ANALYSE THIS: Bellwood Capital’s David Nathanson
We analyse David Nathanson, global equity specialist at Bellwood Capital
If someone came to you tomorrow with R100m to invest in just one company, which would it be?
IGG Inc — a high-growth, high-yielding mobile gaming company trading at a low nine times earnings. In addition to being very profitable and cash generative, it has a clean and simple balance sheet with no debt. This combination of quality and value is rare.
Which talent would you most like to have?
To understand any language.
If you could turn back time, what would you change in your life?
I have no major regrets. A broken leg kept me out of sport for my first two years at high school — something I was really looking forward to at the time.
If you found a lottery ticket tomorrow that had won $100m, what would you do with it?
I’d invest more, travel more and give more. Hopefully I’d still be driven to achieve more — there is satisfaction that comes from working for something instead of just receiving it.
What is your greatest extravagance?
I’m not particularly extravagant, but I enjoy everyday things like good food, coffee, Scotch, restaurants and so on. Quality over quantity, though I’ve been guilty of having both at times.
What’s the best investment you’ve made?
In shares, probably NetEase in 2013, or Apple in 2016. In myself — during Bellwood Capital’s first years, I was very fortunate to be in a position where I could spend all my time thinking about investment from first principles, without the immediate pressure of making money. Our first goal was to develop thought leadership and a worthwhile investment process, which would be more marketable in time. I’ve probably done my 10,000 hours in this field, which has given me a far better understanding of investment than I could have achieved elsewhere.
What’s your favourite song?
The Beatles’ Hey Jude.
Do you own bitcoin or any other cryptocurrency, and why?
No. I don’t believe that any currency, crypto included, can sustainably generate wealth. It can only transfer existing wealth from one to another. The only reason I hold currency is as a short-term store of value to facilitate real transactions and investments. I have no expectation that holding any type of currency will make me wealthy over time.
What is your most treasured possession?
I don’t own anything irreplaceable. I get the most out of my coffee machine and my mountain bike.
What’s the worst investment you’ve ever made?
A few months into my first job I "invested" in a warrant that was short the market in 2009. There was no process, I just listened to the popular stories at the time.
On what occasion do you lie?
Every night when I go to bed. Sometimes on the couch.