PAUL MCBETH – a personal what are you investing in and why?

With the launch of our new interest register to give you a single source of truth on what we’re invested in, which associations we’re aligned with and our status as an inner-city renter, it seems only natural to revive our attempt to launch a regular series on what people are investing in and why.

I’ve long held the belief that having skin in the game is a strong incentive to work hard and build wealth, pestering the late Jonathan Underhill incessantly for equity in BusinessDesk’s former publisher.

That became an astonishing success in the umpteenth transformation of Content Ltd when the late Brian Gaynor came on board in 2019, with the sale of the high-flying financial news service to NZME in 2021.

Needless to say, I’ve got a material exposure to – and big ambitions for – the Curious Media group of companies.

The Bottom Line seeks to tap into that growing hunger among retail investors to arm themselves with a bit of straightforward news and information as their portfolios become increasingly important to them and provide a bit of juicy tidbits for the big end of town in our weekly Dealmaker newsletter. Meanwhile, Curious News is testing the waters to see whether a traditional wholesale agency news service can actually survive among a fractious media sector.

And while I can wax lyrical about news and media at length, that’s the extent of my direct personal exposure.

More measured?

My investment decisions have tended to come more slowly.

It took me about five years to switch my KiwiSaver provider Milford Asset Management’s active growth fund from the default Tower fund I was initially bundled in – and that was spurred on by Fisher Funds’ acquisition of Tower’s asset management arm, rather than shaking off the inertia of actually following through on what had been fairly long-held intentions back in 2014.

Similarly, it took me a couple of years to actually put my share of the BusinessDesk sale to work.

My KiwiSaver is still with Milford – not that this solo business operator is currently making regular contributions – and I also have separate material holdings Milford’s active growth and aggressive funds.

The wisdom of Salt Funds Management’s Matt Goodson was key to me investing in Salt’s long short fund. I’m of the view that taking short positions – where an investor borrows stock to sell it and buy back at a lower price to pocket the difference – is a useful tool in keeping market pricing sharp, as opposed to an act of war on a company that someone doesn’t like, and Goodson is very patient when he’s got conviction in those long positions.

And while I still lean towards active management and their higher fees, I do have an investment in the passive Smart S&P/NZX 50 exchange traded fund.

Opportunistic buying

None of my individual stocks are material in their own right, although collectively my investments in NZX-listed companies make up about a tenth of my portfolio, with Tower the biggest within that.

All of those investments were largely made on my view that they were undervalued at the time.

Rakon had the aborted takeover bid implying a much higher value, Bremworth had a ton of insurance money coming in the door, Allied Farmers had attracted Waterman Capital’s directors to build a stake, Vista Group International, NZX, Tower and Mainfreight were trading at a low ebb while Geneva Finance, Kiwi Property and Stride Property were trading well-below their net tangible assets.

WasteCo was a small speculative investment, where my hopes of a turnaround get slimmer every time I think about it.

Writing about these companies does make me highly cognisant of not spruiking my own book.

Last year, I told Frances Cook about when I noticed how cheap Mainfreight looked as I was reporting on some analyst reports, and that it was a bit on the nose to do anything with that. It was two months later before I bought a few shares on market.

That’s largely behind our disclosure policy’s two-week cooldown period either side of publication. I can say that a good yarn trumps everything until the cows come home, but there’s got to be something to keep us accountable

Crypto’s among the investments I steer clear of. I can wrap my head around how distributed ledger technology has a bunch of useful applications, but I struggle to see how various coins retain a store of value – even if I keep toying with the idea of using some kind of local currency-backed token as a means to provide prepaid access to news.

And residential property is another I struggle with. I’ve previously owned a house, but for me it’s more about having a home to live in that building equity in bricks and mortar – much to my personal detriment having missed out on the booms of the 2000s and 2010s.

Self-reporting by Paul McBeth. Image from Curious News.