Expert Investor: Geoff Wilson Declares WAR

Bryce Leske: [00:01:49] Welcome to another episode of Equity Mates, 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 the dividend. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? [00:02:04][14.8]

Alec Renehan: [00:02:04] I'm very good, Bryce. I'm very excited for this episode. I feel like we're really doing well in the podcast game when we are able to get guests on that. We've admired for a long time names that we were familiar with when we were starting to invest. And we've got a we've got a big name in the Australian finance industry here. So I'm very excited to unpack is, you know, I guess his method and pick his brain. [00:02:29][25.1]

Bryce Leske: [00:02:30] It is our absolute pleasure to welcome Geoff Wilson to the show. Geoff, welcome to equity markets. [00:02:34][3.9]

Geoff Wilson: [00:02:35] Thanks, Bryce, and thanks, Ren. I've heard a lot about you guys. Too shy to speechless. And to me, what you guys do is fantastic because in terms of investing in the market, the quicker and the earlier people can learn about it. To me, the better. And you put a great way of communicating to people. So congratulations. [00:02:58][23.0]

Bryce Leske: [00:02:59] Thank you. I appreciate the comments. So for those of you who haven't come across Jeff before, Geoff is the chairman and chief investment officer at Wilson Asset Management. With over 41 years experience in investment markets, Geoff founded Wilson Asset Management in 1997 and currently oversees eight listed investment companies. Geoff has also led the creation of Australia's first listed philanthropic wealth creation vehicle, Future Generation Australia and Future Generation Global, which will be unpacking a little bit later. So look, a lot to a lot to chat about. But as always, we start with our overrated, underrated game, so let's get stuck in. [00:03:33][34.6]

Alec Renehan: [00:03:34] That's right, Geoff. We'll throw a few themes, indexes out and just get your thoughts on whether they're overrated or underrated by the investing community at large. So we'll start at home and we'll start with our benchmark index, the ASX 200. Overrated or underrated? Overrated. And why is that? [00:03:53][18.9]

Geoff Wilson: [00:03:53] Yeah, it's just an index. So it gives you the average and it's mainly dominated by the big banks. So if you really want to perform, if you take out the big banks and you're looking for growth companies and you're a good investor, you should be able to do better than the All Ords. I'd say. [00:04:14][20.2]

Bryce Leske: [00:04:15] Would the same answer then apply to the Nasdaq 100? Overrated. Underrated. [00:04:19][3.6]

Geoff Wilson: [00:04:21] Oh, I can I can I do stelae rated and you can. [00:04:24][3.2]

Bryce Leske: [00:04:25] Yes, that is that a new category. [00:04:27][2.1]

Alec Renehan: [00:04:28] We've actually had someone from Vanguard on and they said everything was fairly neutral, [00:04:32][4.1]

Bryce Leske: [00:04:34] which is [00:04:34][0.3]

Alec Renehan: [00:04:35] brand for [00:04:35][0.4]

Geoff Wilson: [00:04:37] Yeah, that's right. And I'm no I'm not a believer in indexing, so that's probably an error. So maybe, maybe I'll say overrated just to, you know, just had a phenomenal run. Yeah. Obviously there's, you know, there's a lot of risk in the market and there's a lot of froth and bubble in the market. And and and it's mainly been with low interest rates. The money's gone into technology companies that are showing great, great growth and mightn't have any significant valuation protection on the downside. So I'd say overrated. [00:05:09][31.6]

Alec Renehan: [00:05:10] Well, speaking of froth and bubble, Jeff, overrated or underrated Bitcoin? [00:05:15][5.0]

Geoff Wilson: [00:05:20] Can I put it grossly, grossly, grossly overrated. [00:05:28][8.3]

Bryce Leske: [00:05:29] Fair call, overrated, underrated, full-service brokers, [00:05:34][4.5]

Geoff Wilson: [00:05:36] full service brokers, overrated. Everyone is a good investor and they just need to spend their time doing the research and doing the analysis. [00:05:43][7.6]

Alec Renehan: [00:05:44] And then finally, Jeff, overrated or underrated Australian residential property? [00:05:50][5.7]

Geoff Wilson: [00:05:51] So difficult because I would say slightly. I would say overrated. Let's just again, it's just had a phenomenal run, but that unfortunately, with these record low interest rates, all asset classes are probably more on the bright side from my perspective. [00:06:05][13.5]

Bryce Leske: [00:06:05] So let's start at the start before we get stuck into some listed investment company discussion. We always love to hear the story of our guests first investment as there's probably a lesson or two to be learned. So are you able to share with us the story of your first investment, Jeff? [00:06:21][15.4]

Geoff Wilson: [00:06:22] And probably just before I go from the first company I bought shares in was the first real company I was aware of. I grew up in Melbourne in my sort of mid teens, and my dad would work quite late. He'd come home and after dinner you'd always sit down and he'd read the paper and he spent an enormous amount of time, just one page with all of the numbers and everything on. And I remember saying to him, Look, what are you looking at? And he said, Oh, that's the stock market. So I remember looking down the list for something I could afford. And there was a little company called Cox Brothers was a retailer in Melbourne, and it was trading a half a cent chase. And then I thought, well, gee, I can afford that. And then another time I looked a few weeks later, I was at one cent and I thought, gee, if I'd bought them at half a cent, I'd make a home about one hundred percent on my money anyway. Then a month or two later I went looking for them. I couldn't find them and I said that where they gone and all the company's gone under. And that's probably why always in terms of retail, I've sort of understood that retail is a very tough business. The first actual company I bought was a similar story to that. I was really not understanding that when you buy a company, you become a part owner of that company. It was really just just thinking about is there some leverage and can I make some money? And it was in the late 70s, early 80s, Malcolm Fraser was in and there was this talk about a resource boom which never came, then became a few decades later and I was looking down again for the cheapest company. I had a little bit of money, a thousand dollars. And I found the cheapest company I could find was a company called Timor Oil and Gas, and they were trading at 10 cents. So I bought a thousand dollars worth of those. And my logic was if I went to 12 cents on my 20 percent of my money and I'd sell, it actually went to 12 cents. I sold half of them. And then they end up going to the mid thirties where I sold the other half. Now, I hadn't even done any research on it. And then later I found out like they were drilling their oil and gas company and they were drilling for oil. So that's why the share price went up. They didn't end up finding it. But I suppose that was that was my first investment. And just as a total novice, knowing nothing about the market and I lucked out. Yes. Bet that was the stock I bought. Since then, I've learned that when you buy into a company, you become a part owner of that company. So you really should understand that you want to be a part owner of whatever business you buy into. But that Timor oil and gas, which was my first stock, that sort of bloody [00:09:09][166.6]

Alec Renehan: [00:09:11] well from there to now. You've had a pretty phenomenal career in investment markets and finance over that time. Have you developed a personal investing philosophy? [00:09:22][10.8]

Geoff Wilson: [00:09:23] I tend to I tend to like to be a bit countercyclical. What I've always done is I've always backed management. I believe it's I suppose you have a people listening to you today. Are there backing you as individuals and getting good guests on inside the bank knew or if they anyone invest in any of our companies, any of the Web companies, then they're backing myself and the people that manage the money. So when you buy shares in the company, you're a part owner of that company. But it's so important the person that's managing that company for you. So management is incredibly important of all. So, yeah, over a long period of time, I believe the greatest correlation between the share price and anything now with its yield or asset base. Cash flow return on equity. All the studies have shown it tends to be earnings per share growth. So there's there's that strong correlation. So you want a company that's got growing earnings and an sort of philosophy of how we invest that money is buying undervalued growth companies so that companies that are growing earnings strongly and when we can see a catalyst is going to change the valuation of that company because companies can be cheap for a long time. And if you really want to get the maximum bang for your buck, so you're better off sitting in cash until you can see something, you find a well managed company that's got good earnings growth. But you've got to then identify if you want to get a sort of a better return than the average is identify what you believe is a catalyst or an event to change the market's view of that company. And that's the catalyst. And that's it takes you a little bit of work and experience to get to that. Yeah. [00:11:15][112.3]

Bryce Leske: [00:11:16] So Jeff Wilson, Asset Management now manages seven listed investment companies, soon to be eight. But we will touch on that in the second. Let's start with some basics. If retail investors want access to active managers, why listed investment companies over, say, unlisted managed funds or active ETFs? [00:11:38][21.7]

Geoff Wilson: [00:11:39] Yeah, I mean, you usually think about 30 odd years ago, I saw a bit of research from Morgan Stanley in the U.K. which looked at the listed investment company equivalents over there and looked at the performance of those and they closed in call of capital versus the normally managed funds, like the mutual funds over there, which is an open individual capital. And what it showed is the listed investment company equivalents had outperformed the normal funds by one and a half to two percent per annum over a 50 year period. And that is significant outperformance. Now, why did that happen? Because the average investor that invests in the stock market gets about half of the market's performance side of the market, on average, about 10 percent per annum. Then the average investor, I think, makes it about five percent per annum because the average investor, unfortunately, gets caught up with his emotion. And the toughest thing about investing in the market is you've got to work against your emotions. So the average investor will be buying towards the top and will be selling towards the bottom when they're scared. And what happens is also money that flows into managed funds. Obviously, most of the money flows in when things are really good and say when during the GFC or when there's a big dislocation in the market, then the money will be everyone wants cash and I'll be pulling the money out. So, therefore, if you're a fund manager and you've got an open and a pool of capital, you're a forced buyer when everything's expensive and you're selling when everything's cheap. And the great thing about a listed investment company is you raise money with strategic value. We're going to raise two hundred twenty-five billion, not a cent more. And that's what we'll be managing. So when everything's going well and money's flowing into the market, you're never forced to buy. We can take a medium long term view when things are bad and money is flowing out whenever forced to sell anything. So we can really pick up, pick the eyes out of the market and pick up some great value. So that's why I like the listed investment company structure also. So in theory, I think there's a natural competitive advantage. Also, there is you do have access to the board and the management and you can give them a hard time if you want it. They can be very public. And also what I like is that they can trade at discounts to the value of the assets or discounts to, we call it, into what the net tangible assets of the company are or premium. So, yeah, and that is to me, it's nearly unbelievable that I can manage a pool of capital and I know it's worth a dollar and I can buy it for 80 cents or other point in time. Yeah, I know it's worth a dollar and it could be traded a dollar twenty. So of course I'd be a seller if it's doing that. So that's why I like. So it's really, it's really to me an ETF is great for people starting off. And then I think you can layer on listed investment companies if you just want a broad exposure of the market with your ETFs and you listed investment companies, your skill level is going up when you add listed investment companies. And then if you want to take a greater risk, then you do your analysis on individual companies. Decide whether you want to buy shares in Coles and Woolworths or one of the banks or some of the technology companies, et cetera. [00:15:23][224.1]

Alec Renehan: [00:15:25] Now, Jeff, you mentioned the strategic value. I say we'll get to that in a second. Before then, we want to talk about how you, I guess, really started the movement in Australia to use listed investment companies to further philanthropic causes. So for people who are unfamiliar with the future generation of Australia, let's say, and the global say, can you tell us a little bit about what they do and how they use that structure to further these causes? [00:15:56][31.1]

Geoff Wilson: [00:15:57] Yeah, I mean, first off, I saw this done in the U.K. and I just thought what a phenomenal model. And so what it is, it's a listing of some companies listed on the stock market. The two that we've set up, as you said, are the Koch ones, FCX, and the others. It is the Australian. You get exposure to the Australian stock market if you get exposure to the global stock markets and what it is, effectively, it's a real relationship between the investing community and that investment community giving back to society. And so all the fund managers that we've tapped on the shoulder and FGF, that the Australian fund managers are refugees, the global fund managers, we're allowed to put our money with those fund managers in their mind funds, and they don't charge any performance fees or any management fees. So they're managing the money pro bono, but it's in their mind fund, which they live or die by the performance. And that allows both companies to give away one percent of the assets to charities, and that's focusing at children at risk and youth mental health. So both companies together, a little over a billion dollars each about 11 million dollars a year, because the fund managers doing all this pro bono, we can give to those two areas. So they're fantastic. And if you look at them, the performance of the underlying managers, first class, the managers, we've gone for a boutique, which they call we have boutique managers and they are and they are people that have really set up the funds themselves. And again, they live or die by their performance. And you find I find that a boutique fund manager will outperform what, the big nine fund manager because they've really got everything on the line. [00:17:56][119.1]

Alec Renehan: [00:17:58] It is it's a pretty incredible thing what you're doing, Geoff. People should definitely check those two indices out. Future Generation Australia and future generation global. Some some people in the community may also be familiar with the hearts and minds, I say, which is doing a similar thing using this like structure to further philanthropic causes. So it's pretty cool what both you and the hearts and minds guys are doing [00:18:24][26.1]

Geoff Wilson: [00:18:24] and the heart to mind. It's great I'm actually on the board of Hearts and Minds as well, because I know the listed investment company. Yeah. Market incredibly well. And when Matthew Grounds and then Gary were putting it together, they asked if I wanted to be involved. And again, the hearts and minds are a great product. And that is very similar, a similar concept, similar philosophy, really giving the money to medical research that's the area it's focusing on giving the money back to. And there are similar some of those fund managers that are managing the money for hearts and minds are also managing the money for projects. And they're all great companies. And really, again, you just do your analysis to see what the value of the assets are. And if you can buy those values of assets below their current value, then that's a good deal. And luckily, the the two future generation ones are actually trading at sort of eight and 12 per cent discount to their intech. So you're getting now, in theory, they're on sale at the moment. [00:19:32][67.2]

Alec Renehan: [00:19:33] Now, Geoff, we've talked about this discount to NTI a little bit, which I think leads us nicely into this. New allies say that Willson's about to launch that look before. Before we touch on that, we are going to take a quick break to hear a word from our sponsors. [00:19:48][14.9]

Alec Renehan: [00:19:48] Now let's get into the show. So, Jeff, as I mentioned before the break, Wilson Asset Management is launching a new allies say the strategic value allies say ISIS take a war, which I like. That feels like it's sending a message with that. And really the I guess the problem that it's declaring war on is a lot of these listed investment companies that trade at a discount to their net tangible asset value. Now, for people who are sort of new to this problem, let's start by defining this problem, and then we can talk about how you're working to solve it. So why is an ally, say, trading at a discount a problem for investors? [00:21:37][109.1]

Geoff Wilson: [00:21:40] The allies say trading at a discount I, an airline seat flight to the dollar as a dollar of assets and then the share price because there's more selling than buying. And as Warren Buffet says, the other markets are weighing machine. So the value of the company is a dollar, but it's trading at 90 cents. Then if you paid a dollar, even though there's an asset, the asset to worth a dollar. But when you look up, the share price is 90 cents. You don't feel as though you've got a dollar value. You feel as though you've got 90 cents of value. And if you have to sell. Then, even though the assets are worth a dollar, you're only going to get 90 cents. So that's sort of the that's why it's a concern for some people from my perspective, is as I'm a buyer of listed investment companies, I think that this is a great opportunity. You actually want them. You know, these companies trading at discounts to asset backing because it provides you're getting you're getting exposure and exposure to the market and you're only paying 90 cents for it. If it's trading at a 20 percent discount, you're only buying 80 cents. So to me, it's really too good to be true. Now, what happens is a lot of fund managers, when they raise money for the investment company, they might have had a lot of experience in having a listed investment company, having a lot of shareholders, a lot of retail shareholders, and understanding how to communicate with them and how to inform the shareholders. And a lot of fund managers when they raise the money, they actually think, you know, the day that at least on the stock market, is that when the grand final. Now, from our perspective, it's when you list on the stock market, that's the end of pre-season training. And then a lot of the hard work begins now. Now, what's important, if you're looking at to invest in a listed investment country, what should you look for? You should look for the underlying performance of the manager you need to look at, because the a lot of people buying these are self-managed super funds. So they're looking for the dividend stream. So you want a growing stream of fully franked dividends before seeing the third thing you want. Sorry, is you want a company and a board that looks after shareholders like some companies, unfortunately, do things that destroy value for shareholders, like doing placements at discounts and now taking money from the currency other than giving it to the new shareholders. So they've got to look after shareholders in the fourth thing, and this is the part that most fund managers miss out on is you really have to have a detailed shareholder engagement, communication and marketing. And that's I mean, that's where you guys potentially fit in. So you really you need to do that. A lot of fund managers don't do that. Like we manage, as you said, seven listed investment companies seem to be. We've got one hundred thousand retail investors in our list, investment companies. We've got emails to sixty thousand of them. And also we're managing about four and a half billion dollars. So it's very important for us to communicate clearly with our shareholders so they know what we're doing, keep them informed. And what that does, though, it actually swings the equilibrium from trading at a discount to potentially enti or a premium. And the interesting thing is the six listed investment companies that we fly to WAM Capital being the first one or six of them to try to get into, if not a premium. And the concerning thing, well, to an extent is if the people that are buying it, one of them are Khawam research is trading at forty two per cent above the ENTI. So effectively there's a dollar of assets and it's trading at a dollar forty two. So that's, that is definitely not on sale. [00:26:02][262.7]

Bryce Leske: [00:26:06] Well look, if there are any LSC managers out there that want some investor relations help, we are the podcast. [00:26:12][6.1]

Geoff Wilson: [00:26:14] Are you, are you, are you, are you guys have got a great nation. And to me you guys, you're plugged into the big growth area and but I should pay attention. [00:26:26][12.3]

Bryce Leske: [00:26:27] Well, I'm actually so glad that you mentioned the marketing piece because I've often spoken to Ren about, you know, I've held leases throughout my investing journey. And if you look under the hood, you know, those initial things that you spoke about, quality of manager, they pay a dividend, you know, all of those things tick the boxes, yet they're hidden in a basement, you know, in a city, and no one knows about them. But unfortunately, given that they're listed on the stock market and at the mercy of supply and demand and that sort of stuff, you know, if no one knows about the stock, then they're always just going to be ticking away. So I think for me, that's one of the most important things when you're looking for is how good are they at putting themselves out there and making people aware of what they're doing? [00:27:09][41.3]

Geoff Wilson: [00:27:10] Correct. And it's a new skill for the fund manager because he's yeah, I think there was an article probably twenty years ago in. That newspaper in the US called Barron's and I think the headline was, yeah, what was it was yeah, picking stocks is a very lonely business, doing your research, et cetera, et cetera. And it said funds management is all about marketing and it's really hard to get there. Is the reason why you obviously talking about alliances and being at a discount has been quite a bit of conversation in the press over the last year or so about a number of them trading at discounts. And these managers, they can't they've got to realize once they have an LLC, they're in a new world and they can't just sit in their offices and do their research and pick stocks and just perform. They've also got to communicate, as you said, broche really clearly to the current shareholders, but also potential shareholders about what the opportunities are. And I think that's where they miss out, saying to me, you guys are perfectly positioned to benefit from that. [00:28:24][73.9]

Alec Renehan: [00:28:25] Well, if you want to if you want us to come and be consultants for the new allies, say, when [00:28:32][7.1]

Geoff Wilson: [00:28:32] I want to I mean, to me, I mean, we can talk about what. But when we talk about it, it'll be clear that you guys could have a role to play. [00:28:42][9.8]

Alec Renehan: [00:28:45] Well, let's talk about it, because the first we heard about it, I think was about the stock ticker. And the press obviously had a field day because the stock ticker was war. So maybe for those who haven't read anything about it, can you tell us what the purpose of the fund is and then how you're planning to, I guess, achieve that with some of the losses that you're targeting? [00:29:09][24.0]

Geoff Wilson: [00:29:11] So it's Khawam strategic value. And what the focus of this fund is, is really to invest in undervalued assets and mainly focusing on listed investment companies are listed investment trusts, and it's really to buy a dollar of assets right now. I personally have been doing it for 40 odd years. Doing that. Yeah, as Wilson Asset Management. I've been doing it for twenty-two years. And what we thought is that we would simplify our business. Currently we do this know we've got one hundred and fifty million dollars of exposure to 16 listed investment companies that are trading at discounts, but we do it in various funds. So what we're going to do is effectively sell them across to the new company. I mentioned earlier we're going to rise to twenty-five mil and with that new company that will be focused on buying a dollar of assets, 80 cents and a little bit of money, buy them when you know when I'm going to be the lead portfolio manager, when I believe that there's a catalyst is going to change that valuation. And as you were sort of talking about before, you can actually have a situation where these companies, if they just left and the managers manage the money, it doesn't worry about communicating or shared engagement. They could just try it at a discount for a long period of time. So how do we do that? Yeah, I mean, I've been I would say I probably know as much about listed investment companies as any other person in the market. We've been able to successfully get ours to premiums. And how do we get that is really the four things I was talking about before and really how I see it is know we will take positions in other listed companies, try to get discounts that we believe can get to time, and we really want it more as a partnership to walk work with them and get it. Twenty, or it could be a little bit like, you know, we're the jockey on a horse and we're we're riding it to win the race. Occasionally we might have to get the whip out and give them a bit of a whip or, you know, like with with these guys. And we're happy to clearly explain what we do and let them see exactly what we do. And that's sort of the carrot side. And then if I do it, then they will achieve their goal eventually and we will and we'll be able to sell out. AT&T is not a premium, and if they don't, then we'll have to get the stick a bit. So and the the interesting thing about the card is it probably sounds a bit aggressive. So we see it more as a partnership. But we are happy if we need to go to war. And there's been yeah, we've actually made takeover bids for our five million investment companies that unfortunately we might have used the carrot on them. And then we had to use a bit of stick and then we realized we have to use a lot of stick. So for us as investors, it's really a simple play for us because we're buying a dollar of assets. Friday's sense. And we if we can keep buying till we are one hundred percent of the company, if we combine that cheaply, if they can't get it twenty ideally for us now, I think the listed investment company Spice is fantastic. I want to continue to grow and prosper. And ideally for us is these the people we identify. We buy shares in that, trying to get a discount. I get it. Twenty. Yeah, we sell out. Then I might take their eye off the ball or something happens. I got to a. And again, and we get another opportunity, [00:33:23][251.6]

Alec Renehan: [00:33:24] what will be really interesting is if you, if you have a lot of success, early days with this and close some discounts for Elyse's and the market, recognizes that. Then whenever you take a position in I say the market might be like Willson's here. They're about to close the discount and the market might be like, well, you're in and close the discount for you. It could become a bit of a self-fulfilling prophecy. [00:33:44][20.6]

Bryce Leske: [00:33:45] You've just revealed [00:33:45][0.3]

Geoff Wilson: [00:33:47] that there is a bit of that and there is a bit of that. Maybe that was a little bit also when we had choices for the Dow, what ticker that we use, what I to that was we thought maybe even how we want to operate is like we've always operated and and that's effectively work with the company and companies we own shares in. If you look at the prospectus, we used various examples, one that's listed at the moment, Templeton Global. We own 14 percent of that. It's trading at about a 10 percent discount to A.. We started buying at a 18 percent discount to 90, and we'd been communicating with them for over four or five years. And the latter part of last year, they said, look, they're going to review the capital structure. So, you know, something will happen there. There'll be a catalyst to give people liquidity at a fair price. So, yeah, when we did decide on war, the war is the kind then we thought now with a bit like Ital, it could be a bit self-fulfilling, but we don't want to. The good thing is the market always provides opportunities, so we don't want the market to be too efficient. And liberals and Ren and Bryce have all been around long enough to know the market is never too efficient. [00:35:02][74.6]

Alec Renehan: [00:35:03] Yes. [00:35:03][0.0]

Bryce Leske: [00:35:05] Well, looking forward to seeing how this all plays out. The ASX ticker is a war for those listening at home who would like to also follow along. So, Jeff, you've been involved in a lot of advocacy and public policy work for shareholders. Noticeably, the franking credit campaign and virtual AGM, which we love. What you believe is the biggest hurdle, though, that investors are currently facing in Australia. [00:35:28][22.8]

Geoff Wilson: [00:35:29] Thanks for the question. And I don't know if I'd actually call it the biggest hurdle, but it's really something that we're very passionate about at the moment. And we've actually been passionate about this for a number of years. We put a number of submissions to the government, and that is really about leveling the playing field between wholesale or institutional investors and retail investors. To me, it's not fair that a company can raise money in a placement at a discount to NTI and you've got to buy a sophisticated investor to participate. If you're not back yet, then you can't participate in putting money in and cheaply. But then when the shares come back on trading that afternoon or the next day, you can buy shares on market and it's just totally illogical. Now, Andrew Bragge, who was backed by the Fin Review today in the Chanticleer column. Yeah, he had an inquiry recently, which we put a submission in there and we gave evidence. And so we really hope that he is he's listening to us and we really hope there's an opportunity to level the playing field. So every retail investor you can do, every retail investor in New Zealand has the same rights as a wholesale investor. But for some reason in Australia, the retail investor is seen as this is a second-class citizen. Now, yeah, it's in our interests as in fund managers. We get a benefit being the wholesale investor. But everyone who supports us see the hundred thousand shareholders there, the retail investors. So for us is we're standing up to them. And I really hope that the government does make changes and does level that playing field. [00:37:21][112.3]

Alec Renehan: [00:37:22] Yeah, we love that, Jeff. Obviously, equity mate is made up of a big community of retail investors. So we appreciate you standing up for us. And I don't want this to just be a price alec lobbying that's involved. But, you know, if you ever want to, you know, help get more retail participation in capital raisings, come to us and we'll get the community involved in the country. [00:37:46][24.1]

Geoff Wilson: [00:37:47] Well, I go my boys. And just so so you're aware. Yeah, we're talking about war earlier. The the issue the IPL opens on Monday. So if anyone wants to go to the Wilson Asset Management website, then now then if I want to apply for some shares, then they can say they've got three weeks to apply. So. Well, right now, just a bit of free marketing in that side, too. [00:38:11][23.9]

Alec Renehan: [00:38:12] No, that's great. That's great. Yeah. Now another. Another. The question that we do like to ask all of our experts, we've spoken to a number now on the show and everyone, a lot of people stress the importance of management. And for retail investors, it's really hard to get a gauge of management. You know, we don't get to go to these company boardrooms, look the CEO in the eye, and ask them the hard questions. So we'd love to get your thoughts on company management. What are some of the most important qualities you say in leaders that make them successful? And I guess then the companies they run successful and as retail investors like Bryce and I, what should we be looking for in in, I guess, public statements and press releases and stuff like that to get a gauge of who's a good manager and who's maybe not so good? [00:39:06][54.4]

Geoff Wilson: [00:39:07] You're really making an assessment of that individual and how can you assess them? It's really about whether they meet or exceed your expectations. And it's really having a view on, you know, as you said, read the announcements, read the annual report, see what the managing directors sign and see whether he achieves, meet or exceed those expectations. Listen to the GMs and potentially attend them if you can. That's why we were very, very vocal when they were actively you know, the government was outraged. He was talking about just having virtually. Now, I know Jim is fantastic because it gives everyone to access and I agree with that happening. But you also need to have a physical presence because otherwise the management, they can cleanse the question so they can only answer the questions I want to answer. And you want to be able to put them under pressure and see how they perform at all. So, yeah, I would read, you know, the effectively the more the gossip column areas, because they're the ones that really dig digging deep in terms of what many may be doing or may not be doing. And so you can take an assessment from that. And also to me, it's very important that people have skin in the game. So, yeah, if someone's managing a company on your behalf, you want them to have a decent amount of their wealth invested in that company. Say to me, you look at this bearish things you look at. [00:40:53][105.8]

Bryce Leske: [00:40:54] So, Jeff, before we just briefly chat about a stock that is on your watch list, we will quickly hear from our sponsors. [00:41:00][6.3]

Alec Renehan: [00:41:02] Price life is throwing a lot your way at the moment, managing a growing team, soon to be a growing family, and trying to keep me focused and productive every day. [00:41:12][9.8]

Bryce Leske: [00:41:12] Not sure about the growing family, but I can say that keeping you on the straight and narrow each day is a challenge here at the equity markets office. [00:41:19][6.5]

Alec Renehan: [00:41:19] Well, I may have found the perfect tool to keep me in line and to keep you productive. And that is the Microsoft 365 subscription, which will have you ready to take on whatever life throws [00:41:32][12.6]

Bryce Leske: [00:41:32] your way, which sounds appealing. Ren. You can get premium office apps and Outlook to boost your productivity, the All-In-One organizational hub. And that is something you definitely need. Plus to protect your important files and photos, which you and never let me look at and access them across your devices with one full terabyte of one drive cloud storage. So Ren, I guess the question is, how will you make the most of your time? [00:41:56][23.7]

Alec Renehan: [00:41:56] Well, I guess I'm going to start by going to Microsoft 365 dotcom to learn more and really everything is going to come from that. [00:42:06][9.5]

Bryce Leske: [00:42:09] So, Jeff, we'd love to chat to you about a stock or an idea or an industry or even an LSA that you're particularly excited about or is on your watchlist at the moment. So is there one that you'd be happy to talk about? [00:42:22][13.3]

Geoff Wilson: [00:42:24] Well, there's a couple and that we think that I think a cheap and because we're talking about war and we're talking about listed investment companies and now want to chat about a couple of us. Yeah, yeah. One is there's a listed investment company, what, 40 opportunities that the top that's managed by Alex Whiteflies, very successful billionaire, and that is performed exceptionally well. It's trading at a significant discount. That's 20 per cent plus. So you're buying a dollar of assets for less than 80 cents. The question is, what is the catalyst that's going to will? We'll get that share price, move it up from that less than 80 cents to a dollar. And that's the hard part, because the question is really how committed Alex and his team are to engage with shareholders. They're doing a fantastic job as investing. But how quickly that discount narrows is really how quickly they communicate with shareholders. They rest on their current shareholders. They tighten up the register and the share price moves to a.. Now, that will happen over time, assuming they continue to perform as they have since we've got a medium long term view. To me, I think that's a great buy more more short term. The question is, how committed is Alex to do doing that? And I was meant to catch up with a couple of weeks ago, I missed him. But yeah, that's that's that's the million dollar question. Now, I'm sure he'd like to try to get into not a premium gives everyone more flexibility, but I'm sure you'll get there. But it could just be a little bit of time. The other one is, is another Alisi if that's one, it's trading at about a 15 per cent discount. So you're buying a dollar of assets, ridi Fords, since they are like a one a one thirty, thirty four majors. So that can be long and they can be short. So there's a little bit more risk in that, that they say to me that they're doing a lot of the right things. I was speaking to lam one of the managers a week or so ago. They had been buying back shares, which the retail investor tends not to like that because I think the management doesn't know what to buy. But but it's logical from a capital management perspective, if you buy a dollar of assets for five cents, that that's logical. And I was saying, look, you really got they've got a really good profit reserve. And I said, you've really got to push the dividend a lot harder. We have a we have small positions in in in both sides. Why don't we have bigger positions? It's probably because we're not sure about the timing for top when the discount will close. So if you're taking a long term view, then don't worry about that. And also, I, for one, is they did have a pretty tough year a couple of years ago. And they and they have had a really good period over the last 12 months. And so they're really a high beta manager. So they can go exceptionally well, but then they can mean revert, not Nocco as well. So, yeah, if if it was a bigger discount. And to me, there is a reason that a froth and bubble in the market now. So if the market, the market could come off a little bit. So we've got a little bit of position there when we're more convinced they're going to push the dividend harder, then of course we'd increase our position because then if they did push the dividend hard, I'm pretty sure they'll get in a lot quicker, you [00:46:36][252.5]

Alec Renehan: [00:46:37] know, like that. So, Geoff, we've got, first of all, I want to thank you for taking the time to talk to us. We do have a final final three questions that we like to finish all the interviews with. But before we do, just a massive thank you. It's pretty exciting for Bryce and I to get to speak to you. And we're very excited to see the launch of the LHC, the strategic value. I say if people want to follow, like hear more about you or follow you online, is there anywhere in particular they should be going? [00:47:10][33.4]

Geoff Wilson: [00:47:13] Well, the Wilson Asset Management, the home that I use our website and we do weekly emails on the amount of daily we're going about sixty thousand people on that email list. So we do weekly emails communicating with people. And then if anything relevant about I'm strategic, et cetera, we try to communicate as we try to be sort of the gold standard with communicating with shareholders. So it's like just to sign up for the emails. Right. [00:47:47][33.7]

Alec Renehan: [00:47:48] So we'll get stuck into these final three questions. The first one is, do you have any books that you consider must reads? [00:47:55][6.9]

Geoff Wilson: [00:47:57] Well, one of the books I love and it is a bit old now, is the Peter Lynch book, one up on Wall Street. To me, it just talks about the competitive advantage that everyone's got. And it was funny. I was giving blood a number of years ago and the lady who was taking it said, oh, look, you know why we are day working. And I said, all the fund managers said, I'll invest in the stock market. I know nothing about the stock market. And I said, well, who do you work for, Sonic Health Care? And I said, well, what you actually listed on the stock market, you know more about Sonic and their management than I did. And I said, what do you think of the management? Would just sign that exceptional. So everyone's got their own little competitive advantage. And it's really not particularly, as you said, the you know, the millennials these days. I know you guys think a certain way now I'm thinking in the baby boomer way. So you guys have got a significant competitive advantage and particularly things with after, which has been a great success now. But in the early days, you guys would have seen it, thought, oh, hey, look, this is really going to take off and it's trying to use that competitive advantage. I do like that book. All the buffet bookshelves now snowballing or almost all the historic investment books that they're all good value. [00:49:32][94.7]

Alec Renehan: [00:49:32] And so the second question is, in 60 seconds or less, what's the best company you've ever come across? [00:49:40][7.3]

Geoff Wilson: [00:49:41] Yeah, I actually think it's the the Australian Securities Exchange. The IAC [00:49:47][5.5]

Alec Renehan: [00:49:48] does [00:49:48][0.0]

Geoff Wilson: [00:49:49] well to me. It's just it's like in theory, I know it's not a monopoly, but it's pretty close to monopoly. Volumes grow at well and truly in excess of GDP growth each year. And it's just like a money printing machine. So that's what I think it is. Six. [00:50:10][20.8]

Alec Renehan: [00:50:10] Yeah, right. And then final question. If you think back to your younger self buying that first share in Tamo oil and gas, what advice would you give your younger self? [00:50:21][10.7]

Geoff Wilson: [00:50:22] Well, yeah, I'd say don't buy don't buy that. I'd say, like do some research and don't like sort of just get a dot and try to the board, which I did. Yeah. And find a company that you think will grow over time and and and actually commit capital on a regular basis. I think one of the things that I should have done was commit, invest in the market over time and then you get that benefit. We all know Warren Buffett talks about the benefit of compounding and then the reason he's worth what he is is he started with a small amount of money in nineteen sixty five and it's worth billions of dollars because it's just growing at 18 per cent per annum now over that period of time. So to me that's that's effectively the advice from my younger self. [00:51:21][58.7]

Bryce Leske: [00:51:22] Nice. Well, great way to end there, Jeff. As I said, a massive thank you for your time on equity markets today, a reminder war is the ticker for the new L.C coming. But look, we really appreciate what you're trying to do for retail investors and the lobbying and advocacy work that you're doing out there. And, you know, it's similar to what we are trying to do here at equity rates on a much smaller scale. We don't quite [00:51:49][27.3]

Alec Renehan: [00:51:50] have a lobbyist, maybe one day or maybe [00:51:52][2.5]

Geoff Wilson: [00:51:53] one. I think I think it is. And to me, it's amazing. Yeah. Walk like together now what we can achieve. So it don't worry, you know, we'll be finding your next time with franking credits because that was a big strategy for us is just trying to be fair and equitable to everyone on that. And now you guys, a beautifully positioned in a fantastic in a fantastic neach or not and not actually a fantastic segment of the market. And yeah, we well and truly mieux my call out for you guys to use your muscle you to not need to put pressure on. Now, whether we need the pressure on Senator Bracken that to get the result to make it fair for everyone. So thank you for putting your hand up for that. Well, let's [00:52:56][63.1]

Bryce Leske: [00:52:56] go hard at the capital-raising side of things. I reckon that's where we'll be at. Well, that's what I'm passionate about anyway. But anyway, [00:53:02][5.8]

Geoff Wilson: [00:53:02] excellent. Now, that's it. That's that's that's to me, that's that's what we're focused on. So, yeah, no, it's our people. Our people will be talking to your people, say, well [00:53:11][8.9]

Bryce Leske: [00:53:12] because we have heaps of people in say you. No Geoff, look, appreciate your time and as always, always welcome back on the show. So have a good day. We'll talk later. [00:53:23][11.2]

Geoff Wilson: [00:53:24] Thanks. Thanks, guys. [00:53:25][0.8]

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