article 3 months old

Rudi’s View: Join The CSL Challenge

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Jan 14 2019

Included In Today's Story:

-Join The CSL Challenge
-Bell Potter's Top Picks For 2019
-Best Wishes From FNArena

Rudi's View: Join The CSL Challenge

By Rudi Filapek-Vandyck, Editor FNArena

For many years I have held a positive view on CSL ((CSL)) shares listed on the Australian Stock Exchange, and I have written and talked about this stock ad infinitum.

And with good reason, one might conclude, as the shares have clocked up more than 400% in returns for shareholders since 2011. Its steady climb in the rankings of local stocks, ranked by market capitalisation, has now made CSL Australia's fourth largest company, only preceded by CommBank, BHP and Westpac.

When I arrived in Australia, eighteen years ago, CSL was but a mid-cap stock. This truly has been, and still is, an incredible success story.

Yet, according to feedback and day-to-day observations, and to my genuine frustration, Australian investors seldom own shares in the company. They remain deterred by other expert voices who tell them you simply cannot buy these shares, they are too "expensive".

Others are wrongfully of the idea that successful investing starts with buying stocks that trade on low Price-Earnings (PE) ratios. So they lose their shirt through owning stocks including Retail Food Group, Vocus, iSentia, AMP, or even IOOF. Then there are those who don't understand the intrinsic weakness that comes with chasing high yielding industrials, which has seen Telstra shares lose more than -50% in just a few quick years.

Plenty of reasons as to why investment portfolios in Australia do not have any exposure to what is undeniably one pivotal success story from corporate Australia over the past three decades, if not ever.

My heart bleeds when questions I receive are whether I think this or that beaten down small-cap industrial stock is finally worth buying, or are Australian banks finally turning the corner? Australian investors, including their advisors and many a market commentator, are way too narrowly focused on finding "value".

Whereas the cold hard truth is CSL shares, carried by exceptional quality and supportive market dynamics, have been one of the best investments any investor could have made since listing in the 1990s. And they most likely still are. This is why Australian investors need to wake up and smell the blood plasma and influenza vaccines, so to speak.

In ten years time, CSL might be this country's most valuable ASX-listed entity, further crowning an already impressive track record. How on earth will Australian investors justify not having been part of its story, instead losing focus, sleep, money, direction and potential return via owning stocks of lesser quality, generating lower returns?

It is my conviction you don't need to. Allow me to provide you with the most valuable investment experience you can possibly expose yourself to in the years ahead.

Add CSL to your portfolio. Maybe include ResMed ((RMD)) and Cochlear ((COH)) as well.

It doesn't matter how many shares you buy. Buy as many as you can be comfortable with. If you are extremely cautious, buy one share of each. It might look like it isn't worth it, given the transaction costs involved, but you can consider those as an investment in your personal education.

And while this is about achieving a return on your investment (of which I am very confident), this is equally as much about education: allow yourself to be surprised by how much benefit your investment portfolio can retrieve from exposure to high quality stocks, with long-term robust growth outlooks.

Once you own a piece of the action, you will feel "connected" to these high quality success stories. You'll pay more attention to what goes around in each particular segment of the global corporate world, you'll read analysts' reports in a different manner, you might even download their annual reports and show up at AGMs.

Most importantly, however, you will learn first hand that, beyond the immediate horizon, "quality" is far more important than cheap "value". The difference may not necessarily reveal itself next week, next month, or even by mid-year. But you can be as confident as I am that your journey will conclude with a positive experience.

So when should you join the "CSL Challenge"?

Pick your moment. My own strategy for buying these High Quality stocks is to wait until the share price weakens. You just have to accept you probably won't be able to jump in at the lowest price point possible, but it's probably not good timing to buy at the summit of a strong short term bounce.

But you will become part of something new, something exciting, and something very beneficial to your own insights and understanding about investing in the share market. I from my end hereby solemnly promise I shall regularly update on share price movement and prospects for all three companies. Once you have joined the CSL Challenge, and you are as yet not on the FNArena mailing list, you can send me an email and I shall keep you posted too (

In case this might have escaped your attention: CSL shares produced a 30% positive return over 2018, despite also falling victim to the bear market sell-off from September onwards. Over the past six weeks, the shares already recovered by circa 10%, significantly outperforming local indices and most stocks listed on the ASX.

CSL shares have now returned to where they were trading in October last year.

But all this short termism is really but noise in the greater scheme of things. We are here to learn what investing and sustainable returns from quality growth stories really looks like, through first-hand involvement.

Who's ready to join the "CSL Challenge"?

I cannot provide any guarantees, but am pretty confident you will not regret this. C'mon, what are you waiting for?

P.S. I couldn't help but noticing CSL shares are weaker today…

P.P.S: Do send me an email once you have joined the CSL Challenge as you will want to remain connected to your High Quality inclusions:

Bell Potter's Top Picks For 2019

Stockbroker Bell Potter recently revealed its Favoured Top Picks for calendar year 2019. Keen observers of my own research into All-Weather Performers will notice there are a few names represented in both selections. For All-Weather Performers, including updated share price performances, paying subscribers can access the dedicated section on the website.

Bell Potter's selection of favourites consists of: ALS Ltd ((ALQ)), Caltex Australia ((CTX)), Challenger ((CGF)), CSL, Goodman Group ((GMG)), Macquarie Group ((MQG)), Netwealth Group ((NWL)), Oil Search ((OSH)), Sonic Healthcare ((SHL)), and  Woolworths ((WOW)).

Best Wishes From FNArena

FNArena is gradually ramping up its service this month, with broker views and forecasts up to date via The Australian Broker Call, daily emails and news stories resuming this week, and with Greg Peel re-joining us from next Monday onwards.

As I am presenting at the Australian Investors Association's (AIA) one-day seminar in Melbourne on January 29th, Weekly Insights shall resume from the first week in February onwards. Our Australian Corporate Results Monitor is ready to start adding the first results scheduled for the final week of January.

The team here at FNArena wishes you all a prosperous year ahead.

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi's View stories. Go to My Alerts (top bar of the website) and tick the box in front of 'Rudi's View'. You will receive an email alert every time a new Rudi's View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms