Over the past week or so my company has held its annual investment strategy days in Sydney, Melbourne and Brisbane. And as a presenter and the MC I was lucky to hear some really smart people give revelations that made my audience members, which numbered over 2000, think about how they’re currently trying to make money.
As I sat listening to some of the smartest guys and gals in any room give their pearls of wisdom, it made me think of some of the smartest people I’ve interviewed and worked with over my decades in finance, business and the media.
Something these high achievers often say or imply is that they’re forever looking for people who can “tell me something that I don’t know!”
In my most recent interview with Gerry Harvey — see Coffee with Switzer — the great retailer said he loved talking to young people who can teach him stuff and older people who are still having a go in business.
In previous interviews, he credits the older and smarter people he hung out with as a younger man — even though it was often at questionable watering holes on Friday nights — for his own business success. He also quickly praises his wife, Katie Page, as one of the best retailers he’s ever met, which helps to explain the growth of Harvey Norman, and he’s really chuffed about his selection of his life and business partner. But that’s Gerry!
What I love is the fact that I’m often credited by many of my media mates as a “money guru”, which is a nice compliment, but in reality I know the title is a relative thing and that, compared to a normal person, because of my specialty, I look like a guru.
However, the fact is my strength, like Gerry, is that I want to hang out with people who can tell me something I don’t know, as it builds my competitive advantage, which I then use to help others build their wealth or their businesses or their careers.
That then builds up a relationship that helps my business and keeps my employees in jobs. It’s a virtual circle of lots of win-win outcomes.
This I think was especially so as the 2000 Switzer supporters/followers/clients listened to some of my buddies who are really smart when it comes to investing.
Charlie Aitken of Aitken Investment Management, whose fund’s success has attracted the likes of Kerry Stokes and others to trust his judgment, made a point right at the end of his presentation that “you’ll never overtake someone by driving in the same lane.”
At least three years ago he went very long tech stocks, first in the USA but then into China, and he talked about companies such as Tencent and wechat, which over that time have become the Facebooks, Googles and Instagrams of China. These are huge companies that will dwarf their US rivals, merely because of the sheer size of the Chinese population.
Charlie has also long argued in my Switzer Report , and on my TV shows that we should invest in Australia for income and OS for capital gain or growth and he’s been on the money with that!
His long Asia stance for making money was reinforced by Mary Manning, a portfolio manager at Ellerston Capital, who was unbelievably persuasive about getting us to think outside of our hometown square.
She asked a series of questions, such as where do you invest? Where do you work? Where do you live? All the answers were Australia and she showed how most of us have zero or 0.02% exposure to Asia, when it comes to making money.
However, it is the home for the world’s greatest populations. The countries of Asia are the fastest growers of Gross Domestic Product, out of which come profits that drive share prices. She made the point that growth in these countries is largely structural while growth in developed economies tends to be cyclical.
“There are currently over one billion millennials in Asia and by 2030 four of the largest economies of the world will be in Asia,” Mary pointed out.
Cyclical growth often relies on government policies like the USA hanging out for Donald Trump’s tax cuts and his Mexican wall, but China has this ever-growing middle class and most of Asia has aspirational human beings demanding to have a life like Westerners and it’s driving growth.
Mary effectively asked: “What rational reason do you have for not giving yourself some exposure to that story?” And the only rational answer would have to be: “I don’t have one!”
If you’re asking, well how do I get exposure, that’s where people like Charlie and Mary come in with their funds. Nowadays, there are Exchange Traded Funds or ETFs that give you a chance to own a lot of Asian companies. All of this shows the benefits of hanging out with the right people, of which I hope I’m one.
One of the big issues for investors at my conference was Bill Shorten’s banning on tax refunds for retirees who are not pensioners or on really low incomes. One lady asked me in the Q&A session what she could do?
Our experts said not to panic straight away and start moving investments because Bill has to get elected first, though with Malcolm’s current showing, the Labor leader must be pretty happy with himself and his chances.
My colleague Paul Rickard argued that any law change for tax refunds would have to get through the Senate as well, and personally I believe a $10,000 or $20,000 cap could eventually be put on the refunds so non-rich retirees get a fair go.
But here might be an outside the square solution for those looking for alternative investments and that’s overseas companies which actually do pay fairly good dividends. Daniel Pennell at Plato Investment Management showed there were about 500 companies that they watch worldwide that have really solid dividend returns. Their fund has consistently delivered around 6%.
This is not meant to be financial advice — sure it might be brilliant financial education, but what I’m trying to point out is that if you care about building your wealth, making a better business or creating a more fulfilling career, you should be trying to maximize the hours you try to put yourself in better company.
Okay, we all need chill out time but I think we spend too much time chilling out watching TV, and unless you are watching National Geographic or my show on the Sky Business Channel or equivalents, then you could easily leave yourself out in the cold when it comes to hot opportunities.
I invite you to do an audit on whom you hang out with and then ask the question, do I need to add a few great role models to my group and do I need to let some negative forces, bad role models and dream-takers out of my team.
It works with the great businesses of the world and it should work with the great lives of this world which you should be a part of, but it’s up to you.
P.S. The suggestion I came up with to beat Bill’s tax refund idea was for all of the parents in the room, with voting-age kids, was to tell them that Bill could be about to shrink their inheritance, so they better know what their vote might do to their future bottom lines!
It beats me why Malcolm isn’t running the same line, but I guess it explains why he’s not so popular nowadays.