- Christopher Rosbach is CIO and co-founder of boutique investment firm J. Stern & Company.
- Clients who invest with J. Stern & Co are exposed only to assets owned by the Stern banking family.
- Rosbach shares how he got double-digit returns in 2021 by buying just one stock and his top stock picks.
Last year, it seemed like everyone was jumping upside down in the US stock market, with the S&P 500 index hitting a record 70 close for the year.
Christopher Rosbach, chief investment officer and co-founder of boutique investment firm J. Stern & Co., took a step back.
He purchased only one stock, Salesforce (CRM), over the year for the company’s World Stars Global Equity Fund.
Clients who invest with J. Rosbach.
The public-facing fund has $185 million in assets under management, while the broader strategy has $1 billion under management.
For the fund, Rosbach is looking for high-quality companies to match an investment horizon of 10 to 25 years. He is looking for companies with strong competitive positions and long runways for growth.
Since its inception, the fund has returned 193.2% to investors compared to the MSCI World Index, which has returned 192.5%. Over five years, the fund has generated a return of 123.4%, compared to the benchmark 102.9%.
In 2021, the fund returned 19.7% to investors. This compares to about 22.3% for the MSCI World Index.
The decision to buy one share in 2021 is at the heart of the family’s long-term investment strategy. In 2020, Rosbach has taken a more active position, by taking advantage of the various disruptions that have emerged in the market from the pandemic.
“We haven’t done much at all,” Rosbach said. “We think the portfolio has been very well positioned in the face of the pandemic; that means we were able, in 2020, to make changes from a position of strength.
“And we thought she was in a very good position this year, with her drivers balanced.”
The portfolio was balanced between large technology platforms that could benefit from digital transformation and companies in the healthcare, consumer appreciation and FMCG sectors that could benefit from the 2021 recovery scenario.
This diversity of triggers is important when you have a multi-year investment perspective, Rosbach said. He believes that there is a new major driver in global markets that investors should focus on moving forward.
“I think we’ve seen globalization and that’s really happening since the 1990s,” Rosbach said. “I think we’ve got digitization, which has been going on since the 2000s. But I think we’re now at a point where we need to invest.”
The companies that are driving the investment offer great value, Rosbach said, because the market was so focused in terms of the stocks that rose in them. After the period of digitization, many of these types of companies are now ready to tackle major global challenges using the appropriate technologies that are in place.
However, Rosbach is not entirely shying away from digitization. He is still invested in some of the major players in the technology space, such as Amazon and Facebook. However, he cautions, this topic requires a stock picker mentality, because a lot of these types of companies are overvalued and have unsustainable business models.
He shares some of his best stock ideas from the portfolio that capture the investment and digitalization trends he’s focused on.