Fund Manager Q&A

In the ‘go-go 80s’, a young Alex Waislitz worked for the legendary Australian entrepreneur, Robert Holmes á Court. Holmes á Court was Australia’s first billionaire, though he lost much of his fortune in the ’87 crash – a valuable lesson for the young Waislitz. Some 30 years later, Waislitz has built a fortune of his own, primarily through investing well. In an exclusive interview with Livewire, Waislitz explains one of the key lessons he learned working for Holmes á Court.

"I learned from him to look for hidden value that others may have overlooked. Often, on a company's balance sheet was written down land values that may have been bought many years ago, it could be industrial land from a manufacturing operation. Or it could be a brand that was underexploited but was fully owned by the company. He was a master at identifying value that others seemed to disregard. I'm always looking for the jewels - what is there in the company that hasn't been noticed."

In our latest podcast, we take a dive into the process that’s allowed him to achieve outstanding returns, including his top reasons to walk away from a potential investment.  

Six reasons to walk away from a potential investment:

  1. Run by the wrong people
  2. Management focused on promotion, not operation
  3. The financial metrics don’t stack up
  4. A ‘hockey stick’ earnings profile
  5. A lack of uniqueness
  6. The competitive landscape in their industry too strong.

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Marian Nguyen

Absolutely awesome knowledge to identify value companies. Thank you heaps

Carlos Cobelas

where do you get your investment return figures of 20 or 30% per annum ?? from what I see on Commsec, the Thorney Opportunities LIC total shareholder return figures for the past 1, 3, 5 and 10 year periods are only 0, 16, 15 and 4.5% p.a. 4.5% per annum over 10 years is pretty substandard for mine.

Patrick Poke

Hi Carlos. It's strange that Commsec lists a 10 year period, given the Thorney hasn't existed in its current form for 10 years. Until December '13 the company was known as Wentworth Holdings, had completely different assets, and a different management team. Thorney has existed as a private company for well over 20 years though, and my estimates (unaudited obviously) were based on the long-term returns in his private investment company, Thorney Investments Group.

Peter Brown

In reply to Patrick's comment. On the ANZ Share Investing website it lists TOP Total Shareholder Return (avg annual rate) as follows: 1 Yr 3 Yr 5 Yr 10 Yr 0.0% 16.0% 15.1% 4.5% Every website I have seen does this. They are treating Wentworth Holdings Ltd as essentially being the same company as TOP except there has been a name change. Interestingly this happens to many companies. It also happened to the other Thorney company listed on the ASX namely TEK (formerly Australian Renewable Fuels Limited). Despite only exiting in its current form since 18 Jan 2017 the following is shown on the ASX Share Investing site: Total Shareholder Return (avg annual rate) 1 Yr 3 Yr 5 Yr 10 Yr 0.0% -74.2% -62.9% -45.0% It is treating TEK and Australian Renewable Fuels Ltd as being the same company and hence showing the returns over the last 10 years. The information for both companies is misleading. Disclosure: I am a shareholder in both Thorney companies.

Patrick Poke

Spot on Peter, it's a common problem for backdoor listings and recapitalised companies. When using third party data, it's important to always check facts and figures for yourself before making decisions.

David Bryce

Really enjoying the podcast, Patrick. This episode was outstanding.