Speaker 1: 0:06

Welcome to Finance Friends with Fabian, where we give our listeners an opportunity to be a part of our conversation with financial services industry leaders. Hear their stories, the challenges they've overcome and the invaluable advice they have for anyone interested in the financial world. Keep up to date with us by following Finance Friends podcast on Instagram and TikTok. Hi Vaz, welcome to Finance Friends with Fabian. How are you today?

Speaker 2: 0:34

I'm pretty good, fabian, yourself.

Speaker 1: 0:35

I'm very well, thank you. So can we maybe share a little bit of your background to the audience, so where you're from and what your current profession is?

Speaker 2: 0:53

Sure. So I'm one of the co-founders of Collins Street Asset Management. Collins Street Asset Management is a fund manager. We're a boutique value fund manager based in Melbourne. I say boutique because we don't manage billions of dollars. We are value guys and most of our funds are long-only equities. If I had to generalise, yeah, fantastic.

Speaker 1: 1:15

So when you say you're a co-founder, what is your role in the business?

Speaker 2: 1:20

So I am Chief Investment Officer of the Collins Street Asset Management, so my main role is mainly around the investments, so the various investments our funds make, and the other co-founder and managing director is Michael Goldberg, and so we try to split tasks between ourselves. But if you think of me mainly as the investment side of things, that's mainly what my tasks revolve around.

Speaker 1: 1:56

Fantastic and for our audience that might not be familiar with what value investing is, can you just give us a quick layman's terms explanation of what value investing is? Can you just give us a quick layman's terms explanation of what value investing is?

Speaker 2: 2:08

Sure. So I guess a value investor is a fundamental investor, that they use either kind of intrinsic valuations based on earnings or asset values. So it's not momentum, it's value driven. Most value investors are somewhat contrarian. We tend to get attracted to the unloved sectors and stocks and so, on a high level, that's value investing. I guess the most famous value investor who's still alive today is probably Warren Buffett. So yeah, that's pretty much value investing.

Speaker 1: 2:48

Fantastic. Thank you for that. And maybe so, what qualifications do you need to be a CIO or a portfolio manager? Or maybe talk us about your journey. Maybe let's start with your journey. What was your journey to become the CIO and co-founder of Collins Street Asset Management?

Speaker 2: 3:10

So my journey was a bit unique. So I studied commerce law at Monash, pretty entrepreneurial from a young age, had various private businesses. The first one was when I was 16. And then I knew very early on that I wanted to run my own fund. And so, granted, you need to have, I guess, some connections within the financial services world and you can't just start a fund from scratch at an early age. So, on purpose, I decided to get started in the industry and so I joined a boutique asset management firm. We were running individually managed accounts and that was actually pretty much my first job as an employee. Previous roles were with my own private businesses and kind of pivoted from there to starting our fund. So, yeah, a little bit different. That's kind of my background.

Speaker 1: 4:23

So you mentioned you did a double degree in commerce law at Monash. Is that right Correct? So have you done any other postgraduate studies or did you to become an analyst originally? Did you need to study that?

Speaker 2: 4:39

So, no, I haven't done anything postgraduate. So very early on my love affair with stocks, to be honest, and it's pretty cliche, but I've read probably every book written about Buffett, warren Buffett and Berkshire Hathaway, and so from stocks I'm self-taught. I did have my first stock when I was 12, thanks to my father that raided my piggy bank.

Speaker 1: 5:12

What was the minimum parcel back then? Because I think it's $500 on the ASX today.

Speaker 2: 5:16

I don't know what the minimum was, and I can't remember how I even got the money but he raided my piggy bank and I bought $1,200 worth of CSR at 12. Which is the building? Companies so it was a weird conglomerate. They had building and sugar.

Speaker 2: 5:34

Yeah, okay, so the sugar division and the building division. And the only reason why we picked CSR is we watched that money program with, I think, Paul Clifford, and the recommendation was either News Corp or CSR and my father, who's in the medical profession, said you've got two choices and I picked the one that had the highest yield. I should have picked News Corp because I think it did a lot better. So really that started my love affair with stocks and just really self-taught, you know, throughout high school, I guess you know I would rather go into the library trading stocks than doing sports. So yeah, self-taught, no postgraduates, but you know I constantly read, even today.

Speaker 1: 6:22

So yeah, yeah, so what? So I assume from the age of 12, it's probably you knew that that's what you wanted to do be an investor.

Speaker 2: 6:31

Probably 16. So probably by the time I was 16, I knew I wanted to manage a pool of money.

Speaker 1: 6:40

Yeah.

Speaker 2: 6:41

Obviously, I didn't crystallize the type of vehicle and how it would look, but I knew I wanted to manage a pool of money, yeah and based on, obviously, your dad raiding your piggy bank at the age of 12 and investing in CSR.

Speaker 1: 6:57

You obviously spoke about Warren Buffett, who's been the biggest influence on your life and also on your career to date and it might be more than one person, yeah, probably well, number one would have to be my father, you know.

Speaker 2: 7:14

For I don't know if you would say allowing me to be entrepreneurial, but certainly not stopping me Enabling you, yeah, enabling me, I mean. I mean you know he's, I mean he's still a practicing psychiatrist today. He's, you know, second generation, Greek, australian. It was all about, you know, going to uni, getting a profession and so, directly, I guess you could say, you know my family, we weren't entrepreneurial family, but I don't know what hit me, but I just loved business and I guess, having read all the books on Buffett, you know stocks are businesses. So analyzing businesses, sectors, industries, you know, I find it fascinating and I think I mean, again, I'm not against doing postgraduate work, but at the end of the day, most lessons in life are self-taught and so, you know, reading economic history, I love, reading stock or industry-specific history I love. And the third part and again it's something that I've done religiously for a long time is reading your own history.

Speaker 2: 8:30

So writing your own journals and reading upon your own history, and I'm talking specifically investment history, because you do refine your skills over the years and you try to improve.

Speaker 1: 8:45

Yeah, that's really good insight. I think a lot of people go on that journey and enjoy that journey, but never really reflect on that journey.

Speaker 2: 8:54

I mean the hard part is reflecting and trying to be not biased, even though it's your own history.

Speaker 1: 8:59

Yeah.

Speaker 2: 9:01

But you know you've got to separate In my line of work if I want to talk about being stock specific. You know, just because you made money on an investment doesn't mean you're right, and vice versa.

Speaker 2: 9:13

Just because you lost money on an investment doesn't mean you're wrong. Yeah, you know, you've got to take a level-headed approach and realise when you were lucky versus when you're unlucky. And you know, using evidence based on the information at hand currently, whether something is a good asymmetric I hate using this word because I'm not a gambler but bet, doing a bet based on the current information, and so you know. Perhaps most people find that difficult, but I think over the years, if you start to follow your own journey, you do refine your skill set and you work out what you're good at and what you're not good at. Yeah, so yeah.

Speaker 1: 9:53

Yeah, I guess that might. I just want to go back to that because it's interesting. When I used to run money for clients, I would tell clients that at this point in time, with the information we have available, I either believe this is a good investment or I don't believe this is a good investment for the following reasons. Now, in a year's time, there's probably going to be new information that will affect that decision, whether it's right or wrong. But at this point in time, this is what I believe for the following reasons.

Speaker 1: 10:16

Yep, and I think a lot of people, especially a lot of people that might be, invest with you or, you know, under your guidance, you know you might tell them to, or recommend you, sell a stock and then that stock, you know, could change, it could get an acquisition, take over, whatever it might be, and yet you know the stock might do really well and they look at you well. You recommended, you know that I sell that stock and I said, yeah, I did, because at that point in time that was an unlikely probability. Anyway, let's move on. What do you think the most successful skills are in your role or the skills required to be successful in your position?

Speaker 2: 10:55

So I think, in today's day and age, if people can grasp removing the noise and not being distracted and having proper thinking time when it comes to investments, I think that helps me a lot. Now, I don't know whether a lot of others do that or don't do that, but that's what I do. So removing the noise and you know, if I talk specifics, I know this sounds not the best, but, for example, I rarely answer unsolicited phone calls. I only go onto my emails at the start of the morning. At the end of the morning I don't really use social media that much. I mean, I've got a LinkedIn page, but that's about it.

Speaker 2: 11:46

And so removing the noise and having just organic thought, that's without distraction, I think, is number one. Number two is well, from our perspective is having conviction when the time comes. So every investment, every new investment, needs to make a difference. You know, in my opinion, and I'm sure, there are plenty of ways to make money, but you need conviction to make a difference. And what's the third? Probably what I said previously just reading a lot about history. Now, that's whether it's economic history, whether it's company or industry-specific history or your own history, but constantly reading history. Those are the three things I think.

Speaker 1: 12:30

Yeah, and that's really good, really insightful um and thank you for sharing. I guess this is a little bit different what what's? Because obviously everyone in their career um has has well, everyone in their life and career has has setbacks and challenges, which, ultimately, is your best learning opportunity. If, if you ask me, yep, what's been the biggest setback, or some setbacks, can you share with our audience, with you and your career to date, and how did you overcome them?

Speaker 2: 12:58

So I agree, I think the best lessons are self-taught lessons, number one. However, I guess sometimes again, if you're reading a lot, you could argue perhaps it's best to learn from other people's mistakes than your own mistakes. So there is nothing that I can think of in the life of Colin Street you know we've been around for almost nine years that I can think of that was anything close to fatal. But reading a lot about other people's mistakes and I guess, look, we don't get every investment right, so I guess I could say some setbacks have been, some investments that have not turned out well, and learning from that Nothing fatal, even though I do agree with your comment that you learn from previous failures.

Speaker 1: 13:59

Yeah no, thank you for sharing. And obviously, as an investor and a portfolio manager and CEO, you're not going to get every decision right, but if you get in more than half them right, you're probably going to get every decision right, but if you get in more than half of them right, you're probably going to have some great returns. And what advice would you give anyone you know, maybe someone that's a junior investment analyst or studying finance to become a CIO or a portfolio manager You're running, you know, whether it be an Aussie equity, Aussie long-only equity fund or international fund or whatever investment way of investing you'd like to invest. What advice would you give someone that wants to be an investment analyst or a portfolio manager or a CIO?

Speaker 2: 14:43

Well, I think there are two important things at play and they are interlinked. So I think number one this is a general advice for anything, any profession, to be honest is make sure you're doing what you love, because when you love something, you go the extra mile. And then number two, and and maybe you've got to be pretty self critical, but but make sure that, whichever, if you want to be a COO or a fund manager, make sure you have an X factor and that you're, you know, in the top quartile of that. And so I think human beings are unique in that. I think there are plenty of things we could end up loving but might not be that good at it. So, I think, loving something and making sure you have an X factor, because if you don't find something else you love, that you're really good at.

Speaker 1: 15:35

Yeah, okay, so a combination of something you're good at, but also something you really enjoy, correct?

Speaker 2: 15:40

Yeah, so you can become better at it. I think correct, spot on.

Speaker 1: 15:45

Yeah, I guess that might lead me into the next question, because you obviously love what you do, clearly passionate about investing and learning about companies and doing analysis, and the second thing is being a top performer. Now maybe it would be good to share with our audience around Collins Street Asset Management, and you know you've been operating now for nine years. The business continues to grow and the numbers are exceptional. So let me just share a little bit about Collin Street Asset Management, the funds that you offer From my understanding only available to wholesale investors, but you know some of the performance numbers that you've been able to achieve, and some good in. Well, just maybe share a bit about the business.

Speaker 2: 16:30

So our Flag Chick Fund, which is the fund that's been going for the longest, and what we're known for, I think, is our long-only Collins Street Value Fund. So since inception, which is close to nine years, net after fees, I believe our annualised return has been 13.5% or around 13.5%. We are concentrated investors. I think the portfolio currently holds, if I include precious metals or gold as one thematic, even though we have a basket of stocks, but if I include that as one thematic, we probably have about 12, 13 positions. Yeah, and so you know we rarely, you know we don't have high turnover on our portfolio number one and number two. You generally do find us at the start of a new investment where we're normally in stocks or corners of the market where no one wants to know about.

Speaker 1: 17:29

Yeah.

Speaker 2: 17:29

For example, four years ago, based on our fundamental analysis regarding mine supply, we were pretty heavy in the uranium thematic yeah.