Five principles for growth

With markets historically high and uncertain times ahead, many clients recommended we share our principles more widely. If these ring true to you, we warmly invite you to visit our offices to find out more.

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We want to see skin in the game

We invest like it's our own money. Because it is.

When you invest with Pie Funds, you invest alongside every member of our team. Around 15% of the money we manage comes from our shareholders and staff. In fact, staff can only invest in the share market through us. We care for our investments like they’re our own, as, well, they are. We also look for this commitment in companies we invest in. We love stocks where managers are heavily invested. We’ve found that if leadership stand to do well, it’s more likely everyone does. It stands to reason, but you’d be amazed how uncommon common sense can be in the financial markets.

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We don't like debt either

You don't own debt. Debt owns you.

When we look at companies to invest in we don’t like to see too much debt. It can mean they’ve been doing some tricky things to look better short term, but it certainly means they have fewer choices if the wind changes. We look for sustainable fundamentals like cash burn and growth rates, as we’ve seen high-debt companies end up distressed, diluted or missing their potential. Low debt can also mean better returns, as many of our clients have found in their personal finances; careful choices, like paying down the mortgage, have meant they’ve been well placed to now diversify and invest into our managed funds.

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We invest in people

When driving returns, it matters who drives.

Sure, lots of people can drive, but only a few can race. Even among professionals with millions of dollars behind them, some won’t get to the front, and some won’t even finish the race. It’s the same with company leadership. Skill, experience, passion and ability really do come together to make something more than the sum of the parts. So when we invest in companies, we invest in the senior team running them. And if the people change, we review our investments and exit if we need to. It’s that important.

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We like to see tailwinds

The best sailboat is nothing without wind.

We don’t hold Sky, Blockbuster or Blackberry. They were all once share market darlings, but none had tailwinds. It might seem obvious, but how many of the big companies that index funds track today will be the biggest tomorrow? In fact, only a handful of top companies are the same decade to decade. For long-term wealth creation you need what’s next, so we work to find emerging leaders and get in early for the journey up. We’re interested in where the world is going, and the wind in your sails will take you a lot further.

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Set something aside for a rainy day

Make hay while the sun doesn't shine.

Much like you, we have something tucked away for a rainy day. We hold a portion of our funds in cash, so that if the market comes off these historic highs we are ready to capitalise. It’s no secret markets are frothy, and interest rates have long been low; lifting prices higher, longer than other similar cycles. We watch trends carefully, and now have a larger weighting of cash in our funds than at any time since the GFC. In a way that event was the making of our company. In 2008 our Growth Fund dropped only around half as far as the market index it tracked, and rebounded 105% the following year. Now, as prices run and run, we’ll again be ready to act once we see opportunities reflecting fair future value. We believe long-term wealth comes from long-term thinking.

Interested in finding out more? Please do get in touch to make time to visit our offices in Takapuna or Havelock North.