One of Europe’s best investors says he doesn’t think about Trump
NEW YORK: Elastic NV co-founder Steven Schuurman more than doubled his fortune in two months to become a billionaire as the software company’s stock skyrocketed.
Shares of Elastic climbed 15% to US$82 at the close in New York, leaving them up 128% since the Oct 4 initial public offering.
The firm, which supplies search and data software to companies including Credit Suisse Group AG, Accenture Plc and Uber Technologies Inc, is scheduled to report second-quarter results after US markets close yesterday.
Schuurman co-founded Elastic in 2012 in Amsterdam along with Shay Banon, Uri Boness and Simon Willnauer.
He previously co-founded SpringSource, a maker of open-source software development tools that was acquired by VMware Inc in 2009 for US$362mil.
Schuurman is Elastic’s biggest shareholder with a 19% stake valued at US$1.1bil, according to the Bloomberg Billionaires Index.
Banon, the chief executive officer, owns 12% of the Mountain View, California-based company. Elastic declined to comment on the founders’ wealth. — Bloomberg LONDON: One of this year’s best-performing European equity fund managers says trying to predict geopolitics is a waste of time for an investor.
“We don’t think about macroeconomics, we don’t think about interest rates, we don’t think about Trump, we don’t think about politics or Brexit,” said Kevin Murphy, who helps run the US$1.5bil Schroder Income Maximiser Fund, which has beaten 98% of peers in 2018 by focusing on UK value shares.
“You’re much better off not trying to predict unpredictable events and focus on company fundamentals.”
Geopolitics along with concerns about rising US interest rates have pummelled European stocks in 2018, with the Stoxx Europe 600 Index poised for its worst year since 2011.
Just one strategist surveyed by Bloomberg in January had forecast the European market’s 2018 decline, made worse by Italian and UK political melodramas.
It’s all about careful stock-picking, with a focus on valuation, profit and balance sheet risks, Murphy said in a phone interview.
The fund’s team selects UK companies that have already priced in negative news, so when the market encounters a downturn like the one seen in October and November, such stocks tend to outperform, according to Schroders.
Schroder Income Maximiser Fund has returned 2.9% this year and 11% over the past three years. In contrast, the FTSE 100 Index is down 7.3% in 2018 and the MSCI UK Value Index has dropped 11%.
The fund’s top holdings as of Oct 31 included Pearson Plc, BP Plc, GlaxoSmithKline Plc and HSBC Holdings Plc.
As the March deadline for the UK’s exit from the European Union looms, strategists are split on whether the nation’s stocks are cheap enough to outperform in an environment of intense political uncertainty.
Sanford C. Bernstein calls the market “uninvestable,” while Citigroup Inc says investors have already offloaded British stocks aggressively.
“There will be opportunities thrown up by Brexit, there will be new things to buy and we’ll need to be nimble in the marketplace to take advantage of the opportunities, but we’re not going to build a portfolio designed around hard, soft or no-Brexit,” said Murphy.
He is confident that value shares will beat growth stocks over the next three to five years.
Global value equities have outperformed growth shares for the past three months, triggering speculation that investors are rotating into lower valuation stocks as they prepare for an economic slowdown and end to the bull market.
After the dot-com bubble peaked in 2000, value beat growth in the US for almost seven straight years. — Bloomberg