We analyse Nic Norman-Smith, chief investment officer at Lentus Asset Management.
If someone came to you tomorrow with R100m to invest in just one company, which would it be?
Berkshire Hathaway. It may sound clichéd, but if forced to concentrate such a hefty sum into just one business, one needs a globally diversified portfolio of businesses, run by very able management teams and priced attractively. With current market valuations, not even Berkshire is particularly cheap, but the discount is reasonable enough. If I were restricted to the local market, Remgro has some similar attributes and the valuation is very attractive at present.
What’s the worst investment you’ve made?
Investing in Aveng. Sometimes the negative sentiment is justified, and the value share just becomes a value trap. These “obvious” mistakes are an occupational hazard, but the risk of looking like a fool every now and then is more than compensated for by the winners. It still hurts, though.
What was your first job?
While at university, in the midst of the dot-com bubble, I moonlighted as a sports writer for a website called Sportal. I ended up running the commercial side of the business on a full-time basis once I’d finished my degree. It was my first insight into the manic nature of markets. Even at that young and inexperienced age, I could see that the hype and valuations placed on these businesses simply didn’t stack up when compared with the cash flows being generated.
If you could turn back time, what would you change in your life?
We are who we are due to our collection of life experiences, learnings and mistakes. I’m not sure I’d like to change that. However, if I were going to turn back time, I’d definitely pick up a healthy allocation of Amazon in its initial public offering (and leave myself a whole lot of reminders to hold when it drops 90% in the early 2000s).
What’s the best investment you’ve made?
Investing in American Express shares during the 2008/2009 financial crisis. They traded as low as US$10 and are now more than $90.
What’s your favourite song?
Anything by Depeche Mode.
Apple or Samsung?
Apple as a consumer; Samsung as an investor. Samsung has a more diversified set of businesses, albeit not as exciting as Apple.
How much was your first pay cheque and what did you do with it?
It was probably about R1,000, for my part-time work while I was a student. I’m pretty sure I spent it on beer and steak with my mates.
What travel experience is on your bucket list?
A tour to the Arctic to see the polar bears, followed by a few weeks on the Trans-Siberian Express.
What was your last purchase?
Dan Ariely’s latest book, Dollars and Sense. Anything written by this behavioural economics genius is fascinating reading.
Do you own bitcoin?
No. A hugely popular, little understood asset/currency/commodity that is “sure to take over the world” and has experienced stratospheric growth is not an environment conducive to investment bargains. Perhaps I’ll look silly in a few years, but it’s a chance I’m willing to take given the downside risks.