Well it’s been a very big start to the year, with the ASX200 already up 10% this year including dividends in just 3 months. The markets have of course been ably assisted by record low interest rates here in Australia with the RBA cash rate now at 2.25%pa, the markets now factoring in one further 0.25% rate cut in the next 3 months, 3yr government bonds now a staggeringly low 1.66%pa and 10yr bonds 2.34%pa. Poor old Term Deposit ‘investors’ are looking at an average 2.8% 1 year rate currently. In this environment, continued focus is as always on quality and be prepared to embrace and capitalise on the inevitable volatility and unknown that lies ahead.

See below for a couple of bullet points I shared with you all post my Warren Buffett experience back in 2013 (straight off the website)

“Interest rates are to asset prices what gravity is to the apple – they power everything”
“When rates first go down, people are sceptical. But after a while they start to drive prices”

I’ll have a few more pieces of Buffett wisdom to share with you post this year’s 50th anniversary Berkshire meeting on the 2nd May…. Very excited about this one!

Speaking of wisdom …

Whilst Easter is a great chance to catch up with family and friends, feel free to peruse (in a well deserved moment of peace and quiet) the attached BKI piece of brilliance .. being their latest quarterly report released today (see link below as well). I have shared with many of you over many years now what a fantastic quality ALIGNED investment vehicle this is for accumulating growing passive tax effective income plus growing your wealth. Well, the hard working on the ground team of Tom Millner and Will Culbert have taken OUR business (yes .. we all own a piece of it) to another level with this sort of quality communication and education. Read it and weep ….. with joy of course…. Then you can go back to the Easter festivities with an even bigger smile to share.

Will, love your quote from John Neff …. “who described dividends as hors d’oeuvres that allow you to snack while waiting for the main meal to arrive”

For those who want some further investment wisdom and homework over the break, I can commend to you a 1hr Q&A video from the very successful US investor Howard Marks from Oaktree Capital. Many thanks for sharing this with us all Rob (you know who you are).
To Warren Buffett, Charlie Munger, the CEO’s of the various LIC’s we are aligned with (MFF, MFG, BKI, MLT, ARG, AFI, WHF, DUI), we are all extremely fortunate to have the likes of yourselves and Howard generously share your wisdom, and furthermore … to give us the chance to coinvest with you as well. Have I mentioned the word ALIGNMENT yet??

From all the team here at Fortitude, have a terrific Easter.
BKI Mar15 Qtrly Report