Long-Term Investing Ideas in a Volatile Market
Simon recently spoke with a $35 billion global asset manager about how they're navigating the market volatility. The key takeaways are to think long term, tune out the noise...
Lead Advisor Anirban Mahanti sat down with author Danielle Ecuyer to chat about her career, the most important skills need for investing, and how her process has changed over time.
September 21, 2021 – By Samantha Bailey
Danielle Ecuyer has decades of equities experience that spans the globe. She completed a Commerce degree at the UNSW in the early 1980’s and then trained in Australian equities. In the 1990s, Danielle moved to the UK and worked in senior positions at some of the world’s pre-eminent financial firms, where she specialized in emerging markets. She retired when she had her son and transitioned to becoming a private, full-time, investor.
Anirban Mahanti sat down with Danielle Ecuyer to chat about her career, her investing and how it has changed over the decades, the most important skills to investing successfully over the long-term, and her books. Yes, Danielle is the author of two wonderful books on investing: “Shareplicity: A simple approach to share investing” and “Shareplicity2: A guide to investing in US stock markets”. Both books are available via Amazon as well as other book stores. And if you would like an author-signed copy, you can get them too, here.
Anirban Mahanti 00:00:03
It’s my pleasure today to have today Danielle Ecuyer. If you know, and I had this discussion before and I apologize again, it’s a French name, Swiss French name. I remember that part and it’s a pleasure to have her on the show because we don’t have that many women in investing. We don’t have that many women who are authors in investing.
Right, and that is a rare combo and we don’t have that many women in investing authors in investing who invest globally. Especially here in Australia so it’s my real pleasure to have Danielle here on the show.
And I’m going to ask her because she’s a long CV of working overseas and working in equities, and now doing her own thing, and she has a site website chapter for you to have that I will include in the show notes.
Two books there for people to check out but I’ll let Danielle introduce herself to us and then after we’re done hearing her story from her mouth, her version, I will ask some questions. This is going to be all about her talking and me just listening and just guiding the conversation.
Danielle Ecuyer 00:01:15
Thank you. Now I need to get your pronunciation of your name correct. Now I’m going to do it incorrectly, Anirban.
Anirban Mahanti 00:01:23
Fairly better than what I did, for your last name right so.
I love people from different backgrounds. This is what happens.
Danielle Ecuyer 00:01:30
Exactly, and when you’ve worked overseas like I have worked because. This is for your audience, your listeners. I worked at Baring Securities, which was a very, very famous emerging market stock broker for England’s oldest bank, who was also the Queen’s bank and was obviously very famous for going spectacularly bust in 1996 but we had a trading room floor with 300 people from across the globe.
And trust me, when you did emerging markets and you had all these wonderful characters from around the globe, sometimes the pronunciation of names went a little awry.
Anirban Mahanti 00:02:11
Danielle Ecuyer 00:02:14
Yeah so as, yes sorry go on.
Anirban Mahanti 00:02:16
Please go on, please again, as I said, the floor is yours.
Danielle Ecuyer 00:02:20
Okay, so look really briefly for your listeners. I trained as an equities analyst here in Australia, I did a commerce degree, which was probably stunning then back in the early 80s of women actually moving more into finance. It was an amazing time of change, there was the big bang in London and a company called Barclays came out to Australia. Of course that’s now all since disappeared. It was gobbled up by ABN AMRO and then Royal Bank of Scotland, but the long and the short of that story is, as I trained as an analyst. I then moved to London and I did emerging markets, specifically smaller Asian markets, to start with, known as “TIP” — Thailand, Indonesia and Philippines. Very lucrative. Barings held most of the market share with Flemings, which became JP Morgan. Amazing times 1990s.People could not get enough of emerging markets at the time it was a real boom and then it all went very pear shaped. We went bust. Asian currency crisis. Long Term Capital Management, say no more. And I ended up back in Australia in 2003 after I got divorced after I’d had my son. And at that stage, I decided that I wouldn’t move back into finance because it’s an awful trade-off that women sometimes have to do where childcare costs are so expensive. That you have to go back into a big career and then going back into a big career, you don’t see your child so I did, I actually decided that I would just start down the pathway of managing my own money and really that took place at the start of the GFC. When I had tried a number of different fund managers to look after my money. You may say that’s a bit bizarre but stockbrokers are renowned for being dreadful managers of their own money. We were great at giving advice, but actually managing our own money, it was never a great story. But then I decided Why am I paying people to lose my own money, I can do that really effectively myself. Basically, I’ve been doing it now since 2008 and, as you said. I made a decision which, I might chat about later on in the chat about how I moved out of Australian equities to gain exposure overseas. Yeah, that’s basically my story. It’s over three decades far too long for my liking.
Anirban Mahanti 00:04:39
You know, three decades means you’ve seen the Asian Asian currency crisis, you’ve seen the GFC and you have seen, been through the Covid crisis, as well as i’m actually that that is huge right seeing working through three different sort of events big events right financial events that you know sort of moved stock markets, I think that’s fantastic.
Danielle Ecuyer 00:05:00
You missed the 87 crash, that was a good one, too.
Anirban Mahanti 00:05:05
I missed, I missed 87 crash, you know, because you said you, you said you started in the 90s, I thought. Ah so that’s another one. Okay, I am going to ask you a little bit about your investing style, given that you, you know invested for so many years right basically over decades. You know what’s what’s the style now and I guess how has it evolved over time.
Danielle Ecuyer 00:05:33
That’s a really good question um I actually when I lived in London and I was earning really good money investing was very much a process of diversification and risk management so I’ll just really touch on that briefly so most of my savings actually went into the property at the time and the leftovers went into equities, but if you’re working in equities you don’t really some people did double up their exposure to equities. I took an alternative route and I think that is a good indication of how I like to manage my money, it is a case for me and it always has been. About growing the savings, whilst managing risk. So when I took control of my money in 2008 I had a bit of a steep learning curve, I know it sounds silly but I’ve been doing emerging markets, etc. And I went very much down the traditional path of kind of blue chip Australian companies but I learned very quickly.
Something that I learned when I did emerging markets is that that unknown factor called quality okay with companies is still really important in the developed market. In emerging markets, it was absolutely critical, because when the countries like Philippines Indonesia, you know, India, you know what it’s like they see all this foreign money coming in. And for them it’s like wow this is free lunch, we can potentially you know, make the most of this, so it was really important when we were putting the institutional funds into the emerging markets, I used to say it’s worth paying up for a company that you could sleep well at night that you knew that they kind of weren’t going to abscond with the funds now i’m not saying Australian companies have that same disposition. But I have learned over time that my portfolio style is probably more oriented in that direction, having said that I’m not averse to. Probably in some instances, taking bets on companies which other people would say oh my God, they are so risky you’re absolutely crazy and that would probably be a company that you and I both share a passion for which has starts with the big T for Tesla so. But you know that’s a whole conversation in itself, and I think the main thing for me is getting a balance between companies that I think can be long term winners in a portfolio to grow my money over time. I try not to trade.
I don’t think trading I think trading can be very, very difficult and yeah so that’s kind of where I come from.
Anirban Mahanti 00:08:12
You talk about trading, and this was not in the you know my list of questions that had you know my preliminary draft question, so this is like I’m throwing it on the spot here, but this is related to trading a little bit. Do you, you know because you’ve got this wide range of experience right do you do you do sort of you know normalization of PE type of trades like okay this stock has you know dropped like to a 10 PE and and probably should trade higher, like the Australian banks right, I mean they seem to have this PE range that they trade and they go from 10 to 20. You know from you know okay this thing is going to die to okay irrational exuberance, this is like the next Apple right and there’s that range. Have you ever tried that or is that something that you consider.
Danielle Ecuyer 00:08:53
Sometimes. So I have to explain that I run two portfolios one the investment. One that I’ve lived off and the other one is my self-managed super fund. And because I’m sitting on a few losses in the investment one I have actually tended more to be proactive on. I kind of trading thing you’re absolutely right, I know, one of your questions was about valuations. And that’s a really good point because valuations are relative and you just gave the best example. Stocks can trade in relative valuations and they will sometimes. Never move out of those relative valuation so investors need to understand the dynamics of when a company becomes expensive, but it still can look cheap on a PE. If that makes sense to you and the classic example is. In the 1980s, I learned very quickly that if you want to buy resource companies, you want to buy them when there are really highly elevated PEs. Earnings are totally bombed out, commodities totally bombed out and they’re not making any money. The times that you’ve got a really worry is when they suddenly quote unquote look cheap.
And that’s the great irony, and another example I was listening to BCA which is kind of doing the course at the moment. On asset management, they’re made an incredible point than the early 1980s when interest rates were incredibly elevated; the s&p forward PE forward PE was three times. And and that’s just amazing so we look back and we actually go okay interest rates were 14% or higher the cash rate will then it was no wonder that nobody was sitting there in equities so when it comes to if you want to trade it’s kind of. I look at stuff and go is that a great stock if it’s sold off, what’s the reason it’s sold off, is it a macro economic is it’s, just like the trend momentum followers have decided to turn often dump it, and normally you can actually pick up a good stock.
Like, for example, Wesfarmers had sold off a lot recently I sold it much higher and i’m going okay well you know it’s a bit dollar it’s a bit boring but it’s got a nice yield it’s a little bit safe to tuck some money away and and you know so to me you kind of would look if you were trading disposition of that falling off, and the same could be done with the likes of you know.
Amazon and Apple over in America, you know we saw Apple gets these big sell offs and and probably get another big sell off after its you know announcement coming up next week about the new iPhone sometimes all the the price, you know discounts all that potential good news everybody dumps maybe that’s a good time to come in.
Anirban Mahanti 00:11:42
Excellent, okay I’m going to switch gears a little bit here. I’m going to talk about your book and I’ve only read the first chapter, which was and i’m waiting actually because you know you sent you, as you said, you’re going to you know, have sent me the book and i’m waiting for it to arrive, because the first chapter was pretty riveting so the book is called Shareplicity: A guide to investing in the US stock market it’s so there’s clearly not written for I guess who are actively investing in the US stock market. I guess there’s actually.
I will take that back, because if you read the first chapter there’s actually a lot there for even those people who are regularly investing in that market to take away. But it is written as I guess, also for the audience, that does not invest in the US stock market or what I like to call the global stock market right doesn’t have enough because everybody has a home bias and.
You know if your home doesn’t happen to be, I guess the US of A, then you know if you live in Australia than you primarily or maybe focused on the Australian stock market, so I thought you know, but the first chapter is fabulous I guess. Can you tell us what this book is about and I guess what caused you to write this book or what was the motivation behind writing this book.
Danielle Ecuyer 00:12:59
The real reason was I just felt there are so many opportunities in the US, which I know if you’re a US investor you go what the yeah. The bottom line is that there is so much change happening in the world at the moment, and it was really to give people an idea of how to look at investing in the US, but also start to break down. Some of these things that have been running around these narratives for the last 12 to 18 months are between value and growth and the dynamics between what the US 10 year treasuries are doing there’s a lot of noise for investors, at the moment of how. The macro economic outlook is impacting interfacing with equities, and if you’re a stock picker then probably you don’t see that, but a lot of people who are in picking up information are going to get a lot of this information so was the book you’re right is for people to get an understanding of the US, it also goes breaks down a lot in terms of different ways to value companies like if you’re going to value a growth company what impact interest rates actually have on company valuations.Cyclical companies, what are you looking for they’re trying to point out factors that not all companies survive over the longer term, there is a natural turnover of companies which Hendrik Bessembinder the Professor from Arizona has talked about, and also, I wanted to touch on the likes of ETF products and ESG investing and the machinations of those and how they’re actually impacting on the stock market. So it’s kind of more encompassing than just purely a learner’s guide to the US, so there are the parts of the difference between you know, an old economy and a new economy stock, but I really tried to flesh out some of the more interesting details of what’s going to cause that switching between certain sectors and different cyclical stocks versus growth stocks, for example.
Anirban Mahanti 00:15:19
And while I haven’t read the book, you know, two or three things that resonated a lot with me one is you know this thing about investing in cyclical stocks right so this, this is the point that you made about high PE, is the right time to actually invest in. Mining stocks that actually makes a lot of sense right, and you have to think about it, as to why it is right and I think the impact of interest rate right that’s This is something that people don’t think about a lot, but they should. I mean, if you think about traditional finance and how things are valued right, if you think of everything as discounted free cash flow. Interest rate does matter, and then it matters as to whether it matters even more if the value of the company is all in the tail. Right, it’s all terminal value.Yeah, then you better have an idea of what the terminal value is because that’s going to be impacted by the discount rate so alicia things. These things are really important and actually are more intermediate things. Things for investors right this is when you sort of you know, when you’ve got the basics right you really need to understand these things to actually make some very good decisions right, I mean they probably impact your decision process at that point. So I appreciate that a lot and I think that’s great.
I was going to ask well, you know there’s a company that you and I both like. My next question is going into that territory and I’m just wondering whether at this point that conversation is just going to go completely off script. But maybe it will, maybe it won’t let will try to try to keep our enthusiasm and I’ll try to keep my fan fandom under control. The chapter that I am talking about is called Ford versus Tesla and it’s a super catchy title, and I think it does exactly the job is supposed to do. But you know, I was just gonna ask you what is the message that you’re trying to send here, you know with it that’s the chapter action that you’ve made freely available to everyone right what’s the message that you’re trying to get across to the readers.
Danielle Ecuyer 00:17:19
Okay, so the apologies too for the neighbors as we’re renting an apartment at the time of why we renovate so there’s a few bangs. It was actually based on the first chapter, the first book, which was Ford versus Ferrari, a film that I absolutely loved when I wrote the first book.It’s the hardest thing is actually to create a chapter that sets the scene for the rest of the book and why I loved Ford versus Ferrari so much as it examined through the film. The two different corporate cultures of the company’s incredibly different. So when I wanted to script the first chapter of the second book, well, I thought Well, this is a lay down mazaire, we have Ford versus Tesla because, ultimately, Ford was the company that changed the world.
In the early 1920s Okay, it was a complete change maker, you know the combustion engine mass production of vehicles. And to me this the analogy or the similarity is what potentially tesla is doing in our lifetime, as we you know live and breathe. And I really wanted to show the stories of both these two companies and how much it’s almost like we may have history repeating itself, but because we didn’t live through the history 120 years ago or 100 years ago we don’t realize it. But potentially or I believe very much because there is such a game changer to the world. And so I wanted to explore, as you know, in that chapter to set the scene of how much the world is changing at this point in time and there’s always that analogy, a call the boiling frog we don’t realize that we’re going through this. Until we actually come out the other side, like who would have thought the smartphone 2007. I mean I rejected for someone that’s progressive it’s quite bizarre I rejected, my rebellious side saying i’m not going to get an apple phone i’m not going to get an apple phone to my son, who was you know 10 goes off for god’s sake mom stop being so stupid get an Apple phone and of course now i’m a complete you know convert it but. I think that really it’s it’s symbolic of not only what’s going on in the mobility, transport, energy industries, but it’s also a symbol of what’s going on in so many other industries, at the moment, so old economy stocks incumbents you’re either innovate or your disrupted and you die.
That’s right I love I love I love this you know disruptions actually a big thing for us at seven investing you know Simon’s the founder and CEO of seven investing his Twitter handle is 7innovator, because he loves this idea of disruption.
I would ask you, so you talked about this a bit. Do you mind discussing some of the mega trends, I guess that you see the big big trends, or the I guess the trends that have huge tailwinds behind them, you know let’s say three of them to really. You know, you know entice you the three that you think have huge huge potential.
Danielle Ecuyer 00:20:31
And you will most. Yeah sure the most obvious one to me is decarbonisation.
You know that’s that’s the you know the lay down one the world really has to move very quickly and, as you know, the politics in Australia can be quite blurring on this, but it seems to me that quite a few investors in Australia have drunk the Kool aid on this now, as we know, lithium stocks are going through the roof.
But I do think that that is a game changer the obvious, are the ones the ones that really have been developed accelerated progress will continue to grow from the big fang stocks, you know we are talking cloud computing digitalization cyber security none of those are actually going away, I mean i’m yet to be convinced that the metaverse is going to actually turn into what mark Zuckerberg would like but reading about what Nvidia was doing the Omniverse actually really, really interesting, so I think the transition from it’s not like the physical world is going to disappear because no one wants that and I think we’ll all come out of lockdown so as people probably know Australia Sydney and you know.
The Melbourne and are in terrible lockdowns at the moment and we were actually going to want to flock to actually being in physical presence presence of other people. But I think undeniably the digitalization of the world is going to continue and in one of my presentations I I presented two pictures one was.
A picture of the globe, with this interconnectedness and the pandemic did something really strange you’d actually put up the geographical boundaries between countries really substantially.But at the other side it actually melted away as we became more reliant on the Internet and on our digital marketplaces and everything.
And I think the seminal moment for that was squares acquisition of afterpay you’re actually seeing now the incumbent financial institutions can’t hide behind the oligopolies let’s say that have existed in Australia and America is a different example because they’ve got thousands and thousands of banks but.
The point is, is that we are going to continue to see those trends, so the major thing for investors is, if you find that trend what’s the best way to play it because inevitably. When you get the secular tailwinds as you talk about and people see growth, then competition just moves into the market. And at the moment what I am seeing is almost a bird emerging in companies chasing the millennial purse. And the millennials, and particularly you’re seeing it in that fintech payment space.
And that’s the one thing that you have to look out for is the the optics of the trends, they wonderful stories they’re very attractive, you can get large total addressable markets in great numbers that you wrap around them, and they become like.
The story trends, or the stories stocks, but ultimately you’ve got to have the winning ones that are going to make it through all that competition or the regulation that it actually attracts because, as we know.
You know, there is probably going to be a move now towards more governments regulating. You know, with some of these larger companies, etc.
Anirban Mahanti 00:24:14
I tried yeah so regulation and tech, you know now that I think what I think you say is absolutely right, because on the one hand, we have boundaries and boundaries are sort of become diffused because of tech right and we can do, do so many things you know today, people can work from anywhere, because most companies are saying we no longer need a location.
Right and that changes the game it’s changing a lot of other things for government, and you know, especially governments where there’s a social welfare system right that that depends on a lot of other things, and those are being challenged in some ways, and then of course we could talk about crypto, and that is challenging things in a whole different way, but you’re right So if you can find those winners that have the potential to live for the long term continue growing those are the ones that are going to deliver, of course, you cannot get every one of them, but in New York, try to get them.
I also will note that you said decarbonisation and not climate change, I love that actually i’m going to use that now, because that actually climate change comes with a lot of baggage.
Decarbonization doesn’t seem to have that much baggage, so I love decarboniztion angle that is actually fantastic.
Anirban Mahanti 00:25:29
This is maybe for people, you know you’ve got this whole heap of experience in and sometimes just You know, as you said, decarbonisation versus climate change that’s a different angle actually looking at it it’s the words change the angle changes.
I’m just interested in understanding how you build an edge I guess what’s your edge and what would you tell and guess investors who have recently started or you know, have been investing for the last few years, three, four years have been fantastic bull market.
You know, everybody thinks that you know we’re all geniuses right because it stocks only go up but they sometimes go down to and they go down on so given your experience, given what you have seen
What’s your edge and how do you think an investor can build an edge?
Danielle Ecuyer 00:26:18
Okay, so really good question and the first thing I want everybody to ask themselves what edge you trying to achieve. Because I think people get really caught up, particularly in the here in the now in the momentum and. As you say, is a bull market so there’s lots of momentum traders there’s lots of trend followers those you know stocks that just move into the stratosphere. And then disappear off the face of the earth, so I guess when you ask for an edge, you have to everybody needs to ask themselves, am I here to invest to make the biggest absolute returns I possibly can, so I can retire in one year. Or am I going to stick around and become. That wonderful huge tree that just keeps on growing and growing and reaches to the sky and you create your Warren Buffett type of wealth.
And to create an edge, you have to ask yourself, am I trying to compete against the market, am I competing against myself. Am I competing against somebody else, and I think this is the problem for investors it’s really hard to stick to your knitting because you’re constantly feeling well well why is my stock not going anywhere and that’s what keeps going up or therefore my decision is incorrect, therefore, I better jump onto that stock.
So I think the edge is trying to control one’s emotions and remember what one’s goals are because great stocks, even the one we like like Tesla like this year is kind of turning into you know after such an amazing year last year you couldn’t expect Tesla to go up in an exponential line, this year, I mean it’s just unrealistic and but so a lot of people go I am bored of that one i’m going to you know disappear go away.
But in fact this is probably the year, where you want to be accumulating it and it can take good stocks, a very long time of doing nothing before suddenly they take off and by the time they’re taking off. Some investors who haven’t been on that and then kicking themselves so they can’t get emotionally over the hump of investing.
So the edge is knowing yourself knowing your stocks and knowing what you are trying to achieve and not trying to make it a constant race to be able to beat one’s chest and say.
I’ve got the chicken dinner winner every day because that’s just not going to happen, even every week, you know you’re not always going to win. And the other edge is is is remember you’ve got to cut your losses sometimes and i’ve seen so many instances of. Stocks that have been really popular a certain point of time only to disappear, and never return, and I call them.
The bottom drawer remember when we probably don’t remember we used to have things like share certificates a piece of paper saying you own 100 shares of. I knew an older gentleman who said he had like oh probably like 500 old share certificates of companies that were going to be the next best thing. So that’s that’s the edge. It’s no silver bullet to how to invest it’s really basic staff, knowing yourself knowing your companies and not chasing everything and also yeah i’ll save a couple more for the other questions, because otherwise i’ll use all the goodies all at once.
Anirban Mahanti 00:29:46
In you know I love one thing, I’ll reiterate this. The very fact that the first thing you said was know yourself right to basically control yourself know yourself know what you are, I think that’s so important, it is so underrated. Knowing yourself, because if you don’t know I mean you, if you don’t know what I was you know what you can.
How well, you can handle volatility right.
Then you shouldn’t be involved in it in a volatile stocks, if you don’t if you can’t handle volatility right and that’s the basic lesson right if you can handle volatility me the volatile stocks, which is fine for you.
Absolutely. I think, knowing yourself and then, if you know yourself and saying no that’s not for me it’s perfectly fine because well that’s not for you then that’s.
Perfect okay. And I love that you know you’re thinking about the the mindset as well, I asked him an evaluation, but we talked about valuation already a little bit unless you want to add to it and i’ll make the floor open to you okay and we’ll pass on that.
You know it’s gonna make this quick just we’re getting towards the end of you know, the the the relatively towards the end, but I wanted to ask.
If you would like to share, I guess, your top investing regrets, or you know, or if any couple of big mistakes that you made that you know, perhaps, perhaps any lessons that you took from that. You know, so that maybe others won’t repeat those mistakes.
Although you know what I like to say is that you know, unless you have made those mistakes, you are very likely to actually make the mistakes and making mistakes is just fine, but still I always like to hear what mistakes other people have done because it’s just a mess.
Okay, at least, it gives me confirmation bias.
Danielle Ecuyer 00:31:22
Yeah it’s you will you will only learn from your mistakes that’s The bottom line, I mean the universe, has a way keeps on you know it’s a bit like I would say, a wet fish slapping you in the face and keep on hitting you until you wake up and smell the coffee stopped doing it.
I think look greatest mistakes everybody’s done you one sells I have sold stocks too early and really important, I read your Netflix story.
Anirban Mahanti 00:31:49
Danielle Ecuyer 00:31:53
Hey, I’ve got the Netflix t-shirt too, so don’t worry.
I’ve got that story as well. I’ve got a really funny story i’ll keep it really sweet so it’s it’s the 1990s in London the.com boom is just getting going there’s networking parties about everybody wanting to get involved in the Internet.
And this this our east coast American very wealthy comes across and he’s he’s raising money private equity, so to speak for a nano technology company in the US okay with MIT and it was.
Anirban Mahanti 00:32:24
Nanotechnology 1990s okay.
Danielle Ecuyer 00:32:32
It was called nano technology anyway, and so they were basically it was the transfer of information, you know, through an optic fiber or whatever losing light rather than you know the old whatever.
And she’s going like yeah I did understand at the time, but the bottom line was, as I put my money in. A little bit not too much you know you never because it was unlisted yada yada and did really well and then we’re coming around for another raising of fundraising because you know they wanted some more money and the big family offices in New York wanted the shares I doubled my money did I want to sell.
No, I said i’m holding on for the longer term, you know this is going to NASDAQ yada yada yada well the long the short of the story was is that the the the main protagonists, the owner bankrupted the company and took the technology and started up again.
Great yeah so we all lost our money.
And then I had one more one more little attempt, and I always knows the point of the story when I start looking outside of equities for other ideas okay in private markets.
I usually know that that’s a really bad sign if there are no buys in the equity market, you certainly don’t want to go into the private markets, and if you do want to go into the private markets. You really need a lot of money, because you got to buy have exposure to like 50 startups and maybe you’ll get lucky with one, so my little hint is, if you can’t find any buyers in the equity markets it usually means that it’s probably not time to be buying any asset at that stage.
Anirban Mahanti 00:34:05
That’s actually a good one yeah and you when you’re investing in the private world right, I mean the hit rate is very low right. Very it’s very, very low, so you have to be. I guess the the silver lining would be that for most people who would actually consider going there you probably have some money that they can lose at that point it’s probably okay I’m joking about people losing money but yeah I mean at that point, if you can afford to do some private investing, then you know, the law of averages basically said that you have to do a lot of them.
Danielle Ecuyer 00:34:36
Correct and I get it was more about the case of I know myself again when I start looking outside. Of the equity markets because I go too much risk or I don’t like it it’s usually a sign now just sit on your cash at the moment and wait and be patient the opportunity to become will come to you.
Anirban Mahanti 00:34:54
Since I’m from Sydney, (and) ou’re Sydney based as well, and you know you are refurbishing and rebuilding at this time. You know, a popular pastime in this part of the world, I’m going to ask you, property investing versus stock investing? Which one or both?
Danielle Ecuyer 00:35:19
Well this wasn’t on the list!
Anirban Mahanti 00:35:21
Wasn’t on the list exactly. Sometimes I have to throw some curveballs to make it interesting, just curious, just curious and there’s no right answer to this, I think.
Danielle Ecuyer 00:35:30
Yeah no because I haven’t actually had a wage per se for quite a long time property investing is actually not an option, with the capital, I have available to me so I’ve always split my asset class pretty much 50, 50 between you know my home I haven’t had debt since 1994 or something so between property and then my equities.
If I want to invest in property well hey there’s enough fabulous you know property investment trusts in America and Australia I don’t need to go out and buy investment properties, so no that’s that’s just not my gig.
I like equities, because I like the liquidity of them I did venture into corporate bonds.
Didn’t like them very much they have a terrible habit here in Australia of just liquidity disappearing completely. So if you actually have a massive drawdowns in the markets and you’re getting uncomfortable or whatever. Not that i’m I borrow to invest, again I would never do that i’m to risk of us this phase in in you know my life, but equally when I was younger it’s just not something I would do I just sort of think that that’s a risk too far that’s that’s again that’s taking the fast route to try and make your millions.
But, yeah I just yeah I don’t tend to go down that property investment brochure, and if you do people can come very unstuck because it’s an illiquid asset, or can be very illiquid.
Anirban Mahanti 00:36:56
And leverage works beautifully to the upside and actually works wonderfully you know poorly. On the downside right so yeah that’s The other thing with property investing is that you, you, you would likely have unless you are very rich to start off with a very rich, then why are you investing anyways don’t need to.
But yeah I think that’s, the main thing i’ve got a lot of properties and you’ve got you know 10% invested capital and the rest of it is debt, then you are leaving it up, which you know helps it returns, but it may not as well.
Danielle Ecuyer 00:37:26
So exactly and a lot of people that had margin loans went more wiped out in the GFC. And do you know there’s a lot of sad stories from that and that’s I think you know, a lesson to everybody, as you made the point about you know we’re in bull markets and everyone’s a genius and I still have very vivid memories of how bear markets just you know can totally change the whole specter of everything.
Anirban Mahanti 00:37:52
And if you are levered up, then you know the bear market comes to you in a hurry. We have talked about failures. I want to talk a little bit about successes, if you would be interested in sharing, I guess, one or two stories of investments that have worked out wonderfully and been game changers.
Danielle Ecuyer 00:38:13
Yeah well, I think one of the things that I i’m kind of proud of is that, as we were discussing in Australia, when you invest in Australia everybody has traditionally bought quote unquote the blue chips the miners the banks, etc, and I made a decision in 2015 to sell a lot of them, just after they kind of reached their peaks. Particularly the bank stocks and in Australia, you know how attractive, they are because of their dividends, but I actually made a decision in 2015 that I sort of saw.
That for me that’s not the road the route that I wanted to go down, I thought the banks are going to be challenged and I started my investment journey subsequently into the US then and I remember a friend to has also invested overseas, for a long time that lives in London going Oh, you know you can’t buy Amazon at $700 and I kind of went why.
And she goes well it’s gone up so much and that’s kind of the point as well, you have to be really careful looking at great stocks from where they’ve come from. Because great stocks can just keep on going, and you can buy them anywhere along, so my transition, I think, in my investment journey has been.
Good, not only in terms of making money, creating diversification i’m really happy I don’t want all my assets just in Australian dollars. But also, I think it’s really good for the mind and staying young and I know for younger listeners they’re going to go well, that sounds really bizarre but it’s actually really important to have an open mind and keep on looking at things and because.
As we’ve discussed it’s quite a closed country in Australia, there is innovation and they tend to be sometimes small stocks and great success stories. But you kind of get overwhelmed and America there’s just so much to choose from it’s like this is the biggest candy store known to anybody and it doesn’t mean you go out and buy everything.
But at the end of the day, it’s really good to interact with that, so I guess it was a very big decision, I think it was the right decision and it is also laid a pathway in other ways to being able to write books and have better understandings of how to invest and how to invest for me.
Anirban Mahanti 00:40:25
Fantastic. I love that story, and then you know, I think it resonates a lot with me because it, the one thing I find very interesting is, if you look at I don’t even say us stocks, I say global. And a lot of the great global companies would eventually have a ADRs and things like that will be. Actually listed somewhere in the US market, but I think global stocks give you a global perspective, which is really useful right and teach you about how the world is, which is just fantastic and our very own atlassian, for example, decided they should be listed on NASDAQ, I guess, we will have a square CDI probably trading on on the ASX so that’s that’s I think a win for the ASX in the short term. Or, in the medium term at least. Some parting words of wisdom three things that you want our listeners to take away from this conversation.
Danielle Ecuyer 00:41:11
Oh gee.Never stop reading. Never stop learning but also just always have a little bit of reflection and time to set set and reassess where you’re at with risk profile and manage your risk for yourself, I think, is really, really important.That’s kind of how I see it, and I think people don’t understand risk very well.
Anirban Mahanti 00:41:36
Fantastic I really appreciate the time you spent with us today. I will put the show notes in or i’ll put in the article that accompanies our podcasts and basically will have a YouTube version which are recorded and we’ll put it on the various podcast platforms, but on the article link provide a link to the book, I guess, the best way to get the book would be via the website Is that correct.
Danielle Ecuyer 00:42:01
You’re first Australians if you’re overseas or whatever it’s it’s on Amazon it’s basically online everywhere so booktopia or Amazon or Great bookstores in Australia or you can buy all the signed copies by myself from my website.
Anirban Mahanti 00:42:16
I will provide the links to the Amazon one or if you send me i’ll actually find the Amazon link that shouldn’t be that hard and i’ll provide the link to the website so for anybody who wants a signed copy, they can get in touch and get a signed copy.
Danielle Ecuyer 00:42:30
Anirban Mahanti 00:42:32
Thank you very much for spending time with us today.
Danielle Ecuyer 00:42:34
My pleasure, what a fun, interesting, hopefully conversation.
Anirban Mahanti 00:42:39
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