In this series, members of the Cerno team reflect on the crisis and provide detail on their work and domestic lives.
For our next interview, we caught up with Fay Ren and Mike Flitton, Co-Portfolio Managers of TM Cerno Pacific, to hear how they have been coping and adapting to life during this time.
What do you love about working from home?
I’m definitely not missing the morning commute (particularly on the Jubilee line!). I quite like working from home in some cases as it’s quite easy to multi-task. If you are in a Teams meeting with someone, you can just jot down points during the call and start actually working on the things you are discussing, so it ends up actually being an efficient way of working. We’ve been recently working on the quarterly Investment Reports, which requires a lot of writing and it’s nice to not necessarily be distracted as much as you would be in the office.
The ease of being able to switch around is also great – you work in the garden, or the kitchen – and be in your comfy clothes!
Do you find you are making more changes to the portfolio during this period?
We have picked up a couple of new stocks in TM Cerno Pacific.
ResMed and CSL in particular are high quality stocks that we’ve been eyeing up for the past year or two – two years in the case of one. They’ve always been too expensive to buy, but their valuations were much better on the back of the initial market sell-off in mid-March. Both are healthcare stocks so they dropped off initially quite a lot after we first allocated to them but have recovered quite nicely. ResMed helps with ventilator production within their business. Mindray, another stock we hold in the portfolio, (a Chinese medical device company), is also a big maker of ventilators too and other devices.
We also recently picked up a gaming and e-commerce company based in South East Asia who have been performing well, especially as gaming and shopping is all people can do at the moment!
There are also a couple of new things in the pipeline we are looking at, as well as some currency hedging in GBP.
What technology have you found most useful during this time?
Apart from Zoom and Teams which everyone is using, the tech hardware that I’ve been loving is my Microsoft Surface laptop which I got at the end of last year. We always thinking about Microsoft as a software leader, but they’ve really upped their game in the hardware space too.
I don’t own a TV, so I’ve been using my mini projector which is great for watching a film or TV at home, especially when you can’t go to the cinema at the moment.
How are you separating the working week from your weekend?
It is quite hard, but the one thing that I do to separate work from entertainment is to keep things on different devices. So everything I do for work is on my laptop, but I don’t use Teams on my mobile or iPad. My iPad and mobile are my entertaining devices. I also have a dedicated station for work at the kitchen counter, but make sure not to work on the sofa or in bed, which also helps separating it out and adds focus.
Favourite method of staying connected with family and friends?
I only got into gaming last year, but I’ve been playing a little bit during this lockdown as its been quite a good way of catching up with friends as you can play in a team. There are two friends who I hadn’t spoken to in years. and you kind of form a team and start chatting with each other so it’s been a really nice way of reconnecting and getting to know each other again.
I’ve been doing a lot of Zoom calls with friends from all over the place. When you are seeing friends face to face, you never get everyone all together whereas Zoom you can get everyone at the same time which is great.
Any favourite TV shows or films you’ve been bingeing on?
I’ve been watching Kingdom, on Netflix. It’s a Korean Zombie Apocalypse period drama. It’s not very long, only two series, but short and brutal – pretty bloody!
I haven’t gotten around to watching Tiger King yet, but maybe that’s next…
Any new hobbies you’ve been able to try out?
I’ve been doing a lot of ‘social media baking’! Most these are really pretty recipes that people have been sharing on social media, that usually you wouldn’t have the time to do as they take quite a long time to prep and make. One recipe has required me to make puff pastry which takes a while to knead and rest to get the right layers.
How do you think this crisis will change the way we do things in everyday life?
I don’t think I will do too much differently, but you do learn to appreciate everything more. Of course the NHS above all, but even going out to the park, or to the supermarket without having to queue for hours. I don’t mind the social distancing, while will probably still continue for a while.
What are you looking forward to once we get back to work?
Bloomberg! I’m also miss the lunches at work – being able to sample the restaurants in and around Soho for lunch. Of course I’m also looking forward to planning some holidays once we can travel again, and seeing friends face-to-face will be really nice.
In one sentence sum up your role at Cerno Capital
I co-run the Pacific portfolio as well as contributing to the firm’s other core strategies as a member of the investment team.
How are you keeping on top of market movements?
We conducted extensive remote working testing such that the availability of market data for me now is little changed from being in the office. The data gathering from informal conversations amongst the team is harder to replicate but Microsoft Teams has enabled constant contact between all members.
Do you find you are making more changes to the portfolios during this period?
We have been active in managing our currency exposure, given the volatility of markets. Rotation with the existing equity holdings has remained low, however. We believe the portfolio is already well aligned to structural trends likely to accelerate as a result of the current situation. We have taken the opportunity presented by the panic in Q1 to pick up some quality names where valuation had kept us on the side lines previously.
What do you think are the longer term consequence for society?
We are creatures of habit. It will be hard to shake the cultural inertia built up over centuries, so I would not be surprised if most behaviours return to normal over time. Although the idea of heading to a crowded pub now may seem uncomfortable, at the next big sports event I doubt we will be sitting quietly at home. That being said many people have now been forced to engage with a more efficient, digital world. Trends in ecommerce, virtual events, gaming and automation will likely accelerate. For many businesses this will necessitate rapid adaption in order to survive.
A society which places more value on the contribution of many essential workers, especially in the NHS, would also be a welcome outcome.
Favourite new addition to your routine since working from home?
A chance to mess around with the kids on any break from the desk.
I have it relatively easy. I can hole up in the study and the relative quiet. We’re lucky enough to have a good-sized garden, which is a great pressure valve. Hobby craft supplies have also been a life saver although the patio is now covered in colourful chalk graffiti! I remain bewildered at my wife’s ability to keep them entertained and stay sane.
What have you been doing to stave off the boredom?
As with many others I’ve managed to get out more than usual to run and cycle. I’ve also been hooked by Monty Don’s dulcet tones on Gardeners’ World and have been getting into the green fingered past time.
Light at the end of the tunnel ?
Seeing friends and family in the flesh.