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Published 16 August 2012 05:04, Updated 20 August 2012 07:19
What investments do you like at the moment?
Experience tells you to buy when markets are immersed in fear and currently long-term valuation metrics look attractive for stocks.
We are, however, facing an exceptional set of circumstances, probably a one in a hundred year type situation as many major economies need to restructure after the global financial crisis and more specifically the ongoing trouble of facilitating this across the Europe Union. So specific stock selection is paramount at present – and there are still companies that continue to grow earnings and dividends and have provided positive returns despite the market gloom.
What are you avoiding or selling?
Generally anything I don’t fully understand or feel I have an information or investment edge in but more specifically any businesses which have both operating and financial leverage – with a softer economy and tight funding markets now is not the time for doubling up on specific corporate risk.
What is the best single investment decision you have ever made?
More recently my best call was identifying on public record, and just past the post-GFC stockmarket peak in February 2011, a set of core industrial stocks that I believed would still continue to deliver growth despite all the emerging economic headwinds.
My published list was SAI Global, Austbrokers, Super Cheap Auto, Domino’s Pizza, Macmillan Shakespeare, REA Group and Dulux, which, on average, have returned 20 per cent in a Small Ordinaries market that has fallen 29 per cent.
What is the worst call you have made and what have you learnt from it?
Not owning even more of the above stocks than we do – the lesson being sometimes you need to give more emphasis to what you find yourself saying to others.
Who is your investment hero?
“Hero” is a strong word but I must admit that I do find myself making reference to Peter Lynch of Fidelity Magellan Fund fame and his “local knowledge” concept to investing.
I also like the reputed Baron Rothschild quote in response to the question of why he made so much money: “I always sold too soon”.