Rask - Our Best Investments Ever (PME, TTD, PANW) | 2-Sense Breakdown with Owen & Drew
The conversation begins with a discussion on the best personal investments, highlighting the importance of education and on-the-job learning. The speakers share their top investment successes, including stocks like Palo Alto Networks and Trade Desk, emphasizing the value of holding onto winners and understanding market dynamics. They discuss the benefits of investing in global equities and the impact of currency fluctuations on investment returns.
The discussion transitions to comparing self-managed super funds (SMSF) with traditional super funds, emphasizing personal choice and the ability to replicate investment strategies across different platforms. They highlight the importance of understanding one's investment goals and the flexibility offered by different superannuation options. The conversation also touches on defensive investment strategies, including the use of ETFs, bonds, and alternative investments like gold and credit, stressing the need for a long-term approach and understanding the risks involved.
Finally, they address questions about investment timing and strategies, advocating for staying invested and the psychological aspects of investing. They caution against margin lending due to its risks and suggest using property equity for investment purposes instead. The speakers emphasize the importance of aligning investment strategies with personal values and long-term goals.
Key Points:
- Invest in education and learn on the job for long-term benefits.
- Hold onto winning stocks and understand market dynamics for better returns.
- Choose superannuation options based on personal goals and comfort with control.
- Consider defensive investments like gold and bonds for portfolio stability.
- Avoid risky margin lending; use property equity for safer investment leverage.
Details:
1. 🌬️ Seasonal Changes & Pre-recording Notice
- Drew Meredith notes the onset of winter, highlighting the seasonal transition and its effects, such as morning chills.
- The segment addresses listener questions related to investment strategies, specifically comparing self-managed super funds (SMSF) with traditional high growth options.
- The episode is pre-recorded due to upcoming travel and family commitments, which might cause discrepancies in discussed numbers by the time of listening.
- Listeners are informed about the pre-recorded nature to manage expectations regarding the currency of the information shared.
2. 📚 Insights into Successful Investments
- Education is a foundational investment, but practical on-the-job learning often surpasses academic education.
- Holding onto winning investments can be a double-edged sword; it's important to know when to sell.
- The speaker made substantial gains on a stock (zip) from $2 to $10 but also faced losses when it dropped back to $2, highlighting the volatility of investing in individual stocks.
- Long-term winners in the speaker's portfolio have predominantly been global equities, suggesting a diversified approach with a focus on international markets.
- The speaker's investment strategy includes a mix of mid and small-cap stocks and a core of active or ETF investments, akin to an 'everything portfolio'.
3. 💼 Portfolio Highlights and Winning Strategies
- Palo Alto Networks has been the most successful investment, growing 4-5 times the original investment in the last 12 months.
- The investment decision was influenced by a US podcast, leading to further research and ultimately purchasing shares.
- Palo Alto Networks specializes in cybersecurity, focusing on securing networks for large enterprises.
- Transitioning from this success, future strategies could involve exploring similar high-growth sectors influenced by emerging technologies and market needs.
4. 📈 Navigating Tech Investments and Market Trends
- The company's stock has surged by 53% over the past five years, reflecting robust growth and investor confidence.
- With a market valuation reaching $121 billion, the company holds a formidable position in the tech industry.
- The stock price has increased fivefold over three years, demonstrating exceptional investment returns.
- In the context of market trends, The Trade Desk is highlighted as a critical player, emphasizing its influence and potential in the current market climate.
- To capitalize on these trends, investors should consider the company's strategic positioning and market dynamics influencing tech investments.
- The ongoing digital transformation and advertising technology advancements are key factors driving the company's growth.
5. 📉 Understanding Market Fluctuations
- Targeted advertising opportunities exist for specific demographics, such as viewers of Bridgeton on Netflix aged 40-60, enabling precise marketing strategies.
- Two global tech companies involved in automation and AI were acquired around 2019-2020, highlighting a trend in tech industry consolidation.
- The Australian dollar has been declining against the US dollar, impacting international pricing and market dynamics.
- A notable market event was a massive selloff where a stock dropped from $120 to $60, indicating significant volatility.
- The acquisition trend in the tech industry suggests strategic moves towards automation and AI capabilities.
- Currency fluctuations like the decline of the Australian dollar require businesses to adapt their international pricing strategies.
- Stock market volatility is exemplified by the rapid decline in stock value, which necessitates risk management strategies.
6. 💹 Managing Portfolios: Tools and Techniques
- Trade Desk shares were sold at $16, showing a significant increase to $67, highlighting a notable growth trajectory.
- Shares of Trade Desk, initially at $5 in 2016, surged to $107, marking a 25x return, demonstrating effective investment strategy.
- Currency fluctuations have played a role in making Trade Desk the second-best performer in the portfolio, despite some declines.
- The Monroe Global Growth Fund, with a focus on technology, consistently generates distributions, reflecting its long-term investment potential.
7. 🧠 Lessons from Global Market Experiences
- Access to Hub 24 requires being an advisor, limiting direct investment for individual investors.
- Investing in a company since 2017 resulted in a 36-37x return, demonstrating the potential of long-term investment strategies.
- The company secured the Mayo Clinic as a client with a pay-per-use model for its radiology software, increasing revenue per scan.
- Australian tech firms like Afterpay succeeding overseas underscores the importance of evaluating genuine market traction over acquisitions.
- A long-term holding strategy yielded significant returns despite recent market volatility, highlighting the importance of allowing investments to mature.
8. 🔍 Analyzing Market Predictions and Strategy Adjustments
- Investments in tech giants like Facebook, Apple, and Google have yielded significant returns, with these companies serving as 'multi-baggers.'
- A notable investment in ING Bank, identified as a value pick, saw its stock rise from 5-7 euros to 8 euros, showcasing effective strategy in the banking sector.
- RPM Global, an Australian mining services company, has shown strong performance, validating predictions in the mining industry.
- Alum has reportedly provided a 4x-5x return on investment, exemplifying robust performance and strategic foresight in its sector.
- Netwealth is highlighted as a major success story, underlining the impact of strategic early-stage investments.
- Software companies like Zero have been significant contributors to portfolio growth, emphasizing the scalability and success of tech businesses.
- Past investment recommendations have consistently underscored tech and software companies as key contributors to substantial returns.
9. 💡 Choosing Between SMSF and Super Fund Options
- Consider investing in hyperscaling tech businesses, such as Salesforce, despite potential risks, as there is significant money to be made.
- Always consult a licensed and trusted financial planner to tailor advice to your specific needs, goals, and objectives.
- When deciding between a self-managed super fund (SMSF) and a super fund's high growth option, understand that both have their merits and considerations.
- The decision to invest in an SMSF or a super fund like Australian Super should account for personal investment control preferences and growth potential.
- For a deeper understanding of retirement investment options, refer to podcasts or resources by experts like Beck Wilson.
10. 🔄 Superannuation Strategies: Costs and Benefits
- There is no single superannuation solution that fits everyone; choices should be based on personal comfort and financial goals.
- Superannuation options include industry funds, self-managed super funds (SMSF), and platform funds, each offering different levels of control and transparency.
- Industry funds may not provide detailed insights into individual investments, which can be a concern for retirees seeking transparency about returns.
- Platforms like Cup 24 or BT offer a middle ground between SMSF and industry funds, allowing for personalized investment strategies within the superannuation environment.
- Individuals can achieve similar investment strategies across different superannuation structures, focusing on their priorities and objectives.
- Member direct options within industry funds allow for more control, resembling a self-managed approach without the full commitment to an SMSF.
- Industry funds are typically simpler but lack the investment detail that some retirees desire, leading them to explore other options.
- Self-managed super funds provide maximum control and customization but require significant time and expertise, which might not be suitable for everyone.
- Platforms provide a balanced approach, offering some level of customization without the complexity of SMSFs.
- For those seeking control without full self-management, member direct options within industry funds offer a compromise, allowing for more personal investment decisions.
11. 📜 Defensive Strategies in Alternative Investments
11.1. Fee Comparison in Investment Options
11.2. Insights from SPACs and Retail Investments
11.3. Defensive Investment Options
11.4. Characteristics of Defensive Alternatives
11.5. Credit as an Income Alternative
11.6. Investment Vehicles Beyond ETFs
12. 🔒 Risk Management and Investment Diversification
12.1. Investment Strategies for Low Volatility
12.2. Commodity Trading Advisors (CTAs)
12.3. Alternative Investment Options
12.4. Investment Timing and Strategies
13. 🕰️ Timing Strategies in Investments
- In a study simulating five investment scenarios: buying on the lowest day of the year yielded the best results, but dollar-cost averaging and immediate investment achieved about 90% of the best timing results.
- The key takeaway is to stay invested regardless of timing, as consistent investment in major indexes like the S&P 500 has shown similar returns over time.
- For large investments, spreading the investment over time can mitigate the psychological impact of market volatility, reducing panic-driven decisions.
- Emotional responses, rather than financial calculations, often drive poor investment decisions, highlighting the importance of comfort and emotional stability in investment strategies.
14. 👨👩👦👦 Community Engagement and Financial Advice
- Beginners should start investing with as little as $10 to gain practical experience over a few months using platforms like Raiz or Sharesies, ensuring a gradual learning curve.
- Approach investing by taking 'baby steps' to build a strong foundation over time rather than rushing into large investments.
- The community portfolio, known as Dizzy Rascal, is currently underperforming, but there is optimism for a future turnaround based on strategic adjustments.
- Exercise caution with margin lending due to its high-risk nature, particularly when used for property purchases, as it can lead to significant financial exposure.
15. 🏦 Margin Lending Explained
- Margin lending involves borrowing funds to invest in stocks or ETFs, typically secured by the investments themselves. Investors may receive loans for up to 80% of the investment's value, requiring them to maintain a margin buffer.
- A key risk is that if the value of investments decreases, investors may need to inject additional funds or liquidate assets to maintain the required margin ratio.
- Margin lending is often seen as expensive and less flexible compared to using property equity for investment loans.
- An alternative to margin lending is borrowing against home equity, which tends to offer more flexibility and fewer restrictions. This strategy can be more advantageous for investors looking to leverage their property for investment purposes.
- A personal example illustrates the use of an equity release from a home loan to invest, highlighting the benefits of using property as security rather than relying on margin loans.
16. 🏠 Property Investment Using Margin Lending
- Margin lending in property investment is highly risky and often inefficient due to property being an illiquid asset, making it difficult to quickly recover invested funds if needed.
- Interest rates on margin loans can reach up to 10%, necessitating a return that exceeds this rate post-tax adjustments for the investment to be financially viable.
- Traditional margin lending is not conducive to long-term financial strategies, unlike debt recycling or equity release, which are seen as more prudent and sustainable options.
- The speaker's organization strategically avoids margin lending, highlighting a preference for more sustainable financial practices.
17. 🎁 Audience Interaction and Giveaways
- Promotional giveaways include a free book titled 'The Golden Years: How Not to Stuff It Up' by Drew Meredith and Jamie Nus, aimed at engaging the audience.
- Encouragement for audience interaction through humor and casual conversation, as demonstrated by the inclusion of a light-hearted joke.
- Call-to-action for viewers to like and subscribe to the channel, emphasizing daily content on business, finance, and investing to increase audience engagement and retention.