The Harry Kane Portfolio
What does Harry Kane, English football’s highest ever scorer, have to do with investing? Henry Jennings explains.I have this theory, one that I have put to some of my fellow Englishmen, that Harry Kane is a hoax. Now I know that Harry Kane, the captain of the English football team, is now the highest scorer of goals for England, surpassing Jimmy Greaves and Bobby Charlton. So, on that basis, he is massively successful and a massively talented footballer. My gripe with Harry Kane, is that a lot of those goals come from tap ins, and a lot of those goals come from penalties. He missed the most important penalty! What's important is that Harry Kane has been remarkably successful, he is the highest goal scorer ever for England and yet he takes tap ins and penalties and makes them count. You are asking what that has got to do with investing? Has he lost it completely. Maybe. If we look at the investing world, we could probably learn a lot from Harry Kane, in that we need to take the tap ins, we need to take the penalties, to become the biggest and the best goal scorers. In order to become the Harry Kane of the investment world, we need to look at the easy money, the easy goals, the penalties against Serbia or the penalties against Italy, dare I say it, that are just easy, no pressure. The ones he gets in a friendly perhaps. In that vein, it pays to look at stocks and situations that offer the investor a tap in or an easy penalty chance, ones that have the appropriate risk reward working in their favour. They may not be spectacular bicycle kicks (I tried that once in my fifties, fair to say I looked a goose), they may not be spectacular freekicks from 40 metres out, that speed miraculously into the top corner. They may not be headers, where Harry Kane elevates almost mysteriously and miraculously, 3 feet above any defender to head low and hard through the goalkeeper's legs. They may not be any of those, but what they are; they are goals and a goal is a goal. It doesn't matter whether it's a good goal or a bad goal, I will take any goal. As a former striker myself, I was always very keen to take any goal I could, and I was very happy to take a tap in, of course I was more than happy to do something spectacular, a quick turn and a wallop into the bottom right-hand corner but at the end of the day a goal, is a goal, is a goal and the same applies to investing. I am a simple soul, It is very hard to beat the market, many people try, many people fail. That is why ETFs have become popular. Many money managers become billionaires on a run of luck and outperformance. But one easier way to tilt the table in your direction, is to look at takeover situations. These are trades where there is a bid on the table, could be there is a private equity company with a non-binding indicative offer (NBIO), or maybe a company out there that is under takeover and just needs FIRB approval or other regulatory approvals to ensure that goes through. It may just be a question of timing, as to how long you have to wait for your money, but sometimes waiting for a 7% return perhaps, in three or four months, is better than playing the vagaries of the market. In light of this, I have created the HARRY KANE (Arbitrage) PORTFOLIO. The point was to try and benefit from the arbitrage and the takeovers of these stocks that are under threat or actually under schemes of arrangement etc. They do not always succeed and sometimes, Private Equity walks away. That is part of the risk evaluation process.
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- Invocare (IVC) – Unsolicited NBIO for 1265 cash from TPG. Cu
- United Malt Group (UMG) – Under takeover from the French at 500c.
- Allogio (ALO) – Agreed SoA for 30c cash.
- Origin Energy (ORG) – Agreed SoA with Brookfield at 891c. FIRB will be an issue.
- Alliance Aviation (AQZ) – Agreed by both parties to a 475c bid from QAN in shares. ACCC issues.
- Liontown (LTR) – Bid from Albemarle at 250c.
- Mincor (MCR) – Wyloo bid complicated by BHP and guidance issues. Current bid price 140c.
- Pushpay (PPH) Done deal at 133c currently a small return in the deal. Should complete soon.