Simon Marais Quotes
123 Simon Marais Quotes
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[In April 2014.] If you say what was one of the best areas you could have invested in for the last thirty or forty years, it would probably be tobacco. And the worst area you could invested in was probably something like flat-screen TV’s which have had massive growth but a lot of competition.
Simon Marais
[In April 2014 on shareholder activism with superannuation funds.] If you really think about it, it’s your money, your super money that’s invested with these fund managers. And if they put your money in a company and management does not do their best with those shares or they take too much of the profits for themselves - you should be vocal! Otherwise you’re failing in your duty to your investors.
Simon Marais
[In April 2014 on contrarian investing and activism sometimes going hand in hand.] Often the share’s cheap precisely because management has made some errors. That’s probably one of the most common reasons why a share will be cheap.
Simon Marais
[In April 2014 on looking for a good company board of directors.] That’s really difficult to do but what you look for is actions on the little things. Warren Buffett calls it the cockroach approach and if you see one cockroach in the kitchen, it doesn’t help to stamp on it and think that things are clean. I think it’s the same with companies. If you see a company that pay’s it’s CEO too much, or has lax policies as far as money to themselves go (the directors) you’re often worried because that’s the one point where you know it’s really your interest against often management and the board’s interests. And if they don’t act properly there, they are probably unlikely to look after your interests in other respects.
Simon Marais
[In April 2014.] Just look for what’s down. I think that Metcash is down and out and has no more friends.
Simon Marais
[In April 2014 on whether he was buying into mining stocks like BHP with the start of the downturn.] It’s probably a little early, because they had a fantastic 9 or 10 years. And now they’ve had a false 18 months or so. That’s too short, normally these down cycles take 5, 10, 15 years and you’re probably just into the first bit of it. So I’m a bit wary yet - they’re not yet deeply disliked. People still see hope.
Simon Marais
[In June 2014.] Try to shut out the noise and realise that you make a long term investment.
Simon Marais
[In June 2014.] Before I got involved in fund management I used to be a theoretical physicist. The problem with physics is the universe never changes and so most of the easy discoveries have been made. It’s become so difficult to find something new. The nice thing about fund management is that there’s constantly something new.
Simon Marais
[In June 2014.] I think if you find an investment that clearly 50 other people have looked at and they’ve all missed, and you’re the first to see it, I think that gives one a real thrill of excitement.
Simon Marais
[In June 2014.] Now you may think it’s easy to be contrarian. It is very difficult. By it’s very definition I think we’re all herd animals. We want to do what everyone else does. Who wants to wear green when the fashion is blue?
Simon Marais
[In June 2014.] Invariably the opportunities are where other people aren’t looking, because if they were already looking there and coming to the same conclusion, the price would be higher.
Simon Marais
[In June 2014.] I would love to get great returns every three months and string that together, but I don’t think that’s possible. You have to look at a lifecycle of a company and that lifecycle is five or ten years at the very least.
Simon Marais
[In June 2014.] Anybody that’s alive today that’s below fifty will probably live at least another forty or fifty years. That’s just the way life expectancy goes. So invariably your investment horizon is very long. Probably for 90% of people at least forty years or more.
Simon Marais
[In June 2014.] Try to shut out the noise, and realise you make a long-term investment.
Simon Marais
[In June 2014.] Try to stick to those things that are true or that you know that can be predicted.
Simon Marais
[In June 2014 on avoiding value traps.] You can try to avoid them, but if you are honest you’re going to be hit by some of those. And that’s the great truth about investments, there’s nothing you can do that guarantees success. What you can do is on average you can be successful.
Simon Marais
[In June 2014.] I think if you look at the best fund managers in the world, over time they probably have a hit rate of about 60%. Which means 40% of the time they are actually wrong they get caught in some sort of value trap.
Simon Marais
[In June 2014.] The stock market will always have these wild gyrations. And somewhere in your investing career - if you are a long-term investor, you’re going to lose half your money. That’s the risk. And the critical thing is not to sell-out during those critical periods.
Simon Marais
[In June 2014 on the shortest time someone should look to invest with him.] Five to ten years at the very least. There are remarkably long cycles in the stock market.
Simon Marais
[In June 2014 on key person risk.] I’ll definitely be around. The big thing for me is to make sure I bring through enough people that carry the expertise forward.
Simon Marais
[In June 2014.] We will be wrong at least one in three.
Simon Marais
[In June 2014.] When you deal with investments it’s not about a sure thing, it’s about statistics.
Simon Marais
[In June 2014.] We always try to stay as rational as we can and are scientific about how we do things and not get swayed by all the emotions and noise in the market.
Simon Marais
[In June 2014.] We can be contrarian. It’s very tough in a big institution to be contrarian because if you’re wrong you can lose your job. And that’s what fund managers fear above all.
Simon Marais
[In June 2014.] Time is your great friend in the stock market.
Simon Marais
[In June 2014.] You’re better not to go with the consensus.
Simon Marais
[In July 2014.] Most director elections are a routine affair with an outcome more akin to a North Korean leadership contest than to the democratic process that we are used to in Australia.
Simon Marais
[In July 2014.] The majority of Australian fund managers would rather sell their shares in a company than attempt to spill a board or push for a management change. This may be fine in theory, but the sharemarket price usually captures this negative view of the board and management and the share price will trade well below the fair value for the company under proper management. Without shareholder action this problem never gets addressed.
Simon Marais
[In July 2014.] As long-term investors we are confident that the sharemarket will eventually be rational.
Simon Marais
[In July 2014.] We do not think of ourselves as activists but we are prepared to speak up when an action is taken that, in our opinion, clearly prejudices our clients’ interests.
Simon Marais
[In July 2014.] Current investment markets leave slim pickings for investors. Sharemarkets (other than Australia's) hit new all-time highs almost daily, interest rates are at historical lows and property is certainly no bargain. The probability of double-digit real returns over the next five to 10 years is very low.
Simon Marais
[In July 2014.] Sharemarkets are volatile and you can easily lose half your investment in the short term.
Simon Marais
[In October 2014.] That’s actually the biggest mistake you can make. When the market is down, everybody will tell you to sell. When it’s high, everybody will tell you to buy. They don’t understand that the market is down or up precisely because that’s what everybody is doing.
Simon Marais
[In October 2014 on recent volatility.] What’s happened is we’ve had a big down-draught and that’s been enough for some people to sell. We always have these ups and downs, these extremes. It’s what makes the sharemarket so interesting. But if you want to get killed, change your strategy. Because the moment you decided to do that is invariably the wrong time.
Simon Marais
[In October 2014 looking back on purchasing AusNet Services and electricity company that had a court case due to it’s role in the Black Saturday bushfires but in fact was fully insured.] Nobody wanted to touch it. It was really disliked in the market. But you could buy it on a yield of 10 percent and it was one-third franked. Sure, it might take four or five years to recover, but in the meantime I’m getting 10 percent each year just to hold it.
Simon Marais
[In October 2014 on Woodside Petroleum.] I really like Woodside Petroleum. It’s unexciting and that’s maybe why people don’t like it so much. It’s a big stable business and paying 7 percent fully franked dividend. The benefits of franking are enormous, I’m surprised people don’t make much more of it, to be honest.
Simon Marais
[In October 2014.] In each sharemarket transaction there is exactly one buyer and one seller. For every purchase or sale of a share that turns out to be an inspirational decision, there is some poor individual on the other side of the transaction that either misses out on making a fortune or ends up losing his shirt.
Simon Marais
[In October 2014.] Since the sharemarket is almost wholly controlled by large investment funds selling shares to each other, the success rate (and the failure rate) of the average fund manager must be approximately 50%. Most fund managers believe they are special, but the raw mathematics is simple - for every sharemarket transaction winner there has to be an equal loser.
Simon Marais
[In October 2014.] There is ample evidence to show that with a success rate of only 60% a fund manager will add 4% or 5% per annum to the returns of his portfolio. This will be more than enough to ensure the fund is performing in the top few percent of funds over periods exceeding five years.
Simon Marais
[In October 2014.] If a company is widely disliked by the market and most analysts agree that its prospects are poor, these expectations will set the share price for the company at a depressed level. Since the future is more unpredictable than most people appreciate, there is a decent chance that things may not turn out so badly after all. In that case the upside can be quite substantial as prices re-adjust to incorporate slightly better expectations.
Simon Marais
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