Marlin

[alokdhir]

All the fisher funds started looking like a Ponzi scheme ...36% , 29% and 19% of our own KFL, premium to NAV

One day original holders will think its better to sell and invest at face value in some other scheme like FNZ etc

[SPC]

Yes a 'whopping' 36% 🦮 .. you'd have to be barking mad 😉. Use of the dreaded P word is really not appropriate tho, nothing to do with Marlin per se. Buyer beware...

[Rawz]

The funds investors must be ultra 'never sell' investors?

Do they even know the SP or the premium? They probably just collect the quarterly dividend and don't care about the rest

[alokdhir]

Yes a 'whopping' 36% 瑩 .. you'd have to be barking mad . Use of the dreaded P word is really not appropriate tho, nothing to do with Marlin per se. Buyer beware...

When they sell new units in Marlin at 30% premium to their intrinsic worth ...then was Marlin involved or not mate ?

[SPC]

That price was set a year ago.
Buying at a 30% premium is a buyer decision. Even you know that simple fact, mate.

[Snoopy]

They'll probably lose another 40% but no worries Ashley Gardyne their chief investment officer will be along soon with yet another article in the Herald telling everyone to hang in there and that will fix the problem when he says it for the third time for sure

Marlin is almost the N.Z. version of Kathy Woods ARK investment fund

I think anyone who is with a Fisher managed fund, and takes time out to read their investment philosophy will understand why the Marlin fund has performed as it has. Funds have a mandate to invest Beagle, so they don't have the option of flipping in and out of the market like you can. Lead investment manager, Ashley Gardyne, likes to find good companies and stay invested in them. So if he is a fan of tech, which you can see he is from the table below, then any tech rout will cut into his chosen portfolio deeply.

Last time I looked at the FANG companies, their PE ratios resembled the room numbers you might get allocated when checking into a high rise hotel. This seems to have changed though. Look at the table I have compiled of the top 5 Marlin holdings today.

Share	PE ratio 26-05-2022
Meta Platforms (was Facebook)	13.1
Alphabet (was Google)	19.1
Amazon	51.6
Paypal	26.5
Tencent (China)	13.2

You will probably have heard of the top four on that list. Number 5. 'Tencent' is a Chinese technology and entertaining conglomerate, its subsidiaries globally marketing various Internet-related services and products, including in entertainment, artificial intelligence, and other technology. But looking at those PEs today, you would have to say there are plenty of NZ based tech companies that are on higher PE ratios than those on the top 5 Marlin list (with the exception of Amazon). I haven't researched any of these companies, I just pulled the numbers straight off yahoo. So I am making my statement on the presumption that there are no unusual one offs affecting those figures.

Incidentally, despite Amazon being down 37% year to date (verses -27% for the NASDAQ), I believe most of this Fisher Amazon holding is a recent (post 31st December 2021) purchase (IOW Ashley believes he sees value in the reduced price). I also note that Fisher have stayed out of Tesla (down 45% for the year) in any significant way. So you can't really say that Fishers are just 'following the herd' with their investment choices.

Some of these quoted PEs may be rearward looking in a non-current way. But while a further fall of 30-40% of the underlying fund constituents is possible - as you speculate Beagle-, I think some of these 'battered down' holdings may be showing signs of value right now. So I am of the opinion that if you want a fund manager to manage your overseas holdings, now might be a good time to buy in. Not sell out.

SNOOPY

PS I should note I am not a fan of buying Marlin at so great a premium to the underlying asset backing. I would instead be looking at the 'Fisher International Growth Fund', which is the unlisted version of Marlin run by the same managers. You can buy into that at asset backing value. While the underlying performance of the Fisher International Growth Fund has been poor over the past year, just like Marlin, (and particularly so since the beginning of this year), the five year performance is still very respectable - despite the 2022 hiccup.

PSS Not invested myself in any Fisher managed funds.

[Beagle]

Thanks for your thoughts Snoopy. I came very close to investing 50/50 into Fishers International and Australian Growth, (very similar to Barramundi's portfolio) funds in December last year and as you quite rightly state, this can be done at NTA, and while they don't pay dividends people can easily make their own quarterly withdrawals mimicking the listed funds if they wish.

Certainly in the last month since I posted that remark you quoted we've seen further substantial falls in the Nasdaq which at first glance gives the impression of more reasonable metrics but we've also seen a continuation of the deterioration in geopolitical relations between the superpowers and with high level's of ongoing uncertainty over the extent to which the CCP want to exert control over Chinese based tech companies and complex issues around demands for greater veracity around audit standards American authorities are demanding for Chinese companies listed in the US potentially the resulting negotiations if unsuccessful will lead to widespread delisting's of Chinese companies on the US markets in 2023 the situation at present is perhaps best described as very fragile from a stability point of view.

Speaking of stability I really need to see some more around how the Nasdaq is performing and on the geopolitical front before committing meaningful capital to Fisher's international growth funds. Biden explicit statement around defending Taiwan this week was probably unhelpful (broke a multi decade implicit undertaking and may have been unnecessarily provocative) is sending geopolitical tensions between the superpowers in a direction that makes me even more cautious in regard to the future regulatory framework around these dual listed companies.

The other risk is the massive number of companies in the Nasdaq with no earnings and those still on triple digit multiples causing such an ongoing downdraft in the tech sector as they continue their "reckoning process" (there's a real "show me the money demand" from investors in the US at present), people will keep throwing the baby out with the bathwater and the bear market will become more entrenched including dragging the S&P 500 and Dow into it. "Don't fight the Fed" and "Sell in May and go away" are the well known cliché's that very readily spring to mind !

We live in very interesting times my friend. Did you see the latest that Russian and Chinese fighter bomber aircraft ran a combined mission to send a statement to Biden as her departed the region ? An ominous indicator of future enhanced military collaboration between China and Russia ?

I suspect global growth is going to be much more difficult to procure for the Marlin fund in the next five years than it has been in the last five.
Might be better to invest in an ETF in the American defense sector ?

[SPC]

I can't agree with the notion that Marlin has to stay fully invested regardless of market conditions. They do scale up and down holdings depending on news and the sentiment on how a holding is traveling.
To suggest they must stay invested in a stock(s) despite bad news ahead is like driving down the highway and ignoring the bridge washout ahead. I've been an FF listed fund investor a very long time and I repeat my view that they fall hopelessly in love with their 'favs' and just can't seem to face the fact that things change and sometimes they have to move on, timing being very much of the essence. I don't pay fees so they can sit around, I want them thinking fast and staying on their feet.

[Beagle]

I can't agree with the notion that Marlin has to stay fully invested regardless of market conditions. They do scale up and down holdings depending on news and the sentiment on how a holding is traveling.
To suggest they must stay invested in a stock(s) despite bad news ahead is like driving down the highway and ignoring the bridge washout ahead. I've been an FF listed fund investor a very long time and I repeat my view that they fall hopelessly in love with their 'favs' and just can't seem to face the fact that things change and sometimes they have to move on, timing being very much of the essence. I don't pay fees so they can sit around, I want them thinking fast and staying on their feet.

Wish I had a job at FF. I can imagine they spend a huge amount of time schmoozing with wealthy and influential people. All those long lunches must be incredibly hard work Anyway I see some of their favorites had a very good day today, Dollar Tree and Dollar General prove there's money in consumer staples and basics. Even some tech names bounced strongly overnight. Maybe the bottom is in or maybe its just a head fake Bear market rally that will fizzle out next week. Who knows for sure but I suspect the latter.

[Snoopy]

I can't agree with the notion that Marlin has to stay fully invested regardless of market conditions. They do scale up and down holdings depending on news and the sentiment on how a holding is travelling.
To suggest they must stay invested in a stock(s) despite bad news ahead is like driving down the highway and ignoring the bridge washout ahead. I've been an FF listed fund investor a very long time and I repeat my view that they fall hopelessly in love with their 'favs' and just can't seem to face the fact that things change and sometimes they have to move on, timing being very much of the essence. I don't pay fees so they can sit around, I want them thinking fast and staying on their feet.

SPC, different fund mangers have different styles. The 'move fast' 'quick on their feet' style is NOT how Fishers operates. After reading their end of March year presentations, it is quite clear they are in the 'research first' 'buy on fundamentals' operational game plan. They have little interest in market sentiment, except when negative sentiment creates a more attractive price range in which to buy an already researched potential holding. News is considered, but only in perspective. One bad news day does not make a company bad.

The other problem Fishers face is that they have reached a size, in the NZ market at least, where they can't just 'move on', because the liquidity on the NZX is such that selling out means 'collapsing the investment share price'. Getting out 'at any cost' is not a viable long term investment strategy. My 'beef' with Fishers, from my limited snapshot reading of their investment positions and thoughts is that they may have paid too much to establish some of their favoured investment positions. But I don't see any dud positions in the Marlin investment portfolio per se,

If there is a concern it would be their holding in Meta (Facebook). But Ashley is quite convinced that as that platform moves more towards short video clips and away from static presentations, that advertising will pick up. I can't comment on Ashley's judgement here because I haven''t studied the business of Meta and don't even have a facebook account myself. But a sudden drop in the Meta share price does not invalidate Ashley's investment case.

I can assure you investments teams at Fishers are not just 'sitting around'. They will be digesting market news in context, and figuring out how their investment themes are being affected (the usual answer being 'not much'). Just because they aren't buying and selling all the time doesn't mean they aren't doing anything. The decision to 'hold' is also an active investment decision to make. These guys are not just 'index tracking' chair warmers.

Having said all that, Fishers way of investing is in accord with a certain style. And if that style does not suit your own investment psychology, maybe you should find an alternative investment manager that operates more along the lines you describe?

SNOOPY