For most investors, both amateur and professional, the primary goal of investing is to make money. However a handful of our guests have another top priority – capital preservation. IVA Worldwide Fund’s co-portfolio manager Charles de Lardemelle is one of them. On this week’s WEALTHTRACK he explains why he is now holding more cash and fewer stocks in his value seeking portfolios.
The consensus among all of our recent WEALTHTRACK guests is that after an impressive, multi-year run the market is due for some pullbacks. Asness also thinks the U.S. stock market is expensive. One of his favorite measures of valuation is Nobel Economic Prize winner, Robert Shiller’s CAPE Ratio, or Cyclically Adjusted Price-Earnings Ratio, which measures earnings over 10 year periods, adjusted for inflation, instead of the usual one year period, thus giving a better historical reading of value. The average CAPE Ratio over the years has been around 15. Currently it is 24.1.
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Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
This week’s guest also believes the market is expensive, but his approach uses traditional investment strategies, not alternatives. He also has a different priority than most money managers. His goal is capital preservation first and capital appreciation second.
He is Charles “Chuck” de Lardemelle Co-Founder and Co-Portfolio Manager of the IVA Worldwide fund and IVA International fund which he launched with Co-Portfolio Manager Charles de Vaulx in October of 2008, in the depths of the financial crisis and it turns out the month the market bottomed.
De Lardemelle and de Vaulx are alumni of the Jean-Marie Eveillard school of investing, having worked with the legendary, former Portfolio Manager of the First Eagle Global fund for many years. The fund is now ably steered by WEALTHTRACK regular Matthew McLennan.
Both IVA funds closed to new shareholders in early 2011 after the firm surpassed $15 billion in combined assets. Since inception the flagship IVA Worldwide fund is in the top quartile of its world allocation category with 11% annualized returns and has beaten its benchmark and its competitors by a sizable margin.
De Lardemelle will explain why capital preservation is his firm’s first priority, and why as a result his portfolios are currently holding so much cash – more than 30% in both funds.
IT’S TIME TO LOOK AT U.S. TREASURIES AGAIN
POSITIVE TRENDS FOR U.S. TREASURIES
- Global interest rates are staying lower longer than most forecasters predicted
- Other major economies are slowing
- Other central banks are easing
- Global geopolitical tensions are rising
- U.S. Treasuries are investors’ choice for safety and liquidity
Nestle SA ADR (NSRGY)
- Price: $71.01 on 10/14
- 52-week range: $67.69 – $80.65
Perks & de Lardemelle: Income vs. Protection With Two Leading Fund Managers
Franklin Income Fund has delivered monthly payments to shareholders since 1948! Portfolio manager Edward Perks explains how he is carrying on the tradition. Plus IVA Worldwide Fund’s Charles de Lardemelle explains where he is finding value and protection around the world.
VIVE LA DIFFERENCE
Does being French make any difference in Charles de Lardemelle’s investment approach? The Co-Portfolio Manager of IVA Worldwide and International funds says yes it does in some very fundamental ways.