Expert Investor: Henry Jennings – 3 sleeper stocks with big upside potential

HOSTS Alec Renehan & Bryce Leske|16 June, 2021

Meet your hosts

  • 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 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.

Henry is a Senior Investment Analyst and Portfolio Manager writing for the last six years in the Marcus Today newsletter. Henry specialises in small and mid-caps although he has a thorough knowledge and understanding of large caps too. Henry also works with the MTIS team to formulate investment strategy and portfolio asset allocation and stock selection.

Henry has spent a lifetime in stockbroking and investment banking, originally from the UK, Henry has been divisional director for Macquarie Bank responsible for equity trading and has been both a trader and a broker during his career.

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Alec Renehan: [00:00:00] So, Bryce, we often say on the show that we're crypto curious here. Yes, we're interested to watch this asset class develop. There's plenty going on in that space. Plenty of noise in that space alien was buying. Ellen was tweeting, he stopped buying. He's still tweeting. But, look, it's it's a very interesting asset class to watch develop. And we own some crypto. We do acclimates owns a bit of bitcoin. Yes. And we when we are buying, we like to use swift eggs. [00:00:37][36.3]

Bryce Leske: [00:00:37] That is right. Swift is Australia's fastest growing crypto trading platform. The choice here at equity markets with over two hundred and twenty different crypto assets. We have certainly not worked our way through all of them. Bitcoin is the choice for us. But if you are a crypto curious and want to have a look at many of the others that are available, then Swift might be the platform for you that tiny spreads low fees and plenty of options to deposit cash into your account. So if you are looking to a deputizing, the good news is Swift are offering fifteen dollars of bitcoin to everyone who signs up. So that is 15 dollars If you head to swiftx.com.au/equitymates for 15 dollars worth of Bitcoin swiftx.com.au/equitymates. [00:01:19][41.8]

Alec Renehan: [00:01:22] That's right. Now, crypto may not be for everyone. It may not be for you. But if you're curious like Bryce and I go check out Swiftx and say if it's the right platform for you. [00:01:36][14.3]

Bryce Leske: [00:01:47] 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 status, our aim is to help you break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? [00:02:03][15.7]

Alec Renehan: [00:02:03] I'm very good, Bryce. Very excited for this episode. It's tough to pick who our favorite guest has been over the years, but I think this man would come very close. One of few people in Australia that can tell us anything we want to know about any ASX listed stock through what's going to test it on its life. But I'm excited for this one. [00:02:24][20.7]

Bryce Leske: [00:02:24] It is an absolute pleasure to welcome Henry Jennings back to the studio. Henry, welcome. [00:02:28][3.8]

Henry Jennings: [00:02:28] Thank you. Thank you for having me, guys. And what a great introduction. I've got to say, I'm very flattered and I think you're way off the mark. [00:02:33][5.2]

Alec Renehan: [00:02:34] When are you going to live up to [00:02:35][0.8]

Henry Jennings: [00:02:36] all you say that to all the boys. [00:02:37][1.3]

Alec Renehan: [00:02:39] I don't. You can go back and listen to all of our episodes. [00:02:41][1.8]

Henry Jennings: [00:02:42] I say it's all the guests that I have on my podcast. I'm really thrilled today. [00:02:46][4.0]

Bryce Leske: [00:02:47] So Henry is a senior investment analyst and portfolio manager, writing for the last three years at Marcus today,. [00:02:53][6.3]

Henry Jennings: [00:02:53] Six, six years. Got that right. So you need to update your website. [00:02:56][2.7]

Bryce Leske: [00:03:03] Henry specializes in small and midcaps and is incredibly knowledgeable. We have interviewed Henry a couple of times, so go back and listen to those EPS if you haven't already. And more importantly as well, Henry writes Every day for the markets today, members and runs the small-cap model portfolio, letting you know or the buys and sells that he is thinking and also a bunch of research on small caps. So head on over and follow the work that Henry is doing. And we've got a bit of a special offer for equity mates as we go through this episode. But today we're going to be talking a bit about the investment process that Henry goes through to find small caps, a few of the cymatics that Henry is interested in, and then three sleeper stocks that have a lot of potential upside. So no pressure there, Henry. But let's read into it Ren. [00:03:55][52.0]

Alec Renehan: [00:03:55] So, Henry, before we get into everything that Bryce just introduced there, we want to start with a bit of a game we call overrated or underrated. We'll throw some things out there. You tell us what you think of them. Let's start at home with our major index, ASX 200. Overrated or underrated? [00:04:10][14.9]

Henry Jennings: [00:04:11] Is this a binary? I can't be degrees of overrated. Underrated. [00:04:13][2.6]

Alec Renehan: [00:04:14] Oh, you can give us it's flexible and whatever however you want to answer it. [00:04:18][4.0]

Henry Jennings: [00:04:18] Flexible. I like flexibility. That's always good. ASX 200. I think at the moment it's a little overrated. I think we just need a little bit of a pause for breath. I think we've had a pretty good run. We were seventy three hundred. That's extraordinary. When you consider what's happened in the last year or so, even before the the pandemic hit the market a little bit, I guess a little bit toppy. And here we all were even higher. Yeah. So I'm a little bit concerned. I'm alert but not alarmed. [00:04:53][34.2]

Alec Renehan: [00:04:53] Okay, well, speaking of needing to pause for breath, NASDAQ one hundred overrated or underrated? [00:04:59][5.3]

Henry Jennings: [00:04:59] I think the same applies to that, especially with the pressures that we're seeing at the moment with inflation, bond yields. I know we had a jobs number the other day that was relatively benign, if you like, because it was disappointing. So that was good. But, you know, you can see it in the price of stuff. Stuff is costing more. Everything you buy has stuff in it and that stuff is costing more. So it's only a matter of time before we see that starting to come out and to inflation and interest rates. And that's going to affect those long term valuations, I think. [00:05:30][31.0]

Bryce Leske: [00:05:31] Yeah, it kind of feels like we're going to be going into a bit of services inflation soon. There's a lot of stuff that starts really reopening and prices start coming back in that space. It's yeah, [00:05:40][9.7]

Henry Jennings: [00:05:41] it's you know, it does feel that way, doesn't it? I mean, I'm obviously somewhat older and my demographic is different from what you guys spent money on. But, you know, I have kids that are spending money and stuff, cost money. You go to the bar and I went to buy Schooner of Verrone. Eleven dollars. That's just crazy. [00:06:00][19.4]

Henry Jennings: [00:06:03] I know it was a posh bar but really eleven bucks. Yeah. Luckily I only had one. [00:06:07][4.6]

Bryce Leske: [00:06:11] Henry Overrated or underrated bitcoin. [00:06:12][0.8]

Henry Jennings: [00:06:13] Massively overrated. OK, massively overrated. I still struggle to get my head around crypto. I know that there is a limited supply of bitcoin. There's twenty two million allowed and all that sort of stuff. But then they create another currency and then you have these sort of mean currencies that develop and all these other things. And Bitcoin consume so much energy. You know, it's it's a strange beast. I think it's a sign of the times that we have Bitcoin. I'm sure digital currencies have their place and I think it will emerge that they do. But what the value is and people talk about the fundamental value of Bitcoin, there is no fundamental value of Bitcoin apart from the electricity that it cost to produce one. I know there are lots of other digital currencies out there, theory, et cetera, which can be of use. But at the moment, I still struggle to see the value in Bitcoin. [00:07:03][49.6]

Alec Renehan: [00:07:04] Interesting little tidbit at the end. So you like Ethereum over Bitcoin? [00:07:07][3.0]

Henry Jennings: [00:07:08] I think I got to say I'm not an expert on the other ones because we tend to focus on Bitcoin is like the BHP, I guess, rather than looking at the champion iron down the down the list. People don't look at that so often, but I think, you know, a digital currency that can actually be useful and can be transacted in the real world is fine. But at the end of the day, we already have a digital currency. Now you've got your Commonwealth Bank app. It tells you how much money you have to go up and it takes the money off. You go somewhere else, takes the money. That's a digital currency with Gone Digital. We don't need to have made up algorithms to to do this. We have this currency, whether it's a hedge or not. We'll talk about that later. [00:07:49][41.4]

Alec Renehan: [00:07:52] Next one, Henry, overrated or underrated? Full service brokers and specifically here for retail investors. [00:08:00][7.7]

Henry Jennings: [00:08:01] Underrated interest. I was a full service broker. I chose my one percent, etc. and I think they are particularly underrated, especially if you're starting out because these guys can be a filter. They can tell you when you're being dumb, you can run ideas past them. And if you don't trade, you don't pay. It's not like you're paying a fee to chat to them for half an hour. If you decide the idea they try and sell you is no good, you just say, well, thanks very much and hang up. So when I was sitting at home trading my own money many years ago, I used to use a combination of full service brokers and online platforms. And if I had a really brilliant idea, why would I bother phoning up a full service broker and giving them commission? It's it's pointless. I'd much rather go to Comsec or whoever was my online guy at the time and do it for them. But if the online the full service broker phoned up, said, I've got this fantastic idea and you're going to double your money in a week. It's rudes, then go to Comsec and do that trade, apart from the fact, if you do, he's not going to phone you for the next idea. So as long as these guys are giving you value, they really are a great way to trade. I know that expenses as part of the whole equation, especially if you're dealing with small amounts of money, it can obviously has a big impact. But if these guys giving you great ideas, you should pay them because, you know, ideas are not free. So but if you have your own ideas and your own way of doing things online is the way to go, but then you've got no one else to blame. But yourself is with a full service broker. You can shout at them, hopefully, if you're a good client, they might even take you to lunch. And also, you know, there's a lot of IPOs and these sorts of things around, and you don't always have access to them if you're just always going through the cheapest you can. Five dollars, ten dollar trading systems, you're never going to get the access to the inside. [00:09:52][111.1]

Alec Renehan: [00:09:53] Did you have any rules of thumb? I mean, look, I disagree with you, but I'm not going to work for me. [00:09:59][5.9]

Henry Jennings: [00:09:59] I don't work for anybody else. I've been doing this for 40 years and I've been a full service. I've been a trader. I've run my own money. I've done all sorts of things. [00:10:07][8.0]

Alec Renehan: [00:10:08] Yeah. So do you just. Yeah, yeah. But I think for us, we often grapple with the fees associated. And so how did you have any rules of thumb around, like if people are listening and are interested in going full service, did you have any rules of thumb around like how you manage the cost or did you have like a minimum investment relative to the cost of brokerage? [00:10:28][20.5]

Henry Jennings: [00:10:30] If you're going to be paying one percent and usually they have a minimum as well of 80, 80, 90, 100 dollars or whatever, then you've got to be dealing in a chip size that's appropriate if you're just buying a thousand dollars worth of shares, clearly it's not worth your while. If you're buying fifty grams with the shares, you know, and you're doing that regularly, then you can negotiate the rates down as well. But they've got to be offering you good value. Now, these guys have been around for a long time. When I first started out in broking, you had to be invited to be a client of a broker and they charged two and a half per cent. Now, those are the good old days. If you a broker two and a half percent, you went to lunch at twelve thirty, a cigar, a glass of port. In a way you win. That was it slip for the afternoon. But if they're not offering good value, then don't use them. But if your chip size is big enough to warrant spending 100 dollars an idea. Yeah, not just a trade but an idea, then [00:11:23][53.8]

Alec Renehan: [00:11:24] you know they are worthwhile. Yeah, I think that's probably the thing. My check size probably isn't big enough if I start. Yeah. Getting to that one percent level then maybe I'll be convinced [00:11:33][8.9]

Henry Jennings: [00:11:33] and you can always pick their brains, you can always lie about how much I try. [00:11:37][4.1]

Henry Jennings: [00:11:38] I know it's a bit rude but you can, you get good ideas and then now they are a font of knowledge as well and they may you know, you may invest two or three thousand dollars and pay ten dollars to try it, but you might lose all your money because you've been silly and you've had a silly idea. So it's horses for courses. [00:11:55][16.3]

Bryce Leske: [00:11:57] So Henry, you run the SmallCap model portfolio at Marcus today. I do. And every time we speak to you, there's always a new stock, a new small cap, and new mid-cap that we've absolutely never heard of, which is very impressive. It's also part of the market that is very difficult to get information on and to do research, and particularly for retail investors to actually know where to start. So where do you start when it comes to finding these types of stocks? [00:12:26][29.3]

Henry Jennings: [00:12:28] It's I guess it's a matter of fossicking. We're in a lucky position, which is not every retail investors position because we have three and a half thousand plus members who are really happy to keep sending me the stocks they fancy. And they, like I say, check this one out is great. It's a great filter so you can get a bit overwhelmed by the number of stocks that they send you. I look at this one. This is fantastic. They're doing this. You're looking at I think I'm not an expert in cancer drugs. I'm really no, I'll do my best. So there is that great thing. But, you know, for retail investors, part of the game is to keep your eyes and your ears open and just read as much as you can. And there's so much information out there, whether it's your great podcast from equity markets, whether it's now that there's so much out there and there. You know, some of our competitors are fantastic at fossicking around for stocks. We don't have a massive research department. But the other beauty of signing up for a full service broker is even if you don't use them, is they send you the research. So if you actually sign up with one of the smaller brokers because they don't bother with the BHP is of this world because there's no point. There's no point. Every little tiny broker trying to get the resources to analyze BHP. So they look around like I do for the little stocks. So and especially in this pandemic era, the number of resource conferences and small cap conferences which you can go to, which you'd actually have to go to anymore, you can just sit at your desk. Yeah. And you have it on the background and you think, oh, that one's interesting. And I also I spend my whole day in front of a screen, and I've done that for the best part of. Forty years and you have a screen and it flashes, you know, it flashes signals and it says this once there's stuff happening here, there's stuff happening there, and then you can delve into it and try and find some research, try and find some newspaper articles, try and go down the Googling and then look at the company websites, look at their last presentation. There's so much information out there. But it's it's handy to have that kind of funnel, I guess. So it depends how you how big you want to get the funnel. You know, if your thing is one particular theme or one particular sector, then your funnel gets a lot smaller, which is good. But, you know, sitting in front of a screen and this is again, goes back to full service brokers, that's what they do. They sit in front of a screen all day and they make telephone calls and they talk to people and they get ideas and they tell people about these ideas. And the research guy tells them, and there's this interaction. So finding a good small cap broker, perhaps, you know, the Morgans or the Bell Potters and they're quite big guys, you know, the kind of courts and the stock exchange as well has a good program where they pay brokers to do research on small companies. So, you know, small companies don't get overlooked. So the stock exchange does that every week. They have a list of stocks that have been analyzed by a small broker. They get paid 10 grand or something for the analyst to do the report. And again, that's a good source for those companies that don't get much coverage. But just going to these you know, these Zoome conferences is fantastic. You can you can knock over 20 stocks in a day. [00:15:39][191.2]

Bryce Leske: [00:15:40] Unfortunately, they usually at you know, Thursday, 11 a.m. when most retail investors are looking at Excel spreadsheets for the big boss somewhere else. Well, that's [00:15:49][8.9]

Henry Jennings: [00:15:49] right. Well, I guess the trick is then is to put it on on your headphones and have it going in the background. Just wait for your ears to pick up. But, you know, certainly and a lot of those are repeated as well. So a lot of those webinars and things are repeated. So that's pretty good. It's very useful [00:16:02][12.6]

Alec Renehan: [00:16:03] or to follow you and to get your distilled wisdom [00:16:06][3.4]

Bryce Leske: [00:16:12] seriously softball? And you missed it [00:16:13][1.5]

Henry Jennings: [00:16:14] and I loved it. [00:16:15][1.9]

Alec Renehan: [00:16:18] So you mentioned the ASX broker report, and it's probably worth mentioning for people that anyone can access them for free via the ASX website. If you search ASX broker reports or ASX Equity Research Scheme, they are a good source of information on companies you probably never have heard of. [00:16:35][17.9]

Henry Jennings: [00:16:36] And the other great tool that especially for retail investors and for young retail investors, is your eyes. The Mark one eyeball is brilliant. You're seeing things every day that we old folk just don't it doesn't, you know, compute. Now, when I started out, you'd walk down Pitt Street and you look at the carrier bag, see how many people actually were buying stuff to get an idea of how many people are actually buying, as opposed to just wandering around and talking to people every time I go into a shop or get in a taxi, as I said, how's business? What's happening, what's. So there's all that as well, gives you insights. [00:17:12][36.8]

Alec Renehan: [00:17:13] So you have like a really wide, I guess, top of the funnel. And I think a key thing here is that there's nothing there that is you know, it's not prohibitive to the general retail investor. It's not shaking hands with the CEO not sitting in a right now. It's information that's readily available to anyone. I guess the key question is, once you have an idea, you know, a thought bubble has popped up in your head, do you have any sort of key tools or processes that you use to research the company and come to an investment decision? [00:17:46][32.2]

Henry Jennings: [00:17:47] I think the first thing to think about is the management is the people involved, especially if you're looking at small caps, because, you know, a lot of the time these guys can be just trying to invent the best ever mousetrap and they can be piling money in just you know, it could be a lifestyle business as well. Their lifestyle, not your lifestyle, and especially applies to mining companies that look at the people in the management behind it. The board, if you've got credible people that have done it before, that knows how to take a small company to a big company because it is a massive challenge to do that, it's not always that easy to run a public company. So it's a lot of the times there's that and one gets really excited about the private public arbitrage where you've got a private company trading on stuff or multiples and it goes public and then it becomes a twenty P and suddenly it goes from twenty million to 400 million. That's great. That's fantastic for the company and the founders, etcetera. But they still got to then learn to grapple with how to run a 400 million dollar company. And we're seeing some of the growing pains, I guess, of a stock like New X, which is, you know, it's gone from a private company for donkey's years to a public company with all that comes with that. And we see it time and time again. So I think it's really good to start with the people and then depending on what sort of stock. It is it's whether it's got the technology, the moat, how it's doing in terms of business, you know, every business has its own kind of vagaries and own kind of metrics. And then look at, you know, whether they've got you know, we always look for that big addressable market and biotech guys are fantastic at that. You know, they say, well, this market for this disease is 400 billion. And if we only get one percent of that, we're going to make rubbish. Yeah, you know, it's that's like saying, you know, the globe is 14 trillion or whatever. If we only get a point oh percent, we're going to it's it's silly. So but it is good to look at the addressable market and you look at some of these companies and they're aiming for something. You think, well, that's actually not a very big market at all. You're really going to struggle for that. So I think, you know, and then once you've looked at the fundamentals about how the companies run, what they do, some of the numbers, then it's always good to check the technicals as well because and see who owns the company and whether there are some big institutional shareholders there. That's always a good positive because it means, you know, there's some sort of, you know, imprimatur of, you know, someone like Regal Funds Managers. And Phil King is on the shareholder register. And that's really these guys have got 20 analysts poring over companies. If he's now at this one down and going, yep. And you go, well, hang on, that's a tick. Similarly, with directors having skin in the game or this sort of stuff, short positions have a look at, there are so many things. Just depends a lot on what sort of company. Yeah. You're looking. I mean, last night Biogen got approval for their Alzheimer's drug. And, you know, some of our companies here are now getting a little bit of a lift because of that. So, you know, it's just looking at those sort of sentiment things as well. Themes. And you see that we do have pretty exaggerated themes that go for a while and then they drop off the planet and no one cares about them. And so it's really I mean, so three years ago was lithium was the big thing everyone was going for. And then, you know, EQM in South America said, we're going to push production up. And we went, oh, my God, it's the end of lithium. And the whole thing collapsed. And I wanted to know until. Six months ago, a year ago. [00:21:13][205.9]

Alec Renehan: [00:21:13] Well, I mean, we haven't been investing that long, but even in our time cannabis, there was a massive theme around cannabis. And where's that go now? [00:21:21][7.7]

Henry Jennings: [00:21:21] Well, cannabis is an election thing, so cannabis is an American election thing. So November 16, when Trump got elected, I wrote a big article saying, well, forget the election of Trump for the time being. You knew that was going to be problematic and interesting the next four years. But also at the same time as the US presidential election, there were lots of changes to cannabis laws, and they were voted on and that opened the door. And then, as you say, it kind of went quiet again. And then in 2020, we had the election again. We had that spurt in cannabis because it was again, part of the voting was to do with cannabis and cannabis drinks and I think Corona pushing into that side of things. So there's a lot happening there. But it's it just takes a long time and people get impatient because there's a new shiny thing over here. [00:22:06][44.1]

Henry Jennings: [00:22:06] Look at this one. Look at this one. [00:22:07][0.8]

Bryce Leske: [00:22:08] Well, I bought Galaxy for lithium back in twenty seventeen and a dollar fifty two or something roaded up to about four bucks and then saw it slide for three years, back down to about 80 cents or whatever it was. And now it's back out of it like four or something, 380 [00:22:24][16.3]

Bryce Leske: [00:22:25] I sold it at right at the bottom. I got so impatient with it, I was like lithium sucks. Now it's back. [00:22:36][11.9]

Henry Jennings: [00:22:37] I don't mean to make you feel really, really bad. [00:22:38][1.5]

Bryce Leske: [00:22:39] No, no, no. Let's move on. So I'll just [00:22:42][3.5]

Henry Jennings: [00:22:42] I'll just tell you this story, because we had an email from a client, from a member who had one hundred and fifty grand, and he put it in Kidston Kidman resources rather Kidman and he took that 150 and into 800 and was then going to retire that as part of his debt, he was going to retire debt with 800 grand. He decided instead to put it into law line town resources now with 12 million. [00:23:06][23.1]

Bryce Leske: [00:23:06] Oh, wow. [00:23:08][2.0]

Henry Jennings: [00:23:09] So he's got one stock like Curlee in City Slickers did one thing. [00:23:14][5.0]

Bryce Leske: [00:23:15] Wow. But that's like those people who just backed CSL from [00:23:18][3.8]

Henry Jennings: [00:23:20] it was ten grand. But Enciso, day one, never sold a share. [00:23:24][4.4]

Bryce Leske: [00:23:25] Yeah. And they're now multimillionaires. [00:23:25][0.9]

Henry Jennings: [00:23:27] And the same would apply for your generation with afterparty. There'll be people there that. [00:23:30][3.4]

Bryce Leske: [00:23:31] Well we were looking at Apple this morning when I was 15 cents in the early 90s or whatever and thinking about the people that would have got in on that and just held it through its eighty three thousand percent conviction. [00:23:43][12.4]

Henry Jennings: [00:23:44] Yeah, I just got that conviction. [00:23:45][1.4]

Bryce Leske: [00:23:46] Yeah, that's conviction investing. [00:23:47][0.9]

Henry Jennings: [00:23:47] And that's you know, Marcus wrote a big article this morning about it. How can you know if you are looking at your portfolio, do you want to know 20 stocks kind of vaguely or do you want to know one stock [00:23:57][9.6]

Henry Jennings: [00:24:00] I know the management and talk to the management and follow them and know that really, really well. And in the case of this guy with lines and he just that was his focus. And 12 million bucks. [00:24:10][10.3]

Bryce Leske: [00:24:10] Yeah, well, I saw a quote the other day. I was talking to Ren that I'm sort of pondering over at the moment, because when you start investing, everyone's like, diversify, diversify. But then this quote was, you know, concentrate to build wealth and then later in life diversified to protect that. Well, which is that's why you need that high conviction. But anyway, we digress. We do have a lot to get. Right. So firstly, if you want to hear more from what Henry is writing daily across markets today for his members, it's called Henry's Take, where he talks all things market strategy and small caps and in reference to the small cap portfolio. So you can get 14 days a free trial to Marcus today, which is not only what Henry writes, but it covers the growth income ETF and small cap model portfolios. And the good news is that if you do enjoy that, there is a special offer that is available for equity mates, listeners that they will reach out to you with. So sign up for a fourteen day free trial for Marcus today by going to Marcus today. Dot com dot. Are you small caps and you'll be able to get full access to the offer, which is not only Henries small cap model portfolio, but as well the growth income and ETF model portfolios as well and all the information that they're writing. So markets today, dotcom, small caps. But now let's chat somatics. [00:25:31][80.7]

Alec Renehan: [00:25:33] Yeah, well, we just spoke about how themes come and go and how themes can make a sector very hot for a moment. And ironically, we're going to use that as a Segway to talk about some themes that you think are quite hot at the moment, Henry. So you've given us to hear both very front of mind for a lot of investors at the moment. So we'd love to get your thoughts on them. The first one is gold and the inflation hedge. So why are you interested in this theme at the moment? [00:26:03][30.1]

Henry Jennings: [00:26:04] Well, I guess we talked about this at the beginning of the podcast. We know that stuff is getting more expensive. We know that timber in the US is up. Forty six percent, we know that hog prices are up 58 percent. We know canola has gone through, so we know inflation's coming. The question really is whether it's transitory or whether it is more embedded. Now, most investors in the last decade or even two decades have never witnessed inflation. Governments did a really good job back in the in the 80s and the 90s of of changing the way they measured CPI to the extent that it took out basically the things that were always going up, like housing, insurance, health care and education. [00:26:48][44.5]

Henry Jennings: [00:26:49] So all those things that you need, whereas a pair of shoes or a computer that you buy every once in a while, they're all part of the CPI, etc. So inflation is there. And, you know, if you wanted to put your kids into child care or even into private school, God, that is a scary thought for my children. Put their kids into private school. It will be 100000 dollars a year. So there is inflation out there. So the question is, how do you how do we handle that inflation? What effect is that going to have on the global economy, especially given that we have so much stimulus coming down in theory, if it ever gets through in the US, into the US economy and still so much stimulus in our own economy. Now, there's still, I think 80 percent of the Gladis vouchers have yet to be spent. And we've got to another two and a half weeks. My wife sitting on a few, I'm thinking, what are we going to see in the movies? [00:27:36][47.4]

Alec Renehan: [00:27:37] I actually haven't applied for mine yet. [00:27:38][1.2]

Henry Jennings: [00:27:39] you should do. [00:27:39][0.4]

Henry Jennings: [00:27:41] So inflation is coming. We know that it's a question of how long it lasts and very many, very few people have actually seen. I remember inflation and I grew up in the 80s, 70s. I was at school in the 70s and the 80s, and there was massive inflation and interest rates got to 17 percent. Now, you tell that to the kids today and they won't believe you. Um, you know, so it's there. So the question is, how do you inflation proof your portfolio? And then I guess the other question is, how do you make the most of that inflation and making the most of inflation, I think comes down to the resource trade because they aren't going to be making iron ore 206, 207 points a tonne. That is extraordinary. That's us. You know, that's extraordinary. The last time that this iron ore price was up here, the Aussie dollar was a dollar. Ten was one point one. It was parity plus. So resources are a great place to be to give you some inflation hedge. And then if you want to protect yourself from inflation, which in resources will do to some extent, but you look at things like Transurban now, these guys have price rises for their toll roads every time it goes up. Then you are paying your toll and they have price rises that are linked to inflation, same as you have with the rates, the rentals on a lot of shops and a lot of supermarkets, et cetera, are linked to inflation. If inflation is four percent, that's how much the rent goes up. So there was a certain amount of inflation protection through those sorts of dull companies. The flip side of that, of course, is that they all usually bond proxies. So as rates interest rates go up and they will go up eventually, then they will get affected because they borrow money long term and they use that for buying infrastructure assets or building infrastructure assets. So there are a few ways to do it. And then, of course, there's gold and it comes down to the bitcoin, that being digital gold. Is it digital gold? Well, I don't think it is because it just has too much volatility. But gold has been a store of wealth and an inflation hedge for a huge period of time because it is a relative store worth. There is a limited supply of gold. But like Bitcoin, in some ways, you know, it takes a lot of money to dig up gold. It takes a lot of money to mine, bitcoin as well, that I have a lot of similarities. So gold is a bit of an inflation hedge. So I think it's good to have some gold exposure in your portfolio. Many investment advisers will tell you you have five percent or whatever it should be in gold, whether it's physical or gold miners. I prefer to go with gold miners because you have that leverage. But you have to be careful because not all gold miners are created equally. You know, there's some that have got massive hedging in place somewhere in dodgy countries where there's a big sovereign risk, especially at the moment in West Africa. And some have got production issues, say St Barbara, which has had the gold price has gone up. St Barbara has just slid into oblivion currently. So you have to be careful which ones you pick. Stocks like Chalice have done extraordinarily well, Dougray Mining, which is one that I really like, and maybe we'll talk about that one later. Now they've got a really interesting new project that's coming on stream. Great drill results. So you have to look. And it's also good to look at the timeline as well for these miners to go from explorer to producer. And not everybody wants to do that transition. Everyone wants to make the leap. Some explorers just want to explore. They want to go and dig holes, drill stuff, get out there with the oil, get out there with all the equipment. Big boy stuff with diamond drilling, and then when it gets to a stage, they'll sell it to somebody else, that then does the hard bit of building the plant making during the pit and all that sort of stuff. But there are some good opportunities and gold stocks and resource stocks generally. And this plays into the theme of electric vehicles because it's a green the planet. We're going to have to dig a lot of stuff up. This is kind of ironic, and we're going to abuse the planet by digging it up to enable us to go a bit more green. [00:31:43][241.8]

Bryce Leske: [00:31:44] Well, that is a good Segway into Averys. But just to wrap that, firstly, you'd be pleased to know that I sold all my gold exposure and bought Bitcoin. So you'd be happy with that decision there, Henry. But just to wrap that, so if you are looking to, I guess, play the inflation hedge or game, it's finding companies that are linked in some way to their pricing that is linked to inflation. There are resources. And then also have a look at gold as well. [00:32:15][30.8]

Alec Renehan: [00:32:16] You can remember the other two [00:32:17][0.7]

Bryce Leske: [00:32:18] cash [00:32:18][0.0]

Alec Renehan: [00:32:21] rates and some of the trends. [00:32:23][2.0]

Bryce Leske: [00:32:26] Yeah, exactly what I said. Companies at rising prices. [00:32:29][3.4]

Henry Jennings: [00:32:31] You've got to look at companies that can actually pass on the price rises. Yeah. You know, the likes of you know, the Cogan's, the JB Hi-Fi. Things are going up. Everything that goes into a computer is going up. So the price they pay for all that stuff is going up. And whether they can pass it on to the consumer is the issue. If they can't and their margins are going to get squeezed, then they start to have problems. [00:32:53][22.0]

Bryce Leske: [00:32:54] So let's move to the second thematic that you're looking at at the moment, and you did mention it there, and that is electric vehicles and battery tech. No doubt it's one of the hottest spaces at the moment. What are you interested in here? [00:33:08][14.0]

Henry Jennings: [00:33:09] Well, we all know that electric vehicles are coming, but that I guess that's only part of the equation. Electric vehicles just a car with a different kind of engine to it, whether it's electric or a combustion engine. But it is going to fundamentally change things. And I think we're a bit closer to it in Australia. We haven't really grasped the whole TV thing, whereas Europe has and the US and certainly heading down that way. But Europe has grass, this nettle with both hands and no gloves. And I think partly that is because of diesel gate. And they wanted to rehabilitate their kind of green credentials after they got caught out with the whole diesel thing. So European car manufacturers going nuts and battery tech is very important. The million-mile battery and that short charging and being able to even do the battery swaps, that's very important as well. I was talking to someone yesterday that was looking at a truck company that you could do these battery swaps with. You could pull into the garage and just pull your battery out, stick it in another battery. And Australia's very well endowed with all the natural materials that go into the greening of the new carbon, less economy with whether it's copper, whether it's lithium, whether it's a variety of things. I mean, you even go down to, you know, some of the companies out there, PPK, which is one that we've been following for a while, which has a bore and nitride nanotubes. I mean, this is out there. So this is this super, super kind of material that they've been able to produce with Deakin University. The stocks Gone Nuts is a billion-dollar company now. It's gone nuts. And they have this new material, which they can add to things to make it stronger and lighter. And they do it for another. Sounds dumb, bulletproof glass, bulletproof vests. They're looking at putting it into it helps with the whole battery technology stuff as well, putting it into cars, making them lighter. Same with the stock, for instance. Just a bit more left field carbon revolution. I've recently added to the small cap portfolio. These guys make wheels in Geelong. They make wheels for Ferrari or Mustangs, and they make light and, well, very light. And that's the idea is to make things light so that if you've got an electric vehicle, it can be more efficient. So it's not just about battery technology and we are endowed with the lithium, etc. that we have in this country in the copper as well. So and there are so many out there that are doing it, whether it's Volcan Energy in Germany. I mean, that is another one of these guys are trying to combine lithium brine extraction from geothermal. So they're using the heat from the geothermal to evaporate the brine so that they can produce the lithium and then can sell off the geothermal energy to the German power companies. So it's a twofer. It's fantastic. And it's another stock that's gone really, really well. And we've been following for a while. So I think you just got to think a little left field with all this stuff. And there's a lot of people doing it. The Piedmont's all these kind of guys out there, whether they're in America, that is the whole rare earth thing as well that plays into the. So it's it's the land of opportunity out there, I have to say. And it's it's a theme now at the moment. It may last six months. It may last a lot longer. It might be finished by tomorrow. We'll move on to Alzheimer companies or cannabis companies or [00:36:41][212.3]

Alec Renehan: [00:36:41] whatever podcasts or podcasting companies, [00:36:43][2.1]

Alec Renehan: [00:36:44] it's it's pretty cool how Australia there are some real gems in Australia. You know, you mentioned Carbon Revolution. We spoke to Emma Fisher from Ali a little while ago and she mentioned this company on the Gold Coast Peignoir Holdings, the cooling systems. It's good to see manufacturing, auto manufacturing come back to Australia. [00:37:03][18.7]

Henry Jennings: [00:37:04] Yeah, I mean, PWI are very specialized. They do cooling systems for race cars, V8 supercars and those sorts of things, which I got to say. I mean, I think 56 percent of their income comes from motor sport, which is great, but motorsports changing. And we're going to have electric races when they can actually finish them rather than run out of juice halfway around. But you know that that will change cooling systems. You know, electric vehicles don't need half the bits that are internal combustion engine cars. You know, they're very simple. It's the batteries, the key to it, the rest of it, you know, the brakes, everything else, much more simpler. [00:37:42][37.7]

Alec Renehan: [00:37:42] Well, Henry, we could talk about these themes all day, but you have told us that you have three sleeper stocks with upside potential. That's your quote. So we want to hear about those. But first of all, so Bryce and I can continue to afford stocks are we're going to take a quick break to hear from our sponsor. Bryce, you're a man that moves to the beat of his own drum, actually literally moved to the beat of his own drum when you studied drumming back at uni. [00:38:08][25.6]

Bryce Leske: [00:38:08] Yes. Is true. Got booted out. Yes. [00:38:10][2.1]

Alec Renehan: [00:38:11] And after you study drumming, you had a short lived but highly successful career as a Canberra nightclub DJ. So you're all about moving to your own bet. And that's great because our sponsor to kick off today's episode is all about banking to your own beat. And that is Virgin Money. [00:38:30][18.5]

Bryce Leske: [00:39:04] Now let's get into the show. So, Henry, we just mentioned that you've teased us with three sleeper stocks with upside potential, so we want to hear all about them. The first one is one that I will admit I've never heard of before kadence Exxxotica. Seyda, can you tell us what it does? First of all and why it's got upside potential [00:39:28][23.4]

Henry Jennings: [00:39:29] kadence is a L say, which is a licensed investment company. Pretty dull in theory. I like Lycees because the hot tub time machines, especially ones that's what I call them, especially ones that have transparent assets that you can see and they report often they report they're NCIS because what happens is the assets they own. So when we came out of covid in that March Madness, we came out of court with all the assets these Elyse's owned sprinted to the moon, whereas the Elyse's sat at a big discount. And gradually over time, that discount was back up again. And CDMs Cadence is run by a guy called Carl Seedling, who's a lovely guy. And they had a bit of problems with Melbourne. It they had a big investment in that got all caught up in that and it all got a bit kind of nasty. And whatever the NCA of kadence is around the share price, about around a dollar ten, which is the share price, but the big upside for them, they've got a sleeper inside Cadenced. They made an investment some time ago into a thing called deep green metals. And these guys basically have a system of vacuuming up poly metallic nodules from the ocean floor, which are thick and full and easily processing all of all the goodies that the market craves, the manganese, the cobalt and all that sort of stuff. And they have they have some territories where they have licensed this. Dyson of the ocean to suck up these nodules and off Papua New Guinea and various other places to do this now environmentalists say that this is going to be a major problem because it's going to suck up all the mud and disrupt all the infrastructure of the ecosystem, etc. And there's supposedly something coming out in July as sort of a global thing. But the big attraction of this deep green metals is being stuck into a spack in the US. And it will be listed and the upside, if this gets listed in this back in the US, this deep Ren metals that Carl has put money into some years ago is quite considerable from the NCAA at the moment. The moment the NCAA does not include the valuation of deep green metals, it does. It doesn't have that in there. So I like Elyse's there's another one long, short fund NSF, which we've put in the portfolio at a dollar that now, you know, at 138 percent on those because it's a hot tub time machine. These guys tell you what they own. You can see what they owns, moved 10 percent. And the NCAA, the thing gets reported once a week and you go, well, hang on a second. Well, that's going to move up. And then the share price, it's just it's an easy drop. So and they shouldn't trade at such a big discount. In fact, you know, Jeff Wilson's just raised all this money or process. [00:42:20][171.3]

Alec Renehan: [00:42:20] We had a Twitter chat to him recently, wall to wall. [00:42:23][2.2]

Henry Jennings: [00:42:23] What is it good for? So so that to me is a kind of a sleep. It's it's not so much a sleeper stock, but it's got a sleeper inside that stock. Yeah. Which I think is as attractive if they can pull off this deal. And it was announced in March and they spack they're going to back the steepening metals into and July is the sort of when they decide on the sort of the global. Footprint. Well, the global way they handle these things, sucking up nodules from the ocean bed and it could be quite positive for these guys. [00:42:56][32.7]

Bryce Leske: [00:42:56] Nice. So that is kadence Saddam. The next one is not a small cap and large cap. No, I thought probably one. Yeah. [00:43:03][7.1]

Alec Renehan: [00:43:04] Outside it has been what [00:43:05][1.2]

Bryce Leske: [00:43:06] has been globally. [00:43:07][0.5]

Bryce Leske: [00:43:07] AGL, Ticha, AGL. Australia is one of Australia's most hated stocks, I guess. [00:43:13][5.3]

Bryce Leske: [00:43:15] What's the sleeper going on here? Well, that's part [00:43:17][1.7]

Henry Jennings: [00:43:17] of the attraction is it's one of Australia's most hated stocks. This is a company that that really stuffed it up in the same way that Sol Trujillo did with Telstra. Sol Trujillo, you remember, was the guy that came over from the states, run Telstra. He built the best network in Australia for mobiles, the best by a country mile. But he did argue with the government. He did really like upsetting Canberra. AGL is done the same with the whole Liddell power station. I really done their utmost to upset Canberra as much as they could. The share price has been Dogville. It's been in the kennel for such a long time and they haven't really addressed were they starting to address the Lidell problem. But the other thing that's caught them on the hop is wholesale power prices have collapsed. And they and this is part of the problem they've had is that because it's been so successful with renewables that's pushed, it's perverse, but it's push power prices down, which has been bad for AGL, which has been, to be fair to AGL, have been kind of at the forefront of the renewable push. So talk about shooting yourself in the foot. But in recent days or weeks or months, they have announced they're going to split the company into two. They're going to have a Brown AGL and supposedly somewhat greener AGL with with the coal assets in the brown bit and the renewables in the green bit. It's a bit murky when you mix brown and green together. It's still kind of. Brown, so it's still a bit murky that we haven't had too many details and the guy that came up with the plan then resigned [00:44:54][96.6]

Bryce Leske: [00:44:55] like this straight after, that's commitment for you. [00:44:58][2.9]

Henry Jennings: [00:45:00] You know, why would you come up with, you know, the cunning plan and put your finger in your mouth and do a Dr. Evil? [00:45:07][6.9]

Alec Renehan: [00:45:07] Surely. Surely there's a lot of backroom friction around. [00:45:10][3.1]

Henry Jennings: [00:45:11] There must be a lot of backroom friction, but wholesale prices have moved up. At least they have got a plan. It is one of the dodgiest stocks in the market and every dog has its day. I'm not saying it's going to go back to 18, 20 bucks that it went to. You know, previously it was market darling. It was the one that could possibly go wrong. You flogged electricity, it was regulated. You had a nice, big, fat yield. Simple brokers used to love AGL, and then it just went a little like a submarine going down to the bottom of the ocean. But I just think now it's got potential with this this plan, which will get more details as we go forward. You know, they haven't even come up with a name yet. You know, it's like new CEO and Prime Co or whatever, [00:45:53][42.5]

Bryce Leske: [00:45:54] um, [00:45:54][0.0]

Henry Jennings: [00:45:55] brown and green. But I think this one has got potential and it has shown some signs of life technically in the last couple of days where, you know, it's two percent here, three percent there, but at least it's starting to pick itself up off the bottom. [00:46:08][13.2]

Alec Renehan: [00:46:10] Very surprising. [00:46:11][0.8]

Henry Jennings: [00:46:12] It surprised me as well. [00:46:13][0.8]

Alec Renehan: [00:46:15] So we'll definitely watch that one closely because [00:46:17][2.5]

Bryce Leske: [00:46:18] this surprises me. There's like, well, I'll write that down. Well, I thought [00:46:22][4.0]

Alec Renehan: [00:46:23] this kind of surprises you can expect if you sign up to Henry's newsletter, [00:46:26][3.1]

Henry Jennings: [00:46:27] you've got a bit left field. [00:46:28][0.8]

Alec Renehan: [00:46:28] So this third one is one that I also hadn't heard of before, Neo Meadow's ASX to get NMT. Why do you like it and what's the upside? [00:46:39][11.0]

Henry Jennings: [00:46:40] Neoh Metals has is basically involved in recycling of batteries, the car batteries, the testers and all these guys are going to be using. They're involved in the recycling of this, the recycling technology. And this is going to be pretty important going forward because I suspect supply won't be able to keep up with demand once you sort of hit that critical juncture where there's enough charging stations rather than just three in Sydney or whatever. But once, you know, in some parts I think I read somewhere someone was putting in 360000 charging stations this year and Germany is putting in like a million. So it's this is happening, but just not happening in Australia. So these guys are doing recycling of batteries. They're debt free. They cashed up there in Europe. They're allied with a lot of the big players in Europe to do this recycling. They've got some vanadium recycling as well. It just looks an interesting story. They recently sold off their Lithium Rights Act. I think it's Marijan from memory could be wrong, but they've just recently sold off their lithium writes for 30 million bucks. So they've got plenty of cash. They can see this thing through to you. The moment they're doing pilot plants, they're doing pilot plants in Australia, which seem to be working pretty well. So it's and there's a guy from Tesla, it was really high up, a Tesla that quit Tesla to start up a battery recycling business so that the smartest in the business is looking at this and going, well, you know what? We're going to when these batteries are finished, their life, ten years or whatever, the million miles or however many miles that you get out of electric vehicle battery, what do you do with them? You can't just stuck them into landfill. You're going to have to recycle them and take the good bits out because that's part of the green theme. And we don't dig stuff out. We can recycle what we're using. And I think these guys look quite interesting. You know, metals and is the code. It's again, this was one of the guys on our Facebook group said, have a look at this and you look at it, OK, I get this. I can now watch the guy from Tesla that's now into the recycling. I think it's from Tesla. And, you know, you can see this is going to be big business. I could be two years too early, three, five years too early. But you can see that somebody is going to crack this because what do you do with your Tesla battery when you Tesla finishes [00:49:08][147.6]

Bryce Leske: [00:49:09] get a new Tesla? [00:49:09][0.4]

Bryce Leske: [00:49:10] Yeah, but then what do you do with the whole car? Send it back to Mars. Yes, Senator, I just it just I think [00:49:19][8.8]

Henry Jennings: [00:49:19] it just appeals in terms of, you know, in the circle of life. Yeah. Circle of the green life in electric vehicles, in the batteries, the recycling of them. So I think it looks quite interesting. And it is a European focused company and they are at the forefront of the EV revolution. I think now that they've played catch up with Elon and they want to take him now. [00:49:43][23.7]

Bryce Leske: [00:49:43] So just a reminder there of the three Henry we had kadence CDM is the ticker, AGL, AGL, Large-Cap and Nayo Metals and Amitay as the three sleeper stocks that have potential upside. And also a reminder to the acclimates community that Henry does have his daily Henries take, if you would like more information on what he's thinking and researching and also more info on the small cap model portfolio. Head to Marcus today. Dotcom today, use small caps. We'll put that link in the show notes to get a fourteen day free trial to Marcus today. And as we said earlier on, that's not only access to the work that Henry is doing, but you get access to the work that the whole team at Marcus today are doing, which is across their growth model portfolio income model portfolio ETF model portfolio, which should be pretty interesting, and also the SmallCap model portfolio. We've obviously also had Marcus on the show a couple of times before and he's full of knowledge as well. So between Henry and Marcus, I think the market's pretty well covid [00:50:46][62.9]

Alec Renehan: [00:50:47] a very knowledgeable investment. We're a fun [00:50:49][1.7]

Bryce Leske: [00:50:49] place to work. All right. [00:50:50][0.7]

Henry Jennings: [00:50:50] And it's interesting because we're both social backgrounds are both very similar and we do think very similarly. So it is that that's a positive and a negative. Yeah. So but it is interesting. But yeah, I mean, some of the stuff the team do on the website and the. The news there is astonishing the amount of detail we get some great feedback from members. Yeah, so we've [00:51:14][24.1]

Bryce Leske: [00:51:14] also got on the Couch [00:51:15][1.2]

Henry Jennings: [00:51:16] podcast, I do a weekly, mostly weekly podcast as well as regular as you guys on the couch, on the couch as CEOs or people that would be interesting to our members. So whether it's the CEO of something like Vulcan Energy, which I did recently, or Nick Griffin from Monroe Partners, that one was an absolute crack. And now there's a smart guy and some guys from Ellerston as well. So it's just a kind of a bit of an informal one. This week I'm doing the CEO of the long, short fund from L1 capital, Martland. [00:51:49][33.2]

Bryce Leske: [00:51:50] So it's good. And just a reminder as well that Henry. Well, at last check, you were actually in the equity markets Facebook discussion group. Yes. So if you want to tag Henry and ask him. [00:52:01][10.7]

Alec Renehan: [00:52:01] Yeah, ask him some questions. [00:52:02][0.9]

Bryce Leske: [00:52:03] Questions. So I'm sure he will respond. No pressure. But he is a part of the community. [00:52:08][5.6]

Alec Renehan: [00:52:09] So if you sign up to the free trial at markets today, you go to our Facebook group, you just talk to Henry, get his thoughts, and then you say it in the newsletter through commissions. Yeah, you can slide into Henry. David Soucie, I got with him. [00:52:22][13.0]

Henry Jennings: [00:52:23] I also do this thing on usually every Friday. I could ask the analyst where people is like a quick fire round. You just sit there on a webinar and people just ask you questions and you have to answer them. It's quite fun. It's quite nerve racking. I can imagine it is quite fun to do. And you get to 300 people asking you questions about different stocks over an hour. So it's. Yeah, actually testing keeps me on my toes. [00:52:45][22.7]

Alec Renehan: [00:52:46] Well, look, as we said at the top of this interview, you're one of the few people in Australia that you could ask any anything about any stock and you'd have an answer. And that's not something that we're saying. We actually heard that from someone else. They said three people in Australia. True. They would that would put up on a stage just because [00:53:01][15.1]

Bryce Leske: [00:53:01] I told them I would have been doing this a long time. [00:53:05][3.9]

Alec Renehan: [00:53:05] If that's what it takes, that's what it takes. But look, anyway, we have gone over time. We want to say a massive thank you for joining us and giving you some giving us some of your time today. It's a pleasure, guys. We are nothing if not predictable. And we always like to finish with the final three questions. So we're trying to rip through them quickly. The first one is, do you have any books that you can sit up? Must read? [00:53:28][22.8]

Henry Jennings: [00:53:30] Yes. Catcher in the Rye on the Road. Liar's Poker Market Wizards. Yeah. Anything by Peter Lynch. And if you're vaguely interested in options, options is a strategic investment by launching Millán, which was my Bible when I was an options trader in London. [00:53:45][14.9]

Alec Renehan: [00:53:45] Right now that's [00:53:46][0.8]

Bryce Leske: [00:53:47] options. [00:53:47][0.0]

Henry Jennings: [00:53:47] It's called options as a strategic investment by Lawrence Macmillan. And it's huge. [00:53:52][4.5]

Alec Renehan: [00:53:52] Catcher in the Rye on the Road Life is anything by Peter Lynch options as a strategic investment. I hope I didn't miss any of that. But there's some good ones are second question in 60 seconds or less, what's the best company you've just ever come across? [00:54:08][15.2]

Henry Jennings: [00:54:08] I think I'd have to defer to my previous one of my previous employers. Macquarie Group. [00:54:13][5.1]

Alec Renehan: [00:54:14] Yes. Yeah, fair enough. Macquarie is getting a good run on this question. Well, it [00:54:18][3.9]

Henry Jennings: [00:54:18] is. It's got some bad press at the moment over nukes. But I have to say, I worked there for seven years. I was very lucky to work there in the nineties and at a time when it was a very small company, only twelve hundred people in Macquarie. And it was an extraordinary place to work. And I always likened it to the being a buccaneer, being a pirate. We were allowed we had we had a charter from the queen. And at the time the queen was almost now the queen is a different CEO, Shimura. So we had [00:54:48][30.4]

Bryce Leske: [00:54:48] as well just make cash. [00:54:49][0.8]

Bryce Leske: [00:54:50] Well, yeah, basically. Well, that's what the [00:54:52][2.3]

Henry Jennings: [00:54:52] pirates had from Elizabeth, the first guy that guys annoy the Spanish and the French and make money and but you have to abide by the pirate code. [00:55:02][9.3]

Henry Jennings: [00:55:03] So you had to abide by the code, which was the risk management. And the risk management is everything. If you haven't got risk management, you end up like Archie Goss and that whole disaster, the Credit Suisse just going scratching their heads while everyone else is selling and they're going to on guys we had we sell. So risk management is important. It is paramount. And Macquarie has the certainly my day was the best risk management and still are. And they have that Buccaneer Charter go out. I mean, they made a fortune out of the Texas freeze and that's the kind of entrepreneurial spirit they kind of imbue in their managers division heads, EADS, whatever their buccaneers, their pirates go out and ransack the world. Just do it within this rule. Yes. Keep just keep playing nice. And they do they have goals and values. They have very specific you wouldn't want to see on the front page of the newspaper. Yeah. [00:55:56][53.3]

Alec Renehan: [00:55:57] And then final question, if you think back to your early days of investing, maybe at Macquarie, maybe even before then, what advice would you give to your younger self? [00:56:08][10.3]

Henry Jennings: [00:56:09] I think don't get too distracted by the noise, and this is something that Griffin was saying Monroe Partners runs from the other day, don't get distracted by all the noise. Try and look through the longer term. Start early as well. This is the most important thing, compound interest. I know it's an old cliche, but it is the most you know, it's the most powerful force in the universe. Without question. As Einstein said, that compound interest is the key. And if you start early, it works. You know, just put a little bit of money aside every every week, every month. And, you know, try and look through the noise. And sometimes you've got to stick with your conviction, like the guy who had the Kidman, then the Lions down. There was plenty of noise along the way, I'm sure, with Donald Trump's tweets during the night. But, you know, to end up with 12 million bucks out of hundred and fifty grand. Not bad. [00:57:02][53.6]

Bryce Leske: [00:57:03] Not bad. Not bad at all. Yes. [00:57:05][1.8]

Henry Jennings: [00:57:05] So look through the noise and don't sell your house in London. [00:57:09][3.8]

Bryce Leske: [00:57:12] Don't sell. [00:57:12][0.3]

Henry Jennings: [00:57:14] Don't sell your house in Clapperton. [00:57:15][1.3]

Bryce Leske: [00:57:16] I'm definitely done. [00:57:16][0.8]

Henry Jennings: [00:57:18] That was dumb. [00:57:19][0.5]

Bryce Leske: [00:57:19] We've all learned lessons along the investing journey. So, Ed Henry, appreciate you coming on the show, as always. A reminder to head to markets today at dot com small caps for everything that Henry and the team are doing at markets today. And we very much appreciate you coming on and always sharing something new with the community. So. So it's always fascinating. Much appreciated. [00:57:42][23.1]

Henry Jennings: [00:57:42] Pleasure, guys. [00:57:42][0.0]

[3272.8]

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