Investment Style

Making a Fortune from the Australian Stock Market

It's inherent that in making a fortune in investing in shares you're going to have to think differently than most stock market participants.

Chance Voight is a ‘stock picking’ investment firm. We aim to research and hold substantial positions in a small handful of stocks at any one time. We aim to concentrate our investment capital into our best ideas and have no interest in diversification into average situations.

You're not likely to achieve market beating returns unless you think and behave differently than the rest of the market. As we say at Chance Voight, ‘you have to be different, and you have to be right’.

You may be familiar with KiwiSaver investments or other major share market investment brands in New Zealand. These types of investment firms are very much involved in ‘index’ or ‘passive’ investing. Their results are the annual variation (up or down) in the share market index. Chance Voight has nothing in common with these types of investment businesses. We aim to achieve outstanding compounding returns over multi years through incisive stock picking and to make our investors and shareholders wealthy.

The Chance Voight stock picking edge is investing in worthwhile businesses that have encountered problems which is ultimately reflected in a cheap share price. We hunt the market for special situations or what we refer to as ‘one-way bets’. What we want is a worthwhile business at a bargain price and we have to know a lot about that business to make sure that we are right in our assessment.

We also pay a lot of attention to the ‘probabilities’ of any share investment. By this I mean, what is the likelihood that the share price will go in the direction we expect it to. We don't tend to invest in anything where we think that the probability of this happening is less than 90%.

We think about share market situations in terms of “what happens to us if we are wrong” so for this reason our investment always has to be into a worthwhile business and at a bargain price. This gives us some protection on the downside and of course applying our 90% probability factor on the upside means we are right far more than we are wrong.

At Chance Voight we have some standards that we apply to any share investment that we make, that is that in our educated assessment the share must be capable of doubling in price within two years of purchase (increasing 100%).

We pay absolute attention to thinking in a clear and rational manner. We would describe ourselves as “seekers of the truth” in all things. We do not subscribe to popular and fashionable fads and ideas. For this reason, Chance Voight has no interest in ESG investing and pays no attention to FOMO (fear of missing out!). We buy shares in a calm, relaxed, thoughtful manner. We do not chase returns or ‘jump on’ this or that. We identify value in companies where the shares are selling for a lot less than we think they will prove to be worth, and we look to take a major position in a company like this. It's no use periodically being right about a company in a big way only to be holding a timidly small position in the business. The big wins come along occasionally and are the source of the high returns over multi years. It goes without saying that you have to have a lot of money in these big wins, to get the results.

At Chance Voight we are not looking for the next “big thing”. As a firm we tend to look for share price graphs that go down rather than up. We are out to identify things that are worthwhile and cheap. Sometimes we will watch a particular stock for years without buying it, waiting to see if the planets line up and offer us a fantastic entry point. We don't look to invest in companies (such as BioTech) that have to perform miracles to create shareholder value. We want the value to be self-evident at the time we buy where the company can simply go about their business and the share price appreciate a couple of hundred percent.

We are not ‘wishful‘ or ‘hopeful‘ thinkers on share prices. We are realistic and do not seek more price appreciation than the business can deliver. We are looking for value ‘hiding in plain sight‘, good everyday companies that the market has overlooked for one reason or another.

We have little interest in the New Zealand stock market. We do not view it as a competent or real market. There is only something like 170 companies listed on the NZX with very few new IPO's. There is something like 2300 companies listed on the ASX, which is a market of real depth and competency. We don't expect to find more than a couple of good opportunities every year from these 2300 companies. We are incredibly selective and endlessly patient. If we cannot find a share that meets our criteria, we don't invest anything at all and wait for the right opportunity to come along as it always does.