Ann: Funds Under Management - September, page-7

Really Eric?

I have owned and accumulated a very very substantial amount in the retail Platinum International Fund.using dollar cost averaging for over 20 years.

Of course there have been periods of underperformance just ask Magellan investors. However, over my investment period and strategy the return has been well over 800% on the amount invested with a minimum of effort and the comfort of international diversification.

l have done the hard work as an individual investor and achieved better returns by taking exceedingly higher risks, as well as losing 100% of capital invested where the investment thesis did not play out.

l know know Andrew Clifford has been under intense scrutiny since Kerr departed. I don't think it has helped Fund performance but it certainly hasn't hurt. With average net compound returns around 10% for 10 years straight, PIF has not matched MSCI which largely explains persistrnt fund outflows.

I believe in active management as it incorporates human judgement. Passive investing is purely momentum and wht of money driven.

With every market grossly over valued since the GFC based on extremely abnormal monetary policy, it was normal that active managers saw risk. But reducing risk has resulted in in investors paying fees for under performance. God forbid risk mitigation should come for free.

Over the next 3 years or so markets are likely to be savaged and index funds will bear the brunt of it.

l for one have doubled my investment over the last month in PTM. A perfect storm of bad news impacting a solid, debt free company is an investor's special.

That value driven management have embarked on a 10% buy back vindicates that view.

l would happily forego a tear of dividends to enjoy the price fall below $3 whilst the number of shares contracts and their loyal fund investors continue to enjoy risk managed outperformance. A classic coiled spring.

l don't expect we will get that opportunity, though l am ready for it.

l don't eliminate a MBO if the price sinks much further but that will not stop irrational criticism and behaviour from the market.

I am aware of the full history of the long downward trend in FUM. That is not a death roll it is a market cycle. There was a time when the "old economy" was scorned only to be resurrected 5 years later.

Maybe l am just too old and seen to many cycles and opportunities, learning, making mistakes but eventually profiting from every one.

For my money, a dividend means nothing, a profitable debt free business means everything.

GLTASH