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Hi Paul,
Charlie Aitken in the latest Switzer Super Report advises us before May to sell off high PE stocks such as Ramsay RHC, Orora ORA, CSL, which are in your investment portfolios, plus a few others that I had regarded as pretty safe such as SEK, NVT, GEM, SRX and others. What are you planning to do with your growth and income portfolios? Will you be making any changes? I am finding it pretty hard this year to know what to do, so I value your advice. In my recent experience, Charlie is not always right – but who is? We need a cross section of opinion in the Super Report. So I thought I would ask you.
A: I absolutely agree with Charlie that some of the stocks he mentioned are way over priced and very vulnerable to valuation change, and that for the market to advance, it needs to be led by the top 20 stocks.
We are in 100% agreement, that is why I have been warning about stocks like Xero for some weeks – and our portfolios (particularly the income portfolio) are overweight top 20 stocks.
Orora is not one of the stocks mentioned by Charlie – he included CSL, Ramsay, Brambles and Amcor. I am not too worried about the valuations of these stocks – I am more concerned about the AUD, as each of these stocks was included in part to position for a weaker AUD. So far, this is not happening.
At the moment, I am not planning to make any changes to the portfolio. However, it is constantly under review and if we do propose to make some changes, we will let you know.
Kind regards,
Paul Rickard.
