Maximising Return Minimising Risk In a Sustainable Manner
rainforest investment portfolio
Portfolio Attributes
Resilient portfolio shown to be capable of withstanding financial crises and economic slowdown.
Absolute positive returns.
Significant outperformance over the Index.
Contact Us to find out more about our investments and performance.
“I am concerned about my retirement planning, mortgage payments and cost of my children’s higher education. Rainforest’s efforts to understand my financial needs and to address them through careful and thoughtful investment is a great help to me.”
Rainforest Notes - august 2024
Our Investment Manager's Commentary for the Month
Asia markets had a Black Monday 2.0 on 5 Aug. The Nikkei dropped by 12.4% in a single session, recalling the first Black Monday on 19 Oct 1987. No specific reason was cited, but likely a combination of profit taking, short covering, rumor milling, etc. caused the freefall, purportedly on the back of fears of a slowing US economy. However, the market subsequently recovered and ended August almost where it started. In fact, our Rainforest Fund and Private Accounts were all up. We are happy for our investors, who are a remarkably steady bunch.
For those who did not remain steady, they would have suffered big losses. “If you’re going to do dumb things because your stock goes down, then you shouldn’t own stock at all.” – Warren Buffett (Dumb things, he clarified, are selling your stock just because the price goes down.)
The role of Compounding in Value Investment
“Einstein called compounding the eighth wonder of the world…It is really important to start as early as possible. Warren Buffett says that he bought his first stock when he was 11 and that he was wasting his time before that…I just found a statistic today, if Warren Buffett had not given away 55 billion worth of shares in Berkshire Hathaway, which he has given away since 2006, his net worth today would have been $293 billion, which would be $41 billion more than the current richest man, which is Elon Musk. His net worth is after giving away 55 billion.”
- Mohnish Pabrai, 2024
“Consistency and patience are the virtues associated with accumulating wealth over the long run. Jeff Bezos once asked Warren Buffett: ‘You are the second richest man in the world and yet you have the simplest investment thesis. How come others didn’t follow this?’ To which Warren Buffett responded: ‘Because no one wants to get rich slowly.’ What Buffett is referring to here is his philosophy of investing in good companies and staying invested for the long run, letting compounding work its magic.”
- Yahoo Finance
“The best time to plant a tree was 20 years ago. The second-best time is now.”
- Chinese Proverb
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NEWS
Interview of Richard Choong in The Edge
Investing Wisdom
Value and Quality
“...findings of a review of the 1000 largest US equities (by market cap) over 1975-2013. Value was a higher driver of performance than quality, but companies that were both high quality and inexpensively valued with respect to fundamentals delivered the most consistent outperformance....”
Market Ups and Downs
“It’s in the nature of stock markets to go way down from time to time. There’s no system to avoid bad markets. You can’t do it unless you try to time the market, which is a seriously dumb thing to do. Conservative investing with steady savings without expecting miracles is the way to go. ”
Why Invest in Equities
“Investment possibilities are both many and varied. There are three major categories, however, and it’s important to understand the characteristics of each. So let’s survey the field.
Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments. Most of these currency-based investments are thought of as “safe.” In truth they are among the most dangerous of assets. Their beta may be zero, but their risk is huge. …
The second major category of investments involves assets that will never produce anything,… forever unproductive… The major asset in this category is gold. …
My own preference - and you knew this was coming – is our third category: investment in productive assets, whether businesses, farms, or real estate. …
Berkshire’s goal will be to increase its ownership of first-class businesses. Our first choice will be to own them in their entirety – but we will also be owners by way of holding sizable amounts of marketable stocks. I believe that over any extended period of time this category of investing will prove to be the runaway winner among the three we’ve examined. More important, it will be BY FAR the safest.”