July Folio Update – Week 2

July 10, 2020

People generally use the phrases Bull market and Bear market for the upwards and downwards trends. We recently saw the current market trend referred to as the Kangaroo market.

6000 points seems to be a key zone as the market bounces around in it.

We’re quite happy with the companies and sectors we’re researching. There are still opportunities to be found for long term value investing. Looking for disruptors and companies that can withstand short term turbulence.

CEO quotes

Residential Property

“Whilst we’re seeing a more positive environment currently than we had seen during the height of lockdown, there are two things – it’s off relatively low bases of listings volumes because this is a traditionally slow period of the year, and secondly, it’s a very fluid situation”

Jason Pellegrino, CEO, Domain Holdings Ltd


“We have all seen articles suggesting the office is dead, and we will all work from home. Those types of articles were being written 20 years ago, and they were wrong then and they are wrong now. They show up every time there is a new technology like laptops and then high-speed Internet and Wi-Fi and now low-cost videoconferencing platforms. The predictions are always wrong because it’s not about the technology, it’s about the people”

Jim Keane, CEO, Steelcase Inc [world’s largest office furniture manufacturer]

“Almost every company on the planet is and will have to re-imagine their business. And I believe in the next two years, there is going to be more change than in the last 10. Quite simply, different work needs to get done and work needs to get done differently and to get work done differently, companies will need to rethink their org structure, roles and responsibilities”

Gary Burnison, CEO, Korn Ferry Inc [global management consultancy company]

Travel & Leisure

“I will go on the record to say that travel will never, ever go back to the way it was pre-COVID. It just won’t. People will, one day, get back on planes. But one of the things that I do think is a fairly permanent shift is…a redistribution of where travelers go. I think a lot of people are going to realise they don’t need to get on an airplane to have a meeting”

Brian Chesky, CEO, Airbnb Inc

“We are expecting a lot of [holiday] bookings for Queensland out of NSW and South Australia and we are expecting a lot from Victoria when there’s certainty”

Andrew Burnes, CEO, Helloworld Travel Ltd

Food & Beverage

“From a nutritional standpoint our products match the protein quality and content of the animal products that they replace and they are clear winner from a health and nutrition standpoint. This is why I think people are increasingly aware plant-based products are going to completely replace the animal-based products in the food world within the next 15 years”

Patrick Brown, CEO, Impossible Foods Inc


“A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities. The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed”

Jerome Powell, Chairman, US Federal Reserve


“We think, as far as we can tell, we’re the first ASX 50 company to put carbon goals into our long-term incentive scheme”

Brett Redman, CEO, AGL Energy Ltd

“The worst is behind us. We went from -$40 to +$40 with WTI [West Texas Intermediate oil]. In April we were looking at a demand of about 75-80 million barrels per day with significant supply at that time. Currently, you are looking at almost close to 90 million barrels per day. I’m very optimistic about the second half of this year”

Amin Nasser, CEO, Saudi Aramco [world’s largest oil producer]


“I’d say the basket size is significantly higher for home delivery [vs. in-store]. And so far we’re seeing it being very complimentary to our typical patterns [of trading]”

Brian Hannasch, CEO, Alimentation Couche-Tard Inc. [world’s second largest convenience store chain]

Transport & Logistics

“While commercial volumes were down significantly due to business closures across the globe, there were surges in residential deliveries at FedEx Ground and in transpacific and charter flights at FedEx Express”

Frederick W. Smith, CEO, FedEx Corp.


“Clearly, certain trends that would have taken 2 to 4 years to develop have been accelerated into months. It is easy to see how these changes will drive higher consumption of memory and storage in the long term. The faster pace of digital transformation in the economy is here to stay. The outlook for calendar 2021 [smartphone sales] is promising, with 5G expected to drive a resumption in smartphone unit sales growth”

Sanjay Mehrotra, CEO, Micron Technology Inc [global manufacturer of computer memory/storage devices]

Read on for a local update followed by purchase entries for this week.

Local update

Melbourne Metro has been put into a 6 week lockdown. The market hasn’t reacted too badly to this. The worst is already factored in for now.

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