CIO Insights - 18 October

Hi everyone

Well, what a week for HM1!

As you know, we populate our portfolio with two sets of recommendations, 65% coming from our six core managers; with the remaining 35% coming from the pitches made at the annual Sohn Hearts & Minds Investment Leaders Conference. The core portfolio comprises the three highest conviction investment ideas of each manager and can be held for any length of time, as long as our managers maintain their belief in the investment thesis continuing to play out. Many of the stocks recommended at inception are still held in our portfolio and most have delivered exceptional returns for our shareholders.

But it’s now late October, and so our attention is drawn to the upcoming 2021 conference, where we will see some returning managers, as well as some new ones, pitch their best investment idea that they believe will play out over the coming 12 months. This is obviously very different to what the core managers do and recommend, as there is a clear finish line for how long we have for the theses to play out. Our managers will identify catalysts that they believe should see a re-rating in whatever stock they pitch between December 2021 and November 2022. And they will do this in 8 minutes flat! How exciting!!

But wait, that’s not all…

If you read the financial press or are on the Conference distribution list (it’s free), then you will have hopefully seen the announcement last week that we have managed to secure the one and only Charlie Munger – Vice Chairman of Berkshire Hathaway (and business partner to probably the greatest investor of all time, Warren Buffet), who at almost 98 years young, remains as sharp as ever. He has kindly agreed to do an exclusive Q&A session with Dr Mark Nelson, the Chairman and Co-Founder of Caledonia Investments, who are one of the core managers for HM1.

What a coup!!

And this defines why the Sohn Hearts & Minds conference has rapidly become one of the absolute must-attend investment forums in Australia. Not only do you get to hear the highest conviction investment ideas of some amazing managers, but this year you’ll get to hear from Charlie and Mark as well. In previous years we’ve been able to hear the wisdom of industry titans Ray Dalio, Howard Marks, and Bill Ackman just to name a few, such is the willingness for these guys to participate in what we do.

So put 11:00am on December 3 in your diaries folks. It’s a Friday, and it’ll be the only opportunity for you to listen to Charlie impart his wisdom, experiences, thoughts, and hopes for the future, probably ever in your lives!

The rest of the conference program, including the stock pitches will be available on demand for 5 days, with access from 8:00am Friday 3rd December to 11:59pm Wednesday 8th December AEDT.

Special Conference Ticket Offer

I’m excited to share that we have a limited number of discounted tickets available for HM1 shareholders. You can access 20% off by using this code at checkout: HM1-CONF


Event Schedule
Friday 3rd December

On demand program available from 8:00am AEDT*
Mr Charles Munger Q&A at 11:00am AEDT only (c
heck your timezone here)

*Tickets include 5 days access to the on demand program (concludes Wed 8th December 11:59pm AEDT)

The stock-pitching speakers we have announced so far include returner Babak Poushanchi from Cota Capital, whose 2020 pick Bill. com delivered a realised return of 179% for HM1 shareholders. His previous recommendations were DocuSign and SmartSheet, and these names give a great demonstration of the kind of stocks our shareholders become invested in, which would rarely even come onto the investment radar of most local investors. Also back in 2021 is Beeneet Kothari from Tekne Capital Management, who last year told us about Yeakha Limited in China, which went on to deliver an incredible 112% return for our shareholders in a little over three months.

I’ll talk more about the stock pitch managers next week because I’m running out of space already…

But that’s what the conference recommendations aim to do – provide a basket of shares where our selected speakers have identified game-changing events that could happen in the next 12 months to provide positive shareholder returns. Of course, given the shorter time frame that exists compared to core manager recommendations, we don’t expect every stock to necessarily deliver for the portfolio, so we maintain regular dialogue during the year to risk manage the investments as best we can.

And to finish this weeks update, we are proud to say that since its inception, the Hearts & Minds Group (ie the Listed Investment Company and the Conference) has now raised $30 million to support research partners including the Florey Institute of Neuroscience & Mental Health, Victor Chang Cardiac Research Institute, Black Dog Institute, Brain Cancer Collective, Murdoch Children’s Research Institute, MS Research Australia, Shake It Up, Macquarie University Centre for Motor Neuron Disease Research, JDRF, RPA Green Light Institute, and the Children’s Hospital of Westmead.

How good is that!

Stay safe

Rory Lucas
Chief Investment Officer
Hearts and Minds Investments Limited

Reminder: these are simply my general views and should not be taken as investment advice


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DISCLAIMER: This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220). In preparing this document the investment objectives, financial situation or particular needs of an individual have not been considered. You should not rely on the opinions, advice, recommendations and other information contained in this publication alone. This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Past performance is not a reliable indicator of future performance. This document may not be reproduced or copies circulated without prior authority from Hearts and Minds Investments Limited.



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