Wednesday, February 10, 2010

Investment Markets - what to look for in 2010

Willliam Tomac Global Ventures International - speaking at the GENXT Roadshow – AFA Conference 10 Feb 10

GVI invests in quality intnl companies
colgate – good branding – endorsed by dentists, 75% revenue in emerging markets
Telefonica (Spain),
Exxon, Shell

What to look for in a Company

n• Looks to buy good quality businesses cheaply
• Either 1,2 or 3 in space and difficult to displace
• Transparent
• Good Point of Difference
• Regular and Increasing Dividends to Shareholders – generally outperform companies with low dividend yields re growth.

More than half of GVI’s holdings will increase dividends in 2009 - At the time of the last presentation on 13th August, some 51 out of 66 of GVI’s holdings had reported their results and of these 47 had delivered results that either met or exceeded analyst expectations. More significantly, 56% of GVI’s holdings are increasing their dividends for 2009. While another 39% have indicated that they will maintain their dividends for the year, with only 5% expected to cut their dividends. Those expected to cut their dividends are some of GVI’s more cyclical holdings, however their balance sheets remain strong and the quality of their businesses are high.

• Strong and Lazy Balance Sheets are good!!
• Grow earnings and Dividends over time
• Good Margins
• EBIT has consistent growth
• Strong Brand

Where to in 10 years?

Risky stocks will get nailed – go for quality and sustainability – with focus on emerging markets.

believes there will be a correction - probably won’t go to march 09 levels.. .but growth wont be like it was. upturn was emotion based not fundamentals based.

Inflation Expectations - means that bonds will look attractive -

Aus residential property most expensive - is it sustainable?

Commercial real estate in Aus - white elephant.

M&A will grow into the future . Large companies with strong management will be acquiring distressed businesses.
This happens typically after a recession where the shit is weeded out of the system.

Emerging and Developing Nations will play a key role over next 10 years.
Looks at Demographics, Infrastructure

Interesting change over the years… before Stocks were held for years… now average stock held for 7 months.

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