The people behind the process
In my ongoing interview series of Montgomery Investment Management staff, I spoke to Head of Research and Portfolio Manager Tim Kelley, in order to lift the lid and see what makes the people behind the process, the blog posts and the impressive numbers tick.
Profile: Tim Kelley
What is the best piece of advice you have been given?
Never allow a credit card bill to go unpaid. The interest rate is eye watering.
What makes a successful equity investor?
There are many different ways of being a successful investor. One of the most important attributes that all investors need is an ability to be dispassionate about investments – to make decisions based on the facts, and not to be discouraged when bad luck undermines an otherwise good decision.
What is the biggest mistake that most investors make?
Looking in the rear view mirror and thinking they are seeing the future. When the market falls hard, a good investor should be thinking about the future value now on offer. Most investors focus on the pain they have already felt, and feel a strong urge to get out. The opposite problem arises when markets have been rising strongly.
What has been your best investment?
I stretched myself financially to buy property in the mid 90’s, simply because I wanted a place to live. That turned out – through blind luck – to be a very fortunate decision.
Luck probably plays a decisive role in the best and worst investments every investor makes. Because of luck, even good decisions can work out badly, and bad decisions can pay off handsomely. It’s hard for an investment to deliver spectacular returns without the tailwinds of chance. It’s surprising how often people lose sight of this. The key to successful investing long-term is to get more right than you get wrong, not try to hit the ball out of the park. “Sure things” only exist in hindsight.
What worries you most about investing at the moment?
The Montgomery Fund has had a very successful first few years, and being able to repeat that performance over a long time frame is a daunting challenge. I worry that investors may have become accustomed to the good times, and confidence will be tested in tougher times ahead. Having said that, a strong start to the Fund’s life is not a bad problem to have.
If you weren’t an Investor, what would you most likely be doing?
One of the things I love about investing is the ability to debate interesting ideas with smart people. If I weren’t in the finance world I think I’d enjoy scientific research. Either that or working my way up the rankings in the World Surf League.
What do you do in your spare time?
Time with the kids is usually a priority on the weekends. Also, I’m a beach dweller, so weekends and holidays often have a surf angle to them.
What’s your favourite investment quote?
“If you light a match in a dynamite factory and live to tell the tale, that doesn’t mean it was a good idea”