We’re back with live events in 2024 - get your tickets to Equity Mates Live – Ask An Advisor here.

Expert Investor: Angie Ellis – 8020 Invest

HOSTS Alec Renehan & Bryce Leske|8 April, 2021

Angie Ellis is a private investor from Melbourne. You may know her as 8020 Invest on Twitter or you may have read about her as part of Fairfax Media’s Shares Race, which she has won five times. In this conversation, Angie shares the story of her first investment, how her background as a small business owner has informed her investing style, and the screening methods she uses when looking for new opportunities.

If you want to let Alec or Bryce know what you think of an episode, contact them here

*****

Some of our favourite resources and offers to help you during your journey:

*****

Make sure you don’t miss anything Equity Mates related by signing up to our email list. And visit this page if you love everything Equity Mates and want to support our work.

*****

Equity Mates Investing Podcast is a product of Equity Mates Media. 

All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice. 

The hosts of Equity Mates Investing Podcast are not financial professionals and are not aware of your personal financial circumstances. Equity Mates Media does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given.

Before making any financial decisions you should read the Product Disclosure Statement and, if necessary, consult a licensed financial professional. 

Do not take financial advice from a podcast. 

For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you. 

In the spirit of reconciliation, Equity Mates Media and the hosts of Equity Mates Investing Podcast acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and expend that respect to all Aboriginal and Torres Strait Islander people today. 

*****

Have you just started your investing journey? Head over to Get Started Investing – Equity Mates 12-part series with all the fundamentals you need to feel confident to start your investing journey.

Want more Equity Mates? Subscribe to our social media channels (@equitymates), Thought Starters * Get Started Investing mailing list and more, or check out our Youtube channel.

Equity Mates Investing Podcast is part of the Acast Creator Network. 

Bryce Leske: [00:00:55] Welcome to another episode of Equity. A podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett's status. Our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity mate, Ren. How are you going? [00:01:10][14.9]

Alec Renehan: [00:01:11] I'm good. I'm very excited for this episode. We're speaking to an expert who we've actually, I guess, followed from afar for a while for readers of the Fairfax papers, Sydney Morning Herald up in Sydney. Well, actually, I should say the nine papers now the they run a shared tipping competition and our guest seems to always win it. So we've actually been following for a while. And it's great to finally get on the show. [00:01:37][26.2]

Bryce Leske: [00:01:37] Yeah, always has the magic sauce. [00:01:38][1.1]

Alec Renehan: [00:01:39] Yeah, I know it's going. Yeah. We will find out in this interview. [00:01:42][2.8]

Bryce Leske: [00:01:43] So Ren, before we also kick into the show, just a reminder or letting everyone know that we do have a live show coming up towards the end of April, aiming for the twenty ninth penciled in unconfirmed at this stage. [00:01:57][14.2]

Alec Renehan: [00:01:57] Check the social pipes, email, Instagram, all of those on social media. There'll be more information there. Actually, best place to go for this information and other high quality information. Facebook discussion group. [00:02:10][12.5]

Bryce Leske: [00:02:11] Facebook discussion group. We're going to be doing a live industry night, deep diving on one industry that is of interest to us and will be to you. And that is the alcohol and beverages industry. It's going to be held at a great location that is undisclosed for the moment. But come along, it's going to be live and also streaming. So anyone who can't make it here in Sydney, don't worry, you'll be able to join us online. And then we will make our best intentions and efforts to get around Australia towards the latter half of this year. But keep your eyes peeled for our four hour live show with with the two of us and some experts. Yep. [00:02:46][35.7]

Alec Renehan: [00:02:47] Sounds good. [00:02:47][0.3]

Bryce Leske: [00:02:48] It is our pleasure to welcome to the show, Angie Ellis. Angie, welcome. [00:02:52][3.6]

Angie Ellis: [00:02:52] Oh, thank you very much, guys, for having me on the show. I'm a big fan of the show, so I feel very honored. Thank you [00:02:57][4.7]

Bryce Leske: [00:02:58] So for those who haven't come across Angie before, Angie is a private investor down in Melbourne. And as Alec said, you may know her from the Fairfax Media shares race in which she has won. I'm going to say five times. Is that right? [00:03:15][16.9]

Angie Ellis: [00:03:15] And you want to just so many times. I went running it last year because of all the trouble with covid. I haven't been running it for a while, but yeah, I was in it for about four years and it's just it's like a fantasy. She's raised it all the way for four weeks or six weeks and you couldn't change your stock picks. So you'd have to pick ten stocks and then they'll follow you over that period of time. And at the end of four or six weeks, I would say, you know, this person is the winner. And sometimes I'll pick some really crazy high fliers and I'll be up 70 per cent. Yeah. You know, that period of time. So I would I would pick whatever's hot at the time, you know, like a leaky obstacle. And everyone would be crazy about medicinal cannabis stocks. So I was having a bit of a run. [00:04:05][49.5]

Bryce Leske: [00:04:06] We will unpack that in a second. Also, you may have seen I mean, the audience may have seen you like 80-20 invest on social media. I guess, holding company or investment company that you're investing in privately. So do follow Andrian on Twitter if you would like to continue the conversation with her. All right. Well, time to get stuck into our game. Overrated, underrated, which Ren will kick off and then we'll get stuck into the moving episode. [00:04:33][27.1]

Alec Renehan: [00:04:33] Yeah, let's do it. So Angie will start at home with our major index here in Australia. Overrated or underrated? The ASX 200, [00:04:41][7.3]

Angie Ellis: [00:04:42] I would say overrated, even even though it was a pretty good reporting season. But I was looking at some estimates now saying over the next year we're looking at about four and a half, five per cent per annum for that ASX 200. So I don't hold a lot of stocks on the ASX 200. I've only probably got to Launceston up. So I don't really I follow all the microcap space, [00:05:06][24.1]

Bryce Leske: [00:05:07] overrated or underrated. Then the Nasdaq 100. [00:05:09][2.0]

Angie Ellis: [00:05:10] I said I had to this underrated like to me, these are the hottest companies that just keep getting hotter, like Lululemon, eBay, you know, DocuSign ones I've just bought. So I thought, well, the Nasdaq one hundred, the average returns twenty eight per cent per annum and forty nine per cent last year. So I do like those companies in the Nasdaq 100 and it's good that at least the Aussie company and there now. Hmm. [00:05:34][24.6]

Alec Renehan: [00:05:35] Yeah. Hopefully more in the future. And next one, overall underrated investing in large cap stocks? [00:05:43][7.7]

Angie Ellis: [00:05:43] large caps overrated. I don't invest in any large caps. [00:05:47][3.4]

Alec Renehan: [00:05:48] And why is that? [00:05:48][0.6]

Angie Ellis: [00:05:49] I just don't find I can get a good return. When I started investing and even when I started putting shares in the shares rise, I was very much in that sort of space and I just couldn't outperform the index. I just wasn't generating enough returns to justify all my efforts. [00:06:05][15.5]

Bryce Leske: [00:06:05] We will dig into that in a little bit. Overrated or underrated, then the Australian residential property market [00:06:12][6.4]

Angie Ellis: [00:06:13] I considered underrated as a share investor. I was a property investment. I bought a few properties that are sold now, but I own my own house and I don't have any other property investments and I don't really follow the invest the property space [00:06:27][13.4]

Alec Renehan: [00:06:28] and then the final one is overrated or underrated bitcoin. [00:06:31][3.4]

Angie Ellis: [00:06:32] Okay, this is a tricky question, isn't it? [00:06:34][1.9]

Bryce Leske: [00:06:36] It's pretty straightforward. [00:06:36][0.5]

Alec Renehan: [00:06:38] The price. It's very straightforward. [00:06:39][1.1]

Angie Ellis: [00:06:41] Yeah, I know. Well, I just I had to seek others opinion on this because and they said underrated, but it was like you don't value at things enough until you need them. And then it's often too expensive that in Bitcoin is insurance and the global financial system. But I don't really play into that bitcoin. I do want to check with banks. It's on the Toronto Venture Exchange. It's a payment processor for crypto currencies. But I think that's a bit of right for me to play Bitcoin, like being more on the, you know, the supplies of the shovels and picks. [00:07:16][34.6]

Bryce Leske: [00:07:16] Yeah, yeah, yeah. Fair play. So, Angie, we always like to get a bit of an insight into our guests very first investment as it often holds a bit of a story or a lesson. So are you able to tell us the story of your first investment? [00:07:31][14.7]

Angie Ellis: [00:07:31] Yeah, good question. So there was a stock back in 1999 shows my age called MYOB. Mind your own business. And it's not like, you know this company. [00:07:42][10.8]

Alec Renehan: [00:07:43] Yeah. Yeah I actually do, it's accounting software isn't it. [00:07:45][2.4]

Angie Ellis: [00:07:46] Yeah it's of the stock market anymore. It's been on and off the stock market a couple of times but it's similar to zero. But it's not wasn't a cloud accounting software product. But I actually got into the IPO of MYOB again, it was two dollars. And the reason I got into it is that when I was twenty three, I started my own business and I started a business as an MYOB consultant. And I used to run training classes and I employed up one stage. I had like 10 staff and it was around the time that everyone was computerizing their accounting systems. So we were flat out. It was a really fun business and I loved it. And I started running these courses we did on site training. So when MYOB went to least, the CEO told me, after all my efforts of freedom, I said, and you can apply for as many shares you like. So I thought, well, how fantastic. So I applied for, like you this huge amount. I was like forty seven thousand dollars or something and shares of forty six thousand shares. And then he called me up and said, actually you're number one on my reject list. And he was going to refund me the money and I could only get three thousand five hundred dollars with these shares. I was crushed and they opened at four dollars and I went up to twenty one dollars on that. [00:09:08][81.4]

Bryce Leske: [00:09:08] Could have been your retirement. [00:09:08][0.5]

Angie Ellis: [00:09:09] I know. I watched them skyrocket. I was really devastated at the time. And, um, and I did I did meet someone later he who bought a house outright from that listing. So I sort of gave me that case that these horrifying shares and how I can really change your life and really set you up. Someone just bought a house from that experience. And I knew the company so well know because I had been running this business for so many years and new product. So I think it was a good lesson for me that I probably should have pushed it a bit harder to get that initial money. I should have called them up. No, no, no. This was happening. [00:09:52][42.5]

Alec Renehan: [00:09:53] So from that first investment in MYOB to now, have you developed a personal investing philosophy? [00:10:00][6.7]

Angie Ellis: [00:10:01] I would say a definitely a growth investor. I definitely look for that strong earnings growth, like erm where they was going through the time where you might like. My phone was ringing off the hook with people trying to book training. It was just, you know, I couldn't keep up with the sales, you know, that sort of business. I definitely focus on those sorts of businesses. They got really strong tailwinds pushing the demand for the product. So yeah, I would definitely say that's part of my philosophy is focusing on these small young companies. They're not always profitable, but they've got good profit margin and they've really scalable. [00:10:35][34.6]

Bryce Leske: [00:10:37] So you are now a private investor running 80-20 investments. What's been your journey to this point? And I guess do you have any, like, formal training? Because a lot of people, I think in the community would probably think that you need to go to uni. Always sort of stuff to become a private investor, but is that the case with you? [00:10:54][17.5]

Angie Ellis: [00:10:55] Oh, well, I did go to uni. I did my I started off with a college degree at Melbourne, but I very quickly sort of put that on hold because I got a full time job as an accountant, like as a junior account. When I finish school. So I did an accounting degree at night time. So I used to go like six to ten every night off to Monash, Janine Caulfield and do this accounting degree. So I'm a CPA, but I just don't do accounting work these days. And so when I finish that degree, that's when I started my own little business. So I think that the training that I got doing the degree was great because I learn all about marketing and brain development. So it does help me to assess these fun high flying companies. [00:11:35][40.3]

Alec Renehan: [00:11:36] So as I said in the intro, you've been a prolific winner of the Fairfax share tipping competition four or five times. You've taken out the the prize. So you must be doing something right. And we love to, I guess, unpack your process and learn from what you're doing. So maybe let's start at the beginning and I guess area where a lot of people in the equity community, I guess, have a lot of questions and really want to get more information, which is actually the process of finding companies and generating investment ideas that real the top of the funnel there. So if we start there, how or I guess where do you generate most of your investment ideas from? [00:12:21][45.2]

Angie Ellis: [00:12:22] That's a great question. So I had two systems for generating these ideas. The first system is very much that I learned from being in she's right because like I was saying initially, I would pick fairly boring companies, put CSL in there or Wesfarmers or something, and I just wasn't winning at the start. And so then that's when I started to really make myself a little system. I had a little algorithm that I wrote that was really scanning the whole market for these things, up trading stocks. So that's the sort of half of my portfolio I run on that system. And then the other half hour I'll talk about later, which is sort of more sort of longer term holdings. But this sort of first why I do it where I have this little algorithm that I run, I write about five years ago where I look at these strong volume stocks that could be up trending. They definitely up in the last few days. They're definitely up in the last week. And I run across those stocks and I might generate a list of about 20 or 30 stocks. And then I look through that list. This is the process I would do for the shares right now. I do it for my own half of that portfolio. I want to say that there's lots of news flow about the stock, like what's going on with it? Why is it taking off like this? And I might say that it had lots of articles written. It's really talked about on Twitter. There are lots going on. There are lots of drilling results, say, or it's, you know, at a green space like lithium, it's green lithium space. And that's been talked about at the moment. So definitely something like that where it's going to have a bit of a run for a while. So I get a lot of great ideas from that. [00:14:06][104.1]

Bryce Leske: [00:14:07] So just to unpack that a little bit, what you're saying is you apply and this is just for, I guess, the newer investors in the audience, you'll run like a screen or a filter through one of the, I guess, online tools available where you're filtering for stocks that have a lot of volume or a lot of sort of buy orders coming into them over a particular period of time. And then you're kind of a line that with, I guess, the macro view or some sort of, you know, whatever is going on in the news. [00:14:39][32.0]

Angie Ellis: [00:14:40] Yeah. Yeah, exactly. Exactly right. And I'll look at why it's having this run and make sure that it's real and it's going to sustain that run. Like I might say, that some good fund managers have bought into it. And that's generating a bit of news as well. So, yeah, definitely it throws up some really quirky stocks. We're running scan across the whole market like that. I've run across two thousand two hundred stocks on the ASX and for the shares price, they had to be over five cents. So I still do that in my portfolio. I'll put the scan is greater than five cents and I'll make sure that that uptrend is a bit of a snooze. I've got a filter that looks for a smooth uptrend. Yeah. And I find fun stocks that I wouldn't have picked before. [00:15:24][43.8]

Alec Renehan: [00:15:25] So you've mentioned a couple of different information sources that you mentioned, I think Twitter. And then you said you look at other fund managers and I think that's a real point of difficulty for a lot of retail investors, especially, you know, price. And I can't afford a Bloomberg terminal. Yes. Yes. Yeah. What are some of the information sources that you find most valuable? [00:15:49][24.0]

Angie Ellis: [00:15:51] Inmates, of course, I follow a lot of our markets, too, and I have a digital subscription to. I think that's great. And if you're a student, you can get a student digital subscription to the AFA, which is quite cheap. So you can read it online every day. I find that's a fantastic source of information. I actually read an article filed back in July 15 about to pay back what Nickman was doing it after paying off. That's fantastic. That's going to be huge. So I sent him a message on LinkedIn. I said, I want to follow your updates. This is going to be huge. And so I, I wanted to get into it. At the time, I would never have thought to get into an IPO. I thought to myself, I'm going to I'm going to look at that one at least. And then I actually totally forgot about it. And then I read the IFR again, you know, quite a few months later. And that it had listed and it was already up to almost two dollars. It listed for dollar and it was almost up to two dollars when I saw it. Again, the environment effect company I meant to follow. So I bought into it then. And I've had huge success with that. And that's just from reading the Financial Review. And I've had lots of other success, too, like 18 million companies like that that I that's where I got the information from [00:17:08][77.2]

Alec Renehan: [00:17:09] getting getting in early and after pay and a.m. that really softens the blow of missing out on MYOB back in the day. [00:17:16][7.5]

Angie Ellis: [00:17:17] Yeah, well, I had a similar experience and this is what, just one day. That's just a really dumb mood. And I just sold all my I was eleven dollars and I was just going to really stupid mood and just sold all my patients at eleven dollars. And then I went to a mining conference that day. I caught up with one of the guys, my investment group, because I want to do that feeling like I know just a really dumb mood. And then a couple of days later it was up back up to fourteen dollars and I had to buy them all back [00:17:50][32.2]

Bryce Leske: [00:17:51] like bought [00:17:52][0.8]

Alec Renehan: [00:17:54] at fourteen rather than watching it run to one hundred. [00:17:56][2.2]

Angie Ellis: [00:17:57] That's just really it was really stupid. And then I had to pay tax on that. Yeah. [00:18:01][3.7]

Bryce Leske: [00:18:02] So one half of the portfolio, you're fine, you're generating ideas using a bit of a screen volume based screening process. In researching for this interview, it became evident that you're also using a bit of a fundamental versus technical approach when it came to choosing stocks as well, able to talk us through how you sort of use the to and where that fits in your portfolio. [00:18:26][23.8]

Angie Ellis: [00:18:28] Yep, sure. So the second half of the portfolio, I'm definitely looking for these, you know, companies that I look at the metrics that might be cloud computing or payment technology or an area like that that is just doing really well at the moment. So I'll look across health care if that's what's booming at the moment, and I'll try to find some great companies in that space. So I'll I'll look at what directors are buying, what fund managers are buying. I can often find some interesting companies like I did buy into that one view, that one that's been going crazy on the stock market at the moment. I bought into that because well, because he's a fund manager. He was buying more of that stock a little while back. So I thought, oh, it's sort of captured my attention because he took up the balance of the capital raising that they were doing. So he increased. He's holding a thought. He's a fantastic fund manager. So what's he buying? And I did quite a bit of work on that. Stocks have done really well from that. And just if directors are increasing their shares in a company, especially if they're buying their kid's name or the super fund, I really like that. [00:19:39][70.8]

Bryce Leske: [00:19:39] Where do you find that information? Just for people who are, I guess, curious? [00:19:42][2.7]

Angie Ellis: [00:19:43] Yeah, well, I look at I use insider trading, so I just look at the news and I look down through the news to see what's going on with the company, always looking through the the news filter to say a substantial holdings buying more like is Thorney buying more or Wilson Asset Management, are they taking up bigger positions? So I'll go through the directors trades. I also guys have market index as a little link on my phone that goes straight to directors trade. So a little a little short cut on my phone. It's free like click on that every day. And it just just came through what directors are buying and selling. [00:20:20][37.2]

Alec Renehan: [00:20:21] Interesting. Interesting. So Bryce mentioned fundamental and technical approaches. I think the price has doubled with the dark arts of technical trading and charting. But I think here at equity markets we're definitely more focused on the fundamental side of investing, I guess, in terms of mistakes, what what are some of the common mistakes you hear about or you see retail investors make when they're either trying to follow a technical approach or a. Fundamental approach, [00:20:51][29.9]

Angie Ellis: [00:20:52] well, with a technical approach. I mean, it could be a reason that that pattern is setting up the way it's setting up. They could be sites. It could be a good stock and they might be a significant shareholder that they might have been bought out. Say, for example, say they bought a company up three years ago and they bought them out, which is and now we're coming up after the 3s and in the chart was really trending down. I thought I wonder if that shareholder is selling out like I'm on to other reasons while the child is doing what it's doing. So I would say that might be one of the mistakes. I think retail investors maybe I thought maybe jumping on a hot tip. [00:21:35][43.3]

Alec Renehan: [00:21:36] Yes. Yes, definitely a very common mistake. Feels like a rite of passage almost. [00:21:40][4.2]

Angie Ellis: [00:21:41] Yeah. So sort of check it out. I do remember back in maybe April last year, I was getting all these hot tips to buy freedom foods, like I was just coming through maybe my Twitter feed or some way of freedom food. So I thought, I'll go down to the supermarket now, buy some of the products and see what's going on. It was around the time that you know, everyone was buying toilet paper and the shelves were all empty. And the only thing there was the freedom food products, all the gluten-free muesli. [00:22:10][28.9]

Bryce Leske: [00:22:11] And that's really that's really interesting process. How often do you take a company that you're interested in and try and then I guess do that sort of qualitative research rather than just look at the computer screen? Where does that sort of fit in with your with your process? [00:22:27][16.6]

Angie Ellis: [00:22:29] Well, that's what I mainly do. Like, I'm always going and trying the product. Like I been having some fun recently with Red Bubble that I've been posting on Twitter on my crazy things that I've been printing out of Red Bubble to try to understand the platform. So I've set myself up as an artist on the platform and I've been making lots of interesting sort of designs. I've been maybe putting some friends photos and printing some magnets or some jigsaw puzzles. And just in a private account, some other people can't buy that design. But it just gives me a way to understand red bubble from the customer point of view and from an artist's point of view. So I'm very much into that. Like, I like to try the products. I'll get friends to try the products and see what they think about it. And one of the products that I tried a couple of years ago was how fresh the meal. Yeah. Yeah. Did you guys know Molly Spoon and how fresh. Yeah. [00:23:25][56.6]

Alec Renehan: [00:23:26] Yeah, yeah. [00:23:26][0.3]

Angie Ellis: [00:23:28] So, yeah, and I got friends to try it, and and then I bought shares in the company and I've done really well from those companies. And then sometimes I go to parties and all my girlfriends would be just raving the whole time at the party about how much they love phrase, not even knowing that I have shares in it, just talking about how much they love the product so that I would top up my shares and end up buying more shares. [00:23:51][23.4]

Alec Renehan: [00:23:52] And I love that style of investing. Like, that's very much what Peter Lynch wrote about in one up on Wall Street. And there's just so much information all around us because every everyday people moving and interacting in the world and you've really just got to have that investment investor hat on at all times and really just be aware of what's going on around you. [00:24:12][20.8]

Angie Ellis: [00:24:13] That's right. Drive the kids crazy. Going to the chemist. And I'm like, oh, how's the steak and ice cream selling? You know, like just a lot like, you know, you're going to love this, you know, the fast food through jewelry store. And I'll be like, how are you going? You know, do you like working for the company? You know what's selling at the moment? You find your Busia this month and you were last month. [00:24:34][20.5]

Alec Renehan: [00:24:36] Well, if we now have a whole bunch of equity mates going out to retail stores around Australia and harassing staff members with lists of questions, we'll know. They've been listening to this episode. [00:24:47][11.4]

Bryce Leske: [00:24:48] And now before we move on, we'll just take a quick break to hear from our sponsors. Ren, you are all about getting fit. You've bought the gum and you bought the golf membership. You bought the gym membership and you're on the my MasterChef. And even in lock down last year, you bought those resistance bands of Instagram that from memory didn't even come. [00:25:09][21.2]

Alec Renehan: [00:25:10] No, look, they didn't come. But all of that effort really was canceled out by the numerous menu log orders that were a real staple of my lockdown experience. [00:25:20][9.5]

Bryce Leske: [00:25:21] Well, we've just headed into a new financial year, so I think it's time you get money fit with Virgin Money, our latest sponsor. [00:25:28][7.0]

Alec Renehan: [00:25:29] That's right, Bryce, with a high interest savings account bundled with a seriously rewarding everyday transaction account, you can manage your money easily on the go smash your savings goals and be rewarded for it. [00:25:41][11.9]

Bryce Leske: [00:25:41] And with the Virgin Money Go transaction account, you can earn rewards on your everyday spending with zero monthly fees. Sounds like just what you need. Ren. [00:25:50][9.3]

Alec Renehan: [00:25:51] Yeah, the FBI twenty one get Ren didn't quite work, but if y twenty to get Ren money it might be to go [00:25:59][8.4]

Bryce Leske: [00:26:00] back to your own beat. Virgin Money terms and conditions and monthly criteria apply. Now let's get back to the show. So, Angie, one of the yeah, look, I really enjoy that part of the process, and it's something that anyone in the equity markets community can go out and do themselves like, you know, you could have taken the same approach with after pay, go on and buy something, use it, understand the customer experience, etc.. So I think that's that's great. Are you able to give some, I guess, practical and clear examples of then what fundamental aspects you look at to overlay with that qualitative process to help then like crystallize that decision? [00:26:39][38.6]

Angie Ellis: [00:26:40] Yeah, definitely. I mean, I definitely read all the financial reports. I definitely want to see, you know, that the revenue's going up and that they know what they're doing with their business. So I definitely look at a lot of those fundamental things. I look at their debt levels. You know, I used to focus a lot more on those sorts of things like price earnings and pay and all that sort of fundamental indicators. But I, I must say, I don't really do that as much now. Like, I might not put me off a company where I can just say I see what they're doing. You know, they've they've changed their revenue mix. So that's why the revenue went down. And now they're on more of a recurring revenue model and they pivoted their business a bit so I can look more to the future. So otherwise I might they might you know, the revenue might be down 10 percent. But if you dig through it, you think I can see what you did. You got rid of that big customer that was sort of driving you crazy. That was really low gross margin. And instead, you've got these smaller customers and you've got these different revenue model for them. So I'll I'll look across that a little bit more. And then sometimes with that, I might get out of a stock because of certain fundamental reasons. And I think that's what it looks like sometimes retail investors don't make they realize. If I realize I've made a mistake, I'm happy to get back in. Yeah. I want to know if you get out of our eleven dollars and it just keeps taking off and it's fifteen point twenty dollars and you love ups. I know your friends are raving about it. Just get back to the party. Yeah, yeah, yeah. It's a stock you really believe in and you just are disappointed you did that. Just pick it up and get back in. [00:28:21][101.2]

Alec Renehan: [00:28:22] Sanjit once you've, once you've found some of those are I guess fast growing companies or, you know, the the screen that you've built has identified some companies that are particularly interesting. The the question then becomes are actually building a portfolio. And I think, you know, the the idea of, you know, finding great companies and investing in them is, I guess, conceptually quite straightforward to understand in some ways. But then I think where, you know, the great investors really separate themselves is building a really great portfolio. So I guess to start, General, how do you think about portfolio construction? [00:29:00][37.7]

Angie Ellis: [00:29:00] Great question. I mean, for me, portfolio construction starts with setting what return I want to achieve. So it's important for me to select the assets that are going to get that that goal. So for me to justify that, I'm full time. I'm doing all this work, I'm paying subscriptions, I'm listening to podcasts, know you have to get a certain return. So I think it's really important to, first of all, start with your goal. Like, what do you what do you want to achieve? And then then you can build the portfolio from there. Like, there's no point sort of thinking, OK, I want to get 30, 40 per cent per annum and then build your portfolio with those really very conservative stocks that are just not going to get that sort of return. So I hold about forty positions. I only hold listed companies don't have anything else besides listed equities. I really hold cash. I did I did go I was about nine percent cash at the end of February. That was the first time I'd ever really gone into that. Well, and that took me a week. It took me a whole week to bring my portfolio down to to be nine percent in cash. It felt very dramatic thing to do at the time. But so then when I sort of got back into the market sort of in early April, I, I did read that global stocks will take off a lot more than I think. So I started building up a lot more global stocks. So in my portfolio that I've constructed it now, I do hold about 30 percent, probably a bit more in global stocks. [00:30:31][91.0]

Bryce Leske: [00:30:32] I mean, you spoke there about you need to figure out your required return so that you can, I guess, live and continue to be a private investor and also, you know, continue investing as well. What is your general time horizon with those sort of forty positions? And how do you kind of think about the balance of that? [00:30:52][19.7]

Angie Ellis: [00:30:54] Yeah, in terms of how long I told them, I think because half of them are more of a trading portfolio than the other half the companies that I really understand quite well, and I definitely use the products and I'll sort of hold for a lot longer. So, you know, only half I would sort of trade quite regularly. Right. Yeah, so I sort of like that balance that I've got, the ones that I just think know that's a great company, I'm happy to hold them for longer term. [00:31:17][23.7]

Alec Renehan: [00:31:19] So, Angie, you mentioned there that you're only in listed equities. Does that include, I guess, ETFs or listed investment companies? And more generally, how do you think about those as investment options with ETFs? [00:31:34][14.5]

Angie Ellis: [00:31:34] Like, if I just wanted to sit and forget, I tell people buy an ETF because it's going to rebalance all the time, like every three months, you know, the low performing ones or the sort of the ones that aren't really trending up come out and all the the new hot ones going. So it's going to rebalance every three months. So I like ETFs for more of a set and forget I don't generally hold them like I might get one and then hold off a little bit and think, nah, it's just not going to get me the rich. And then after I have bought heck a few times, I've got quite a few cyber security stocks. So I bought Hack on and off over this period. And definitely last year I did buy into a few global ETFs that were listed on the Nasdaq and they did really well because when I looked at the stocks that were holding up, looking at what I did, all the stocks I was wanting to buy. So it was just much easier to buy a global ETF. But I think I'd rather just buy the strongest ETF. I've got Crowd Strike and Zis scholar and I'm think I'm just happy to hold the two. The two from the ETFs that I see have got the most potential [00:32:46][71.4]

Bryce Leske: [00:32:47] to D leverage in your portfolio. [00:32:49][1.6]

Angie Ellis: [00:32:50] No, I don't. Interesting. [00:32:51][0.9]

Alec Renehan: [00:32:52] So one more question about portfolio construction, which I think is again, it's a question that a lot of people in the equity markets community have. You know, Australians as investors love income. We have high dividend-paying stocks in Australia relative to the rest of the world. And yet, you know, growth investing has really taken off. And we've all watched in amazement at some of the growth stories coming out of the US. How do you balance the, I guess, the desire for income and growth in your portfolio? [00:33:26][34.2]

Angie Ellis: [00:33:27] Well, I would rather say, you know, at the moment, one of my big holdings for a bubble, you know, they've got quite a lot of cash at the moment and everyone's saying, well, they should pay a dividend, they should pay a dividend. And I think we'll know. I really don't want them to pay me the dividend. I'd much rather they use that to grow their business, maybe find some other businesses to buy and and just use the money that way and grow it. So you would like, I think, some of those companies that were high dividend paying companies like Telstra, you know, they missed so many opportunities because they were giving all the money back to the shareholders and they weren't growing their business and looking for good opportunities. So looking at all these other businesses got to start up and take a lot of their market share because of that. [00:34:13][45.8]

Bryce Leske: [00:34:14] So actually, we've sort of covid on how you find the stocks and, you know, you use the mix between fundamental and technical analysis and and look at the volume and and then also take a bit of a qualitative approach. The big question that we often don't talk about on the show is actually knowing when to sell stocks. And I think in your situation, it'd be particularly important given that you're often, I guess, investing in stocks that are hot and on a run and can equally, I guess, go in the other direction. But also you need to sell to continue to earn and stay alive and those things and continue to invest. So at a high level, how do you know when to sell? [00:34:58][43.6]

Angie Ellis: [00:34:58] It's so difficult, isn't it? Yeah, definitely. I mean and I would say there was the for me now I talk about this big sell and just the normal sell because that was something I'd never done before when I'd sold out of all my positions at the at the end of February. So know. So with that, I'd now sort of think about, you know, when would I do this crazy big sell and when would I just sell particular stocks throughout my portfolio? And with that sell, like, I was very lucky. I had I was following the right people on Twitter at the end of January, so I started seeing lots of news flow coming through from China. You know, lockdown's and people wouldn't be had to leave it. Erm and I look, this is the fliers are located in sort of India and Thailand and China, but their um quality control is in a town in China called Tindale, which is sort of I got nine million residents and that went into a lockdown at the end of January. So I was quite worried that the wouldn't get any stock out of China. So I went into a few stores and and said to them, you know, are you worried about. And I said, oh, yeah, we are not getting stuck in at the moment and looked at all the hooks and that was starting to look a bit empty. So that's when I started sort of selling a lot of my position. So I now think about when I'm think about selling, I think about like when would I get rid of everything or when would I just get rid of a particular company? And so that's something I hadn't thought about before. But definitely one of my sole criteria, I look like I was saying before, Directors' trades. And the reason I do this, I had I had a big you know, the directors are selling is a lot of big sales going on. I might look to get out of that company because back in in twenty-sixteen, I had a good position in a company called Focus and I wasn't I wasn't following direct trades as a rule back then. But I did I did say District is the outgoing CEO, James Spenceley. He sold 70 percent of his holding in focus because he was wanting to start a funds management business. And I thought, oh, that's a big red flag, because I would hope that he would want to buy shares, that he's starting a funds management business. And I thought that might not be a good idea to put in your funds management business rather than sell it. So that got me very worried. So when I saw that Appendix three, why I actually sold out of my focus, lucky indeed, because I sold it above eight dollars and it just continued to go down and down for many, many years. And I had a good position in it. So I after that I, I really followed Directors' trades and I looked to see these big sales going on. I might look to sell that with those, that sort of portfolio I might just sell because that might just be a better opportunity elsewhere. I might just need the money for something else. And, you know, I might feel that that companies already had such a good run that there's something else to do with the money and just to free up for another opportunity. [00:38:04][185.7]

Alec Renehan: [00:38:05] Do you have rules around position sizing? Like would you sell because a stock like you mentioned after paying A2 milk, they obviously run a lot in your in the time that you held them. Would you ever sell just because they're taking up a large too large a percentage of your portfolio? [00:38:26][20.4]

Angie Ellis: [00:38:28] I, I try not to because I think that so much almost like this, I eye-watering the weights and pulling out the flour. I think I think sometimes, you know, people here trim trimmed those positions. But it might be a stock that I think, you know what, I still want to buy that stock. So I still think it's just really running at such a good company. They're expanding overseas or about to go into that country. It's a really scalable business. It might still be a stock that I would be very happy to add to my position. So I try not to do that. [00:38:59][31.1]

Alec Renehan: [00:39:01] This is one of the things that we were you know, retail investors don't have a lot of advantages over professional asset managers. But, you know, one of the one of the areas where we think retail investors do is they're not constrained by this, you know, maximum position sizing rules that a lot of funds have. And you can actually really let your winners run that. [00:39:22][21.2]

Angie Ellis: [00:39:22] That's exactly right. Unless there's a private investor in the US that I follow now because he's a toits a lot of that red bubble and red bubble is a massive part of his portfolio. I think it's sort of 70 or 80 per cent. And he had a great year last year. His return was fantastic, maybe 30 percent or something like that. And I think that's right. It's just such a great company that he just kept his position really high in that. And I think another advantage that I see for us private investors that I hadn't really acknowledged or understood before is when I spoke to a lot of fund managers about that time last year at the end of February and March, you know, that they weren't trimming their positions in January and February. And I couldn't understand why they're doing that. And they said, you don't understand why we have mandates for a cash cash position. They can't go to one hundred percent cash. They you know, some of them might be a very small cash proportion that they can hold. They have to stay invested. [00:40:25][63.2]

Alec Renehan: [00:40:26] Yeah, yeah, yeah. So, Andrew, we've we've run out of time, I think we could talk stocks with you for hours, but if people want to, I guess, follow you online, continue the conversation, where where should they go? You know, the particular social media that you're active on or anything like that? [00:40:47][21.3]

Angie Ellis: [00:40:48] Yeah, fantastic. So I would get definitely on Twitter, I'm ready to invest on Twitter and I tweet about ICIC stocks. I'm jealous as well. And I sort of tweet about global stocks a bit on A.J. Ellis, but I'm also on LinkedIn and I've got about fifteen thousand on my LinkedIn, so I would definitely encourage any listeners to link in with me. And I think that's a great way for for people to connect on LinkedIn and ask questions. And then if you're linking with me, because I've got so many connections, it's easy for your listeners to connect with other people because it's a second connection. So it's a great way to sort of building your LinkedIn connections. So if I have a question for for someone, I'll go onto LinkedIn and find them and and send them information that way. So I think LinkedIn and Twitter, a great resources, are very happy for people to connect with me. [00:41:40][52.2]

Alec Renehan: [00:41:41] Nice one. Well, we do always like to finish with the same final three questions. We're nothing if not predictable, so we'll get stuck into those. The first one is, do you have any books that you consider must read and these can be investing or otherwise? [00:41:58][16.9]

Angie Ellis: [00:41:59] Well, as you mentioned before, Peter Lynch is one up on Wall Street. It's a great read and quick read. And I've recommended that few people have loved it. I definitely read one of Wall Street and another great book, I think is the stop principle that Richard Coche book. He's written several books and he helps us to find these start businesses like these are businesses that operate in the high growth sectors. And are the leaders and the books great, too? Because, you know, even if you want to start a business that sort of helps you to look at what sort of business you should start and identify those sorts of business. So definitely I do read read books. I find even reading on Wall Street, you might read it once and then maybe pick it up a bit later and read it again. You'll get something new out of it each time. [00:42:45][46.4]

Alec Renehan: [00:42:46] Yeah. Yeah. No, I haven't heard of Star Principle, so I'll definitely go on to my list. [00:42:51][4.9]

Angie Ellis: [00:42:52] Yeah. And he wrote several books on how to apply the 80 20 rule and my funds. I think he's written quite a bit about how to apply that 80 20 rule to all walks of life. [00:43:02][10.2]

Alec Renehan: [00:43:03] And for people who are unfamiliar with the 80 20 rule, do you want to explain like I'm five? [00:43:07][4.1]

Angie Ellis: [00:43:08] Well, yeah. I mean, you can apply in all different ways, but I called my fun that because when I ran my business, it was very much that 80 percent of my sales or from 20 percent of my customers and just yeah, I sort of is trying to get you to focus on, what, 20 what is that 20 per cent that's achieving the 80 per cent. And look at that and try to work out what that 20 percent is. So you can like anything with my stocks, I think 80 percent of my profits are from 20 percent of my stocks. So what's the what are those 20 percent? And and it can have a lot more success that rules fantastic luck. If you read some of these books or even just watch some of these YouTube videos. It's quite interesting. [00:43:49][41.0]

Alec Renehan: [00:43:50] Yeah, great. So the second question is, are in 60 seconds or less, what's the best company you've ever seen? [00:43:58][8.1]

Angie Ellis: [00:44:00] OK, this without question, like I thought, all these things like Google, Microsoft, all these other businesses, you know, Apple, but then I thought and you have never bought shares in any company. So that's not the I. So I'd say Shopify. So I built an amazing online shop for friends back in twenty thirteen in two days using Shopify. So I was totally hooked and I bought shares in Shopify and I find like it's a weapon, not an anchor for retailers. And they've got over one point seven million stores using the platform like JB Hi-Fi, it, LA Red Bull, Kim Kardashian like a retail shop. It's just such a great platform to create this shop on. [00:44:41][41.0]

Alec Renehan: [00:44:41] Yeah. Yeah. As as a long term holder of Shopify, I have to agree. Also, Tesla's website and store is built with Shopify. So it really, you know, the big end of town all the way down to the small online retailers. [00:44:55][13.3]

Angie Ellis: [00:44:55] So and they doubled revenue last year. Over last year, they doubled their revenue. Yeah. [00:45:01][5.3]

Alec Renehan: [00:45:01] Great company. Anyway, we could talk Shopify all day. But we will move on to the final question. If you think back to your early days as an investor, you know, when you were running your business in trying to get as many shares as possible in the MYOB IPO, what advice would you have for your younger self? [00:45:22][20.3]

Angie Ellis: [00:45:25] Yeah, definitely, I would say maybe the nations even on the Whitsundays just now, but I don't think I was back then, like I would probably have fought a bit harder for something. And I would when I thought about that question, I thought I would definitely say to my younger self, don't don't seek validation on your ideas. That's really important. And I've watched a few videos. Clinton likely she has a company called SpaceX, which is worth a billion dollars, and she's funded all herself. She's never taken any investment from anyone, says she owns it one percent. And she's talked a lot about this seeking validation, things like when she had the idea for Spanx, she didn't tell anyone. She totally set it up, had it in stores and didn't mention it because she said friends and family are going to want to protect you, that they won't want you to lose money. So if you can if you tell people your idea about a stock or a business, they might be trying to protect you and and tell you all nice. And there are lots of other businesses doing that. And, you know, like the gooseberry guy is kind of a Mexican store. And I'm sure, you know, people would have said, isn't there already a lot of Mexican stores? So I think sometimes just I would tell my younger self, don't seek validation. Just if you've got a good idea, just go for it and trust yourself. And I've got this silly little thing. I was going to just push it. It's like this little device that it's called Yes, dear. And then if I've got a really good idea, I'll push it. This is like, you know, do you think you should do this? I got it. Does all these other ones. I think of that. So I think instead they're just thinking validation of other people. I pushed my little funny thing that I've got here, like. Yes, you know, that is a good idea. [00:47:17][112.3]

Bryce Leske: [00:47:18] I love that. We need to sell that on the Shopify somewhere. I love it. Nice. And you have a great piece of advice to finish on. And look, I think there's been a lot in in today's interview that would certainly be relatable to a lot of our audience and also actionable, which I think is also important. You know, you don't have to get too deep in the weeds when it comes to the financial reporting and all that sort of stuff. As you've demonstrated, you can get out there and find a fair bit about a company to invest in just by speaking to people working for it or going, going and experiencing it for yourself. So thank you for sharing your journey and your story. And we appreciate your time today. [00:48:01][43.4]

Angie Ellis: [00:48:02] Thanks, guys, for having me on. I really appreciate it. Thanks. [00:48:02][0.0]

[2724.3]

More About

Meet your hosts

  • Alec Renehan

    Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

Get the latest

Receive regular updates from our podcast teams, straight to your inbox.

The Equity Mates email keeps you informed and entertained with what's going on in business and markets
The perfect compliment to our Get Started Investing podcast series. Every week we’ll break down one key component of the world of finance to help you get started on your investing journey. This email is perfect for beginner investors or for those that want a refresher on some key investing terms and concepts.
The world of cryptocurrencies is a fascinating part of the investing universe these days. Questions abound about the future of the currencies themselves – Bitcoin, Ethereum etc. – and the use cases of the underlying blockchain technology. For those investing in crypto or interested in learning more about this corner of the market, we’re featuring some of the most interesting content we’ve come across in this weekly email.