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Why Chris Kourtis just bought CSL and ResMed

Joshua Peach
Australian Financial Review
Nov 6, 2023

A true contrarian investor, Chris Kourtis can find himself sounding a lot like a bull when in the company of bears, and there’s a lot to be bearish about at the moment.


“When you put it in the melting pot very slow global growth, very high and sticky stagflation against a backdrop of the geopolitical environment, it’s a time to be cautious,” he tells The Australian Financial Review.

Chris Kourtis has spent two decades at Ellerston Capital. Picture: Peter Rae

“A lot of people I speak to are pretty bearish, and it worries me because when everyone is bearish, that’s when the market will surprise you.”

With more than three decades managing Australian equity funds behind him, the famed stock picker has seen his share of market shake-ups.

“It’s fair to say, I’ve probably negotiated every market cycle or geopolitical event you can think of, with the exception of the Great Depression and the Vietnam War,” says the funds management Hall of Famer, who will reveal one of his latest stock picks at the upcoming Sohn Hearts & Minds event in Sydney, next week.

Kourtis left his own boutique firm Portfolio Partners in 2003 to start up with Ellerston Capital, where he’s spent the past two decades, which was initially established by the Packer family.

There, he’s developed his reputation for going against the market – but that hasn’t stopped him picking up a few well-known names more recently.

“Whether you’re a value manager or a growth manager or a quant, I guarantee there are certain names that everyone owns – we don’t own a lot of those names,” he says.

“But there are a couple I’ve invested in recently that have been smoked – absolutely pulverised – and we’re happy to now be long on a couple of those,” he adds.

Ozempic panic overdone

New additions include health tech giant CSL, which Kourtis says he hasn’t owned in some time, opting so stay on the sidelines until this month.

In fact, not owning the biotech during its recent sell-off was one of the fund’s smartest more recent plays, successfully avoiding a 7 per cent decline in September alone, according to the fund’s latest report.

However, with prices now down more than 20 per cent in the past six months, Kourtis says CSL is simply too cheap to not pick up, given its fundamentals.

“Back in July and I said CSL was an expensive defensive,” he says.

“But now for the first time in a long time, it’s no longer an expensive defensive. It’s screening really cheap.”

Another new addition is ResMed, which like CSL, sank further last month after the rise of weight-loss drugs like Ozempic sparked concerns over the companies’ key revenue markets.

“[ResMed] is in the CSL camp. It’s no longer an expensive defensive. It’s now become an oversold, cheap defensive. The market has got it wrong.”

Unperturbed by the Ozempic acolytes, Kourtis likens the Ozempic panic hitting healthcare companies such as CSL and ResMed to the sell-off that hurt Harvey Norman shares in the lead up to Amazon’s launch in Australia back in 2017.

“People were acting like JB Hi-Fi was never going to sell another flat screen again,” he says. “That stock was at $22. In two years it was $50. How can the market get it 100 per cent wrong? It happens all the time.”

Kourtis is no stranger to making unpopular buys and isn’t afraid of doubling down when the market disagrees.

“I love buying bombed out names. Sometimes you catch a falling knife but if your investment thesis holds true, and it’s oversold for the wrong reason ... you strengthen the position,” he says.

“If you get it wrong, you just have to wear it – that’s life in the big city.”

And over his four decades in the industry, Kourtis has honed his talent for picking oversold stocks against the backdrop of some of the worst market crashes of the past century.

“I was on the trading floor when the equity market crashed in October ’87,” he recalls. “I walked in one day and suddenly the market’s down 25 per cent. That was a bit of a shock to a young upstart.”

But even after several boom-bust cycles, including a once-in-a-century pandemic, Kourtis says nothing was more humbling than the global financial crisis of 2008.

“We were on the precipice and just about to go over the cliff into the abyss. A lot of the institutions that are very highly regarded today, were on the edge of disappearing,” he says.

“I thought that could be the end of the capitalist system.”

That kind of experience means Kourtis’ major bets often look different from his peers’. Ellerston’s Australian Share Fund commonly holds index heavyweights like BHP and Santos alongside big holdings in relative minnows like Insignia Financial.

“Insignia is one of the cheapest financials in the world. I will go blue in the face buying that stock every day,” he adds.

‘Long and wrong’

True to his guns, Kourtis is sticking by the stock, despite the already embattled wealth giant falling 12 per cent in October alone, following news chief executive Renato Mota will leave the business in February.

“We’re long and wrong at the moment, but I’ll stand by my statement: that is a cheap stock. It should be $5, not $2.06,” Kourtis says.

“The company has borne the pain, and it’s now time to milk the cow, but the market is not rewarding because it’s had negative momentum.”

And it’s these kinds of momentum trading trends that Kourtis thinks has much of the market mis-priced at the moment.

“I’m all about buying the long and not having the time horizon of a gnat, which is what the market has currently,” he says.

“There’s always day traders running amok, but I’m taking a 30-year view. I think a lot of these guys take a 30-second view.”

And with that decades-long perspective behind him, Kourtis appears in his element in the current environment, hunting through the discard pile for mis-priced gems.

“I’m happy to be long a few of the names we’ve recently picked up. And if we’re wrong from here, then we’ll all go off the cliff together – but again, that’s life in the big city.”

Chris Kourtis will speak at Sohn Hearts & Minds at the Sydney Opera House on November 17. All profits will support Australian medical research organisations. The Australian Financial Review is a media partner for

This article was originally posted by The Australian Financial Review here.

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