Meet Dimitri: The Greek who loves to buy the dip (no, not tzatziki)

James Marlay

Livewire Markets

While Dimitri is a proud Greek-Australian, he wields the luck of the Irish when it comes to picking his moments in life and the market.

Dimitri moved to Australia to study a few years before the Greek debt crisis got out of hand in 2010. He completed his Master of Engineering Science at UNSW and did his PhD in big data and energy management modelling.

Since 2011 he’s been running his own education business teaching kids’ mathematics and science – and why it’s a good idea to not have a portfolio comprising only cryptocurrencies.

Dimitri applies his knack for numbers to the market and his three-pillar philosophy is built on taking advantage of volatility to buy quality companies yielding no less than 6% before franking, holding them forever, and scouring information to become a better investor.

"I learnt that investing with a strategy makes the learning curve much more manageable and helps you maintain your sanity in times of madness."

His process has netted him screamers such as Dicker Data and HiTech Group at bargain prices, alongside a handful of quality ETFs, LICs and AREITs.

In this wire, Dimitri – who recently celebrated the birth of a lockdown baby – kindly shares with me details about his investing journey and his highs and lows so far.

I hope you enjoy his story.

Image: Dimitri sporting a t-shirt from one of his favourite 80s TV shows

Livewire Investor Profile

Name: Dimitri

Age: 40

Employment status: Self-employed

Years investing: Over seven years

Investment goals: To generate enough income to cover annual expenses, and have the choice of not working

Products used: Equities, LICs, ETFs, unlisted funds

Biggest portfolio holding: Dicker Data (ASX:DDR)

How old are you and how long have you been investing?

I am 40 years old and have been investing since 2014, so that is a little bit more than seven years. My first exposure to investing was via my dad back in the late 90s in Greece. We had a major bull run back then, courtesy of the new shiny Euro, cheap interest rates, and infrastructure boom for the upcoming 2004 Olympics. 

We enjoyed good times, and my family certainly prospered from some good investment calls. Eventually, reality kicked in, and I saw how easy to lose some serious wealth too.

Being the 90s, the information we had access to was found in those yellow financial newspapers with square meters of tables with tiny fonts, via teletext or the finance segment at the end of a news show on TV.

Fast forward to 2010, I moved to Sydney, started my Master's and Ph.D., as well as saving some of my own money from 2012 onward. After seeing that I was earning a dwindling pittance via the falling interest rates in my savings account, I decided to dip my toes in the ASX and never looked back.

What is your objective from your investing?

To say that I had a clue, let alone an objective, about investing would be an understatement when I started. Over the years something beautiful happened: my investment objective shaped itself effortlessly, entwined with my personal and professional circumstances. 

It became part of my larger life plan, and central to my and my family's future.

My objective is to reach a sufficient annual income (before franking) that will allow me to cover 100% of my projected annual expenses. At that point, which is about 2.5 years away, I am planning to stop working apart from maybe 3-4 hours a week. 

I am hoping that I will be able to cover my annual expenses indefinitely via this income stream; luckily, I have repaid my mortgage, and our child’s budget has been well covered already, so I am expecting low volatility and high certainty in my budget situation for the years to come.

What products do you use to execute your strategy?

As of 2021, my portfolio is composed of:

  • 60% equities (mainly small and mid-caps with high yields)
  • 20% LICs, with healthy profit reserves
  • 5% ETFs, mainly investing in corporate or emerging market bonds
  • 5% unlisted property funds
  • 10% cash sitting on the sideline to be deployed as opportunities arise

How would you describe your strategy?

As per many Livewire contributors’ articles, I believe that a good strategy is a boring one. 

I have come to accept that I cannot compete in the same arena with professional traders with fancy algorithms or even active short-term traders. Believe me, I tried!

Instead, my investment strategy in its most recent iteration is based on three primary pillars:

1) Patiently wait for the dip: I aim to invest in companies/products that have a trailing yield of at least 6% (before any franking credits). I extensively research company fundamentals, announcements, and sector context, to eliminate any obvious yield traps and dividends funded by debt. Lots of patience is required, as I have companies with yields close to my target for months on my watchlist. I wait daily for some market volatility to brings them to bargain territory. Admittedly, I have missed several opportunities in the past by being super conservative, but there was no shortage of good buying opportunities either.

2) Hold forever (under certain conditions): The last thing you want if you rely on passive income in retirement is to be deprived of it. My holding period is forever, so capital gains are mostly irrelevant in the long run. However, I am not afraid to act and accept losses when the likelihood that I overestimated the yield of a stock becomes too high. Obviously, I have learned my lessons in painful ways, waited until it’s too late before realising holding forever won’t always work.

3) Reading, reading, and more reading: As a retail investor, I am blessed to live in an era where information and data is so readily available. It certainly helps to have an aptitude for mathematics, but either way, I believe it is now possible to find answers to everything you need in a jiffy, which helps tremendously with being a flexible and independent investor. Ultimately, it’s the feeling of accountability that drives performance. If I make a good call based on my analysis, I try to replicate the process. If I make a bad call, I invest extra time in reading about how I could have avoided it.

Could you please share your top five holdings in % terms and tell me a bit about why you hold each of these positions?

The following five investments comprise nearly 30% of my portfolio.

1. Dicker Data (ASX:DDR) - 10% portfolio weighting

  • The company is blessed with an amazing Founder and CEO in David Dicker, and directors who are savvy and have skin in the game.
  • Best investment I’ve made by far as I bought its shares at around $1.70.
  • I believe there will be strong tailwinds for years to come in the hardware/software distribution for ANZ markets.
  • The dividend policy matches my strategy and I'm enjoying incredible yields at my entry price.

2. Centuria Office Fund REIT (ASX:COF) - 5% portfolio weighting

  • Centuria has proven to be a reliable fund manager. COF holds properties in suburban markets that were proven to be resistant to COVID disruptions.
  • Safe weighted average lease expiry (WALE) and occupancy levels.
  • Tenants are mostly large-cap companies and government entities.
  • My average entry was sufficiently low, so the actual yield is in the 8-9%.

3. XRF Scientific (ASX:XRF) - 4% portfolio weighting

  • This was a relatively lucky one; it has been on my watchlist for a long time and I was furious I did not buy when it was trading at around 20 cents during COVID. I got a lucky order in at 29 cents and have seen nothing but good news since.
  • It's a small, debt-free company with a niche market and diverse clients.
  • XRF's services are essential throughout the mining cycle and across many metals.
  • My realised yield is exorbitant at my purchase price, and I expect it shall remain high for the short and medium term.

4. Grange Resources (ASX:GRR) - 4% portfolio weighting

  • Been in and out of GRR for years, but finally happy with my average entry price.
  • Great debt-free miner of extremely high-grade iron pellets, with a very long mine life and what appears to be a safe client base.
  • Management decisions have been dubious and unpopular in the past, but the sheer quality of the balance sheet and monstrous dividends are too good to give up.

5. HiTech Group (ASX:HIT) - 4% of my investment portfolio

  • A small-cap gem, directors have big skin in the game and have been running the company successfully for years.
  • The tailwinds in information and communication technology training will persist in my view, and whilst there is no structural moat in this sector, HIT has too good of a team and expertise to be threatened in the short and medium term.
  • Dividends are great and consistent with my strategy.

What has been the standout performer in your portfolio?

Australian Real Estate Investment Trusts (AREITs) for certain. I hold a lot of them and they have never failed me; at worst I was able to sell and break even if my thesis has changed. 

"In my experience, if you buy a REIT with a yield of at least 6%, an occupancy rate of 90%+, gearing of no more than about 30%, and it is trading at a 10% discount to net tangible assets, you cannot go wrong."

Niche properties like childcare centres, supermarkets, government buildings, or servos are a welcome bonus.

The brilliant thing is I get these opportunities often, as AREITs are generally not the most loved asset class in the mostly growth-driven market epoch we live in.

Could you tell me about your worst investment?

Certainly, it was WMC (later rebranded to BTK). A Chinese company listed in the ASX, as a distributor and developer of routers and other network equipment. 

The boxes were all ticked for my “under the radar hidden gem” detector. It had great dividend growth prospects, was trading at an incredibly low price-earnings (PE) ratio, and it had great prospects for gaining market share in China. 

I was so excited about my find that I had convinced my wife to co-invest with me and even some of our friends (who wisely did and sold for 20% profit a few weeks later).

Unfortunately, it turned out to be one of the “quasi-fake” Chinese listed companies that, at some point lost 90% of its value for no reason, ceased all communications, and was finally forced to delist.

Apparently, Chinese schemes like that aim to list on the ASX or NYSE to validate their profits (I found at least three more examples at some point in ASX that all shared the same fate). There is no ASX protection in case something goes wrong. My wife and I lost 100% of what we invested in that security.

How does Livewire help with your investing process and what tips can you share with other investors about using Livewire?

I am grateful that Livewire is a free service, I have learned so much from reading articles on your website. I find the general investment education articles particularly useful, as they put some context to the market over long periods and help retail investors develop a matching strategy.

I also find the diversity of views insightful, as it often challenges my views and ideas and makes me think again about my next move.

My tip is to get your kids or friends to read more on Livewire, it’s hands down the best free resource for investors and it actually has great advice without any bait. I certainly do so with some of my more curious students and aim to do so with my daughter once we get to a point that we can read something that is not a couple of letters long!

Do you have a favourite contributor you recommend other investors follow?

  • Marcus Padley is a pure joy to read, and I find his views about the market and macroeconomics extremely insightful and well thought out. His light-hearted writing style is certainly the icing on the cake.
  • Shane Oliver publishes great education articles and has influenced my investment decision-making and long term views significantly. Too bad AMP isn’t doing as well.
  • Miles Staude and his team at Global Value Fund have equally useful insights about the market and macroeconomics; I happen to hold ASX:GVF.

Honourable mentions to Richard Coppleson and Christopher Joye for their pointed views and insights into markets.

What can Livewire do better or what do you dislike about Livewire?

I don’t think I dislike anything about Livewire. A few ideas that would certainly make it even more useful to me:

  • More interviews with directors (especially small cap) of listed companies.
  • A forum for more open discussion between members on individual stocks or Q&As with contributors (like HotCopper, but that’s probably too much to ask).
  • More reader engagement initiatives, like this series!

11. Is there a lesson you’ve learned as an investor that could potentially help others?

Develop a core strategy early and stick to it.

Of course, the aspects of a strategy can and should be tweaked and adapted according to each investor’s life circumstances, experiences, and as new information emerges.

I learned that investing with a strategy makes the learning curve much more manageable and helps you maintain your sanity in times of madness.

I admittedly made lots of mistakes in the COVID crash, but hey it was my first crisis and I'll hopefully have better luck next time and it ultimately makes you a better investor.

Can you share a personal passion or ambition you have for your future?

If my plan goes well, I will have plenty of free time to enjoy in a few years. Most of that will be allocated to bringing up and educating my lovely daughter and spending time on my decade-old hobbies of gaming and running.

However, it has always been a passion of mine to open and run an amateur radio station that plays music from the last century, has themed days, competitions, and conversations with listeners. 

I was a radio producer for years during my 20s and an avid radio listener in the 90s, and I believe it still has its place today. I think many among my generation are missing this type of shows, and the younger ones are missing out, so I hope to bring back some of this radio magic.

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James Marlay
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