Watanabe & Brothers’ Investment today announced its financial results for fiscal 2022 third quarter ended December 31, 2022.
In this regard, gross assets of our “Orphan Fund” was decreased by as much as 44% with respect to 2021 Q3. It was possibly due to rising long-term interest rates in the U.S. treasury bonds markets.
We believe that the rising of the interest rates is corresponding to supply chain restrictions caused by COVID-19 pandemic as well as the ongoing Ukraine War. Since the future outlook is still uncertain, we cannot predict the FRB’s monetary policy in 2023 despite several statements regarding the federal fund rate.
The best investment strategy under such great uncertainty would be diversification. We have to retain an adequate amount of current assets. It would enable us to purchase stocks at the time of future market crash.
However, we have to note that Russel2000 and DAX seem to have hit their bottom around the end of the last September. Thus, there still are some possibilities where the stock markets will head for rapid recovery.
In 2022 Q3, we purchased TDOC and ADS.DE considering their reasonable stock prices. Exchange rate of EUR is now rebounding after the relatively-long term decline of the rate.
As for the portfolio of the “Orphan Fund”, TSLA and SQ account for up to 43% of the gross assets as of December 31. We believe that investment strategies of retaining the higher PER stocks under the higher volatility market would bring the larger earnings after the interest rates are going down.
Since both TSLA and SQ are recording the higher growth rates in their revenues and retaining the adequate amounts of cash, they would lead the growth of our fund’s earnings in near future.
Watanabe & Brothers’ Investment will continue to invest in the U.S. and European stock markets considering the philosophy of the ESG investment.