The lucky accidents that made Rudi Filapek-Vandyck successful

Rudy Philip Pek van Djk, thanks for joining us on this very special the very first episode of the diary of a successful investor. Thanks for joining us. >> I am I am stumped the title. I mean, the pressure on my shoulders >> and and and Rudy, you know, you've never been boastful about your investing, but I've known you a long time and given what you've predicted and and like like me, not always right, but certainly some of your big calls have been fantastic big calls. Um, and and both you and I know we're not always right, but what you've learned over the years is what I want you to share with others today in this interview. Um, and I think that I well I'll kick off in a more predictable way than I usually do with you. Um, apart from saying if I can't interview Charlie Mer and I can't because Charlie's now passed away and I can't interview Warren Buffett because he's a little bit too hard to access, I want to do really Philip Pec Van Djk. So, thanks for joining us, mate. >> Well, at least I'm more accessible than than the other guys were mentioning. >> What first drew you to investing and how uh did your approach evolve? Um I I not that long ago I I described my uh entrance and development in investment as basically a series of accidents and and and luckily me and maybe other for other people as well. Um a lot of those accidents have actually worked out quite well. Um, I mean, I I originally started off as a as a journalist who who would simply chase news and that wasn't necessarily in finance. Um, but by by pure sheer uh luck, unplanned, I ended up on the business pages of a newspaper and and ultimately I I became the editor of a of an online news service in Amsterdam. and and from there onwards I um I developed my my knowledge of the markets and and ultimately I I end up in Australia. Um ultimately uh by accident again I I founded FN Arena here and it was it took until the GFC for me to change my focus towards which companies are better than others. and and from then onwards I I developed a specific focus on on high quality companies which I have ultimately dubbed uh all weather stocks. Um and and I think um that has also it has developed but that has also uh ultimately proven an an alternative view to to look at the market and I I I don't think that that angle is wrong. Let me put it that way. It it definitely has taught me a lot. U and one of the things that has taught me is that um simply because a share price looks cheap, it's not necessarily a good investment. >> Yeah. >> And I and I tend to emphasize more nowadays more the quality of a company than the cheapness of the share price. M R Rudy, was it your intention to create a business like FN Arena that would effectively service your own investment goals as well or did you create the business and realize what you created was going to help you become a better investor? >> Yeah, it's it's the latter scenario. I mean, as I said, the it's it's a series of of lucky accidents and it just developed the way the way it did and and all in the first instance, it was never the plan that Fan Arena would would manage its own portfolio or that we would even develop our own philosophy with investing and all of that. Originally, it just started off as reporting on what the the stock brokers were doing and from then onwards, it just developed into into something more. So it's it's uh it wasn't it wasn't planned but that doesn't mean I'm unhappy with with the end outcome. >> Yeah. What was there a defining moment or early investment that ultimately shaped your thinking particularly around the all weather approach to investing? >> Yeah. As I as I said earlier the I mean I've I've obviously witnessed the the the NASDAQ meltdown in 2000. Uh that that left an impression on me. uh I mean I've seen the the the the super cycle uh coming to its end as well in commodities but the the deepest impression on me was was the GFC essentially where you would you where you would see the majority of of of the market going down by 50% and more. uh that definitely left a big impression on me and and and companies that previously were were riding high on investor optimism they were absolutely annihilated uh subsequently. >> Um and how bad things how bad things became and how how little foresight how little knowledge uh there was amongst investors about what was actually happening in the United States and what was causing uh the trouble. Um it mean it taught me a lot. taught me but that I think and from that obviously from there onwards the the old weathers were born uh that's where that's where the whole um the the beginning uh started but um and and yes so those those events definitely have left the biggest impression on me. Yeah, >> it's funny because around the the GFC series where you and I got closer because we were you were on my TV show and we were both trying to work out what was going to happen. And it's funny, I'm sure you've had the same kind of experience, but the person who taught me more about what was likely to happen, was someone who's not really a stock market uh or wasn't a stock market uh funky or or groupy like you and me. It was Phil Riven. Do you remember Phil who started Ibis World? >> Yes, I do. Yes. and Phil came on the show and Phil was a great uh analysis of the historical trends of businesses and whatever. And I remember him saying he said the the historical uh nature of stock markets are that they do recover. And he gave me sort of parameters of times when they should happen. And he pretty well got it right that when that March of 2009 bounce started happening. He was on the money and he made the point it's going to be our top 30 companies that will be the fast rebounders. And it was actually I found that really interesting. that made me look more outside of just the market people that we you and I often talk to. There are other uh people who can offer insights that you would never thought before and I thought I'm sure you over time have learned that as well. You have to look beyond um the the people inside the industry. >> You you that's one thing I can definitely vouch for. You have to you have to have a very broad view and and knowledge and insights can come from from all corners. It doesn't have to be uh from the usual sources. One one one thing maybe to point out here as well Matthew Kitman which which I'm sure you know and I met >> he uh he published a book uh in 2008 from memory and the last the last chapter of that book is where he >> asks the question what makes a a bare market end and when will it end? And uh I particularly paid close attention to that. He was he was pretty close on the mark there as well in in Manetwood End and and and things like that. And I've always been very surprised by uh by the by those predictions that come true. >> Yeah. I think it was called Bulls Bear and a >> and a groupier >> and a Kier. That's right. Yeah. Yeah. Um so uh let's go my my next related question. How do you personally approach and or manage risk in your portfolios? >> Yes. So there was there was a lot of insights I I gather myself from reading a lot. So I'm I'm piggybacking on other people's experiences, but nothing beats when you well obviously when when you manage your own portfolio. And um so I've I've I've added real time real life experiences to to the to to the insights I picked up from elsewhere. And um in my experience um I I try to literally not take on risk. I try to manage it. And and and and that for example uh that has led to the fact that I I always have some exposure to gold. And where other people are asking me constantly, what do you think gold is going to go to 4,000 or it's going to go to 3,000 or I actually don't care because to me gold is insurance. And that's and that's one way of uh of of obviously of managing risk. Um what it also taught me is that a lot of things that people do um are actually counterproductive. Uh they're actually not as smart as they might seem on average. Like for example, very simple example, if I own shares in a particular company and the company comes out with a with a big profit warning, share price dives, uh the last thing I do is immediately throwing more money at it. And a lot of people think that if the share price drops, you have to you have to put more money in it. Um and that um I mean I can I I have at least a few dozen examples where that would have bankrupted me if I would do that. Um, and if it turns out to be the right thing to do, that is more to do with luck than with anything else. There are many other examples. You you will hardly find me ever um uh dabbling in micro cap stocks. Uh it's fine for people to do so, but uh it it just doesn't serve my my risk profile. I mean I like to have a little bit more more certainty even though that at times is a very very uh ephemeral very naive proposition because sometimes there is no certainty in the share market but nevertheless I try to I try to put put the money where there is at the very least uh less uncertainty than there is in the more speculative corners of the market and and that that comes in many ways in uh I mean I'm very considerate in in um in taking on new investments and adding to existing ones and that's not always uh dominated by what the share price does. >> Yeah. Now I I I have to ask you this question because you and I have talked about this stock before and I bet you you can nearly guess what I'm going to ask you about. It starts with a C. >> Exactly. Right. And and what what really annoys me is that you haven't lost a hair of your head and I'm sure I have. Um, what's your current view on CSL? A company that both you and I have liked. We know it was a a recent report that wasn't as good as people might have expected, but I I'd be really keen. I think a lot of my investor uh audience would love to know what your current thinking is. Yeah, I recently gave a presentation in CRA to uh to members of the Australian Shareholders Association and um no surprise uh CSL was uh up front uh among the questions. Um I think I shocked a few people in the audience. Um and I've also written to F in the winger subscribers about this. Um, in general terms, uh, when I just 10 seconds ago when I said I didn't throw more money at a share price that that fell, uh, CSL was the one that came to mind. I just didn't name them. Um, because I don't believe that a weaker share price has has now reduced the risk. Um, I mean, u, as we both mean, you've already said it. Um, I mean, I've been a shareholder in CSL for a very long time. Um, the portfolio made a lot of money out of it. uh although not in in the past 5 years and the the the August disappointment is probably the worst I've seen from CSL in at least the past two decades and uh clearly they they they are struggling. Uh there's probably a a a multitude in factors at play. Um I mean the one that obviously comes to mind is a a very erratic and unpredictable uh administration in the United States. Um but there's also um a a a a health care department now that is let let's just call it for what it is. It's anti- vaccinations and and CSL uh unfortunately for them now is the number two player in in vaccinations in the world. Um so they're under the pump essentially. Um that there's there's there's other reasons as well but um it was it was a big disappointment in August. It it definitely would have shocked quite a number of people. um many uh institutional investors and I'm not I'm not institutional but I I am I am with them on on on CSL. We felt quite comfortable in holding the shares because uh management had predicted had guided that they would get their margins back to precoid levels and they've now abandoned that that they basically pulled the wagon to that. Um that's very disappointing. Uh they obviously don't do that without reason. But it has it has made me less comfortable now in in predicting that that that CSL share price and their operations will will recover anytime soon. I think at the very least um they're a bit in a pickle. Uh market sentiment now is extremely against them. Um which is what sometimes happens. I mean let's be honest, Peter. Um, in the good times the there was probably a a 30% in the market that absolutely hated CSL because they didn't understand it and the share price would perform year in year out. Those same people are hating today CSL and there's now even a larger C because now a lot of people have lost money basically on the stock. Uh the the the shares will have to work through that. The management hopefully uh works very hard. Um I have not increased uh the holding where I I I had decreased the holding already in the earlier stage in the portfolio. Um it has for a long time been the largest allocation in the portfolio that I run but uh it no longer is. But I still own shares and I'm and I'm actually now I haven't made up my mind in what to do actually. But I won't be I won't be throwing more money at it anytime soon because um I think there's still a risk that um any sustainable recovery will take time and there's a lot of insecurity with with the the divestment and the spin-off of secures the vaccine uh whether they can do that or not >> and it it places a lot of question marks about the strategy and and and the progress they will be making and stuff like that. So big question large question marks. Uh share price is cheap by I think that that's that's a given but as we both know from experience and from history share prices can remain cheap for quite a while. I mean the market the market will need some tangible turnaround proof and otherwise it's it's it's I don't think we should we should expect any miracles. Now, what routines or habits help you stay informed and grounded? >> You're you're a really grounded guy. You know that. I know that. >> I I uh when I get too excited, I take a cold shower. >> I And sometimes I need to do that for verbally after. I try to as much as much as much as I can because I've I've obviously made made my made my uh my own uh basket of of mistakes over the years. But uh in many cases when I look back at and um I often made mistakes when I simply acted too quickly uh without overthinking it uh more. Um so what what I try is is I try not to act hastily in in either direction. Um and and that's yeah that's what I try to and it sometimes means I I might have acted too slowly. Uh and then I mean but that those things happen and and you just have you just have to weigh up the fact that um for all the opportunities that you've missed uh you've also missed out on a lot of oops dupsies and and they are often as much valuable as as as the as as the other options that that you have at your disposal. So >> that's the longest and obviously from the from the from the seat I'm sitting on I'm I'm I'm obviously the editor of FN Arena. There's a lot of expert voices out there that I have access to and that I um I I consult on occasion and I think about it and I read them and sometimes they uh they bring some calm into my nerves because uh that's all that's what we all need at times, isn't it? >> Yeah. Uh can I just clarify? Did you say whoopsy dupsies or oopsy dupsies? I said oopsy dupsies. Are you ready? I always wanted to be able to spell that if I ever have to write this interview out. Uh uh are there any books or thinkers who've deeply influenced your strategy? >> Uh yes. Um and and they might come uh a little bit from from the unexpected corners. I think um this harks in into what you said earlier that sometimes the voices to learn from are not necessarily the voices in finance. Um I would highly recommend the the books written by by Canaman and byeski. Um people people will it's um the the the title just escapes me but uh but it's like international bestseller. Um and the other one is I'm actually reading the books by Nasin Talb at the moment uh full by remandomness the black swan and and and and anti anti-fragile uh in particular anti-fragile I could I can I can recommend to people these are these are not your typical finance books but what they do is they explain how we humans think and we think in the wrong way and um it makes it makes it makes you realize that often the the uh the most straightforward thoughts that you might have about the share market, about companies, about investing that they're simply wrong. And um and that's good to realize. It doesn't always mean that that by thinking alternatively you get it more right but um it helps it helps with with the thinking process and and it helps polar be avoiding lots of mistakes and and creating new angles to view both things as I often say to people the decision to invest in certain companies is often also related to how we view those companies and that sometimes that sometimes require take taking a slightly different angle. Well, you you remind me of what uh Charlie Aken's daughter said to him one day when they were walking through Bondi Junction and she said, "Daddy, I want to be a fund manager just like you." And he said, he laughed along and he said, "Okay, well, what would you invest in if you were a fund manager?" And this is a few years ago. He said on my TV show, she said, "U JB Hi-Fi. I love Jabby High Five for the things we buy and I love Bunnings for the sausage sizzle and I like baby bunting because my little baby sister me buy stuff then it was funny like all the stuff that people often do and that would have made a very good portfolio I think. >> Yes, absolutely. By the way, I just remember the title of the book from Canaman. It's a thinking fast and slow. >> Oh, okay. >> It's a very good book. >> And on Talb, what is Talb's first name? Nasim. >> Yeah. Nasim. Because he was the black swan. Yes. >> Explainer. The only reason I haven't read that book, I I concluded before I read it is that you can't see a black swan coming by definition. So why would I read a book that would tell me how to identify something you can't identify, but obviously you can you can improve my knowledge of that. >> It's it's essentially about risk management. >> Yeah. So what what uh what what Talop is trying to trying to impress upon people is that you you prepare for a risk that that may not have happened yet but will happen or might happen and when it does happen at the very least you're you're prepared or you will benefit from it and that's basically uh the long the long and the short of of of the story. Yeah. Well, a as a consequence of that, are you becoming more defensive in your portfolio as we move into 2026? Donald Trump's um uh leadership is unusual uh for for for us. It's one of the things I found very hard. A normal political leaders a lot easier to to read, but are you becoming more defensive or do you think there's more upside in the market? Um I I I have not become more defensive and I do think there's more upside in the market. Um my my focus uh in particular the past 2 years or so has has definitely shifted towards uh the mega trend we all have come to know as AI artificial intelligence >> and um and early in the year when when when when those companies got sold off in the share market because the apparently everyone was convinced that there was a bubble that would uh that was about to burst. Um I've steadfastly said to people this this is your chance. I mean this is a chance to to scoop up those share prices um because they have a much much much further to run. Um I do I mean I I have noticed that over the past year and a half or so uh the number and the freak doomsaying predictions about the share market has has accumulated to uh to quite a pronouncable mountain at the moment. um maybe dangerous for me to say but I do think those people will be proven wrong and I think uh there is no bubble waiting to to burst and I think the share market uh in 6 to 12 months time will will be higher than where it is today. >> Let's go back to one part of the question. I don't know if your answer was that the the habits that you've developed around selecting stocks. >> Yes. So I I as I said earlier I don't make hasty decisions. I take my time and um I also one of the things I I tend not to do is I I I tend not to worry about my portfolio on a daily basis and um and and that that serves me that serves me well I must say. Uh he's a practical example. Um early in the year I I added McCquory technology shares to the portfolio because uh they had sold off which I thought to ridiculous ridiculously level. Um in August the company actually came out with a with a very disappointing uh report. So those shares sold off again and then I had to remind myself of course whether I thought this that's I mean the first instant that's always a disappointment because you think that that was not expected and that's that's not why I own these shares but I have taken my time and then did nothing and um and to my delight those shares are actually back in an uptrend now. So that's sometimes just one practical recent example how on many occasions doing nothing is is is the and staying the course is is the best course of action. And I've and I've and I've seen that on multiple occasions and that's a lesson in itself. >> Um do not just simply throw money at a share price that drops but you also don't necessarily have to sell immediately because uh temporarily disappointment rules the share price. I think you might remember a time when I I certainly asked you, but I can remember um Michael McCarthy was the the guy who I did pressure BHP down at $14. And I asked Michael at the time, I said, "Are you telling me within three years this is not going to be a $20 stock? And if I can make $6 over 14 in three years, I'm happy to do it." And he he kind of said, because at the point in time as a short-term play, it wasn't a buy according to him. But by the end of the he said, "Yeah, on a three-year basis, it seems it was $20 by the end of the year, which I'm sure you remember that was." >> Yeah. Yeah. Yeah. You got to stay to court. >> I I actually think you're you're you're understating the story. I actually think that the share price quickly went to $30, I think. >> Well, or quickly. Yes, >> you're right. Yeah. I I I remember boasting at the time, so I think you reminded me of me being boastful. Um >> but also just just coming back also com combining a few of your questions here. One of one of the things one of the interesting things that Talb is describes in his books is that that we think in straight lines as human beings and and and and we have to accept that things do not happen in a straight line and that's obviously where one of the conflicts exists when we when we watch our share prices or when we when we have forecasts for our investments. They do not necessarily go into a straight line. >> Yeah. Let's let's talk about when you like a company. >> Mhm. uh and and a do you think about the people running the company and do you then if you like the company or don't like the company do you back the company or not and I guess an interesting one is wise tech like at the moment a lot of people I think I like the company I I worry a little bit about Richard's um influence but he's been very good in the past you know if you ignore some of his social behavior but certainly as as a lead of that business has been very good and I think the business is good. So how do you deal with the people factor in your investing? >> So I I um I am very well aware of the human flaws and in in um impreciseness uh of basically how we exist as humans. Uh we're far from perfect. So in my research I I I try to identify the companies the companies itself without anyone running it. uh and see whether they have a mode and whether they are deservant of of the of the label high quality uh all weather. So my favorite expression in this regard is that I I rather buy a company that can be run by an idiot because at some stage it will be won by an idiot >> and then it will still be a good company and and and so um in another form if if you if you invest in a cyclical company or in a lowquality company and the tie turns in both cases no matter how good management is they cannot turn against the tie. Right. But on the other end, if it's a really great company, management really has to do almost do its best to to destroy that company or or do not do the right thing. And that's I think the quality of the company itself, I think of the business model itself is is is normally at the core of my of my research. >> Yep. How do you separate noise from signal in the volatile markets? Yeah, that's that's that's definitely a a difficult one and because in particular in times of of social media um and I and I dare to say also um less experience uh amongst journalists in the in the mainstream media um so much noise mean on the daily basis there's noise there's trailers there's price charts there's there's the market themselves um again I'm a little bit privileged in that uh I have access to a lot of research. Um obviously um I tend to own uh companies for quite a while which means uh you get to know those companies as well and and I and I that's one of the things I definitely appreciate over time is the fact that that um I mean for example um I mean I've owned Resmet um I don't even know for how long but for a very long time and the same is with technology one for example and and clearly CSL as well. And and and over time because you you you keep on following those companies, you keep reading up on those companies, you you you read annual reports, etc., etc., you really get to know these companies and there's a value in that because over time it it it teaches you well at least it helps you to distinguish noise from from information that really counts. And on many occasions in in in in companies, I see other people literally jumping around like like a chickens without a head on their shoulders. And and it it's just noise. It's just I know I know it impacts the share price at times. But whether that's important or not is is also dependent on what's your horizon and and and what are you trying to achieve with your portfolio. And for example, the one thing I've also uh become more confident about over the years is I I don't get freaked out now when when the portion of short positions in in some of my stocks is is increasing. um up to the point sometimes that I I I actually start using some derogative words about those shortters because I don't think they know what they're doing or they're doing it on on on on different considerations than than is valuable to me as an investor in those companies. >> Yeah. And often their view is short-term where your view is long-term. So yeah, I totally get that. Rudy, what what's a belief you hold about investing that most would disagree with? >> Yeah. Yeah. A cheaper share price is not by definition a better investment. And I think that that that I think for me that just stands. >> Um the the other thing of course is that u conviction is is is you have to build conviction. Um, getting a tip from someone else leaves you with little conviction because you're just trusting on the other person that gave you a tip. But you have to build the conviction yourself and and that helps you in times of turbulence and in times of lots of noise. Um, but amongst other things, uh, know your know your companies and know why you own them. >> Yeah. I mean, sometimes I I I own uh a company and the share price doesn't move and um and I'm confident because I know why I own that company. And sometimes, for example, that can be because I realize it's it's cheap, but I I realize it pays a good dividend and I realize this this this two shall pass. And so I can be patient while while collecting the dividends and and I and wait for things to for better things to come. >> Yeah. What mindset shift would you recommend to someone wanting to get better at investing? >> I think it starts with finding yourself in the share market. And uh what I've come to realize over the years is there's there's no such thing as this is how you do it. There's no one strategy that works. The share market is like the Olympics in one stadium. And if you're good at throwing the javelin, well, don't join the guys on the rugby field. Just find what works for you. And it doesn't have to be trading. It also doesn't have to be value investing. Uh it can be something completely else. Um I mean if if you are the kind of person who likes the adrenaline by jumping on and off micro cap stocks that nobody else is interested in and you get you become really good at it, by all means. I mean it's not my thing. It's not your thing. But if it works for you, by all means, right? And on the other end, if you're happy by having your portfolio stacked with uh with dividend stocks and um and you're underperforming the market on a total return basis, but you're happy with that, then again, I mean, by all means, do whatever makes you happy. >> Okay, one last question, mate. I could and you know, I could ask you questions all day. What are the three stocks you like right now? We've had reporting season. Um, I know I I have the view I love buying quality companies when the markets are bashing them up. Um, but what are the three companies that you think look really good value right now? Well, I pro I probably I'm going to make a combination out of things because I think the the original knee-jerk response is always to pick 10 stocks that that have recently fallen into share fallen into price and um that's not always the case. So, I'm going I'm going to pick one that hasn't hasn't really fallen a lot. Uh, but that's Goodman. >> And And why is that? I mean, I think people are still underestimating how how how high quality this company is and how much money they're going to make over the over the years ahead from from this thing called data centers and AI. >> And um and again, it it it you need to readjust your views there. you need to understand how they work and all of that. They are valued as a as a growth stock now and and they they will deliver. I mean they're high quality. They they will deliver. Um one example that comes to mind and they haven't reported in August but they will report in in uh about six or seven weeks from now is technology one and a lot of people uh can't get their head around the the valuation, the share price, you name it. But there's very little doubt on my in my mind and I and I've I've seen some of the analysts like for example the the analysts at at Bel Potter as well um that they will come out with a crackover result. It just it's written in the stars so to speak. anything that happens to the share price it's it's simply on the basis of of uh of of of tech stocks in the US of sentiment locally um in the share price has has come off from memory uh I think at one stage it temporarily reached $44 it's now 37 I think now percentage term that's quite a lot but I'm not worried because I mean I I've owned this stock since forever and ever >> and also that doesn't really count uh I I I keep on owning this stock because I'm still confident in in what lies ahead >> and I think that's that's that's very positive. Uh let me let me pick another one. Um and maybe that's um also one that um okay let's let's pick car group. Uh I think car group uh similar as as technology one. I think at one stage it was $44. It it has gone to 37 38. Um, it's it's not a spectacular grower, but it's it's in good nick. It's it's doing all the right things at the moment. It's it it uh its acquisition in the US, which which had a lot of skeptis at first, is is working out well. It's it's it's still a very strong market positioning locally. Um uh I I mean, again, anything that happens to the share price is is is micro related. It's it's speculation about uh valuations, interest rates, sentiment, you call it. Um but again, there's there's absolutely nothing wrong with that company and I think it's it'll it'll be it'll be a good performer going forward. >> Yeah. Well, Rudy, thanks for joining us. Um I know there will be lot of um older investors who on their deathbed will be thanking God and Rudy Philip Van Djk for the uh divine inspiration you've given them over the years and thanks for joining us on the program. It was a pleasure, Peter.