Slack Investor is delighted to report that the ‘Wedgie’ has returned. The ‘Wedgie’ is a chart pattern that is less entertainingly called the ‘breaking a long-term downtrendline’. Looking for chart patterns can be confusing and belongs to the ‘dark art’ world of technical analysis. However, Slack Investor has some faith in the ‘Wedgie’. The chart pattern was first discussed by Slack Investor back in 2019 and he has done a small-scale analysis on whether it works 1-yr on. His conclusion, yes, mostly!
The top of the wedge downtrend line should be drawn for a period of at least 3 months (preferably 6 months) and connect at least 2 (and preferably 3) descending high points.– Slack Investor
Telix Pharma (TLX.AX) weekly chart showing the ‘Wedgie’ in blue and the price bars breaking out of the ‘Wedgie’ – incrediblecharts.com
There is a reason why I think it works. Firstly, there is a long-term decline in price, usually because of some bad news in reporting season. Then there comes a point when the market starts thinking that things have gone too far … the stock is relatively cheap … and people start buying the stock again. Slack Investor likes owning stocks that other people want. The price has a real reason to increase.
It brings some pain to Slack Investor to revisit the chart above as Telix Pharmaceuticals (TLX.AX) has been one of his biggest losers this financial year. He should have got out much sooner! But, to Slack Investor’s credit, he will try to judge this case without hard feelings – as the breakout from the downtrend looks to be quite strong.
Naturally, having been burnt once on TLX, he revisits the important numbers from Market Screener Finance. There are a number of traits that Slack Investor looks for before investing in a company. A good summary can be found here with the definitions of the Slack Factor and Slack Ratio. As a rule of thumb, Slack Investor likes the Slack Ratio to be greater than 0.7 and the Slack Factor to be greater than 10. For TLX, the Slack Ratio is below this – but I have bought a parcel of shares anyway on account of the strong projected annual growth (greater than 100% p.a.). Note: for all his Slack Factor calculations he limits the projected growth to 30% p.a. to try to avoid the far too heroic forecasts.
Due to past disapointments, he will be keeping a close eye on TLX but the recent regulatory hurdles for their products seem to have been mostly cleared. Slack Investor is heartened by the recently announced collaboration deal with Regeneron Pharmaceuticals Inc (NASDAQ: REGN).
The ‘Wedgie’ below for NDQ says it was time for Slack Investor to also enter the NASDAQ 100 again via the Betashares Nasdaq 100 ETF (NDQ.AX). I like being involved with the 100 largest tech companies in the US. This index really aligns with innovation and growth. There are similar ‘Wedgie’ outbreaks on some of Slack Investor favourite companies – PME and TNE.
Betashares Nasdaq 100 ETF (NDQ.AX) weekly chart showing the ‘Wedgie’ in blue and the price bars breaking out of the ‘Wedgie’ – incrediblecharts.com
Sitting
Similar patterns are beginning to show on my weekly review of the charts of stocks in the Slack Portfolio. Slack Investor also looks at stocks that he would like in the portfolio that may have got caught in a downtrend – and have recently shown signs of positive momentum. Of course, with the ‘Orange Buffoon’ still in a powerful position – anything could happen! But this won’t stop me from investing in good companies.
CAR Group (CAR.AX) weekly chart showing the ‘Wedgie’ in blue and the price bars hopefully breaking out of the ‘Wedgie’ soon. – incrediblecharts.com
Slack Investor is patiently sitting with a bit of cash and hopes to take advantage of any further ‘Wedgie’ opportunities that present themselves. In addition to CAR, the ‘Wedgie’ is in its pre-breakout form for companies with prospects such as WTC, GMG, REA, SNL and XRO.
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).
Slack Investor likes to keep up with investor news and he was a bit slow with the emergence of the Claude Cowork platform. Claude Cowork is built by Anthropic as a way to bring the command line Claude Code tool to non-technical users. Claude Cowork is available as a desktop application for MacOS and Windows. This is just another way to help take AI into the workplace. Amazingly, the entire Claude Cowork feature was built in approximately ten days using Claude Code itself.
A legal firm conducted a test that asked Claude Cowork to draft a contract and critically read another legal contract to point out concerning clauses for a risk-averse client. The task was completed in seconds and was ‘Bang On’.
“I thought it was great. If I got that from a junior lawyer after they worked on that for hours I would be pleased. … It was clear, it was concise, it accurately reflected the commercial context – Sarah Pool, Lawyer and founder of EstateXchange
Luke Hopewell is a tech contributor to the Switzer report and has held editorial roles with Twitter and Gizmodo. He obviously has good tech skills … and he accepted the challenge and offered the task to Claude Cowork.
The article is well worth the read and he asked Claude if it could replicate the Xero software with Claude Code. It didn’t take Claude long to assemble 21 different pieces of financial software to mimic the Xero suite – at zero cost! This compares with Xero packages for small business which start at $75 per month.
Mr Hopewell admits that the Claude derived suite was clunky and ‘a pain to try and get running‘. This Claude assembled software is unlikely to satisfy a business owner who wants a seamless well designed product. However for something conjured up in a few minutes, Claude’s work is pretty impressive – and pretty cheap!
Claude and other AI developments have spooked the tech stocks
Claude Cowork and other AI-sourced jitters have set off a big slide in Healthcare and Software as a Service (SaaS) companies. Since August 2025, there have been falls of between 25% and 50% for some ASX stocks. Sadly for Slack Investor, these are just the type of profitable, low-overhead businesses that he likes and owns. He has been selling some of his tech stocks (but not enough!) whose chart patterns resemble ‘falling knives‘ – hoping to get back in when things stabilize.
As impressive as Claude is, there are a few hardy souls who maintain the recent sell-off of the SaaS stocks is a bit overdone. Slack Investor can comprehend that this type of intuitive AI software represents a massive change to the way we work. Businesses in many fields (legal, administrative, graphic design, financial, etc.) will have their earnings model challenged. However, he thinks that despite the industry-wide downturn, there should be a move towards quality businesses with platforms that are essential and AI-resilient.
This fear has been applied largely indiscriminately, with little consideration given to whether software platforms are embedded in core workflows with control of data and distribution – Jai Mirchandani – ELM Responsible Investments
At the recent ProMedicus AGM, the CEO Dr Sam Hupert was asked whether their main software tool Visage was under threat from AI if anyone will be able to use AI tools to write industry grade software in a fraction of the time.
This, in our view, is an overly simplistic generalisation, one that certainly doesn’t apply to us. Visage 7 was built from the ground up using our own proprietary technology. It is not based on some readily available tool kit or platform. It is a very specialised, highly technical, patented suite of software that incorporates more than 30 years of domain knowledge; it is not a product that can be readily replicated with or without AI. We have not left a roadmap for others to follow. – ProMedicus CEO, Dr Sam Hupert
Slack Investor is still a bit stunned by this rapid re-rating of all software related stocks. In the tech sector, the market is obviously not willing to pay the high P/E multiples on the promise of future earnings.
This may be wishful thinking, but Slack investor thinks Dr Hupert is right … and this AI scare for complex software products that are embedded in their clients workflow has gone way too far. Good companies will develop their own AI tools to enhance their software. It is time to focus on only high quality SaaS companies with a moat that Claude-type things will have difficulty in crossing. Time to get off the couch.
Slack Investor is a simple man and he likes things that are not too complicated. He introduced the Slack Factor 9 months ago – a way to condense a lot of information down to just one number. The things that Slack Investor likes go on the top line and the things that he doesn’t like to be a high value – go on the bottom line.
ROE is the forecast ROE (ROE 2028), EPSG is the forecast EPSG for the next three years (EPSG AV – Max 30) and, PE Ratio is the forecast PE Ratio (PE 2028).
Return on Equity (ROE) is a great measure of how profitable a company is and Earnings per Share Growth (EPSG) is a measure of growth – both of these are desirable company traits for Slack Investor.
Price/Earnings (PE) Ratio is a way of looking at how expensive a share is according to its earnings. This is a ratio that Slack Investor likes to be below 40 or 50 (ideally even lower!) when forecast for the next 2 to 3 years.
The Slack Factor has flaws
Evidence of this is the relatively poor performance of the Slack Fund in the last 6 months compared to benchmarks. The problem with the Slack Factor is that it gives prominence to a stock’s growth forecast. Slack Investor has found that many high Slack Factor stocks are found in the medical innovation sector where there are also very high risks – and if growth forecasts are not met, this can cause a massive slide in share price.
For example, back in August 2025, Telix Pharmaceuticals (TLX) had a very high Slack Factor. Slack Investor had thought that by limiting the 3-yr growth forecast to 30 might protect him from any outlandish growth forecasts. The raw figures for TLX EPS growth for the next 3-yr were 26%(+1yr), 97%(+2yr) and 92%(+3yr). On this high growth prediction, he bought a decent parcel of this stock back in March 2025 – based upon its high Slack Factor.
Slack Investor recognizes his imperfections, but he always looks for ways that he can improve. To avoid being pushed into stocks that have extremely high growth forecasts that may fail to materialise, he has decided to take growth out of the Slack sorting equation … but putting the important growth property into the pre-requisites beforehe will invest.
The Slack investor pre-requisites or, ‘things he likes’ before investing are mostly found on the Market Screener Financials page:
Profit – An established record of profit or a trend towards profit in the next year or so
Increasing Revenue – An established record of increasing revenue and forecast revenue
High Return on Equity – A forecast ROE of greater than 15%
Maneagable debt – Slack Investor loves companies that fund their own expansion but debt is sometimes necessary to grow
Growth – A forecast Earnings per Share Growth (EPSG) of greater than 10%
Price Maker – Ideally the company will have a unique product or it is ‘best in class’ – a business with a ‘moat’
Introducing the Slack Ratio
This is just a simplification of the Slack Factor (without the EPS growth). Slack Investor likes a high Return on Equity (ROE). A high growth company may also have a high PE ratio because the price will rise to account for future earnings growth. By expressing these two factors as a ratio – hopefully profitable companies that are not too expensive will shine. If the Slack Ratio is above 0.7 – Slack Investor is more likely to buy.
Slack Investor has tabled the shares in the Slack Portfolio (in Bold type) and a grab bag of other stocks plus a few new ideas from Livewire growth stocks. I have sorted the table by decreasing Slack Ratio.
Over the next six months, Slack Investor will have a minor tinker with the Slack Portfolio. He will be more likely to buy a company that is higher on the list. If there are insufficient funds for a purchase, he will probably sell a company that is lower on the list. This is not advice, just an insight into Slack Investor’s financial journey.
Slack Investor has a little bit of spare cash and his Macquarie bank savings accounts are offering a risk free (but taxed!) interest rate of 4.25%. Not a bad place to park your money temporarily. However, even in this risky environment, he would rather have his money working in a profitable company. He is continually hunting for opportunities.
Last September, he read about a profitable business in a Livewire discussion with Martin Hickson and Steve Johnson. They mentioned SKS Technologies a company that is gaining contracts in building data centres and other types of electrical and audio visual fit out work. Slack Investor put SKS on his watch list and did a bit of research. This is not advice, just a little journey into Slack Investor’s small mind and a case study on how he finds companies to invest in. This type of information gathering is something all investors should try to do before they press the ‘BUY’ button. Extra research offers no guarantee of success, but Slack Investor only aims for ‘mostly right’.
SKS Technologies Group (SKS)
My first port of call is always the Market Screener Finance page to see if this idea is worth exploring further. Their income, projected income growth and lack of debt looked fine.
Next he looked at the projected numbers on the business health and relative price. Projected Price to Earnings ratio (PE) was refreshingly low for a growing company. Return on Equity (ROE) was high indicating a very profitable business. Because of some recent successful tenders, Earnings Per Share (EPS) Growth was also very high. These type of numbers gave an extremely large Slack Factor. Was this too good? Is the recent growth inflating the numbers too much?
Slack Investor was recently burned by a few recent purchases in the pharmaceutical sector that had high projected growth figures and a subsequently high Slack Factor score. The stock price came crashing down when there were a few regulatory problems and doubt on the future growth.
Over 70% of their order book now comes from data centres, and that’s up from zero four years ago … At the moment, the company has an order book of $200 million, a tender pipeline of $500 million – Martin Hickson, 1851 Capital
SKS is an unusual type of business for Slack Investor to be interested in. They submit tenders for their services and their income depends on whether their tenders are accepted – there is always some uncertainty about the future income flow of these type of businesses. However, things are running hot at the moment with a just completed acquisition of a similar business and, they have just announced a new $130m project.
I don’t see SKS as a long-term ‘set and forget’ holding as the tender process is competitive and results (income) are not assured. But for now, data centres are the big thing and SKS certainly have the established expertise and a growing tender pipeline. They also have won contracts with Defence and other government work. I will hold my small parcel (0.5% of Slack Investment Portfolio) and, with the lessons learned from recent pharma investments, watch for the first earnings downgrade – then exit with some dignity (hopefully).
Sometimes, the numbers (fundamentals) on the business can be really good and the chart tells a different story. Slack Investor kept looking at the charts, weekend after weekend in October. SKS was caught up with a general bad feeling on the AI and data centre companies – with a subsequent price slide. The market thought that these sectors were ‘overcooked’ – and prices were falling. This changed on Monday 24 November 2025 when there was a 10% price rise after a positive AGM presentation. Somebody was buying. Slack Investor got onboard with this momentum at $3.70.
November 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 (+0.1%) and the FTSE 100 (+0.0%) had a volatile but eventually flat month. For the ASX 200, a bit of a slide downwards (-3.0%). The UK Index (FTSE 100) needed its stop loss moving upwards as prices were 15% above the previous value. The new UK stop loss was moved up to the new ‘higher low’ of 9276.
All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).
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
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 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).
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.
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.
‘Do not judge me by my success, judge me by how many times I fell down and got back up again.’
Nelson Mandela
Slack Investor is obviously not in Nelson Mandela’s league … but I do admire President Mandela’s resilience. Learning to live with stock prices that go down is an important part of successful investing.
This post is a bit of an annual ‘poke around’ in the portfolio. 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. 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 extracted the predicted 2027 Price/Earnings (PE) Ratio and Return on Equity (ROE) and average forecast revenue growth for the financial years 2025, 2026 and 2027. He then condensed all this information into one number, the Slack Factor, to make things easy for Slack Investor’s limited brain. The Slack Factor is still ‘experimental’ but, increasingly, Slack Investor is using it to differentiate between stocks – the higher Slack Factor, the better.
Slack Investor Stinkers – FY 2025
Financial year 2025 was big on volatility. Despite this, Slack Investor’s followed markets all ended up with solid total returns when dividends are taken into account. Australia +9.0%, the UK +10.8%, and the US +15.2%. Slack Investor knows that stinkers are a part of the game, even in good years – and managed to attach himself to a few stinkers along the way.
Webjet (WEB + WJL) -46%
This is a complicated story as Slack Investor bought into Webjet (WEB) which then split into two entities. The ‘sizzle’ was that Web Travel Group contained a wholesale booking business that was growing fast. Suffice to say, that sales didn’t meet expectations and both companies sank. He then lost faith and sold both. When it comes to the travel business, Slack Investor wants to be only a consumer as there seems too much competition in this field.
CSL (CSL) -18%
(CSL – Forecast 2027: PE 22, ROE 18%, Av. Growth 14%, Slack Factor 12). CSL is a big holding for Slack Investor (10% of portfolio) and, for the past 6 years, has been rangebound between $230 and $330. It has not had the chart of a growth stock but, they have continued to spend on Research & Product Development at levels around 10% of revenue. This should be a good thing for future earnings. The eternal optimist in me is thinking … this is the year! But, I also thought this last year … and the year before … there is a strong chart signal this year though – the powerful ‘wedgie’! If it wasn’t already such a large part of my portfolio, now would be a good time to buy.
Botanix Pharma (BOT) -12%
Slack Investor entered the murky and volatile world of Biotechs with a small stake (0.2% of portfolio) in Botanix Pharmaceuticals. So far, not very good! It seems there is a lot that can go wrong in this field for startups.
Slack Investor also went backwards with his holdings in Dicker Data (DDR), GlobalX ACDC ETF, and Cochlear (COH) – all now sold. Wisetech (WTC) and Alphabet (GOOGL) were also on the slide but, thankfully now recovering.
Slack Investor Nuggets – FY 2025
Nuggets are a blessing in any portfolio – this Financial Year, there were some bewdies. Slack Investor continues to invest in high Return on Equity (ROE) companies with a track record of increasing earnings. If expectations are met, companies with these qualities sometimes behave as ‘golden nuggets’.
TechnologyOne (TNE) +124%
(TNE – Forecast 2027: PE 64, ROE 34%, Av. Growth 20%, Slack Factor 11). Technology One is a great Australian success story. It sells software as a service to other companies internationally. I first came across this company through Rudi Filapek-Vandyck – who included TNE as one of his ‘All Weather’ stocks. Glad to be an owner of TNE, as well as owning many other of Rudi’s All Weathers. Very highly valued (2027 PE 64) now though!
Pro Medicus (PME) +104%
(PME – Forecast 2027: PE 154, ROE 53%, Av. Growth 38%, Slack Factor 13). Pro Medicus is a developer and supplier of healthcare imaging software and services to hospitals and diagnostic imaging groups. The Price to Earnings ratio is frighteningly high (2027 PE 154) – but Slack Investor is enjoying the journey.
Codan (CDA) +75%
(CDA – Forecast 2027: PE 27, ROE 23%, Av. Growth 20%, Slack Factor 17). Codan is a technology company that specializes in communications and metal detecting. It is one of Slack Investor’s core holdings. CDA has had a checkered past – a nugget in FY 2021 (+161%), a stinker in FY 2022 (-58%), a nugget in 2024 (+54%), and again, a nugget (+75%) in 2025. What has kept me in the stock was its low debt, (generally) increasing earnings, and the high profitability (ROE 23%).
Supply Network (SNL) +70%
(SNL – Forecast 2027: PE 30, ROE 38%, Av. Growth 18%, Slack Factor 23). Supply Network are a bus and truck parts distribution company using the Multispares brand. Although there are competitors in the big-vehicle parts business, what sets SNL apart from the rest is their great management and strict adherence to processes and efficiency. They have consistently held a profitability advantage over their rivals. They have maintained a high Return on Equity (ROE) of 36% even as the company has expanded and grown in price. What a well-run company!
Megaport (MP1) +52%
(MP1 – Forecast 2027: PE 74, ROE 18%, Av. Growth 55%, Slack Factor 13). Megaport provides software that helps other companies tocreate and manage secure network connections between offices and the cloud. They must be doing something right as their average predicted revenue growth for the next 3 years is 55%! I’m in, but this is one of Slack Investor’s more risky buys!
Nick Scali (NCK) +43%
(NCK– Forecast 2027: PE 18, ROE 28%, Av. Growth 14%, Slack Factor 22). Nick Scali is well known in Australia for importing and retailing furniture. They have done an excellent job of expanding their business in Australia due to their fine management skills. They expanded into the UK in 2024 and have been quietly, and efficiently, getting on with the job. Future profitability remains good (ROE 28%), and PE not too high.
Some very honourable mentions to some top results this year that didn’t quite make the nuggets. BetaShares Global Cybersecurity ETF (HACK)+38%; Resmed Technologies (RMD.AX)+38%; XRF Scientific(XRF)+37%; Wesfarmers(WES)+35%; Coles (COL) +29% and REA Group (REA) +24%.
Slack Investor Investments performance – FY 2025
After a bonanza FY 2024, this was a wild ‘Trump affected’ FY 2025. In the Australian superannuation scene, the median growth fund (61 to 80% in growth assets) did manage to return+10.5% in FY 2025.
Slack investor has just two piles of funds for his retirement – the Stable Income pile (Cash and Conservative) and an Investments Pile. The Stable income represents around 25% of total retirement funds. I used to rebalance each of my piles after every year, but the stable pile now has enough in it that, together with dividends from my investments, could supply me with enough living expenses to last out an extended (3-yr) bad run of the stock markets. Slack Investor would not be forced to sell stocks. The stable pile has again produced a moderate return of nearly 5% (inflation plus ~ 2.5%).
The Investments Portfolio rise nicely with preliminary figures showing an 18.1% rise at June 30, 2025. A good result for Slack Investor in his growth investments pile. Including the relatively low returns from my stable income pile (4.7%), overall, the weighted return on all my retirement funds grew 14.6%.
For the most part, Slack Investor concentrates his annual performance details for the much more exciting Investments pile.
For Slack Investor, the 5-yr performance is a more useful way of measuring – as it takes out the fluctuations of yearly returns. At the end of FY 2025, the Slack Investments Portfolio has a compounding 5-yr annual return of around 15%. Full results and benchmarks expected next post.
July 2025 – end of Month Update
The new financial year has started off positively for Slack Investor markets. The ASX 200 + 2.3%; FTSE 100 +4.2%; and S&P 500 +2.2%. He remains IN for all index positions.
I have taken the opportunity to adjust upwards the stop losses on all followed index markets. The prices had crept up to around 15% above their old stop losses. See Index pages for details.
All Index pages (ASX Index, UK Index, US Index) and charts have been updated to reflect the monthly changes.
Thank you Perplexity AI for creating this engrossing image.
Amongst the usual Trump horror stories, a news item emerged from the US that grabbed Slack Investor’s eye.
NVIDIA made history by becoming the world’s first publicly traded company to surpass a $4 trillion market capitalization. – USA Today
This made me wonder about the other US Companies that are now really big and worth a lot of money. It is no surprise that the top 5 are all tech companies.
Company
Market Cap (USD)
NVIDIA
$4.00 trillion
Microsoft
$3.75 trillion
Apple
$3.20 trillion
Amazon
$2.38 trillion
Alphabet
$2.18 trillion
NVIDIA has only been around since 1993 and Slack Investor can remember buying their top range Graphic Processing Units (GPU) when he was looking to improve his home PC. The company has really moved on and started its growth spurt when they decided to design chips and software platforms specifically for Artificial Intelligence (AI). NVIDIA chips and networks are used extensively for AI development and training – and the world is crying out for these products to deal with complex AI workloads.
According to the Shiller PE , Buffet Indicator, and a range of other measures, the US market is overvalued. Slack investor has even considered deploying his US funds elsewhere. But, amongst the vast array of US choice, there are still companies that will do well – whatever the conditions. Slack Investor has almost 14% of his portfolio in Alphabet shares and, this might be a case of too many eggs in the one basket.
Alphabet is a great company and has done well for Slack Investor but recent developments make him think that their dominance may be slipping as it faces new competitors.
Also, there are a few annoying things that are starting to bother Slack Investor about some Alphabet products. This is tricky … as a share owner, I like my companies to make money but, it is a balance – you don’t want to kill the golden goose!
Youtube – what a killer application! However, the amount of ads starting to creep into Youtube videos has started to destroy the experience for Slack Investor.
Google Search – has long been my go to search engine, but the dominance of sponsored links and cluttered feel has made Slack Investor start to look at other search providers. The recent prominence of the Google search AI summary is a good step to help compete with the alternatives.
Alphabet is a conglomerate of many great businesses and my whinging about a couple of their products is just nit-picking – thank you Spinal Tap! However, Google search and Youtube ads are important to Alphabet and contribute 67% of total revenue (2024) – both of these businesses are under competitive pressure.
Perplexity
Thanks to a suggestion by Trevor, a keen reader of the blog, Slack Investor has been exploring a new AI based search engine – Perplexity. He is liking what he is seeing so far and using it more and more to search the web. It has a refreshingly simple interface and can be used via an app or a web page (https://www.perplexity.ai).
So far, it has been very useful for even complex tasks. Yesterday, I asked Perplexity to find me a ‘package holiday for Australian travellers that includes 3 nights in Bangkok and 4 nights at a beach resort’ – the results were on point! Further, NVIDIA is backing Perplexity and has just launched an AI-powered browser to challenge Google Chrome.
Time to take a look at this NVIDIA company in a Slack way.
NVIDIA (NVDA.NASDAQ) vs Alphabet (GOOGL.NASDAQ)
Both are big growing tech companies in different parts of the industry. It’s too hard for Slack Investor to look at everything so he will just condense it down to numbers that he can understand. The excellent finance resource Market Screener was used to get the statistics. Where PE (2027/8) is the predicted Price Earnings ratio for 2027/8, ROE is the predicted Return on Equity for 2027, EPS Growth (av) is the average of projected earnings annual growth 2025-2027, and the Slack Factor combines all of these metrics into one number – the higher number the better!
Name
Symbol
PE (2027/8)
ROE (2027)
EPS GROWTH (AV)
SLACK FACTOR
NVIDEA Corp (US)
NVDA
26.3
57
29
62
Alphabet (US)
GOOGL
15.2
26
13
23
Although Alphabet is still projected to be a growing company, it seems that the growth may be slowing. NVIDIA is currently in the spectacular growth stage and Slack Investor wants to be part of it.
It is not cheap (PE 2025 = 53; Forecast PE 2028 = 26 ) … but great companies seldom are. After some compulsory Tour de France viewing, I stayed up late last night to access the US markets to sell some GOOGL and buy NVDA. After the NVDA purchase, respectively, they are now 5% and 9% of my investment portfolio.
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.
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 lowSlack Factor and, a bit of buying on those with a highSlack 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.
Name
Symbol
PE (2027)
ROE (2027)
EPS GROWTH (3-YR AV)
SLACK FACTOR
Telix Pharma
TLX
23
27
50
59
Supply Network
SNL
31
38
18
22
Codan
CDA
22
23
20
21
Megaport
MP1
58
18
64
20
Pro Medicus
PME
130
53
36
15
XRF Scientific
XRF
17
18
13
14
CSL
CSL
19
18
14
14
Cochlear
COH
34
25
13
9
Macquarie Group
MQG
17
12
9
6
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 metricsusing 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.
