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A presentation by a Melb PC member on a successful Investment Strategy which has been in place for the last 10 years was the highlight of the meeting. Included in the presentation was advice and techniques that he uses to manage his investments and a summary of the results he has obtained. He concluded the presentation with a summary of stocks for consideration at the current time. Following the presentation, the meeting focused on factors and stocks which may be considered for longer term investing.
The theme for the meeting was to allow discussion of means of identification of potential star stocks. Within the investment patterns of members, a star stock definition is one that has the potential for a significant return over a significant period of time. The emphasis was on the significant return. Within this definition, a potential star stock was one which has already yielded significant returns and is expected to continue to do so. The discussion focused upon factors that allow expectations of “star stock” returns into the future.
The ASX February Reporting Season has come and gone. The yardstick is increasingly whether companies meet market expectations rather than improving financial performance. Company reports which beat market expectations may lead to double digit per cent jumps on the day of the report and those that do not to double digit falls. Even companies with improved financial performance not meeting market expectations generally fall on the day of the report. With a small time elapsing since most reports, the meeting considered companies with share prices which have both jumped and fallen by double digit per cent amounts on the day of the report in relation to subsequent price movements. These price movements were also be discussed in relation to the longer term price trends of the companies.
Long term trends in many ASX stock and sectors were broken with a distinct downturn in the period October to December 2018. There has been a general reversal of this trend in the period January to February. This pattern was reflected in many international stock markets, especially that in the USA. The impact of the Australia Financial Service Royal Commission, which recently reported was discussed. Internationally the trade war between the USA and China which is still on-going is considered to have a significant impact. The impact of these factors was considered. ASX stocks which may be considered to be still in a longer term trend were considered along with those showing a strong up-trend in the January February 2019 period.