Red October Performance Update

Portfolio Managers John Husselbee & Paul Kim

In the film The Hunt for Red October, the character Captain Ramius (played by Sean Connery) and a handful of Soviet naval officers take more risk than most of us could ever imagine doing.

Late in the Cold War, the officers try to make contact with the US navy in the Atlantic to seek asylum for themselves, along with the newest and most advanced Soviet nuclear submarine. Before successfully making contact, they are hunted by both the Soviet and US fleets, with the latter unaware of Captain Ramius’ intentions. These officers decided the potential long-term reward of escaping the Soviet Union to enjoy the rest of their lives in the US was so attractive that it justified the risks.

Taking appropriate levels of risk to achieve long-term financial goals should be at the heart of all investment decisions and when deciding how to react to significant market, economic and political events. This certainly applies when analysing investment markets’ own Red October last month.

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