Knowledge, Luck and Timing

I really don’t know where I stand on this stock anymore.

In fairness the MFG board and management are in an impossible situation. They have to start outperforming the market to stem the FUM outflows yet they can’t really afford to take the sort of punts required to outperform the market.

Below is the current mix of top stocks in the Global Fund and below that the mix that was held in mid 2021.





The current mix is a portfolio of stocks that is all about steadying the ship…..but in doing so it’s very much vanilla. It won’t attract inflows and it doesn’t justify premium fees.

The top 10 stocks in the Magellan Global Fund at June 2021 however were a disastrous mix that precipitated the MFG tailspin.

Yet let’s imagine a new fund manager arrived on the scene at the beginning of this year ……let’s call him Hamish Friendless…..and he was preaching that 2023 would be the year of the tech recovery and his fund was very much weighted in that direction…..and at the start of this month he proposed buying up that very same mid 2021 mix. Here’s how he’d be going against the current vanilla portfolio :



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The actual current portfolio has done ok in a vanilla sort of way (ie somewhere in line with the general rise in the market) but it has been completely outperformed by that old mix…..who would’ve thought - Hamish Friendless’s fund might even be starting to attract inflows right about now !

Success in this game is as much about luck and timing as it is about market knowledge (granted it’s only 3 weeks in and it could all unravel)

One final point. I watch a lot of CNN finance out of the US and almost to a person the ‘experts’ were talking a shaky first half in 2023 followed by an improving second half. No one forecast a start like we’re having. Even when it comes to the experts, their predictions and forecasts are nothing more than educated guesses.

Best wishes to all with your luck and timing in 2023.