September 11, 2020
Guest: Jay Sivapalan, Head of Australia Fixed Income, Janus Henderson Group
Fixed income investors have long held a reputation in markets as the ‘smart money’. With a focus on stability, income, and capital protect, and a propensity for complicated formulas and spreadsheets, fixed income investors often have a better idea of what’s happening in markets than just about anyone else. So, when Jay Sivapalan, one of the most respected fixed income managers in the country talks about the future of the Australian economy, interest rates, and housing, you can be sure there’ll be some outstanding insights. This conversation was no exception.
In this week’s episode of The Rules of Investing podcast, we hear why investing is so different today to when he joined the industry 20 years ago, and he shares his views on what could lie ahead over the next 12 months.
August 28, 2020
Guest: Jordan Eliseo, Perth Mint.
Headlines in recent weeks have touted an about-turn by Warren Buffett as he finally bought gold after years of criticising. But is that really what happened?
In this week’s episode of The Rules of Investing podcast, I spoke to gold expert Jordan Eliseo, Manager of Listed Products and Investment Research at the Perth Mint. He points out that it was a gold mining company (Barrick Gold), not physical gold itself that Berkshire Hathaway purchased.
“They’ve bought a gold mining equity, which, to me, is entirely consistent with their mandate. It’s not surprising to me that they’d buy a gold mining company.”
We also discuss gold's strong performance this year and whether it can continue, and he shares some indicators that should tell us when the bull market in gold is getting long in the tooth.
August 14, 2020
Guest: Sam Granger, Totus Capital
Whether you’re investing in ASX small caps, global large caps, or somewhere in between, one challenge that all investors face is how to narrow down a huge universe of potential companies into a manageable list for research. Sam Granger, Portfolio Manager at Totus Capital, knows this challenge all too well. With a small investment team, the Totus High Conviction Fund covers small and large cap companies both in Australia and overseas. One strategy he uses to narrow down the field, is the draw on the research of other great investors.
“We always do our own research, and I’d never buy a stock just because they bought it. But why not focus on businesses that other great investors have already said they like? Apple’s a great example. Buffett bought Apple in 2016… You could’ve made three or four times your money just by following Buffett into Apple.”
In this episode, we discuss why he doesn't engage in short selling, and he shares two stocks that appear to be underappreciated by the market.
July 31, 2020
Guest: Andrew Mitchell, Ophir Asset Management.
In recent years, there's been an increasing trend of successful Australian businesses expanding offshore. In prior decades, offshore expansion attempts had rarely gone well. But now, Australian businesses ranging from fintech to retailers have seen their fortunes grow overseas.
Andrew Mitchell, Director and Portfolio Manager at Ophir Asset Management, says one key reason has been the falling costs building a brand overseas. While once, a huge team of marketing and salespeople would’ve been required to launch a brand offshore. But today, this can be done with a small team using Google or Facebook ads.
In this podcast, Andrew tells us how identify these offshore growers, why A2 Milk could double, or even triple its market share, and he gives us an update on his #1 stock for 2020.
July 17, 2020
Guest: Troy Angus, Paradice Asset Management.
Investors ask themselves many different questions when considering an investment thesis; how fast can the company grow? How expensive is it? How good are the management? But one question they general fail to consider is, 'am I wrong?' Troy Angus, Head of the Australian Equities Fund at Paradice Asset Management, says it’s important for investors to always consider the counter factual.
“When a stock goes up, and you don’t own it, prima-facie, you’re wrong. You should be constantly reassessing the investment case and wondering, ‘what did I get wrong here?”
This is a question they were forced to ask themselves again recently, as expensive technology stocks on the ASX have continued to rally.
Hear the rest of the story in this week’s episode of The Rules of Investing podcast. He also shares one thematic that’s a major beneficiary of recent policies, and his preferred exposure to that theme.
July 2, 2020
Even at the best of times, building a new portfolio from nothing is a challenging task. But for Chris Stott, Chief Investment Officer at 1851 Capital, the challenge was truly unique. After a 12-month break from the industry, he raised $80 million for his new firm (including a chunk of his own money) in late 2019. February 1st looked like a good time to start investing, given his track record of outperforming during reporting season. For the first three weeks, everything was business as usual. But in the final week of February, fear took over as reality sunk in for markets.
In this week’s episode of The Rules of Investing podcast, Stott tells us how he reacted to the changed market conditions, whether he thinks the worst has passed for markets, and he shares one Aussie small cap that's riding tailwinds from the COVID shutdowns.
June 19, 2020
Guest: Ben Cleary Portfolio Manager, Tribeca Global Natural Resources Fund.
Soon after COVID-19 lockdowns were announced, central banks injected trillions of dollars of money supply into economies. This, combined with huge rescue packages from governments, lit a fire under financial assets, quickly sending them back towards (and even beyond) previous highs. One sector set to benefit from this money printing is precious metals, according to Ben.
“The last real bull move for gold was following the GFC in the US, where there was around $3 trillion globally in stimulus. We’ve already had almost five times that amount in the last three months.”
In this episode of The Rules of Investing Podcast, we also discuss a better alternative than lithium for getting exposure to the battery boom, and one little-known sector that could deliver big returns in the coming years.
June 5, 2020
In Australia, just 20 coal fired power stations remain operational today. That number is set to fall dramatically over the coming decade; by 2030, 55% of Australia’s coal-fired power stations will be over 30 years old, and many of them will be either retired or scheduled for retirement. This creates a massive opportunity for investors, who can benefit from the stability, income, and capital growth that comes with investing in renewable energy.
Sam Reynolds, Managing Director of Octopus Investments, is well familiar with this opportunity, having managed the largest investment team in Europe dedicated to renewable energy. He returned to Australia in 2018, seeing the massive opportunity here. With such a large portion of our power generation requiring replacement, someone needed to fund the investments.
"You're removing 85% of the supply in the market. To replace that 85%, you're looking at about $170 billion to $200 billion of new energy investments required in Australia."
In this episode of The Rules of Investing podcast, Sam busts the myths that renewables are expensive and unreliable, and he explains why coal-fired power stations must be replaced regardless of climate change concerns.
May 22, 2020
Working as an analyst on Wall Street, Qiao Ma, Portfolio Manager at Cooper Investors, had the privilege of meeting legendary hedge fund manager, Julian Robertson. Qiao worked at Coatue Management, one of the famous “Tiger Cubs” that spun off from Tiger Funds Management. It was an incredible experience to be grilled by Julian about a stock, but she warns that it was important you’d done your homework.
“Julian had an unspoken rule, if you cover a stock, or you pitch a stock, you better know more about that stock than anyone else in the world.”
Today, she applies that same principle with her own analysts.
In this episode of The Rules of Investing podcast, we discuss her experience in China at the start of the COVID-19 outbreak, how one of her first investments saw 15% of its value evaporate overnight, and some of the exciting opportunities she's seeing throughout Asia today.
May 8, 2020
Michael Frazis, Founder and Portfolio Manager at Frazis Capital Partners, is positive about the outlook for equities. Despite the obvious challenges the world faces, a combination of monetary and fiscal stimulus, and economies that are beginning open back up, should present a perfect setup for growth equities. But that doesn’t mean investors can be blasé about what they buy. He warns that in some popular sectors, the prices have gotten too high in some names.
“Even in the hottest parts of the market, where there’s companies trading on 25-35 times sales or more, there are companies trading on a tenth of that. I think it’s extraordinarily important now to dodge some of those companies.”
In this episode, we discuss why he's so bullish right now, some new additions to his portfolio over the last two months, and why he was buying Afterpay as the stock fell in March.