Behind the Portfolio Managers curtain

Posted by MoneyTalks Editor

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stevedeschesnes

stevedeschesnesEd. note: GPS Portfolio Manager Steve Deschesnes is a regular guest on MoneyTalks. We asked Steve to pull back the curtain and share his unique approach to portfolio construction and stock selection in advance of his upcoming private seminar series in four Western Canadian cities.

Q:       How often do you and your team make changes to the portfolios? What is the general time horizon for trades?

As a philosophy, we buy stocks that we expect to be holding for 3 to 5 years. That being said if we buy a stock we think is undervalued by 30% – and it gained 50% quickly? We will probably sell it. Another example would be Tim Hortons that we sold lately. Following the Burger King offer we felt there was not much more upside left, but big risk if the offer does not work. The new risk/reward assessment wasn’t as strong – so we sold.

Q:      Are clients able to see the track record / performance of each portfolio to date? How far back does the tracking go?

Absolutely. For example, directly on the front page of Disnat GPS you can see that since the launch, our Canadian portfolio has outperformed the market by an average of 2% per year for the past 6 years. By the same token, if we did not perform well – it would still be there.

Unlike most funds, clients can also see all the trading info on each portfolio back to the launch. With most products and manager you don’t really see what they did. With GPS you can see that I had some Research in Motion or Yellow Media in the Canadian portfolio, I can’t hide anything I did. On the other side I could point out how I made some great trade with Alimentation Couche-Tard or Tim Hortons.

Q:       Do you share any of the background research that influences your investment choices with clients?

My job is not just to manage portfolios. I want people to follow my ideas. You have to remember, our clients can review, track and reproduce the GPS portfolios at no cost – so I share everything with them. I will tell clients if a stock I bought was recomended by Desjardins Securities. But I just as often talk about the independent Morningstar Report on US stocks and Candian large cap stock (which we also give our clients access too), and other times I will talk about an emerging consensus in the market.

But more important than pointing to analyst assessments, I also explain why we bought or sold a stock. Not only when we buy it, but I regularly send info alerts explaining why I still like it. Every quarter I go over every stocks we hold – and tell clients, in an audio bulletin, where we stand on all of them.

Q:       What differentiates your approach from most others?

Well, first and foremost, it’s specifically designed for retail investors to follow without any management fee or other costs. It’s cheaper than a mutual fund, broker – even an ETF. Secondly, it is designed for retail investors. Too often financial products are targeted to institutional investors, and the retail guy gets a copy of it. For example, we take into consideration things like minimizing personal capital gain tax. When we sold part of our position in Canadian Tire at a huge profit I also used that time to sell some losing stock to compensate.

Q:      How did to you decide on the 5 types of portfolio that you included in GPS?

At the launch in April 2008 we started with 3 portfolios, the Canadian, Global (the world except for Canadian stocks) and Diversified which is kind a unique portfolio. After that, following demands from clients we launch an ETF one in 2010, and with interest rates so low, clients asked us to launch a High Income portfolio.

Q:       Do you envision adding new portfolios in the future?

Unfortunately, I’m not allowed to say much right now, but since the launch in 2008, we added portfolios, we added features, so chances are good we will continue to innovate in the future.

Steve Deschesnes is providing private seminars in Calgary, Edmonton, Vancouver and Victoria next weekend October 4th in AB and October 5th in BC. Desjardin Online has been kind enough to allocate a small number of seats to MoneyTalks. If you would like to meet and talk to Steve CLICK HERE to register.

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stevedeschesnes

stevedeschesnesEd. note: GPS Portfolio Manager Steve Deschesnes is a regular on MoneyTalks. In advance of his upcoming private seminar series in four Western Canadian cities, we asked Steve to pull back the curtain and share his unique approach to portfolio construction and stock selection.

Q:       How often do you and your team make changes to the portfolios? What is the general time horizon for trades?

As a philosophy, we buy stocks that we expect to be holding for 3 to 5 years. That being said if we buy a stock we think is undervalued by 30% – and it gained 50% quickly? We will probably sell it. Another example would be Tim Hortons that we sold lately. Following the Burger King offer we felt there was not much more upside left, but big risk if the offer does not work. The new risk/reward assessment wasn’t as strong – so we sold.

Q:      Are clients able to see the track record / performance of each portfolio to date? How far back does the tracking go?

Absolutely. For example, directly on the front page of Disnat GPS you can see that since the launch, our Canadian portfolio has outperformed the market by an average of 2% per year for the past 6 years. By the same token, if we did not perform well – it would still be there.

Unlike most funds, clients can also see all the trading info on each portfolio back to the launch. With most products and manager you don’t really see what they did. With GPS you can see that I had some Research in Motion or Yellow Media in the Canadian portfolio, I can’t hide anything I did. On the other side I could point out how I made some great trade with Alimentation Couche-Tard or Tim Hortons.

Q:       Do you share any of the background research that influences your investment choices with clients?

My job is not just to manage portfolios. I want people to follow my ideas. You have to remember, our clients can review, track and reproduce the GPS portfolios at no cost – so I share everything with them. I will tell clients if a stock I bought was recomended by Desjardins Securities. But I just as often talk about the independent Morningstar Report on US stocks and Candian large cap stock (which we also give our clients access too), and other times I will talk about an emerging consensus in the market.

But more important than pointing to analyst assessments, I also explain why we bought or sold a stock. Not only when we buy it, but I regularly send info alerts explaining why I still like it. Every quarter I go over every stocks we hold – and tell clients, in an audio bulletin, where we stand on all of them.

Q:       What differentiates your approach from most others?

Well, first and foremost, it’s specifically designed for retail investors to follow without any management fee or other costs. It’s cheaper than a mutual fund, broker – even an ETF. Secondly, it is designed for retail investors. Too often financial products are targeted to institutional investors, and the retail guy gets a copy of it. For example, we take into consideration things like minimizing personal capital gain tax. When we sold part of our position in Canadian Tire at a huge profit I also used that time to sell some losing stock to compensate.

Q:      How did to you decide on the 5 types of portfolio that you included in GPS?

At the launch in April 2008 we started with 3 portfolios, the Canadian, Global (the world except for Canadian stocks) and Diversified which is kind a unique portfolio. After that, following demands from clients we launch an ETF one in 2010, and with interest rates so low, clients asked us to launch a High Income portfolio.

Q:       Do you envision adding new portfolios in the future?

Unfortunately, I’m not allowed to say much right now, but since the launch in 2008, we added portfolios, we added features, so chances are good we will continue to innovate in the future.

Steve Deschesnes is providing private seminars in Calgary, Edmonton, Vancouver and Victoria next weekend October 4th in AB and October 5th in BC. Desjardin Online has been kind enough to allocate a small number of seats to MoneyTalks. If you would like to meet and talk to Steve CLICK HERE to register.