Like many people, I’m itching to go on an overseas holiday again. I’m writing from a lonely room in locked-down Sydney. My phone keeps tormenting me with “remember this day” notifications. Midnight meals in Milan with my work colleagues. Aperitifs in Cape Town with my wife’s South African family. Once Australians are allowed to travel again, I will be on one of the first planes out of here. And I won’t be alone.
As a fresh-faced uni graduate, I worked on Macquarie Bank’s bid for Sydney Airport. We had a beautiful chart that showed historical airline travel growing at 1.5 times the economic growth rate in almost every country around the world. That relationship has held up nicely in the two decades since, and it’s a fairly safe bet that the trend continues after the world puts Covid-19 behind it. As humans get richer, they travel more.
That’s a bet we are explicitly taking in our Forager Australian Shares Fund. Its investments include three listed tourism stocks that we expect to do well when inbound tourism returns to Australia and New Zealand.
But, unfortunately, successful investing isn’t quite that simple. If all we had to do was identify a fairly obvious theme and invest in it, our lives would be a permanent holiday. Investing is not about what you know. It’s about what you know that others don’t.
Mr Market isn’t stupid
Investing legend Ben Graham introduced Mr. Market to investors in his 1930s classic The Intelligent Investor. His personification of the stock market illustrates how the rational, sensible investor can take advantage of irrational, emotion-driven moves in market prices. Some days Mr. Market is depressed and wants to sell you his stocks at absurdly low prices. On other days he is wildly optimistic and wants to buy your shares for a fortune.
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