Platinum Capital why do I like thee?


Let me count the ways.

1. Platinum Capital doesn’t pay investment ‘advisors’ to recommend its product.

2. It doesn’t ‘index hug’ but rather tries to make money as well as it can using a range of strategies that are broadly contrarian. Thus rather than hedge currencies in a mechanical way, it will limit hedging where it thinks it will harm return and hedges more where it will enhance it.

3. Likewise it ‘shorts’ stocks and stock markets it thinks are overvalued at the same time as going ‘long’ on others. Their International fund is currently short where it thinks stock markets are overvalued (eg US) but still has some long positions in US stocks it likes. It’s long in Japan. This provides great protection against the risk of a downturn everywhere, and yet Platinum’s Stock picking has been sufficiently good to ensure that it still outperforms the indexes with which it compares itself.

4. Platinum’s reporting of its’ own results is always pretty hard nosed. Like Warren Buffet’s famous preparedness to conceded his mistakes so too Platinum Capital is frank about mistakes and poor performances it has put in. It recently had a bad patch which it frankly reported to its unit-holders. The more common approach is to say “but for some bad luck on (pick some mistake) we performed strongly”.

5. Platinum’s performance over its lifetime has been remarkably good. All the graphs on their site are in security protected pdf files, but I’ve managed to find one truly impressive graph of the performance of their Japan fund.

Anyway, I’ve put some money where my mouth is and we’ll see how it goes. Remember, you’re welcome to follow in my footsteps, but at your own risk. I am an amateur investor – and claim no special knowledge. There may be better fund managers about, but I don’t spend my time scouring the market for them, so I’d not know of them. And as they say, past performance is no guarantee of future performance.

Interestingly, rather than buy into ethical investment miasma, Platinum has a very clear disclaimer in its prospectus.

Labour standards and environmental, social or ethical investment criteria Platinum regards the subject of ethical investing as highly complex and point-, to the contradictions and conflicts that are ,in essential element of the capitalist system. Platinum has no way to assess the individual beliefs and Values Of Oil[ Investors. I [its is made all (tic more. difficult as multi -culturalism has become a way of life in this increasingly globalised world

Cognisant of a diversity of views on these subjects, Platinum has no formalised policy of considering labour standards or environmental, social or other ethical investment criteria in selecting. retaining and realising investments. On occasion Platinum does take these matters into account, however, the extent to which Platinum does so is limited.

To take more than a limited account of such matters Platinum would need to develop a template of ethical values and considerations that satisfy the majority of unit holders on matters including, but not limited to, labour standards, environmental impacts, social intercourse, governance behaviour and standards, and national institutions, In Platinum’s view it is not possible to create such a template Without unduly imposing a set of values and considerations on all investors which sonic Investors may not share.

Well you can’t complain about their being up front about it. And they do leave room for considering the issues in egregious cases. That seems like the right position to me. And I hope they don’t invest in tobacco products. As for the possibility of Platinum being essentially amoral I was intrigued and pleased to see their submission to the Senate on the terrorism legislation. There is some direct relevance to Platinum’s specific operations from the anti-money laundering regulation. But Platinum’s concerns are broader than this. To quote their submission.

We presume other submissions will address the ways in which this legislation weakens civil rights. However, we note that the lack of full judicial oversight (a key feature of this legislation) may reduce respect for the law even when the guilty are apprehended. Preventative detention orders provide a case in point- if individuals over whom such orders are placed, do not have the same rights as those in a criminal hearing, is it not probable that family and associates of the accused will reject the action as unfair and unjust-giving rise to martyrdom? The guilty will be able to dismiss the actions as conspiracies to rob them of employment, property, and relationships. The lack of judicial oversight to the standard expected in criminal cases bears the considerable risk of injustice and raises the prospect of this country losing the very essence that it is trying to preserve. False witness and martyrdom are unattractive alternatives.

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