John Garrett is a Portfolio Manager at MA Financial Group Ltd (ASX: MAF) (formerly Moelis Australia) and shares investing wisdom on his website, mastersinvest.com. He joins Raymond Jang on The Australian Investors Podcast to share his investing knowledge and lessons with our investing community.
John’s career in the financial markets has spanned across over nearly 25 years and currently manages three funds at MA Financial Group. His significant experience combined with an insatiable appetite for consuming books along with learning from the greats has helped him build an encyclopedic knowledge of mental models to find great businesses, which can compound at high rates over long periods of time.
Listen to Part 1 on The Australian Investors Podcast right now
Listen to Part 2 The Australian Investors Podcast this Saturday (Jan 22)
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Talking points
Beginning – How John felt when he heard that Ben Rundle said he was the most influential person in his investing career.
02:40 – John’s personal journey as an investor.
05:15 – First decade of John’s career in REITs with UBS Investment Bank and the impact of the Asian financial crisis and the tech bubble. We talk about CISCO Systems Inc (NASDAQ: CSC), Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT).
13:00 – John’s experience in hedge fund advisory and building live model portfolios for institutional clients.
20:00 – What was going through John’s mind during the global financial crisis and how Mark Twain’s quote, ‘History doesn’t repeat itself but it often rhymes‘ was relevant. John also mentions the book, House of Morgan.
24:55 – John’s foray into the buy-side and the investing philosophy of the funds he currently manages at MA Financial Group. John shares some interesting statistics highlighting where the best ASX investing opportunities lie.
34:10 – Why focusing on the destination is important to John when he approaches valuation. John uses Nick Sleep and Walmart Inc (NYSE: WMT) as an example.
38:00 – Using Australian Ethical Investment Ltd (ASX: AEF) as a case study of where the valuation became overstretched.
42:15 – How John works out the risk and reward payoff when assessing investment opportunities, using Johns Lyng Group Ltd (ASX: JLG) as an illustration.
46:30 – What John does to take his mind off investing.
48:40 – The key lessons John gained from studying the great investors.
55:30 – Which great investor resembles John the most.
58:45 – Importance of understanding the qualitative factors that drive the financial output and taking a holistic view of the business.
1:4:50 – Why companies that can ‘fight the fade’ are rare and can override a valuation model. Notable mentions include Meta Platforms Inc (NASDAQ: FB), Alphabet Inc (NASDAQ: GOOG) and REA Group Limited (ASX: REA).
1:12:45 – Why John believes management and culture are the longest forms of potential competitive advantages.
1:14:20 – How John devours so many books and retains knowledge to build his mental models. Book references include Let My People Go Surfing by the founder of Patagonia and Invention: A Life by James Dyson.
1:19:25 – How a concept in Nassim Taleb‘s book, Skin in the Game led to an investment in Australian Ethical Investment.
1:24:30 – Lessons about culture and incentive structures from reading Pride in Performance by Les Schwab along with further discussion about Johns Lyng Group.
1:30:00 – Why I quickly bought, In Search Of Excellence: Lessons from America’s Best-Run Companies by Tom Peters and Robert Waterman after my chat with John.
1:32:30 – John shares a personal anecdote to highlight how great businesses find ways to get the best of their employees.
1:34:15 – Why John has been devoting more time towards reading everything about technology.
1:37:45 – John provides his views on the future of blockchain and cryptocurrency.
1:41:30 – The emotional and psychological mindset required to be a great investor.
1:47:15 – What John does to overcome biases and he discloses the two biggest ones for him.
1:50:05 – John lets us know who has had the most influential impact on him as a person and investor.
Date recorded: January 18th, 2022
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