Yes, that last presenter is a funny guy. By dint of being a...

Yes, that last presenter is a funny guy.

By dint of being a long-time investor of some of his flagship funds, I have had occasion to meet him in person and one of the things he once said to me many years ago (which, truth be told, I sometimes tend to quote as if it is my own unique insight), is:

"Pessimists get to sound smart; optimists get to make money."


Mind you, he's clearly talking to his book, bless him!

Because one of the flagship funds he manages, the Regal Absolute Return Fund, in which I have been an investor for some time, is geared to buggery, with 370% of portfolio NAV being long, versus 175% short, for Net Gearing of 195%! (At times that Net Gearing figure gets up as high as 300%!)



When you've got that sort of leverage, you can't but generate very significant investment returns when markets are rising.

But when stocks fall, then watch out(!) because the fund draw-down becomes acute.

Maximum drawdown for the fund was 69%, which occurred at the peak of the GFC (!), but the fund then returned 200% and 100% in the two years that followed the GFC when markets rebounded.

So not for the faint-hearted... and certainly not for the smart-sounding pessimists out there.

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