Sometimes I worry that our portfolios don’t have enough growth in them, and sometimes I worry that they don’t have enough “sizzle” in them, e.g. enough of “the market darlings”.

The job is partly all about worrying, so that’s fine, and you can get more concrete by saying “am I exposed to a well-diversified factor portfolio of time varying premia” in the right amounts, including momentum.

So I often find myself revisiting the tech sector, and, almost as quickly, moving on again.

If we are in a world with a positive real interest rate (where the Fed projects ~+160bps), then I don’t see the appeal in paying 10x revenues for tech (not that I saw it before, either, with the Sun Microsystems guy never too far from the mind).

You can swap to EV/Sales to a similar enough outcome.

IRE we like, despite being burned by a downgrade we didn’t expect, and XRO we like, but deep down, are not totally confident of how well they can take on the world. It’s a tough market, out there. Mind you, everyone has the same view, that’s why the stock halved, so, we aren’t adding much value with that observation.

ALU, we’ve owned in the past, and done tremendously well out of. But I find I can’t convince myself to own it at 10x revenue.

Oh well, boring old banks, insurance, select commodities, teleco’s and healthcare it is. Reporting season is just around the corner, perhaps we will find more inspired trades then.

Cliff Asness, of AQR fame, continue to make the point that the factor dispersion between growth stocks, and value stocks, is still extraordinarily high. In other words, the value factor looks great, and, at the least, the growth factor overcooked. That’s the view we are essentially espousing above.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.