Written by: Matthew L

December 28 2021

Peters interview on Livewire markets was great.

What Peter looks for in a business to invest in (as a former Chartered Accountant):

Good balance sheet with low debt.

Companies tend to overstate balance sheets now and talk regularly to the market, 20 years ago they tended to understate assets and not talk to the market.  This could be a result of continuous disclosure requirements, however, Peters point is more about pumping the upside rather than trying to obscure the downside.

Past good companies Brambles, Reece, Soul Pattinson, Brickworks.

Central banks holding bonds.  How can ECB and BOJ taper from here?   Effect if banks taper, keep rates zero where do we end up, we must have inflation

In the overall market beware of ‘everyone being on the same side of the boat’

Look for good stocks in a sector that is out of favour

Discount to NTA, trading at 80% of NTA, management is sound and not a lot of debt eg Reef Casino Trust (Peter has visited and largest shareholder owns 65%)

NTA backing

LICs trading at a 15%-20% discount to NTA – wait for sentiment to change

You don’t have to swing the bat every day or bet on every race, waiting for the right opportunity is better.

Lots of money going into illiquid private equity markets.

Favourite books, One up on Wall Street Peter Lynch turn over the most rocks and Zero to One by Peter Theil.

Alumina, RIO tried to buy at $7 now it’s $1.50.

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