor reports on his results on a yearly basis, the annual Nuggets and Stinkers post is a constant reminder of how, in successive years, a company can be “a nugget” … or “a stinker”. The market will often go in trends of overvaluation followed by a period of undervaluation – and the true measure of how the stock has performed is lost in these constant tidal changes. For my purposes (Slack!), a 5-yr measure of performance is about right – as this allows for the true performance of a quality stock to shine through.

I trawled through the Slack Portfolio to find stocks that I had owned for 5 years. I was suprised to find that, of my current 22 individual stocks or ETF’s that I own, I had held only 5 of these for 5 years. This is not what I expected from a Slack Investor and I had to drill down into the portfolio to realize that I had given my portfolio a big shake-up about 4-5 years ago. I had retired, injected a large portion of my work super into my SMSF, and also sold a few stocks to make way for a house purchase.

The 5 stocks that I had 5-yr data on were Altium, Macquarie Group. REA Group, CSL and Codan. The 5-yr Internal Rate of Return (IRR) figures give an “average” annual return for the 5-yr period and include dividends as well as any stock price growth. The results below, for the five years up to 30/06/23, are from my financial software – the free “Sunset” international version of Microsoft Money Australian Version. There are IRR calculators and Compound Annual Growth Rate (CAGR) calculators also available online. I have also included the CAGR Total Return (TR) till 30/06/23 for each of the Slack followed markets (in bold) for reference.

Stock	Symbol	5-yr IRR
Altium Ltd	ALU	14.8
Macquarie Group Ltd	MQG	12.7
S&P500 (TR)		12.2
REA Group Ltd	REA	11.3
CSL Ltd	CSL	8.4
ASX200 (TR)		6.3
FTSE100 (TR)		3.8
Codan Ltd	CDA	3.3

Digesting the above table, Slack Investor is generally pleased with the annual IRR over 5 years of the majority of held stocks. The exception is Codan (CDA) which has had a roller coaster ride in the price charts (see below) – and underperformed the ASX 200 index over 5 years. This stock needs further evaluation to see if I should continue to hold it in the Slack Portfolio.

There are strange days
Full of change on the way
But we’ll be fine, unlike some
I’ll be leaning forward, to see what’s coming
Looking Forward Looking Back – Don Walker (composer) (1951 – ) & Slim Dusty (vocals) (1924 – 2003)

I go to Market Screener Financials page for Codan to quickly see that the income for CDA is projected to increase for the next few years and the company is in a solid financial position. The projected Return on Equity (ROE) remains above 15% and, despite the dramatic price fall during 2021/2022 over earnings downgrades, the companies price trend so far in 2023, has been positive. This holding is currently on “watch” – but I remain a holder of CDA for now.

5-yr Price Chart of Codan (CDA) – from Investing.com

November 2023 – End of Month Update

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

Due to a strong rebound this month Slack investor has cancelled his SELL Alert for the ASX200 that started at October 31 2023 due to a stop loss breach – and he now remains IN .

All Slack Investor overseas followed markets had a bumper month. The S&P 500 led the way with a massive rise of +8.9 %. More modest rises for the FTSE 100 +1.6% and the Australian stock market – the ASX 200 +4.5%.

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