I’m Philip Bish and I recently joined the Intelligent Investor research team as an analyst. I want to take this opportunity to introduce myself and tell you about my investment philosophy.
It was about 20 years ago that I began my investment journey, buying shares in a number of high profile public floats. As someone who has always been interested in mathematics and finance I quickly became fascinated by investing and spent every available hour studying companies and their financials.
Adopting value investing as my investment philosophy was a natural step, as I could see quite clearly the logic of buying stocks at prices less than their intrinsic worth. It was at this point that I read my first book on Warren Buffett and I discovered the incredible success that Berkshire Hathaway (NYSE:BRK.A) has had over many decades.
Years later I am still reading as much on Warren Buffett and his business partner Charlie Munger as I can. I have studied in depth the thinking behind Charlie’s ‘Latticework of Mental Models’. These are the big ideas from across multiple disciplines that shape Charlie’s decision-making process.
Two months ago I had the privilege of making my first pilgrimage to Omaha for the Berkshire Hathaway AGM. At the Berkshire shopping day, I was able to see first hand the quality of the companies that Buffett and Munger have assembled. I was also captivated by the six hours that Buffett and Munger spent answering questions from their shareholders.
Good and bad calls
Like anyone who's been investing for a while, I’ve made both good calls and bad calls.
One of my best calls was buying into a small funds management company called Clime Investment (ASX:CIW) during the depths of the GFC. The shares were selling at $0.18 despite the company owning $0.40 of net tangible assets (NTA) and a profitable funds management business. The NTA consisted of cash, shares in listed investment company Clime Capital (ASX:CAM) and shares in a profitable business. The share price soon moved above NTA and I've also received accumulated dividends that have well exceeded the initial purchase price.
My biggest investment mistake was with Magellan Financial Group (ASX:MFG). Several years ago I purchased a significant number of MFG shares at around $1.60 but then sold them months later for a similar price. They're now selling for around $22.00.
I often reflect on why I sold these shares. I did so because I just had an irrational fear of a significant downturn in global sharemarkets, which of course hasn’t happened. The experience serves as a reminder that temperament is of vital importance in investing.
One of Charlie Munger’s philosophies that I subscribe to is that of being a lifetime learner. By continually reading and learning about investing, you can’t help but become a better investor. I’m delighted to be working for the Intelligent Investor research team, where I can further this goal and share my experiences along the way.
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Disclosure: the author owns shares in Clime Investment, Clime Capital and Berkshire Hathaway.