This month, NZ Shareholders’ Association member Jeanette Miller describes in her own words her investing style and journey, and shares her favourite advice.
“I am not your average investor. I don’t class myself as a good role model as I tend to fly by the seat of my pants and hope for the best. This approach works well for me as I don’t put at risk any money I can’t afford to lose.
“I class myself as a ‘collector’ rather than an investor. I am slightly risk averse and as a result take calculated gambles or punts with my investments. I tend to hold my collection of investments for the longer term although when I see red flags I am happy to offload. Sometimes that ‘offloading’ should have happened sooner but it is always easy to say this in hindsight.
“I participate in KiwiSaver (only because it seemed like a good thing when it was introduced in 2007). I have also provided funds for several start-ups and I am currently researching a few others. Like most things in life your needs and wants change as time passes. My investment journey has been no different. What I ventured into when I was young would most likely not be something that would interest, excite or I would consider taking on today.
“As a child, I recall my father saying to me: ‘You either work hard when you are young and able, or work hard in your later years when you are not so able.’ I also learnt very early that it was not what you earned but what you did with those earnings that mattered.
“Term deposits were the starting point of my investment journey, followed by managed funds (sold by the same bank who held my term deposits). From memory my returns from managed funds were not that great – hence my foray into the “do it yourself” approach.
“When I first started buying shares, I would simply scan the share prices in the daily newspaper, looking in particular at the 52 week high and 52 week low price, and then I would compare those prices to the latest sell/buy price. I would then buy when the latest sell/buy price was fairly close to the shares’ 52 week low. As a result I bought lots of ‘penny dreadfuls’, but that was probably more because I was not confident about spending up large. When I look back it was more about quantity rather than quality!
“Over the years my modus operandi has changed and I now look at the annual reports, the organisation’s governance, liquidity (‘can I sell the shares easily should I need to?’), who is running the show (Board and CEO), and the company’s growth prospects.
“I also keep a lookout to see who or why someone is selling their shares. I tend not to participate in IPOs as I can generally pick these up cheaper on the market once the company has floated.
“Investments that interest me now are ones that ideally benefit society or the environment, and have good governance. They encompass organisations or leaders who are visionary. These organisations rarely have to make excuses for non-performance.
“And on the other side of the equation I tend to stay away from stocks where the industry is heavily regulated, prone to government interference, have not adapted to change, have sudden increases in audit fees, high impairments following acquisitions, pay excessive remuneration to executives regardless of performance and where the strategic direction is not obvious.
