The people behind the process
Continuing my ongoing series of interviews with Montgomery investment staff, where I lift the lid and see what makes the people behind the process, the blog posts and the numbers tick. I catch up with our newest senior analyst – Joseph Kim who joined the domestic equities team recently.
Profile: Joseph Kim
What initially drew you into funds management?
I’ve been fascinated by the concept of buying and selling things from an early age, ever since playing monopoly. The stock market was something I became interested in later on though, and it wasn’t until starting my M&A job (in Soul Pattinson) that I really became interested in the market. E.g. reading broker reports. While doing a stint in research, I realised I wanted to be the one making decisions on what to invest in, rather than advising people on how to manage their money.
What makes a successful investor?
I read something recently on what made Stanley Druckenmiller such a successful investor, which I think sums it up perfectly – mental flexibility, independent thinking, competitiveness, inquisitiveness and self-awareness. And I’ll add one more thing – an element of patience.
What is the best piece of advice you have been given?
From an investing perspective – I had an interview recently with one of Australia’s most prominent investors, which whilst not direct advice did serve as such, bit of a seminal moment. In summary, his point was that a good / natural investor analyses businesses, not just share prices.
I think that’s a very important in today’s market, where there is so much information and noise analysing what share prices are doing based on short-term profit and loss statements, rather than analysing the underlying businesses that we are investing in. Not to say you can’t generate returns doing the former.
What is the biggest mistake that most investors make?
A lot of anchoring bias, which can take various forms – a desire to lock in profit by comparing the current price to their entry price, or an aversion to selling at a loss. When the facts change, you need to have the mental flexibility to adapt with it.
Also, these days – feeling like action is better than inaction because investors feel they are “doing something”, when often it is an overreaction based on the news of the day and is better to do nothing.
If you weren’t an Analyst at a boutique funds management firm, what would you most likely be doing?
An analyst at an institutional funds management firm? I personally think this is one of the most rewarding careers out there. If I wasn’t working in markets, I’d probably look at further studies with a view to becoming a teacher of some sort.
So Joe, can you please share with our readers what you are working on at this minute and why?
Sydney airport – a monopoly asset that scores quite well on our quality metrics. The company has done a great job in rewarding its shareholders through various initiatives especially on the retail and property side of the business. I want to assess whether the current share price undervalues the possible upside in passenger growth from new destinations, especially out of China.
What do you do in your spare time?
A lot of sport – I just had a competitive basketball game last night, and will probably go to the gym later tonight. Reading where possible, and I keep a busy social calendar. Travelling, whether it’s to meet friends and family, or to go somewhere I haven’t been before.