Knowledge is power - my personal research into All-Weather Stocks

Our final presenter this evening, also our guest speaker, is Rudy Filippek Van Dyke, founder and editor at F&A Arena.

For those who don't know, F&A Arena is a supplier of financial, business and economic news, analysis and data services.

Rudy is the author of two books, Change Investing in a Low Growth World.

and who is afraid of the big bad bear.

And he regularly appears as a stock market commentator on Auspice TV, Livewire and Switzer TV.

His presentation today is Knowledge is Power, my personal research into all weather stocks.

Welcome, Rudi.

It is a pleasure to be here, Angelina.

I guess this is where I start.

This might sound really weird today, but when we started two decades ago, more than two decades ago, the whole expert information, what stockbrokers were doing, fund managers, et cetera, about the share market and individual stocks, that was actually very scattered around in Australia and it wasn't readily available for investors.

So we thought we just jump into that gap and we fill it in and we thought,

we were providing transparency in a market that had none at the time.

Now over time, I've come to realise that it's not so much about transparency, although of course that's what we do as well, but it's more about knowledge and insights.

And for those who are not familiar with F&R, what we do is we essentially collate the information from the major stockbrokers in the country.

We put that together, we package it up, we dissect it, we make calculations out of it, we take snippets from it.

And essentially, we make that available to investors in Australia, both professionals and retail investors.

Now, most investors will appreciate that information.

And you can see why that's attractive to at least parts of the investment community.

is they look immediately at the buy-hold-sell ratings and they think that's all they need to know and maybe even some forecasts and price targets.

But I think the challenge is to not focus so much on buy-hold-sell ratings and to more look beyond that into the information that's available beyond those ratings.

And I think a service like F&R in particular is ideal for those investors who would like to increase their knowledge and have insights in why certain stocks are more attractive than others.

Why are some companies higher valued than others?

What essentially makes a company enjoying structural growth?

Why is value not always value?

And you can go beyond of course, we can assess acquisitions, we can assess new orders, contracts, structural changes and all of that.

And all that is, if you want to, available through F&RINA.

And I mean, the website is pretty structured that investors can look up stocks, they can look up sectors, there's forecasts that we have data on more than 2000 companies.

So essentially what we are providing as F&RINA is knowledge.

And I do understand that not everyone is interested in long term investing.

Some investors would rather look at a price chart or follow momentum or subscribe to a tip sheet that tells you exactly when and how to buy and to sell.

We're not really into that business.

We're more into sharing knowledge.

And in the current context, for example, one of the things that we've jumped up pretty quickly is the fact that we are now experiencing artificial intelligence, which is coming into the markets.

And it already has had quite a pronounced impact on markets.

It will have, of course, a much bigger impact in the decades ahead.

And the advantage that we had at Efren Arena is not only did we identify

the importance of this new phenomenon.

We also had access to research and that allowed us to pretty quickly start disseminating and sharing vital information, knowledge about which companies would be beneficiaries, why, how and for how long.

And at this point in time, we just recently put together a whole special report around artificial intelligence.

Of course, it's put together in an electronic format, but if it were printed, then the cover would be looking something like this.

On top of all that information sharing what we do, I have put my own research aside from that, and my research specifically, as I call it, is into all-weather performers.

And all-weather performers, the name is chosen for a reason.

These are the high quality companies that perform most times and they perform quite well for shareholders.

The fact that I have identified all the weathers in the Australian share market has been vindicated by the fact that

over the past decade and a half post GFC, stocks like REA Group, like Cara Group, like CSL and ResMed, they have been amongst the better performers in the share market over the decade, not necessarily in one particular year or in a month or a day.

But for long term investors, that information has been vindicated.

And that's obviously the type of information I share

with subscribers at Efren Arena, because we don't have that many true all weather performers in the share market.

And we are going through so many changes in the share market.

I've broadened that analysis into high quality growth stocks.

And the idea was there that we are going through similar changes, I believe, as we went through in the 1920s, last century.

And that means that if we can identify those higher quality growth stocks that are benefiting from those changes, that should be very beneficial for investors.

And a couple of the names that, again, that have been part of my research over that period are the likes of Algium, likes of Y-Stack Global.

And in more recent times, of course, we've seen the rise in popularity

for companies like a Goodman Group and the NextTC.

Those are all part of the research I share with subscribers at F&RINA.

Somewhere on the sidelines, there is a portfolio that I run on the basis of my research.

And if you are a subscriber, there's a dedicated section on the website, which specifically zooms in on my research, which comes on top of all the other expert information, forecasts, insights and knowledge that we have on the website.

Thanks, Rudi.

Do you have time for two questions?

Of course, while I'm here.

You talk about all weather stocks and your research into high quality companies.

Can you explain your definition of quality and why this is important for investors?

Yes, that's quite an interesting question because there's no universal concept of what makes a quality company.

But I usually pin it down to

a company that reinvest in the business and does so on a consistent basis and obviously in a way that it actually generates value for shareholders.

And as I said before, those companies they perform for shareholders most of the time but they do so over a longer period of time.

So while the value

may not become apparent on a day-to-day basis.

If you take a long-term view, that value is very, very much apparent on price charts.

And if people have followed my research or will follow my research, you will find that the outperformers in the share market, there's no coincidence there.

They are usually companies that follow, that come under the moniker, as I described them, as all-weather performers.

You mentioned artificial intelligence, AI.

Can you give us an insight into your thoughts and how this affects your own research and investment approach?

Yes, I believe that AI is probably a once in a generation, maybe even once in a lifetime phenomenon that comes along.

And we should actually praise ourselves, lucky that this is happening while we are in the markets, because it is actually quite exciting.

Now, investors will have to get their heads around and obviously nothing runs into a straight line.

But I think that in 10 years time, if we look back at today, we are going to be amazed by how much the world has changed.

And clearly those changes, they will be reflected in the share market.

And it's not only about winners, there will be many, many losers and in between there will be many, many pretenders, of course.

The key element about artificial intelligence is that it requires heavy investments and not every company can make them and not every company can make them successfully.

So it will be a stage by stage, step by step.

approach that we will have to follow and monitor developments.

But I do believe it's very, very exciting.

And instead of focusing on the fact that share prices in the short term can look a little bit bloated because we all get excited about the future.

I think investors should take a long term view and should should definitely put a lot of time in getting their head around in what is happening, why and what is coming towards them.

Thanks, Rudy.

My pleasure.