With our Vistafolio business, we run wholesale managed accounts. Most of our clients seem happy, especially given the strong returns since the Covid-19 recovery. This did present many opportunities for us.
But, from time to time, we get more ornery clients.
‘Why did you buy this?’
‘Why did you hold this for so long?’
And so on.
Many fund managers get annoyed by this.
‘Why are they questioning our strategy?’ they may ask. ‘A strategy we spend our days, nights, and entire experience researching and perfecting to try and make them money!’
In actual fact, it is these questions that help a good manager perfect their strategy. No investor is going to get it right all the time. No research is going to cover every single possibility.
Hence, the best way for you to learn and develop your craft is to sometimes be wrong. And be open and willing to explore where you may be wrong. Then adapt your strategy.
Generally speaking, this is why we like property businesses. The downside can be protected since, if push comes to shove, the companies still have real property they can liquidate. And usually at reasonable gearing that will see lending covered.
Now, two of our larger property picks are involved in the business of shopping malls.
Both companies are continuing to maintain high occupancy.
Both companies are still materially cheap based on their price-to-tangible book ratios of 0.5 and 0.4 respectively.
These are based on valuations of the underlying property assets, usually under EPRA (European Public Real Estate Association) methods.
Here’s why we’re seeing opportunity for a mix of value, income, and post-pandemic potential in these businesses…
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