Chris detailed his sophisticated investment strategy in part one of the episode. In part two, Chris gives us some examples of companies that he has invested in, and answers other questions about what he reads, the best advice he’s ever received, his favourite book and much more (click on the link to listen below).
If you missed the first part of my interview with Chris Judd, you can
start with part one of the interview here.
Chris mentions Paragon, an Australian healthcare company that fits into the macro healthcare theme that he likes. He also identifies that one of his best investments was in a cobalt stock. Why cobalt? Cobalt is used in lithium batteries (e.g. used in electric car batteries – think Tesla) and, unbeknownst to me, there is more cobalt than lithium in these batteries.
We talk about the benefits and difficulties of doing the opposite of the crowd when investing. We also discuss second guessing yourself in investments when prices move against you, and the risks of confirmation bias. These are psychological issues that all investors face, and which often lead to investing mistakes.
Other points of interest:
He says the best investing advice he ever received is to back the right people – good advice for businesses of any size.
The worst advice Chris received was to always trust the “experts”. He explains that, when he was younger, he overestimated people’s knowledge and expertise based simply on years in the industry. He’s learned that time in the industry doesn’t always mean greater knowledge.
I am a big believer in the power of habit. When Chris reflects on his playing days, we touch on how Chris would habitually ban himself from reading the Financial Review on game days because he thought about stock ideas in games! The best taggers in the game could not shut Chris down over the course of his career, but as one of Chris’s opponents I laugh when I think that the humble paperboy delivering a Financial Review could have been Chris’ kryptonite. If only some AFL coaches had known this at the time!
Chris’s investment style takes a lot of time, and he is very well read. He reads material from the 11 brokers that he uses around Australia. He likes Grant Williams’ blog “Things that make you go hmmm”, Livewire, The Financial Review and The Australian. (He didn’t specifically mention my podcast ‘The Richards Report’ but I think it’s a given that it’s probably the first thing he listens to in the mornings for investing insight.) The best book he’s ever read is Shantaram by Gregory David Roberts (full disclosure - I’ve actually never read it).
Having shared his investment approach, Chris reveals that he also makes a good coffee. He’s trying to cut back on his coffee intake – while he only has two coffees a day, he’s a fan of triple shots. (Note: never try one of Chris’s coffees if you intend to sleep that night.)
At Six Park we’re probably the antithesis to Chris’ investment style. We invest passively over seven asset classes, whereas Chris usually limits himself just to Australian small cap stocks. Just like his coffee Chris is the triple shot when it comes to investing – intense. Chris’s investment strategy works for him, but he is open about the constant requirement for a large time commitment to stay on top of investments and opportunities.
This may not be a strategy you can employ, especially if you are time-poor, but whether you’re a Brownlow Medallist or a mum and dad investor, taking control of your finances is a great skill. And this doesn’t just have to be about taking control of your investments – it’s equally, if not more, important to take control of your expenses too. At Six Park we believe that everyone should take a vested interest in how they manage their own money.
Chris’ twitter handle is @cjayfive, and he uploads his regular column from The Age football section.
As mentioned earlier, Chris says the best advice he ever received was backing the right people. You can read about the Six Park Investment Advisory Committee here – we’re proud of their experience and our clients back them too. Just like Chris, their track record speak for themselves.
Director of Business Development