Julian is an Investment Specialist with Platinum Asset Management. He first joined Platinum in 2001 and then quit in 2002 to travel the world. He worked at Credit Suisse in metals and mining before starting his own minerals exploration company.
“Mining is nice business where you can actually understand the cost basis”
In the mining business it's easy to read the numbers and see how much it costs to extract a certain amount of minerals. I'll be taking a deep dive into the mining industry in an upcoming episode.
Now back at Platinum, Julian brings his uniquely contrarian view to investment management. Platinum is an Australia-based investment manager that focuses on one asset class - international shares, providing portfolios of listed companies from around the world.
In this episode Julian talks about his book recommendations for learning more about share investing.
- The Making of an American Capitalist - Roger Lowenstein
- One Up On Wall Street and Beating The Street - Peter Lynch
- Reminiscences of a Stock Operator - Edwin Lefevre
- The Alchemy of Finance - George Soros
BMW - A Deeply Contrarian Idea
My main reason for wanting to interview Julian was to share his story about the inherent value of the BMW company in the age of the electric vehicle (EV). It's not as sexy as Tesla but it makes a lot more cars, has a highly profitable leasing business, and has already invested heavily in EVs. Julian and I both dream of owning a hybrid like BMW i8 below.
There are 2 valuation metrics that are mentioned that a beginner should explore more deeply.
1. The Earnings Multiple also know as the Price Earnings Ratio or P/E. In a very simple example if you buy share XYZ at $10 and it earns $1 profit every year, it would be on a P/E Ratio or Earnings Multiple of 10. It would take 10 years of profits to cover the cost of the share purchase. Here's a link to a more in-depth look at this metric.
2. Book Value or Equity Value. This is the theoretical value of a company if all of its assets were sold and all of its liabilities paid out. Here's a link to some more information you may find interesting.
And finally some wise words from Julian:
"If you really don't think you need financial advice and you can't afford it, you probably need it most...even Rafael Nadal has a coach."
Julian's presentation about BMW at the ASX Investor Day in Sydney June 29, 2019.
"When you buy a stock, you become part-owner of a living organism. You need to understand what makes it tick, rather than focus on numbers alone." Kerr Nielson Founder & Director of Platinum
Here's a link to Platinum's website for more information
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Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.