Latest / The Money Puzzle / BONUS: Investing Secrets from $1.5bn Fund Manager Jun Bei Liu

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BONUS: Investing Secrets from $1.5bn Fund Manager Jun Bei Liu · The Money Puzzle

• 0:09
  Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
• 0:13
  Speaker 1: James Kirby. Welcome aboard everybody. Well. I've mentioned in recent
• 0:17
  Speaker 1: weeks that we are planning to do some new features
• 0:20
  Speaker 1: here at the Money Puzzle, and today and over the
• 0:23
  Speaker 1: next three mondays, we're going to present a short series
• 0:26
  Speaker 1: to you on how top investors pick their winning investments.
• 0:31
  Speaker 1: My colleague at The Australian, Julianne Spragg, sat down for
• 0:34
  Speaker 1: a chat with top stock picker jun Bei Lu, the
• 0:39
  Speaker 1: co founder of ten Caps. She's more than tripled funds
• 0:42
  Speaker 1: under management more than one point five billion dollars. How
• 0:46
  Speaker 1: does she pick a good stock and what's your advice
• 0:49
  Speaker 1: for everyday investors? Let's find out.
• 0:54
  Speaker 2: Gin Bailou, thanks for joining me. I want to have
• 0:56
  Speaker 2: a chat to you about your journey.
• 0:58
  Speaker 3: So you came to.
• 0:59
  Speaker 2: Australia as a sixteen year old, got yourself into the
• 1:02
  Speaker 2: funds management business, initially as an analyst involved in a
• 1:06
  Speaker 2: fund that I think had around three hundred million dollars
• 1:08
  Speaker 2: funds under management, and grew that to over a billion
• 1:10
  Speaker 2: dollars and now out on your own at ten cap.
• 1:12
  Speaker 4: It's a pretty extraordinary story.
• 1:14
  Speaker 3: Oh, thank you.
• 1:15
  Speaker 2: We want to have a chat about that, but also
• 1:17
  Speaker 2: really keen to learn from you about what you've learned
• 1:19
  Speaker 2: about investing and get some of your tips for those
• 1:22
  Speaker 2: of us who just want to get.
• 1:23
  Speaker 4: Better at it. Let's maybe just start at the beginning.
• 1:27
  Speaker 2: And you came to Australia as a sixteen year old.
• 1:29
  Speaker 2: What was that like?
• 1:30
  Speaker 3: Oh, look, it's quite incredible.
• 1:32
  Speaker 5: Actually, I still remember thinking the first day I landed
• 1:35
  Speaker 5: in Australia, the first thing that struck me is the
• 1:37
  Speaker 5: sky was so blue. And I come from China at
• 1:40
  Speaker 5: the time, we don't see blue sky very often. Sky
• 1:42
  Speaker 5: so blue, and the cloud is so three D, almost
• 1:45
  Speaker 5: as if you could touch it. It's such a beautiful country.
• 1:48
  Speaker 5: I just remember thinking that was incredible. Of course, over
• 1:51
  Speaker 5: the next six month, I think I couldn't understand the
• 1:53
  Speaker 5: word of English, so it took a little while to
• 1:55
  Speaker 5: vaguely translate the body language into what people meant.
• 2:00
  Speaker 3: We went to read people.
• 2:01
  Speaker 5: Yeah, you kind of need to read, and it's incredible
• 2:03
  Speaker 5: how your our mind adapt them. So our brain sort
• 2:06
  Speaker 5: of adapt to the situation. I think within three months
• 2:09
  Speaker 5: I can sort of vaguely understand in the class that
• 2:11
  Speaker 5: what teachers sort of meant some subject matter like matt
• 2:15
  Speaker 5: and other things a bit easier, but when you go
• 2:16
  Speaker 5: into biology and others, becomes a bit harder.
• 2:19
  Speaker 3: But still you pick up real quick.
• 2:20
  Speaker 5: And I still remember every day when I was on
• 2:22
  Speaker 5: my way to school, I have to catch the bus
• 2:24
  Speaker 5: to go to school, and it's about forty minute bus ride,
• 2:27
  Speaker 5: and I used to take deep breath. I get quite
• 2:30
  Speaker 5: stressed and take deep breath, keep forcing myself thinking in English.
• 2:34
  Speaker 5: Because the hardest thing for a migrant is that you
• 2:37
  Speaker 5: think in your own language. Then you before you speak,
• 2:39
  Speaker 5: you translate it, and then when you hear it, then
• 2:41
  Speaker 5: you translate back and then you think again in your
• 2:43
  Speaker 5: own language. That's why it takes so long for you
• 2:46
  Speaker 5: to actually speak something. So if you force yourself to
• 2:49
  Speaker 5: think English, then it much faster, and then you actually
• 2:52
  Speaker 5: get practice all the time. So I remember that forty
• 2:55
  Speaker 5: minute bus ride. I used to practice every day and est.
• 2:58
  Speaker 4: In your head, you're strying to speak talking to myself.
• 3:01
  Speaker 5: Yeah, so I think I still today people catch me
• 3:03
  Speaker 5: talking to myself all the time, going crazy.
• 3:06
  Speaker 2: And your parents what triggered the move? Did they sort
• 3:09
  Speaker 2: of talk to you at the time about why they
• 3:10
  Speaker 2: were doing that.
• 3:10
  Speaker 3: Yeah.
• 3:11
  Speaker 2: Sure.
• 3:11
  Speaker 3: Look at the time, so my mother came.
• 3:13
  Speaker 5: To Australia as part of that whole relaxation of student
• 3:15
  Speaker 5: visa posta Tiama Square and Massacre. And at the time,
• 3:19
  Speaker 5: but in China, China was very poor. Every person in
• 3:22
  Speaker 5: China really wanted to see what it's like to be
• 3:24
  Speaker 5: in the foreign country. It's almost it's like a dream
• 3:27
  Speaker 5: come true. And my mother was very fortunate that she
• 3:29
  Speaker 5: came through in the visa and then she managed to stay,
• 3:32
  Speaker 5: worked many jobs and managed to stay. And then I
• 3:35
  Speaker 5: came and joined her six years later. So we separated
• 3:38
  Speaker 5: for six years and joined her six years later, and
• 3:39
  Speaker 5: then my dad came another four years later.
• 3:42
  Speaker 4: My goodness, what a journey.
• 3:43
  Speaker 3: I know, it's incredible.
• 3:45
  Speaker 2: And the attitudes towards money when you were growing up,
• 3:48
  Speaker 2: did your sort of parents sort of instilled in particular values.
• 3:51
  Speaker 5: Yeah, look, I think it just we grew up pretty poor,
• 3:53
  Speaker 5: so making money is it's probably a big thing.
• 3:56
  Speaker 3: But even though we were.
• 3:57
  Speaker 5: Poor, But my dad always remember he's I think he's
• 3:59
  Speaker 5: quite adventures. He was I would say, one of the
• 4:02
  Speaker 5: earliest investors in share market or bomb market there in China.
• 4:06
  Speaker 5: This is I think he started in maybe like ninety
• 4:08
  Speaker 5: nineteen ninety when the capital market was really literally it's
• 4:12
  Speaker 5: infancy in China and it was more or less just punting, right.
• 4:15
  Speaker 5: So I remember at home, we don't have computers. He
• 4:18
  Speaker 5: will print out all these paper and draw all the
• 4:21
  Speaker 5: lines of where the stock is today, and then draw
• 4:23
  Speaker 5: all these ratio and everything, and then every day he'll
• 4:26
  Speaker 5: make a prediction about the stock either going up or
• 4:29
  Speaker 5: going down.
• 4:30
  Speaker 3: He'll never get it wrong.
• 4:31
  Speaker 5: And then every day he'll stick up a paper. So
• 4:34
  Speaker 5: we literally have all these lines of paper because we
• 4:37
  Speaker 5: don't have computer going across my bedroom, his bedroom, living room,
• 4:41
  Speaker 5: all the way down downstairs, and they're into the kitchen,
• 4:44
  Speaker 5: so we just have all these charts everywhere.
• 4:46
  Speaker 3: So I grew up with the charters.
• 4:48
  Speaker 4: Wow investing you learned by Osmosis oh.
• 4:50
  Speaker 5: I reckon, it's exciting. I think what I learned is
• 4:53
  Speaker 5: that excitement. To me, it's always investing a bit like
• 4:56
  Speaker 5: treasure hunting. You go and find something before everyone else,
• 5:00
  Speaker 5: and then you founder you did the work, you found it,
• 5:03
  Speaker 5: and you know you make the return. So it's very
• 5:05
  Speaker 5: much like treasure hunting. So at the time I feel
• 5:07
  Speaker 5: a lot of my dad's excitement and disappointment and then
• 5:10
  Speaker 5: my at the time, I thought he would never be
• 5:12
  Speaker 5: wrong because every day he's pretic either up or doubt.
• 5:15
  Speaker 3: Sideway will be the wrong day.
• 5:16
  Speaker 4: What was treasure hunting?
• 5:18
  Speaker 2: Can you remember your very first investment, what it might
• 5:21
  Speaker 2: have been, and how old you were when you made
• 5:23
  Speaker 2: your first, like your first investment all on your own?
• 5:26
  Speaker 3: Yeah, yeah, that's right.
• 5:27
  Speaker 5: So my first investment actually when I already started working,
• 5:31
  Speaker 5: but very early days.
• 5:32
  Speaker 3: I think I put my money in a company.
• 5:35
  Speaker 5: Actually I put my money in a company where at
• 5:38
  Speaker 5: the time I thought, oh, look, I don't really know
• 5:40
  Speaker 5: how to invest. I just want to invest in something
• 5:42
  Speaker 5: that I know what it is, which is worth her
• 5:45
  Speaker 5: and because I go to the store. In fact, I
• 5:47
  Speaker 5: worked in Woolworth briefly as a checkout chick in high school.
• 5:50
  Speaker 1: So you knew it.
• 5:51
  Speaker 3: Well, yeah, so it's like that touch and feel. It's
• 5:53
  Speaker 3: really exciting.
• 5:54
  Speaker 4: And I still have my name bad from Coles just quietly, Oh.
• 5:57
  Speaker 3: I think I do too, Yeah, I think I do too.
• 6:02
  Speaker 3: And that was my first experience.
• 6:04
  Speaker 5: I didn't know anything about it, and that was at
• 6:06
  Speaker 5: the time where I just started looking at some of
• 6:08
  Speaker 5: the financial statements I learned in UNI and then my
• 6:10
  Speaker 5: first job as a start analyst, also working for morning
• 6:13
  Speaker 5: Staff for a bit as well.
• 6:14
  Speaker 2: So you studied finance to knew you wanted to go
• 6:17
  Speaker 2: into the finance industry become an analyst. So you've got
• 6:20
  Speaker 2: a bit of knowledge behind you then, but then you
• 6:21
  Speaker 2: sort of think you still stick to what you know.
• 6:23
  Speaker 5: So you'll buy I tell you what I think that
• 6:26
  Speaker 5: it's actually less inspirational than often what I portrayed to be.
• 6:30
  Speaker 5: It's actually, look, I always feel finance. I did finance
• 6:33
  Speaker 5: because as a Chinese kid, we'll go finance or accounting
• 6:36
  Speaker 5: definitely will find a job. That's what my mother tells me.
• 6:38
  Speaker 5: And as I go through finance, and then I kind
• 6:41
  Speaker 5: of learned the things that I like. I never liked
• 6:44
  Speaker 5: the accounting part of it. I find a very try
• 6:47
  Speaker 5: so and.
• 6:48
  Speaker 2: People who know me, they'll be having a giggle now
• 6:50
  Speaker 2: because one of my stories is my dad wanted me
• 6:53
  Speaker 2: to study accounting.
• 6:54
  Speaker 4: You'll get a job. But then I was just delinquent,
• 6:56
  Speaker 4: going no, I don't want accounting.
• 6:59
  Speaker 5: No, yeah, I think the accounting is the thing. Yeah,
• 7:03
  Speaker 5: Well I think I'm kind of pivoted as well. So
• 7:06
  Speaker 5: because with accounting, I did a one year of accounting
• 7:08
  Speaker 5: or that that that's not.
• 7:09
  Speaker 4: Me all the accounting.
• 7:10
  Speaker 5: Yeah, that's right, and they're too scared to drop the
• 7:12
  Speaker 5: entire commerce. Then my mother will be hugely disappointed. So
• 7:15
  Speaker 5: I shifted to finance, and then in finance that you
• 7:18
  Speaker 5: learn about behavioral finance and economics and a few other things.
• 7:22
  Speaker 5: And behavioral finance was so fascinating because that's the soft skill.
• 7:26
  Speaker 5: That's where you do the treasure hunting. You're trying to
• 7:29
  Speaker 5: think about how everyone else is thinking, what are their biases.
• 7:33
  Speaker 5: It's almost like a psychology class. I find that very fascinating.
• 7:36
  Speaker 2: Is that then how you can work out whether to
• 7:39
  Speaker 2: go with the herd or not? You know how there's
• 7:40
  Speaker 2: that herd mentality in markets.
• 7:42
  Speaker 5: That's absolutely right. I actually think unlike what many other
• 7:45
  Speaker 5: people think. Many people think investing about numbers and get
• 7:48
  Speaker 5: the numbers right and everything. I actually think get the
• 7:50
  Speaker 5: numbers right is almost a basic and that's a small
• 7:52
  Speaker 5: component of ultimate what the share price will do. It's
• 7:55
  Speaker 5: actually get your numbers right and what the share price
• 7:57
  Speaker 5: will do, especially in the immediate future, in the next
• 8:00
  Speaker 5: three to six months. Short term is all about sentiment.
• 8:04
  Speaker 5: Sentiment is behavioral bias, you know, is all about what
• 8:07
  Speaker 5: would other people pay for those numbers that you just
• 8:10
  Speaker 5: put together, And that's what share market. That's why these
• 8:13
  Speaker 5: days you see wild swings.
• 8:15
  Speaker 3: It's just that sentiment.
• 8:16
  Speaker 5: So it's actually incredibly important because if you can understand
• 8:19
  Speaker 5: that and then you can sometimes go against the hurd
• 8:22
  Speaker 5: then you make a lot more return. There's your treasure.
• 8:25
  Speaker 5: You found that before other people realized it was a treasure.
• 8:27
  Speaker 2: So is there something that you look towards to try
• 8:30
  Speaker 2: and work out that behavioral piece? Like, is there I
• 8:33
  Speaker 2: don't know if you're reading different aspects of how do
• 8:35
  Speaker 2: you try and determine what people are going to do?
• 8:38
  Speaker 3: Yeah?
• 8:38
  Speaker 5: I think firstly you need to and when you start
• 8:40
  Speaker 5: investing in something, don't start with a preconceived idea of
• 8:43
  Speaker 5: what it should be, because I find many investors make
• 8:46
  Speaker 5: this mistake is that they always feel, oh, I think
• 8:48
  Speaker 5: this is that, and then they when you believe something
• 8:51
  Speaker 5: firmly without open mind, then you start finding evidence just
• 8:55
  Speaker 5: to support your own view, our own view sometimes right,
• 8:58
  Speaker 5: sometimes right. It's very important to when you start looking
• 9:01
  Speaker 5: at something just keep a complete open mind looking at
• 9:03
  Speaker 5: as afresh or some of the previous mistakes, many mistakes
• 9:07
  Speaker 5: made mistake all the time, and one of some of
• 9:09
  Speaker 5: the biggest mistake is that when we have presecuencive idea,
• 9:11
  Speaker 5: then we start making pivot to the wrong side. Then
• 9:14
  Speaker 5: you stop listening to everyone, and then you kind of
• 9:17
  Speaker 5: just make the wrong bet about a company's future simply
• 9:21
  Speaker 5: because you just couldn't see what is coming. So yeah,
• 9:24
  Speaker 5: so I think open mind and curiosity is very important.
• 9:28
  Speaker 2: Do you have any rules or structures around how you
• 9:32
  Speaker 2: go to invest that you're talking about? It sounds like
• 9:34
  Speaker 2: you do an awful lot of research and you sort
• 9:36
  Speaker 2: of sounds like you pause and really get to understand
• 9:39
  Speaker 2: the company before you invest.
• 9:40
  Speaker 4: But how long does that take?
• 9:42
  Speaker 2: And is that sort of a metric or some sort
• 9:46
  Speaker 2: of plan that you work to before you actually invest
• 9:48
  Speaker 2: your money or your client's money.
• 9:49
  Speaker 1: Oh.
• 9:50
  Speaker 5: Absolutely, so look for a brand new company, it does
• 9:53
  Speaker 5: take much longer because ultimately we always talk about doing
• 9:56
  Speaker 5: your homework, is that you do need to understand the business.
• 9:59
  Speaker 5: So the core understanding of the business is firstly, what's
• 10:02
  Speaker 5: its customer proposition? What's the proposition? Why does it exist?
• 10:06
  Speaker 5: So ask this question, why does it exist? How does
• 10:08
  Speaker 5: it exist? How is it better than others? And how
• 10:11
  Speaker 5: does it make money and is that how or specialty
• 10:15
  Speaker 5: going to continue? Are they keep reinvesting what's special about
• 10:18
  Speaker 5: that business that they can keep going? And then you
• 10:21
  Speaker 5: can decide, Okay, well it can make this much money
• 10:24
  Speaker 5: and next share you will make more because I know
• 10:26
  Speaker 5: all these things they're doing, it's going to drive this
• 10:29
  Speaker 5: and I know the management execution is very important. They've
• 10:32
  Speaker 5: done it before and you met the management need. They're
• 10:34
  Speaker 5: driven because ultimately, especially small business, they run by people
• 10:38
  Speaker 5: who's creating, innovating an idea, so they've got to be driven.
• 10:42
  Speaker 3: So it's them. You kind of follow them when it's
• 10:45
  Speaker 3: early on.
• 10:46
  Speaker 5: So a lot of these when once you're done your homeworld,
• 10:49
  Speaker 5: you understand, you really understand the driver of the business,
• 10:52
  Speaker 5: where it's going, You understand the management, you understand in
• 10:55
  Speaker 5: and out of that business and that industry. And then
• 10:58
  Speaker 5: this is the first part of it. And then the
• 11:00
  Speaker 5: next part of it is to actually work out what
• 11:02
  Speaker 5: you want to pay for it. And that is the
• 11:05
  Speaker 5: tricky part.
• 11:06
  Speaker 4: That is the tricky part.
• 11:07
  Speaker 2: When we come back, let's talk about how to know
• 11:09
  Speaker 2: when a stock is too expensive, And I also want
• 11:12
  Speaker 2: to know your investing mistakes. What do they teach you
• 11:16
  Speaker 2: and what's your investing advice for everyday investors. We'll return
• 11:20
  Speaker 2: to our chat following this small break.
• 11:36
  Speaker 4: Jim Bay.
• 11:37
  Speaker 2: Before we went to the break, we were talking about
• 11:40
  Speaker 2: investing in shares, so doing all of the research deciding
• 11:43
  Speaker 2: which company you'd like to back. The tricky part though,
• 11:46
  Speaker 2: is working out whether there's value in that company. How
• 11:49
  Speaker 2: do you go about working out whether a company is
• 11:52
  Speaker 2: too expensive to buy?
• 11:53
  Speaker 5: I think in today's world the expensiveness really come back
• 11:57
  Speaker 5: down to relative valuation, so you compare it with something else.
• 12:01
  Speaker 5: So we in Australian market, if something is expensive, it's
• 12:05
  Speaker 5: not a reason for not buying something or for selling
• 12:08
  Speaker 5: something because yeah, I tell you why.
• 12:11
  Speaker 3: I'll tell you why.
• 12:11
  Speaker 5: Because Australian market growth is very hard to come buy.
• 12:15
  Speaker 5: So and then there's only limited there's only a couple
• 12:17
  Speaker 5: of companies you can buy that can grow. So there's
• 12:20
  Speaker 5: an incredible amount of money keeps piling into growth within
• 12:23
  Speaker 5: our share market and they will keep going to the
• 12:25
  Speaker 5: same company. So the evaluation today is much much higher
• 12:28
  Speaker 5: than they were ten years ago.
• 12:30
  Speaker 2: Simply because it's just not as many companies, not many compants,
• 12:33
  Speaker 2: that's right, And there's an awful lot of money that
• 12:35
  Speaker 2: needs to be funneled.
• 12:36
  Speaker 3: Towards amount of money. That's right, Yeah, that's right.
• 12:39
  Speaker 5: And everyone wants to growth company to future proof their portfolio. Right,
• 12:43
  Speaker 5: So your portfolio will have always have bit of everything.
• 12:45
  Speaker 5: You have, bit of gold, bit of a company that
• 12:47
  Speaker 5: paid dividend like banks and things give you good income,
• 12:50
  Speaker 5: and then bit of maybe bit of material, but bit
• 12:53
  Speaker 5: of a growth company because in five years time, you
• 12:56
  Speaker 5: want your portfolio to keep growing rather than just paying
• 12:58
  Speaker 5: out dividend, right, you don't want to then still every
• 13:01
  Speaker 5: year they say share market should double every seven years,
• 13:03
  Speaker 5: So you want that growth company to be the core
• 13:07
  Speaker 5: holding of a portfolio. And then on top of that
• 13:09
  Speaker 5: you've got some dividend. You've got some ciclical they call
• 13:12
  Speaker 5: a cicl call ciclicll is like companies do well when
• 13:15
  Speaker 5: the economy picks up and then do badly when economy
• 13:18
  Speaker 5: So you buy and sell you much more shorter term
• 13:21
  Speaker 5: with those ones.
• 13:22
  Speaker 3: So that's the portfolio.
• 13:23
  Speaker 4: So you think I need to have a bank in
• 13:25
  Speaker 4: my portfolio.
• 13:26
  Speaker 2: We always refer to the Big four and then Commonwealth
• 13:28
  Speaker 2: Bank has absolutely gone out on its own, like it
• 13:31
  Speaker 2: is just on a different level. So then how do
• 13:34
  Speaker 2: you work out then, if I want to have a bank,
• 13:36
  Speaker 2: does Commonwealth now look so expensive that I'm better off
• 13:38
  Speaker 2: going with these other three?
• 13:40
  Speaker 3: Pick one of them?
• 13:41
  Speaker 2: Or do you say, like what we were talking about
• 13:43
  Speaker 2: before is like the herds obviously going with CBA.
• 13:47
  Speaker 4: How do you make that decision? How do you sit
• 13:49
  Speaker 4: down and assess it?
• 13:50
  Speaker 5: Yeah?
• 13:50
  Speaker 3: Look a two things I agree with you. I think
• 13:52
  Speaker 3: banks looks really expensive. Yeah yeah.
• 13:54
  Speaker 5: And then the thing is like you don't really want
• 13:56
  Speaker 5: to As an investor who's not constantly watching the market,
• 13:59
  Speaker 5: I always have advice to stick with quality, stick with
• 14:03
  Speaker 5: the best quality company, and because you don't want to
• 14:04
  Speaker 5: worry about a day to day you've got to day
• 14:06
  Speaker 5: trade and all of that. Right, So unfortunately, I think
• 14:09
  Speaker 5: CBA is best position. It's the best bank, most expensive
• 14:12
  Speaker 5: in the world, I can say that. So when you
• 14:14
  Speaker 5: pick one, I think NAB looks okay. Relative Again, we're
• 14:17
  Speaker 5: talking about relative valuation. Things look relatively cheaper. NAP still
• 14:21
  Speaker 5: looks expensive for a bank on historical terms, but it's
• 14:24
  Speaker 5: a whole lot cheaper than what CBA is offering. So
• 14:27
  Speaker 5: I think relatively I would hold NAB instead of CBA.
• 14:31
  Speaker 5: But nothing will stop CBA from keep rallying away because.
• 14:34
  Speaker 4: If anyone listening, if they just put CBA, you.
• 14:36
  Speaker 5: Keep up because I tell you what, last three months
• 14:38
  Speaker 5: at the share price going where it actually six six
• 14:41
  Speaker 5: months ago a share price was moving higher because of
• 14:44
  Speaker 5: it's earning was doing a bit better and buy back
• 14:47
  Speaker 5: and all these great things. But last three months all
• 14:50
  Speaker 5: because international investor want to put money in Australia and
• 14:53
  Speaker 5: then what do they do. They kind of just buy
• 14:55
  Speaker 5: the top companies and they don't want to buy resources,
• 14:58
  Speaker 5: so they bought banks and then watch banks buy, you
• 15:00
  Speaker 5: buy the CBA. They don't want the problem with an
• 15:02
  Speaker 5: they's had a lot of issues and even Westpac is
• 15:05
  Speaker 5: not doing gray, so they kind of just put money
• 15:08
  Speaker 5: in the big one.
• 15:09
  Speaker 2: We get told a lot that, particularly when markets are volatile,
• 15:13
  Speaker 2: don't sell, sit tight, hang in there. I think for
• 15:18
  Speaker 2: investors too, there is an art in knowing when to sell.
• 15:21
  Speaker 2: How do you work out when it's a great time
• 15:23
  Speaker 2: to sell?
• 15:24
  Speaker 5: Yeah, so to sell is always the hardest question for it. Yeah,
• 15:28
  Speaker 5: so hardest question. I always believe you find a proper
• 15:31
  Speaker 5: growth winner. You do not sell right so you can
• 15:34
  Speaker 5: trim a little bit because you need money to buy
• 15:36
  Speaker 5: something else.
• 15:37
  Speaker 3: That's how we look at it.
• 15:38
  Speaker 5: So if I some of our winner like like three sixty,
• 15:40
  Speaker 5: Promedicus and these one that incredibly well. But the thing is,
• 15:44
  Speaker 5: if I find something else I think also can do
• 15:47
  Speaker 5: very well in the next to a month, I might
• 15:48
  Speaker 5: sell a little bit and put into it, but I
• 15:50
  Speaker 5: don't completely sell out because winners history have proven that
• 15:54
  Speaker 5: if you sell it, you'll never buy back in because
• 15:56
  Speaker 5: they keep going. So a company like that is they
• 15:59
  Speaker 5: just such a strong driver behind them in terms of
• 16:03
  Speaker 5: earning's growth. It just we just don't have many of
• 16:05
  Speaker 5: them around.
• 16:06
  Speaker 4: So how do you go about balancing your portfolio?
• 16:08
  Speaker 5: Yeah, So the good thing is that when you find
• 16:10
  Speaker 5: when we have the next opportunity coming out maybe so
• 16:13
  Speaker 5: I think even with like three sixty, it was a
• 16:16
  Speaker 5: few years ago, was very cheap. Everyone worried about what's
• 16:18
  Speaker 5: happening with the US and all that, and then you know,
• 16:21
  Speaker 5: you sell some of the growth names and funding too.
• 16:23
  Speaker 5: Those and even early in the year when you talk
• 16:25
  Speaker 5: about the market volatility, these times are great to picking
• 16:28
  Speaker 5: up high quality companies because people sell everything, especially people
• 16:32
  Speaker 5: like to sell winners because they go, oh, I don't
• 16:34
  Speaker 5: know what tariff is going to do I'm going to
• 16:36
  Speaker 5: sell my profit my winners because I've done so well
• 16:38
  Speaker 5: out of them. So people sold out all the growth names.
• 16:41
  Speaker 5: They're all thirty percent cheaper, literally in three weeks thirty
• 16:45
  Speaker 5: percent cheaper, and then they all jumped more than thirty percent.
• 16:48
  Speaker 5: Some of them have gone up thirty percent.
• 16:50
  Speaker 4: Behindslight's wonderful, isn't it. So yeah, that's how do you
• 16:53
  Speaker 4: stay calm in those times it can be turbulent.
• 16:56
  Speaker 2: That's got a job where you'll wake up in the
• 16:58
  Speaker 2: morning or maybe I don't know if you would have
• 17:00
  Speaker 2: done to go what's my morning going to be? Like,
• 17:03
  Speaker 2: It's just it's what Deffen is happening on global markets
• 17:05
  Speaker 2: really does impact what's happening on the local market.
• 17:08
  Speaker 5: Absolutely, so I think, look, I've been doing this for
• 17:10
  Speaker 5: twenty five years, so you kind of get used to
• 17:12
  Speaker 5: the volatility. Volatility will come, but you know it will
• 17:15
  Speaker 5: always pass. It will always pass, but you need to
• 17:18
  Speaker 5: work out what's the new information. So what we didn't
• 17:20
  Speaker 5: know at the time was really in this particular time
• 17:24
  Speaker 5: was tariff. We don't know what Trump is going to
• 17:26
  Speaker 5: do one hundred and forty seven percent on China or
• 17:28
  Speaker 5: all that. So for companies that potentially get impacted by
• 17:31
  Speaker 5: that tariff. We just thought that's too hard because I
• 17:33
  Speaker 5: don't know tomorrow. It could be one hundred percent tomorrow
• 17:36
  Speaker 5: or zero percent.
• 17:37
  Speaker 3: I don't know. That's we don't do.
• 17:39
  Speaker 5: But for the company actually doesn't get impacted by tariff,
• 17:42
  Speaker 5: they are thirty percent lower on no change to earnings.
• 17:45
  Speaker 5: This way, we know it will come back. So you
• 17:48
  Speaker 5: buy these businesses same as during pandemic. I remember when
• 17:51
  Speaker 5: market went free four same thing. Everything fell, especially the winners,
• 17:55
  Speaker 5: they fell first, and then we just sort of work
• 17:58
  Speaker 5: out what we do know what we don't know. So
• 18:00
  Speaker 5: the first thing is that what we do know is
• 18:02
  Speaker 5: that hard asset will come back. Sit in the airport.
• 18:04
  Speaker 5: Someone will buy this thing. It was forty percent cheap,
• 18:07
  Speaker 5: or someone will buy it. So you buy the hard asset,
• 18:09
  Speaker 5: and then we have the government promised to step in
• 18:11
  Speaker 5: give stimulus and all of that. Then we'll go, okay,
• 18:13
  Speaker 5: we can then buy retailers by JP high vibe. So
• 18:16
  Speaker 5: really need to really understand what information is there and
• 18:20
  Speaker 5: then based on and see if there's any change to
• 18:23
  Speaker 5: your investment assumptions of a company.
• 18:25
  Speaker 2: Let's dive into some of the mistakes along the way.
• 18:28
  Speaker 2: We've all made some safe places.
• 18:31
  Speaker 3: It's a safe space, that's right.
• 18:34
  Speaker 2: But I think to learn and to grow and to
• 18:35
  Speaker 2: become a better investor, you've had to have made some
• 18:37
  Speaker 2: clangers along the way. So I don't know if there's
• 18:39
  Speaker 2: one in particular that you recall what it was and
• 18:43
  Speaker 2: what it taught you.
• 18:44
  Speaker 5: Yeah, look, we make a mistake all the time, that's
• 18:46
  Speaker 5: what they say. So investing in the share market, right,
• 18:48
  Speaker 5: you work out your probability, so what they say, but
• 18:51
  Speaker 5: we do better than that, So we are probability is
• 18:53
  Speaker 5: about seventy to twenty percent will outperform, and but that
• 18:56
  Speaker 5: twenty percent time that we're underperforming will pick the company
• 18:59
  Speaker 5: that in the workhouse. So you always make misspedakes. That's
• 19:02
  Speaker 5: the key advice. You have to make mistake to learn,
• 19:05
  Speaker 5: otherwise you never learn. So there's one name always click
• 19:09
  Speaker 5: with me because that's early days in my career, obviously
• 19:12
  Speaker 5: feeling fantastic buying Woolworth's.
• 19:13
  Speaker 2: Oh this is easy, and so that investment went well,
• 19:16
  Speaker 2: we meant an So that that was your first investment.
• 19:18
  Speaker 4: Can you recall how much you's?
• 19:19
  Speaker 5: Can remember, Yeah, I made money and then I sold it. Yeah,
• 19:23
  Speaker 5: that's right, I made money. I think I made a
• 19:24
  Speaker 5: thousand dollars. I was so excited and I saw it,
• 19:26
  Speaker 5: I was like, yes, lock it.
• 19:27
  Speaker 3: In, okay.
• 19:28
  Speaker 4: So then you feel like, yeah, I know what I'm doing.
• 19:29
  Speaker 3: Yeah, that's right. It's way too easy.
• 19:31
  Speaker 5: And then that's when and then the I also just
• 19:33
  Speaker 5: started my celside job where I was the first time
• 19:36
  Speaker 5: young person being my full lead analysts and initiate on
• 19:39
  Speaker 5: this company. And I remember at the time JBHIGHI just
• 19:43
  Speaker 5: listed and it was expensive. I think sixteen times earnings
• 19:46
  Speaker 5: was very expensive. Then now will be like two hundred times.
• 19:49
  Speaker 5: But anyway, I was sixteen times earning. And then I thought, oh,
• 19:52
  Speaker 5: jbhif I sixteen times earning, Strathfield Car Radio, I don't
• 19:56
  Speaker 5: know if you know that one.
• 19:57
  Speaker 3: Oh that's going back. Yeah, yeah, okay, that's it. So
• 20:01
  Speaker 3: Strathfield Car Radio was trading on twelve times.
• 20:04
  Speaker 2: And and so just weren't they They were the company
• 20:06
  Speaker 2: and you could take out your the car radio and
• 20:08
  Speaker 2: your existing car and put in like the radis and
• 20:11
  Speaker 2: city players and stuff.
• 20:13
  Speaker 3: That's right.
• 20:13
  Speaker 5: And then those days car radio is big thing. So
• 20:15
  Speaker 5: every people when they buy the car, they go and
• 20:18
  Speaker 5: change their radio, they upgrade their radio. So JB High
• 20:21
  Speaker 5: Fi used to have those as well with the car radio.
• 20:24
  Speaker 5: It was a big credit, big components of that time, right,
• 20:27
  Speaker 5: that's right. Yeah, So you walk into Strathfield car radio.
• 20:30
  Speaker 5: They so they got car radio they got back then
• 20:32
  Speaker 5: they just started selling mobile phone in those things, and
• 20:35
  Speaker 5: they got a little bit of consumer electronics on the
• 20:37
  Speaker 5: side as well. So it's like a mini JB high five,
• 20:39
  Speaker 5: but poor men version JB High.
• 20:41
  Speaker 3: Five, okay, And he thought, well, it's cheaper. I was
• 20:42
  Speaker 3: as much cheaper.
• 20:43
  Speaker 5: Why not? They're rolling our stores as well, and JB
• 20:46
  Speaker 5: High five's rolling our stores.
• 20:47
  Speaker 3: Why would not buy this one? It's all great?
• 20:49
  Speaker 5: But and then I put on a great strong buy
• 20:52
  Speaker 5: and everything, and actually share price did well for about
• 20:54
  Speaker 5: three months. And then Richard Utriz was running JB High
• 20:58
  Speaker 5: five at the time. He came omember and saw for me.
• 21:00
  Speaker 3: He's like, you bad.
• 21:02
  Speaker 5: Have you been to the Strathfield store. That's the question
• 21:06
  Speaker 5: to me. He's like, have you actually been to the store.
• 21:08
  Speaker 5: I was like, no, I've seen pictures. It looks fine.
• 21:12
  Speaker 3: He's like, you should go and have a look.
• 21:14
  Speaker 4: And was he there to chat to you about trying
• 21:16
  Speaker 4: to invest in it? You never sell one jock.
• 21:20
  Speaker 5: I didn't have cell but they just just essentially he's
• 21:23
  Speaker 5: educating in the market, just listed yeah, doing a kind
• 21:26
  Speaker 5: of road show, and he's like, have you been to
• 21:28
  Speaker 5: the store. I've seen the pictures and everything. And then
• 21:31
  Speaker 5: I thought, oh damn, I probably should go and see
• 21:33
  Speaker 5: the store. And I did go see the store, was saying,
• 21:35
  Speaker 5: oh god, this is not like JB High Fi. A
• 21:37
  Speaker 5: majority of the store was designated to the car radio.
• 21:40
  Speaker 5: And then there's a couple of I think they have
• 21:42
  Speaker 5: a big contract where the Optus or Telstra, they're like
• 21:45
  Speaker 5: Telstra Optus love us, gave us all these big trailing revenue.
• 21:48
  Speaker 5: We sell one mobile phone, we'll get paid so much
• 21:50
  Speaker 5: and all that, and then tiny bit income stroom electronics,
• 21:53
  Speaker 5: completely different, very old school, very dated. They're not in
• 21:56
  Speaker 5: the shopping center, they're outside on those Paramatta roads, and
• 22:00
  Speaker 5: very different vibe between the stores. And then it's not
• 22:02
  Speaker 5: efficient every category and jbhihid back then only just started
• 22:06
  Speaker 5: selling a few category. They haven't started selling game yet,
• 22:09
  Speaker 5: they haven't started selling PC. There were so many new
• 22:11
  Speaker 5: categories to come, completely different, and I came back thinking
• 22:15
  Speaker 5: this is not good. But anyway, I wasn't experienced that
• 22:17
  Speaker 5: I thought, look, I could write it because.
• 22:19
  Speaker 4: You've made your decision right, and so I'm going to
• 22:20
  Speaker 4: back yourself in.
• 22:21
  Speaker 3: So every fritten it's great.
• 22:22
  Speaker 5: Yeah, and invested and I said it's great, buy and
• 22:25
  Speaker 5: then trying to convince everyone to buy. And six months later,
• 22:28
  Speaker 5: retail condition got a bit tougher, so consumer become tightened
• 22:32
  Speaker 5: their pockets and everything else. Immediately, Stratfield, they're like for
• 22:36
  Speaker 5: like started going negative.
• 22:38
  Speaker 4: Can you what year are we talking?
• 22:39
  Speaker 5: Maybe it was two thousand and five. There was one
• 22:41
  Speaker 5: year many retailer had downgrades. I think maybe it was
• 22:45
  Speaker 5: May two thousand and five or two thousand and four.
• 22:47
  Speaker 5: Winter was too hot as well, everyone downgraded because it
• 22:50
  Speaker 5: was two hot jackets won't selling A just group was
• 22:53
  Speaker 5: listed at the time as well. Remember but yeah, so
• 22:55
  Speaker 5: just retailer when things got a little bit tougher, retailer
• 22:58
  Speaker 5: don't have strong business model.
• 23:00
  Speaker 3: They just don't do it as well. People don't need
• 23:02
  Speaker 3: to go to.
• 23:02
  Speaker 5: Stratfield, whereas JB High Fire because they have a strong
• 23:05
  Speaker 5: busin models, but they pull people in. People want to
• 23:07
  Speaker 5: go and see what's going on or the excited excitement.
• 23:09
  Speaker 5: So things started going backwards and the minute staff for
• 23:12
  Speaker 5: retailers when things going backwards, going negative, it's heavily leveraged
• 23:16
  Speaker 5: because they don't have much debt, but the lease.
• 23:19
  Speaker 3: They have to pay a lot on the lease, so
• 23:21
  Speaker 3: there's not much room to move for retailers.
• 23:22
  Speaker 2: Start to see it turn negative, but you realize, as
• 23:25
  Speaker 2: we spoke about earlier, it's like you've made a decision
• 23:27
  Speaker 2: and you don't.
• 23:28
  Speaker 4: You don't sell out when things get volatile.
• 23:30
  Speaker 3: So did you stay? Oh no, no, no, So I
• 23:33
  Speaker 3: got this one wrong.
• 23:33
  Speaker 5: Yeah, because I realized how quickly things can back can
• 23:36
  Speaker 5: get bad, and so the minute it turns negative, I
• 23:38
  Speaker 5: think I sat there for six months, longer than I
• 23:40
  Speaker 5: should six months. So when it started turning, I didn't
• 23:43
  Speaker 5: move straight away because I thought it will get better.
• 23:46
  Speaker 5: Maybe just patch your consumer, Maybe they just unlucky. Management
• 23:49
  Speaker 5: always find the best excuses. Oh this thing happened, too
• 23:52
  Speaker 5: much rain or something.
• 23:53
  Speaker 3: Always this.
• 23:54
  Speaker 5: So at the end, so and they're six month later,
• 23:56
  Speaker 5: I realized that the operating d leverage is very significant
• 23:59
  Speaker 5: for a retil and for a retailer. By then, I
• 24:02
  Speaker 5: have realized that there is something that whatever I thought
• 24:05
  Speaker 5: it was special about the company, it was not there.
• 24:07
  Speaker 5: I should have really visited the store. Really see what
• 24:11
  Speaker 5: was the value driver why people walk into that store?
• 24:14
  Speaker 3: There was no reason. That's why when things are tough,
• 24:16
  Speaker 3: people don't walk in.
• 24:17
  Speaker 4: Do you remember how much money you might have lost
• 24:19
  Speaker 4: with that investment?
• 24:20
  Speaker 1: Oh?
• 24:20
  Speaker 3: I think I lost like twenty thirty percent of the investment.
• 24:23
  Speaker 5: Yeah, okay, all right, but it stuck with you all
• 24:25
  Speaker 5: this time. Mistake forever. It's just to do the homework right.
• 24:29
  Speaker 5: It's about really truly understand the business instead of what
• 24:32
  Speaker 5: management tell you.
• 24:33
  Speaker 2: Seeing as we're going down back to two thousand and five,
• 24:36
  Speaker 2: maybe if you could go back sort of twenty years
• 24:38
  Speaker 2: or so, if there was a financial habit that you
• 24:41
  Speaker 2: could have picked up back then, do you know what
• 24:43
  Speaker 2: that would have been?
• 24:44
  Speaker 4: Just layering a good.
• 24:46
  Speaker 3: Habit, financial habit.
• 24:48
  Speaker 5: I think it's probably back then I was at the
• 24:50
  Speaker 5: early stage of I do think reading financial publication is
• 24:53
  Speaker 5: very important.
• 24:54
  Speaker 4: Excellent, you can all read this.
• 24:56
  Speaker 3: The Australia is the best. Well, that's right, that's right.
• 24:59
  Speaker 5: I actually it's really important. And these days that's where
• 25:03
  Speaker 5: we read about the mergers and acquisitions, the rumored deal
• 25:06
  Speaker 5: that's coming through. We'll get it from the paper. And
• 25:09
  Speaker 5: in those days, still early days, a scheme through every
• 25:11
  Speaker 5: now and then, but then you miss things.
• 25:13
  Speaker 2: Also you want as dedicated to reading and making sure.
• 25:15
  Speaker 2: So if you could go back in time.
• 25:17
  Speaker 5: You would actually just read more consistently absolutely every single
• 25:20
  Speaker 5: day like as information, and process the information much earlier
• 25:23
  Speaker 5: in the day. So how I process information these days?
• 25:26
  Speaker 5: All the reading everything is done before a thirty, So
• 25:30
  Speaker 5: everything is done before a thirty. So all the and
• 25:33
  Speaker 5: the a thirty we have our team meeting, we talk
• 25:35
  Speaker 5: about what we have absorbed. This includes everything what happened overnight,
• 25:39
  Speaker 5: what happened to, what happened in the US market, what
• 25:41
  Speaker 5: sort of things that's change, which company said well, which
• 25:43
  Speaker 5: company had done great, and what's this. And they're also
• 25:46
  Speaker 5: absorbing newsflow in Australian market before it opens, so all
• 25:50
  Speaker 5: the morning news knowing what's going to change, and by
• 25:53
  Speaker 5: a thirty we almost know how our market will open,
• 25:56
  Speaker 5: which sector will do well, which company will go up
• 25:58
  Speaker 5: and down, which announced meant to earnings down and all that.
• 26:02
  Speaker 5: So by a thirty everything's processed.
• 26:05
  Speaker 4: We'll return to our chat following this small breakthrough, Jinbai,
• 26:14
  Speaker 4: is there a piece of advice for someone like me
• 26:17
  Speaker 4: or someone listening about how they can is the one
• 26:21
  Speaker 4: thing that they should be doing that can make them
• 26:24
  Speaker 4: a better investor or at least start to build that wealth.
• 26:28
  Speaker 3: I feel like we're just all very busy, that's right.
• 26:30
  Speaker 4: What can people do? You sort of juggling? People are
• 26:32
  Speaker 4: juggling a lot.
• 26:33
  Speaker 5: Oh absolutely, and it's a never ending I've got kids myself,
• 26:36
  Speaker 5: it's just constantly juggling. So look, I think the advice is,
• 26:39
  Speaker 5: therefore someone wants to really learn about investing, because I
• 26:43
  Speaker 5: do all of these beforehand. Because I'm a professional farm manager,
• 26:46
  Speaker 5: I'm meant to know everything about what's happening in the market.
• 26:49
  Speaker 5: Then I can change my bed so I can be
• 26:50
  Speaker 5: more active. I can respond to different things. But you know,
• 26:54
  Speaker 5: if you're an individual, you're buying peel to your own portfolio,
• 26:56
  Speaker 5: you don't A lot of these things are noise. As individual,
• 26:59
  Speaker 5: we just want want to grow your own wealth. You
• 27:01
  Speaker 5: may one year you do a bit worse than the
• 27:03
  Speaker 5: share market, but it doesn't matter. You pick the company
• 27:06
  Speaker 5: that's still gone up. So it's a very different dynamic.
• 27:09
  Speaker 5: But for individual it's really about I feel it's about
• 27:12
  Speaker 5: the find the company you really understand and its quality,
• 27:16
  Speaker 5: so they get much less headache when you find a
• 27:19
  Speaker 5: spivvy stock. When you get a hot tip from somebody,
• 27:22
  Speaker 5: usually hot tap are bad because somebody told you the
• 27:25
  Speaker 5: hot tip would probably means that many other people already
• 27:27
  Speaker 5: got that hot tip a long time ago, and then
• 27:29
  Speaker 5: you might be the last person before it become not
• 27:31
  Speaker 5: so hot. And a lot of hot tip is fine,
• 27:33
  Speaker 5: but it just means they've probably it's gone up a lot,
• 27:36
  Speaker 5: gone very expensive. One of the example is recently there's
• 27:39
  Speaker 5: all these difference companies, Yeah, gone through the roof, that's right,
• 27:42
  Speaker 5: trying to sign up and everything, and I would say
• 27:44
  Speaker 5: a lot of them has a lot of hot air
• 27:46
  Speaker 5: in it, so they're not really training on how much
• 27:48
  Speaker 5: earning is multiple and the traditional things you're looking at
• 27:51
  Speaker 5: they're training are it's hot, we just got to get
• 27:53
  Speaker 5: in because there's only a few of them. So these
• 27:55
  Speaker 5: companies when they it's just risky, right, you got to
• 27:57
  Speaker 5: watch them because if suddenly one day people go, oh,
• 28:01
  Speaker 5: you're maybe it's not spending as much, or maybe actually
• 28:04
  Speaker 5: a company didn't win quite that many contract because the
• 28:06
  Speaker 5: shapprice the amount of share price gone out. People waiting
• 28:09
  Speaker 5: for a lot of contract to come through, So that's rial.
• 28:12
  Speaker 5: So I just think stayed with the company, especially you
• 28:14
  Speaker 5: can touch and feel, you understand the product and in
• 28:17
  Speaker 5: the quality larger blue tip. It's just much much easier,
• 28:21
  Speaker 5: less headache, you don't have to be on call suddenly
• 28:23
  Speaker 5: something happens, share price down twenty Just invest is that
• 28:26
  Speaker 5: the message you have to get started. Don't invest in
• 28:29
  Speaker 5: ETF for ETF is his least lazy.
• 28:31
  Speaker 3: Way of doing so. Atfs are booming. Yeah, there's now
• 28:36
  Speaker 3: active ETF coming.
• 28:37
  Speaker 5: Actually were launching it active ETF as well, So that's
• 28:40
  Speaker 5: with active manager ETF is fine, but you're not really learning.
• 28:44
  Speaker 3: So if you really want to learn.
• 28:45
  Speaker 5: About investing, when we talk about understanding company, you're doing
• 28:48
  Speaker 5: all that homework. That's a big part of the treasure hunting, right,
• 28:51
  Speaker 5: that's the fun part.
• 28:52
  Speaker 3: So that's when you.
• 28:53
  Speaker 5: If you pick a company, it forces you to learn
• 28:56
  Speaker 5: about it. So that's actually investing part. But if we
• 29:00
  Speaker 5: put in the ETF, that's more grow wealth part. So
• 29:03
  Speaker 5: because if you want to just an easy way just
• 29:05
  Speaker 5: say okay, I just want to go with the share market,
• 29:07
  Speaker 5: put in the ETF.
• 29:08
  Speaker 3: That's an easy way to do it as well.
• 29:09
  Speaker 2: Say we were talking defense stocks, so I might not
• 29:12
  Speaker 2: be able to pick the winner of who's going to
• 29:13
  Speaker 2: get the contracts. But I would think my logic would
• 29:16
  Speaker 2: say by the defense ETF, so you can spread the risk.
• 29:19
  Speaker 5: So the challenge with that is that you've got to
• 29:21
  Speaker 5: be early, right because when the hot air comes out,
• 29:23
  Speaker 5: the whole thing goes. Yeah yea, So it doesn't matter
• 29:26
  Speaker 5: which one you're in, so it's just the whole thing goes.
• 29:28
  Speaker 5: So I always feel the thematic there is a lot
• 29:31
  Speaker 5: of thematic ETF. But when you look at your own portfolio,
• 29:34
  Speaker 5: you don't want to have a big part of it
• 29:36
  Speaker 5: in it.
• 29:37
  Speaker 3: You have a small part.
• 29:38
  Speaker 5: It's almost like part a little bit on this. But
• 29:40
  Speaker 5: my core portfolio are these things. We know the core
• 29:42
  Speaker 5: things because the other one can be very volatile.
• 29:45
  Speaker 2: Juinbe we are fast running out of time, So I
• 29:48
  Speaker 2: do want to put our fast five to you, five
• 29:50
  Speaker 2: sort of rapid fire questions just to see.
• 29:53
  Speaker 3: How we go.
• 29:54
  Speaker 4: First up, morning or night.
• 29:56
  Speaker 2: When do you make your best financial decisions? Morning morning, okay,
• 30:00
  Speaker 2: before thirty, before thirty, when you've.
• 30:02
  Speaker 4: Done all the digesting.
• 30:03
  Speaker 3: Yeah, that's offee is fresh. I'm assuming this' coffee in
• 30:05
  Speaker 3: the morning. Yeah, less of coffee, okay.
• 30:08
  Speaker 2: If you could invest in one thing for the next
• 30:11
  Speaker 2: ten years. So you're only forget about the diversity, forget
• 30:14
  Speaker 2: about the I'm only allowing you to invest in one
• 30:16
  Speaker 2: thing for the next ten years.
• 30:17
  Speaker 3: What would it be? Yeah, you miss stock stock. Yeah,
• 30:21
  Speaker 3: maybe that's.
• 30:22
  Speaker 4: Trying to be a little bit specific. You get up.
• 30:24
  Speaker 4: I'm only get I'll.
• 30:25
  Speaker 3: Got plenty of that.
• 30:25
  Speaker 5: But I think I'm just going to give a very
• 30:27
  Speaker 5: high quality one, which is Cochlear. We know Cochlear, great
• 30:31
  Speaker 5: company in Australia, a huge, huge amount of years of that,
• 30:34
  Speaker 5: strong execution globally, not expensive relative to others. Yeah, I
• 30:38
  Speaker 5: think it's it's going to continue to grow.
• 30:40
  Speaker 4: Okay. Is there any investment app you can't live without?
• 30:43
  Speaker 3: Investment app? Bloomberg?
• 30:45
  Speaker 2: Okay, the terminal Bloomberg is a thing you can't live without,
• 30:50
  Speaker 2: Like if I took it away, you would actually have
• 30:52
  Speaker 2: a difficult day.
• 30:53
  Speaker 5: Yeah, I think yeah, because Bloomberg is a professional one
• 30:56
  Speaker 5: where we get all the life pricing and the like.
• 30:58
  Speaker 2: Here, what's the one thing you want your kids to
• 31:00
  Speaker 2: learn about money or to know about money? Something you
• 31:03
  Speaker 2: want them to really take away.
• 31:04
  Speaker 3: Oh okay, that's a really hard one. So I want
• 31:07
  Speaker 3: my kids.
• 31:07
  Speaker 5: I think the key thing I want my kids to
• 31:09
  Speaker 5: start really understanding the value of money.
• 31:12
  Speaker 3: I think every probably doing that. I want them to.
• 31:14
  Speaker 5: Actually the key thing is I want them to understand
• 31:16
  Speaker 5: how to grow money. Actually already created lots of those
• 31:19
  Speaker 5: savings to help them to understand you grow your money,
• 31:22
  Speaker 5: the compound, the effect of money.
• 31:24
  Speaker 4: And are they so how old are you kids again?
• 31:25
  Speaker 3: Eleven? Then fourteen?
• 31:26
  Speaker 2: Eleven and fourteen? And do they have their own investments?
• 31:28
  Speaker 2: Are you letting them invest themselves or that?
• 31:30
  Speaker 5: Yeah, I've been telling them about so they do so.
• 31:32
  Speaker 5: But obviously they always pick the easiest, the Tesla, the
• 31:35
  Speaker 5: Apple and these ones. So I'm trying to get them
• 31:38
  Speaker 5: to whenever they see go to Woolworth and the like
• 31:40
  Speaker 5: and then tell them that the shares that's listed and
• 31:42
  Speaker 5: everything else. So that's how I get them, essentially, the
• 31:45
  Speaker 5: things that they touch and feel every day. The more
• 31:47
  Speaker 5: the consumer goods product.
• 31:49
  Speaker 4: Hey, what's the one thing money can't buy?
• 31:51
  Speaker 3: Happiness?
• 31:53
  Speaker 5: And look, I think the money one thing money come by.
• 31:56
  Speaker 5: I think lots of things money come by. Even in investing,
• 31:59
  Speaker 5: always feel it's actually I do it for I just
• 32:02
  Speaker 5: think it's so much fun in doing so because of
• 32:05
  Speaker 5: that treasure hunting that journey, the resilience. You get things wrong, resilience,
• 32:09
  Speaker 5: come back and learn, then do it again. So more
• 32:11
  Speaker 5: than just money, it's actually for me, it's character building.
• 32:15
  Speaker 5: It's incredible experience.
• 32:17
  Speaker 2: A lot of people find investing quite intimidating. So is
• 32:20
  Speaker 2: there a piece of advice you have for people who
• 32:23
  Speaker 2: look at the success that you've got and think, oh gosh,
• 32:25
  Speaker 2: how do I replicate that?
• 32:26
  Speaker 3: Yeah?
• 32:26
  Speaker 5: Look, I think I just get started. It's not intimidating
• 32:29
  Speaker 5: at all, and it's not. And remember you don't have
• 32:31
  Speaker 5: to be accountant to do really well, but if you're countan,
• 32:33
  Speaker 5: you'll still do it. It's not just numbers. It's actually
• 32:36
  Speaker 5: so much more than that. We talk about some of
• 32:37
  Speaker 5: those thematic and things. Every company is so interesting, and
• 32:41
  Speaker 5: just have the curiosity and just get started.
• 32:44
  Speaker 4: I think people think they need a finance degree or
• 32:46
  Speaker 4: some sort of education in this. Is that sort of
• 32:49
  Speaker 4: a big miss? Do you think?
• 32:50
  Speaker 3: I think you don't need it.
• 32:51
  Speaker 5: But remember when you build a portfolio for the first time,
• 32:54
  Speaker 5: you first you pick the blue chip, the larger company,
• 32:56
  Speaker 5: and diversify. You need to have at least ten to
• 32:59
  Speaker 5: fifteen stock and don't just pick them out of one sector.
• 33:02
  Speaker 5: So if you pick a bank, and then you could
• 33:04
  Speaker 5: pick a growth company, you pick a gold company, picker
• 33:07
  Speaker 5: just a bit of everything, just so your portfolio is diversify.
• 33:10
  Speaker 3: It takes away a lot of risks when you do that.
• 33:12
  Speaker 4: JIMBEI, thank you so much, Thank you so much for
• 33:14
  Speaker 4: having me, Thanks for joining me.
• 33:16
  Speaker 2: I'm Julianne Sprague, Wealth editor at The Australian. We'll have
• 33:20
  Speaker 2: another bonus episode of the Money Puzzle next week. We'll
• 33:23
  Speaker 2: sit down with Roger Montgomery, a leading fund manager, a
• 33:26
  Speaker 2: firm favorite at The Australian, a regular columnist. He wasn't
• 33:30
  Speaker 2: always a great investor, and so we'll go back and
• 33:33
  Speaker 2: learn how he launched the trade, some of the mistakes
• 33:37
  Speaker 2: he made, and his advice for us.