Henry Jennings on his favourite moments from nabtrade’s Investor Room

Henry Jennings | Marcus Today

A really interesting event yesterday which hit home, how much I am just warbling in the dark. The Funds that presented were very impressive. So much so that I will put some of my own money in the funds.

Let’s run through the three that really caught my eye. All from fund managers that I know and have done podcasts or events with. That always helps.

First up was Anthony Doyle (Firetrail).

Anthony beat me at financial trivia at Finfest on the big stage in 2023. He's a lovely guy, and I don’t hold that against him.

He had a high conviction idea in the US. They all do. When will we see a high conviction idea in Australia? His idea was RSG. Ryan Services Group. A speciality insurance broker in the US. Insurance for some areas is hard to get. Florida being a prime example. The man who founded AON is behind this business. He retired and then got bored so he started a company that now has a bigger market cap than WOW. In the US there is an Excess and Surplus market in insurance. RSG are making a significant impact in the hard-to-get insurance market. You will need to do your own research on this one if interested but it has run 65% this year and he believes it has another 40% upside.

Anthony has done very well with the performance of his listed fund S3GO. He talked about the energy transition and the infrastructure that is required to digitise the world.

Next up was Nick Griffin from Munro. 

Many of you will have tuned in to Nick and I talking some time ago about his philosophy. Nick is a smart guy, and his presentation was all about the opportunities in AI.

He has a suite of listed active ETFs. MAET, MCGG and MCCL. All have done very well. They have all had their moments of doubt and pain.

He believes that the AI revolution is an iPhone moment. What he meant by that is, do you remember when the iPhone came out? I suspect we all do. The iPhone was a platform. It was an enabler. So, what that it connected us to the net, the real key was the millions of apps that have been built to leverage the phone. He believes that it is the same with the AI chip and the huge growth in the ‘apps’ that will come from it.

His best idea for the next decade was Nvidia. Still. It is still not expensive according to Nick. He cited Meta as a fine example of the power of AI. FB was struggling against the competition for eyeballs and attention spans. It used AI, within Instagram to keep people on the platform, and leveraged FB to ads using the same technology.

He demonstrated some very cool technology that was harnessing AI. One example was Axon which is involved in police cameras and drones. It is able to use footage from these body cams, and with AI translate that footage into a proper police report. It keeps police out on the streets rather than behind a desk writing reports!

He also showed us a new app called Gemini which can take documents and reports and turn them into a podcast with two people talking. And discussing in language that we can understand, in a voice that we can choose. The voices are real people but recorded and then used by AI to create these podcasts. He played one of these. It was really impressive. Gemini is from Google and only just released.

This is from one website on this new technology.

After uploading a new or existing Notebook, users can click on the "Generate" button to create an Audio Overview, where the hosts will start a deep dive discussion based on the document's sources, summarizing material and offering back-and-forth banter about related topics. Users can even download the audio and listen on the go, much like a podcast.

I know this is spooky. The voices were not at all robotic. And this is early days. The new ‘Alan Turing’ may have to come up with a new test. AI is going to redefine our world.

Now fair to say I am a dummy. And when you listen to people like Nick, you realise that there are smart people out there that can do it far better than I ever could. I have not got the time, nor the resources to do the deep dives that Nick and his team do. They do it all day every day. I am constrained by many things, not least of which is my IQ.

The good news is that I am smart enough to recognise that somethings are best left to the experts.

Now, it is fair to say that Nick has had some underperformance in the past, but it has come good recently. I suspect Nvidia helps. It is designed for a three-year time frame and not for investors that do not have a high tolerance for risk.

This is the MAET ETF – The Global Growth Fund

Source: markettech

This is an absolute fund. No benchmark. The purpose is to make money.

MCGG - This fund is benchmarked – The Concentrated Global Growth Fund

Source: Munro Partners

Benchmarked against a MSCI world Index ex-Australia.

And lastly, was my old Macquarie buddy Alex Pollak who runs Loftus Peak. Alex is one of the smartest guys you will ever come across. That is the reason his fund now has around $1bn under management from a cold start.

Alex played a video from Nvidia on the way it identifies objects. He was so impressed he bought the company. Big position in Nvidia for years. Now no exposure. Interesting. His fund is not a technology fund. It is a disrupter fund. He focuses on companies that are disrupting the status quo.

Here are some of his biggest winners.

Source: Henry Jennings

The gentleman from Macquarie rammed home that consistency in investing is key. A 1% extra performance over 20 years equates to 85% difference in total returns. Long term consistency.

Blair Hannon (Macquarie) was talking about systemic investing. What is systemic investing, I hear you cry. It is basically a quant fund. It takes thousands of data points for thousands of companies and distilling the case of Macquarie, those data points to 70. These are then used to be slightly under or overweight the basket of stocks. The aim is to capture 1% outperformance over a 5 -year period. Now call me old fashioned that seems a massive amount of computer crunching for really not that much extra. I know that the 1% is incremental and that consistency will win out, but as a retail investor, are you really just looking for 1% over the benchmark? If you manage $16bn like Macquarie do in this fund, then 1% is understandable, but as a flexible retail investor, 1% is not what you are after is it? So much effort involved. But that is quant funds for you.

Two interesting hand up moves. One presenter asked the room of some 250 investors who used Co-Pilot. 4 hands went up. He asked who invested in Private Equity 3 hands went up. Clearly both have upside potential.

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