The London South East, Investing Matters Podcast, Episode 12, Mark Dampier, the former Research Director at Hargreaves Lansdown

LSE 00:01

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Peter Higgins 00:17

Hello and welcome to the Investing Matters Podcast.

My name is Peter Higgins and today I have the privilege and honour of speaking with Mark Dampier, the former research director at Hargreaves Lansdown.

Mark retired in 2020, after nearly 40 years in the industry, and 22 years at Hargreaves Lansdown. Prior to that he works at Whitechurch Securities, and he set up IFA Churchill Investments.

Mark, you're semi-retired now, essentially, but you're still doing a lot of work in the industry. Welcome to the Investing Podcast.

Thank you ever so much for coming on the podcast with me. And I want to start really with yourself in a sense of what have you learned the most I'm going to start with you've been in the business for 40 years, and you've got so much and you're helping so many people now you've got other podcasts going on.

So I know that you're you do this other stuff where you're asking questions in your people opposing deliberations to you and you're going, oh, you know what, maybe this is a salt situation to go on?

Mark Dampier 01:12

Well, that's a deep question to start with. What have I learned was actually what I've learned is you keep learning, there is no stop, which is why I'm actually very active on Twitter, people say to me, Oh, why on earth you on this, because you know what it's like, if you're on Twitter, it's a bit like the hanging mob sometimes.

But there are some very good people on there, you know, IFAs, fund managers, economists, and you know, they actually talk to you on Twitter, and a lot of them are really good, they come back to you. And so you learn lots more.

And so I think that's the biggest thing that you just you just don't stop, I could pat away my way through the stuff that everyone's heard. But it's still the same. I mean, the most important thing is patience. And people aren't patient. Investors are patient, I would say the media don't make me patient. They talk a long term story, but their business model is inherently short term. And the Internet has done lots of good things, but lots of damage as well, because the information flow to investors is enormous. And it's highly emotional. And emotions and investment just don't work well. So loads of my mistakes in the past have been emotional ones from a personal portfolio. And I think why the hell did you do that? You idiot. You didn't need to do that.

Why did you just leave it alone? So I often say to people, at times of crisis, switch off the screen, go and play golf, or do whatever you do fishing a thing, but stop looking at all the news. I mean, have a look at it occasionally. But you just you get these people say oh my god, it's the end of the world. And you think, well, I've got to sell everything. And then you find a few months later, that actually is not the end of the world. It's not the end of capitalism, and just stayed invested.

But it's easy for me to say all that it is really hard to do. That's the biggest mistake that investors make, I think just impatience and the thought that I have to keep trading, by the way, I'm not any kind of trader, I mean, better useless, tried to do that sort of thing.

Timing markets are were very, very difficult. I'll probably contradict that, by the way later in the interview, if you ask me something else, because I do have some very firm feelings about where we're going, which sort of contradicts a lot of the stuff. The other thing, by the way, I'd say is that I think investors become trapped to their own history.

That is their last few years. And I think you have to look back I watched Neil Ferguson do a talk once a historian and it was just after or during the financial crisis. And he asked the audience, has anyone read about the Great Depression? Have you read what books have you read about it? And but three people held up their hand and he said, Well, how the hell do you know what's going on? Now, if you've not even read that, he said, your history is this, but you need to go way back to look at what's happened to get a better perspective. And I think perspective is really important. So I sort of do challenge myself. And I find Twitter quite good. Because I'll take an opposite stance.

Sometimes, I often will agree with what someone's saying. But then I'll take the opposite stance to see whether I can sort of get an argument going and whether that's well founded, because I think I'm as equally trapped as well. And I think that my retirement made me or a few years before I decided to retire sort of thinking about it on the way it started to make me look back. And I've been really lucky. If you look at me, I've had the bull market, because I would say we've had a 40 year bull market, because it started basically when I started I mean, I bought US Treasuries at 15% for clients.

You see your your expression is whoa, whoa, yeah, but that was my history. It's what were your thoughts about, and hey, UK interest rates for us for my generation 8% was low and 15 to 17% was high. Look at Equitable Life its huge mistake was the thought that interest rates would never go below 8%.

So it didn't insure against it. And so that's what I kind of challenged myself is what we've seen now just going to continue and I don't think this decade is going to work out in the same way, which is also allowing up my own investment, by the way, because I don't actually know what to do right now.

Peter Higgins 05:00

Well, that's a brilliant context to go where I want to go with the thing about context and, and history. I want to go back now a little bit to Whitechurch Securities and your IFA at Churchill Investments, your start there, you're new in the industry.

What was it that you know, now that you didn't know, in the 80s? When you're going in fresh faced going, Oh, my gosh, and you've given all these responsibilities. I'm asking that in a sense of lots of people want to get into the financial industry? And what sort of nuggets could you give them about the learning about grabbing opportunities?

Mark Dampier 05:31

Oh, Peter it’s so different. Yeah, I started with there was no compliance, there was no regulation. And I didn't know anything. I came in Whitechurch, because my next door neighbour was Kean Seager, who formed Whitechurch Security. So he was a fund manager before that. And we did a couple of chats over the garden fence on investment, because I was sort of vaguely interested it. And I joined an operation which was described as one man and his dog. And I think I was the dog effectively.

So I learnt on the job, which you can't do now. I mean, it's really hard for me to say to a youngster once, you've just got to go for the full qualifications now. And I just didn't have that in those days. So I learned on the job, which has been great.

But you have to ask lots of questions. You have to have someone like Keen, who was incredibly patient, because I'm often asked the same question about 10 times, as I used to try and challenge him sometimes, but you know, you've just got to get yourself first of all, you've got love it. If you don't love investment, don't bother. I mean, it's like any job. I mean, I could never pass an exam is something bored me to start with. So you've got to do that.

But you've got to do all the qualifications. Got to read a bit. I'm not the world's best reader of books on finance, partly because most of them are boring. Lots of deal, which I'm not a direct share person. I've got a few shares in the portfolio.

But you know, I'm not particularly great at picking shares. They're not really my thing. And I think that's tough. And a lot of books do that. That's not for me. If that's for you. That's great. It's not for me, so stuff I like is history stuff. So I think you might ask me about books. And there's two books, I think, Russell Napier's book on Bear Markets. It's very readable. I'm a history, I love history, I did history as a degree. That's fantastic book, because it goes through the Great Bear markets, you learned so much from that. And then Sandy Nairn who mananged Edinburgh investments has done two books, and I forget their actual names, but one is on the internet, while one's on that you canals and railways and the internet. And he's just written another one.

Again, I'm sorry, I'm getting to all I can't remember names. But they come from a sort of history, but and the canals and railway ones brilliant, because he looks at the internet boom. And if you replace railways and canals and poor internet, it's also so 17th and 18th century goes through the newspapers, exactly the same. So having a sense of history really does help you in investment. And I don't think people read about history at all.

So I think that's incredibly important. So if you're a youngster starting read, find stuff and read it, find what you enjoy reading partly. And I'd say get on to things like Twitter, I read an awful lot of stuff on good stuff on Twitter. And I think most as I said, most people will think Twitter's just a chat show where it can be. But there's an awful awful lot of really good stuff. And youngsters, in my view, don't see that. There's lots of people share their opinions and thoughts. And you can take them or not. But where would you get all that normally? I mean, that's one of the great things on the internet. I think that is available to you now.

But it wasn't available to me, 40 years ago, best thing I had was Money Management Magazine, which stopped publishing a few years ago, that was the Bible, because that was the magazine monthly magazine, because it was a seriously good magazine. But now all that all the information is at your fingertips. Fantastic.

Peter Higgins 08:39

Yeah, obviously, the FT has been going for a long time. And that was my first opening to what's going on in the world of finance.

I didn't know anything about finance at all. And that was my Bible to start with. But you know, you've talked about good books. And you've got a good one here, which we'll talk about a bit later on. And that talks about the history of funds as well and the allocations aren't and how to do it and how to simplify things. We'll talk about that in a little while I wanted to talk at the moment, if I may, about going into Hargreaves Lansdown, you'll start the middle, and the end. And we're going to talk about a few things with regards to that journey.

And also the fact that obviously, it was essentially a very, very small business, I would say, I'm not being disrespectful to them. But when you left, X amount of years later, it was a significant size. So I wanted to talk about that and how you and the team grew that and supported thousands and thousands of investors, because the whole point of investing is to, to better your life. I think from wherever you start, you can improve your life by saving and doing it prudently. So I want to talk about that if I may Mark.

Mark Dampier 09:40

It’s all about improving the quality of your life. That's what I've always said completely. Right. Correct. So when you want to start with HL?

Peter Higgins 09:46

Start at the beginning. You went in there very young and middle and end please.

Mark Dampier 09:51

But I wasn't that young, I’m an old git now so that was early 40s. So Peter Hargreaves rang me up one day and said I hear a bit unhappy, why don't you come and have a chat, which I did. I have to say it was the best decision that I've ever made.

Because working with Peter and Steve Lansdown was fantastic and inspirational. I don't know that those words but they were fantastic people to work with completely different characters themselves, but they respected each other and worked really well together. And that's a big thing to the other thing is loads of people who run businesses or start businesses, that's what I would say is just because you're good with clients, you can be a brilliant IFA, but you get promoted or you you start running your own business.

Some people are good at running your own business. But just because you're good at with clients, doesn't mean you can run a business. And Peter and Steve knew how to run a business. And not many people know how to do that, actually, to be frank, they were very, very good at it. And they're very good at sharing that. And getting people on board. I mean, in the early days of HL, well, I wasn't there right to start with.

But anyway, I mean, they started from a back bedroom. You've got to say something back bedroom to a FTSE company, why isn't there a Sir in front of their names or or Lord, because I see a lot of completely average people get stuff. And these guys, no one has achieved that. Let's say that no one has achieved to go to a FTSE company from a back bedroom without any acquisition and no debt. I think that's a remarkable achievement. absolutely remarkable. I think we've obviously we've helped them along the way, but by golly, it was their drive.

Can't take it away from them. So when I joined, HL, they was quite big, by the way from, from companies I've been in, it was probably about 100 people. And there's over 2000.

Now, just to give you an idea of size, and it was a very exciting, I worked a few yards from Peter, fantastic to work with always ideas coming through.

He was always interested in ideas. And we just sort of what can I say the business just develop from there. I can remember the platform. We already had our own self-select PEP in those days, I would see Transact well, actually they came down.

They were the first platform that I saw. And I remember going to Steve Lansdowne and saying, do you want to meet these guys, this is something this is really good. Because I love the idea. Because I'm useless at admin.

Most private investors are great at admin, boring as hell, but really important. And I said, well, here's here's your back room office for the client. You've got everything here. Why would you want your in one platform? Why would you want to move? And let's see administration was poor.

That's what you want. And kind of the whole platform is, I think developed from there. Because they grasp that really, really well. And obviously, that's how it sort of move forward. And Peter was always interested in clients Funds investment, he was a great market here and being speak very plainly, fairly jargon free way. I remember him taking a pension form from Standard Life, and it was 36 pages. And he ripped every page out and said, you just need this one page Mark. This is the bit you need. It's no wonder no one does a pension would you write for 336 pages each page, he said 10% of people drop off. So he was trying to make things simple and easy for people.

And it's been copied, of course by everyone else. Really? Frankly. Yeah, I can only say it was the most exciting days of my life. Really, really great. I had a wonderful years at HL. Absolutely fabulous, best time ever. And I got paid for it too, even better.

Peter Higgins 13:20

Absolutely. And as I said earlier, you absolutely brought together so many people in a sense of people that hadn't envisaged that would ever be able to save anything, nevermind invest anything, you educated them, you've informed them, you made them aware, they've delivered returns that will be on their dreams for many that you guys did exceptionally well, you know the whole team ladies as well that are in the team.

So I want to talk a little bit because obviously the elephant in the room is towards the end, where the media got hold of what was going on with all things Woodford that he developed his fund, he went solo, he built it up the media took it up.

And then the media essentially brought it back down to earth again. So share what you can and let's talk a little bit about the a) the best buy list, which has always brought a bit of contention and be a little bit about the Woodford fund if we may?

Mark Dampier 14:12

Yeah, I'm a bit limited, I guess. But I suppose I'd actually start off with so just using a phrase that a fund manager actually sent to me. He said Mark, the more you try and do the best for clients, but it just doesn't always work out that way. And effectively. It's that simple. In one respect. I often feel like saying, yeah, we want to do our best. But sometimes you read stuff in the media, you think actually our starting point appears to be well actually we deliberately tried to find the worst fund possible and put clients into it. I mean, there's this absolutely absurd to even go there.

So I mean, I know Neil Woodford for well over 30 years. I, by the way, didn't know he's not a friend or anything like that. Just a business person that I that I knew in the business like I know Nick Train for even longer actually, in that way but I've never met him socially either. But they’re great fund managers. And I have to say, I don't really want to sit here and defend it, Neil completely, because he obviously made a huge cock up.

But what I will say is it up to the gating, he'd made 26 times your money, I think this is off my memory. So against the market of 12 times, which is a pretty extraordinary game, he did get himself into a, obviously into some kind of mess. But I think the media are finished this really more on this at the moment. And so if he started it, the media finished it. And one of the things I should have probably learned or known to seem that I've been dealing with media for a long time, is that they have got a very big influence.

So I don't think they always realise how bigger influence they had. All I'd say is that if you replace Woodford’s name with Lloyds Bank, you would either run on Lloyds Bank, in my view, so perhaps I'll leave it there. So yeah, it's always a humbling investments, a humbling experience, maybe that's what I should have started off with, when you first asked me, that's one of the things you learn that you want to be right all the time, but you're not going to be and you're always going to learn.

And in another interview with you, I can go through the learning bits as well that we've learned from that. But it was not a great experience, to say the least, it did bring some tears, and some of those were mine.

Peter Higgins 16:18

No, Mark, I really appreciate you sharing that it's very, very kind of you to go and share anything with me regarding that.

So I know it's been very, very difficult for you and, and family as well. I will just touch them. Go back a little bit about your views currently about best buy lists for funds, etc. And what your thoughts are about it. Are you still positive about them? You still proactive about them? Or have you changed lately?

Mark Dampier 16:39

Well, best buy list. Yeah. You know, I sort of started the whole thing 20 years ago or so when I went up one of the ideas of Peter, I said, Look, there's only about 2% of funds are worth looking at is actually less than that, I think to be honest with you.

Why is that one of the guys that I found on Twitter, it's called Fund Hunter, we're very well worth following by the way. He reckons it's more like 1%, because he looks for funds. And he's a bright guy. So my idea was to condense that because we've got 1,000s of funds. And so for a lot of beginners, where do you start with? So if you can bring it down to some funds that's greater than the same that way? I still think it is. I think they're still worth it for private investors to look at but doesn't mean they're all right. And I go back to patience. You know, I said to some media people years ago, a few years ago when it came to all this, and I said, Well, I can make it a top list if you want. And they went, why don't you?

I said, yeah, well I'll do is I'll go back to Lipper, which is one of the statisticians you can find. So I'll take their best funds for five years, let's go five years, I'll take the best funds. And on each sector, I'll take their two best funds and put them on the list. And then I'll roll it every three months. And then I always have the best list. And my idea of a best list was not the best fund straightaway. But was to say, if you want a Japanese fund, I think this is the Japanese fund to look at, or I think this might be the recovery fund to look at.

But it doesn't mean there'll be blisteringly brilliant in the next three or four years depends on the markets and whatever. So it's never going to be perfect. And in some ways, I think they've been misunderstood, really.

And I think HL also suffered from the fact that they also thought it was all about commercialization. Well, there is commercialization because you know, newspapers don't write articles for free. So yes, there's commercialization in it. When we first started, the first thing I said was, well, you'll negotiate deals with these groups. I know you will, but I don't want to know what they are. So it was always a Chinese war.

So if I recommended a fund, I had no idea what HL got from it. I'd always walk out of anything like that. And then post RDR well, everything was open then. So I didn't know what deals and actually I tried to contribute to that I got the fees down. Actually, the worst thing I found in the media was having been criticised for not knowing for knowing and then trying to get them down, which is what they wanted for themselves and the FCA, we then got criticised for it, which I found really amazing. Because I think one of the things that HL did was to get the cost of investing down for a lot of people and frankly fund groups have had it away for years in fees. I know they say HL platform fees is high, but I would actually say is something controversial, I'd say the platform's deserve more money than the fund managers in fees.

And why because they take on all the risk Woodford’s a good example if you want really, they take on the risks, they do all the management in terms of all the admin and everything was the fun of setting up a fund management group. And though it's got more expensive is nothing like setting up a platform. ongoing investment on a platform is incredible.

So most people could start a fund management group with fairly small amount of money but if you said to be started platform, I'd say Well, alright, how many millions and millions and millions if you've got Peter, and it's going to take take quite a few years to break even so you're going to support it all the way through that. That's why it's been quite hard to catch HL everyone thinks is easy. They always say that you just got to be there and people will come. They won't.

Peter Higgins 20:04

They won't. And lots of people have tried. I've seen lots of platforms come and go in the time that Hargreaves Lansdown have grown. So yeah, you're absolutely spot on. Now, you've touched on performance fees. So we'll ask you this question Mark, say around 40% of investment trusts charge a performance fee. What are your thoughts on that and views on this? Because I know that it's something that you've tried to combat in the past as well?

Mark Dampier 20:28

We go back to fund charges again. And incredibly, I mean, we I was a bit naive on funds, go right back, there were a few funds Unit Trust, as well as started to put performance fees on and we didn't spend a lot of time looking at it. Very initially, then we did. I don't know what it was a year or so later, we started looking at these things and saying, well hang on these funds.
Some of these funds are getting performance fees, but they're not outperforming and then we started looking at it. And this is where it gets complicated.

Because performance fees There is transparent as mud, and they're complicated. And so for private investors, I mean, if you look at some of the performance fees on VCTs, I hold some, you need to go into a dark room and hit yourself over the head.

I mean, my God, but that alone means that it's going to be expensive. That's always if you can't understand it, you know, it's going to be expensive. So we looked at these and then we came down to things like high watermarks, crystallisation, some of them were three months. So you can have a year where you did really badly, but one three month quarter, you did brilliantly and caught a load of money. And so you look at investment trusts in Allianz took 24 million in 2000. Because of their performance in technology, well, wow.

Okay, they might have done a bit better than the market, but 24 million pounds. That was nearly 4% AMC that year. And Henderson, Henderson Tech back in 2000, was I can't remember what it was 40 million it anyway, they set up Polar on the back of it. I mean, that's how much money they took. And that's because they were, I think their benchmark was the MSCI World Index, not a tech benchmark, no correlation with. And I'm amazed at how many people are so cool with giving fund managers who I mean, I haven't met many poor fund managers, Peter, and it is absolutely nuts that this goes on.

Now there are a few cases where if you're trying to keep a fund fairly small, as a fund manager, you know that you're not you can't grow the AUM because you can't run the fund 10 billion or whatever. They're not I can see it as long as it again, it's transparent. But most of the time, the fees are just they don't align the shareholder or the unit holder at all. Like they always say that, but how does it align the shareholder, all it does it line the pockets of the fund manager brilliantly well, I'm really shocked.

I mean, with at least with the investment trust, some of the boards have been taking action and stopping it. But I don't begin to understand those who still got them on the whole, I couldn't sit on a board with some of those fees. just absurd. I mean, you get you're aligned with the fund manager anyway, because you get a you get a percentage fee as hopefully it goes up. So that should align you with the shareholder and unit holders perfectly well. But performance fees mainly just feel to me like just a terrible ripoff. What does the fund manager do? Does he suddenly do, I've got a performance fee.

So suddenly, I'm going to perform better, I've got to do a different job. I'm going to do something different fund managers are just like kids, okay, kids at school, if you're at school, and you used to have your school report, and you used to be placed in the form, you know, were you at the bottom quarter of the form, or were you the top on the top. So the former fund managers, that's how they treat it better.

They love it few fund managers who don't love being in that top bit. They want to be the top school report. They don't want to be at the bottom. So what does a performance fee are they suddenly going to pull out something they've never done before? In which case, they haven't been doing the job properly. Anyway, so So I don't understand where you're getting paid extra for is what I really say.

Peter Higgins 23:57

I love that reply. And thank you ever so much for that.

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Peter Higgins 24:18

The person and lots of other people doing major major work in the sense of addressing some of these issues is your good friend Annabelle Brody-Smith at Association Investment Companies. And you gave her a really big shout out in press X amount of months ago now.

Mark Dampier 24:32

Well ask if she does a brilliant job. I mean, she's been doing that for 25 years and investment trusts were a backwater. Really bad reasons for being a backwater. I mean, I get accused of not liking Investment Trusts it's not true. It's just I'm the only one who will also criticise them because everyone's now fallen in love with them. Mainly because of Annabelle

Peter Higgins 24:51

[Laughs] Because of Annabelle.

Mark Dampier 24:53

Well, she done a brilliant job. I mean it's a trade association so I wouldn't expect it not to beef up it but she's done. Fantastic job, I think things like dividend heroes all that, wow, what a great marketing job. I think it has certain problems that boards, you know, get themselves stuck with having to raise dividends all the time, which I don't think is always a good thing. But she's done a fab job and a half. I mean, most of the media, most of the media now in love with investment trusts where they weren't sort of 20 years ago, and I got to hand it to her what a good job. And she, she I think she does battle behind the scenes on on fees or whatever. I'm not actually talk to us specifically, I can't remember on performance fees, but I don't want to speak for in that way.

Peter Higgins 25:35

no, she's this is her in the team do a fantastic job. And they continue to do that. But I think all of that is built on the back of the stuff that other people, including yourself have done. And I think together, the investment industry is improving. There's still room for improvement as well.

Mark Dampier 25:49

Well I think when I say I think the most important thing. I mean, she does a great job, because obviously, it's a trade association. What I don't like and it's not her, it's all of us in a way is that we all get into sort of you have Investment Trust zealots, you have passive zealots, you have your act, you know all of it. And I think we need to be more pragmatic as an industry. Because if you're a newbie looking in, you'd be saying, well, hello, this person says investment trusts are the only way to go. And then I'll hang on this person says, no, yeah, just by passives, this person says, just buy this. And I've always felt what isn't just buy this, it's take the best of all of it, if you can. And so if I look at America, where it's very hard to find the fund, most of time, you might as well just buy the S&P 500 index, a passive fund by passive fund in it, because it's such a high quality index very, very hard to beat that, let's have an argument about it. Generally speaking, people would be better off with that. But it doesn't mean that they're better off in passive everywhere, necessarily.

Peter Higgins 26:48

You've just answered four of my questions going forward. I'm not sure how I'm going to weave them in or out now. But thank you very, very much. So I'm going to skip those questions and ask you about the funds that you're actually a non-exec director, which is the Invesco Income Growth Trust and a Jupiter Emerging Frontier in the Chinese names.

Mark Dampier 27:06

Well, it's actually Invesco Select now we merged it one of the big problems with the investment trusts, in my view, is about 200 of them are too small. The one argument that I have with the media and Annabelle well, not less than Annabelle, that but is liquidity.

And it's not liquidity of the fund manager running the trust is the liquidity of a buy and sell as a broker, an individual doesn't really come into it, because most individuals are going to buy five grands worth or 10 grand you can pretty much do that on most trust. But you know, HL got criticised a lot, or has been criticised a lot for investment. If you're an execution only platform.

Please explain to me if I suggested a on a list to have I don't know XYZ fund, and it's 60 million pounds in size, HL, I might get 20 million pound order that on the Monday morning, if I did it on the Friday, how the hell am I going to fulfil that order? You can't? And conversely, because you couldn't sell it either. So I banged my head against a brick wall with this so many times I just find it incredible. So okay, Scottish Mortgage, everyone's thrown Scottish mortgage at me. Well, okay, fine. She made a buy and sell that. But how many other trusts the size of Scottish mortgage? Well, there are a frankly, you need to be 500 million pounds in size and over to get anywhere.

So we merged the Select Trust with it's still not big enough. And the Jupiter one well, we're folding it up now, basically, because it's too small, and it had an annual redemption. Yeah, this is one of the ironies of investment trusts, because in a way, they want to be like unit trusts, but don't tell anyone, because they want to be able to buy and they want to be able to bring in funds in as well when you can only ever bring funds in when you're a premium, which if you think about it is a bit odd. I mean, there's one raising money today, but you're paying a 5% premium. I think for it, and investment trusts are cheap, they tell me is one of the ironies and the other side of the coin is people want to get out or bigger wealth managers.

So then you have to to have some kind of redemption policy. So suddenly, I mean, on JEFI, fortunately, we had a yearly one. And if you go to a discounts, so people suddenly realise that they can get in at the fund at 6% discount. And then six months later redeem it all that part. So actually the reason why open ended funds don't really it's one of the wonderful sort of paradoxes of investment trusts.

Peter Higgins 29:26

Well, that paradox has only happened and of late because of technology. We've got the speed of transactions and all the rest of it. And I think that's actually diminishing investing. I'm not sure you agree with me on that mark. But the speed have just accelerated you and other people and friends of mine who were investing in the 90s and the early 2000s. Were buying, holding, forgetting now it's der der der on the phones all the time. It's like I'm in and out of the stock or in and out of a fund. And a fund is meant to be held for 3 to 4 to 5 to 15 years, not three weeks in between rate capital raising.

Mark Dampier 29:57

Exactly but as I said everyone talks a long term game But actually, most of them don't play the long term game. And the thing is something hits the fan, they suddenly all want to get out, well, investment trusts come with a problem, the smaller ones come with a problem that you can't, as a broker, you can't as execution only you can't do that. I mean, if you're a wealth manager, and you've got a trust, you can eke it out over weeks and weeks.

But if I've got buy and sell orders as execution only when I say to these people can't fulfil your order, Peter, actually what happens at HL is, we've got about 300 people on Help Desk, the whole bank of Help Desk all lights up. Frankly, people don't understand Investment Trust still. So they'll look at the paper or on the internet and say it's 50p and number see, when you bought it at 53p, so you've written me off, or you've sold it at 48p or 47p. And so the idea that all investment trusts are cheap as well. And when there's times of trouble, they can go out to spreads of 10-15%.

So all I'm saying is it's not as easy as everybody kind of makes out really, there's some real practical issues. And I do wish some of the media would come in to any of the platforms, and just sit there and look at it and say and go to the dealing desk and say well, this is what happens. I mean, one person, I won't say who it was copied my Best Buy list use of investment trusts. And she used, I think it was Acorn Income in the Best Buy list.

I mean, it seemed like a good fund, I could see why she might have chosen it, because she had no idea about liquidity was 26 million pounds in size. And her just putting it on there cause huge problems at HL with people tried to buy it. And people get very resentful. When you say we can't do it all the prices, the market makers aren't daft. They see you coming down, they put the price up.

Peter Higgins 31:39

They do. Now, I'm conscious of the time that we've got on here. And I wanted to talk about your fantastic book, Effective Investing. And what you were trying to do was we are today with brilliant knows.

All right, it's been out since 2015. But and I hope you're going to write another one, because you're trying to simplify how people build wealth by investing in funds, essentially. So I want you to briefly talk about that, and how you went about it. Because the whole point of writing a book is to try and simplify. You're trying to make sure that people learn about the history of funds, learn about the caveats, and the nuances, but also are given the tools to purchase and become DIY investors of. And I think you captured that brilliantly for the DIY investor. However, my thing that I want you to share with us is the learning from the book and what people should get from it and why they should go back and buy a copy now?

Mark Dampier 32:31

Well, you can have a laugh by buying it now. Because if you know all investment books become out of date, and I shared some of the stuff that I bought, because I tend to eat my own cooking. So you can all have a better and it doesn't need updating.

But Trouble is I'll let you into a secret Peter, that was the hardest thing I've ever had to do write that book, I write articles, but writing a book. And I have to save my thanks to Jonathan Davies, who helped me who's a great journalist as well. Without his help, I It's amazingly hard to write a book. And also it was quite a learning experience for me.

Because if you're in an organisation when I was at HL, you have fantastic I can ring up any fund manager basically and speak to them pretty much. It's I mean, you get fantastic access to all the best people or whatever. When you're not I still had to write this book and thought, well hang on, I'm writing to an audience. They haven't got this. They can't just pick up the phone to Nick Train. So why are you still running Pearson Nick?

Or why are you still doing this or, or whatever. And actually, that became the toughest bit because if I hadn't realised before I realised then how hard it is for private investors, the information is better out there now.

But you've got to spend time, and I think too many people even DIY, don't spend enough time on investment. You can't do it in five minutes, you've got to do reading. And if you're not really prepared to do that, then either buy passive investments or go to a financial planner, wealth manager, let someone else do it for you. It might not produce you the results that you might but you've got to put some effort into it and actually done lots of research and, and I've seen I brought lots of clients into HL, we've talked to them, and some spend a lot of time and others. I mean I remember one chap saying I go on I look at the line this the lines going up by by the fund. Okay.

And here's a lovely story I had years and years ago at HL when someone rushed in the old day, this is before we had all the electronics and ISA or PEP, it might have been PEP days I don't know came in and said I wouldn't buy that planet I want to buy the planet. And I said what do you mean the planet he said well you know the planets Neptune he said no, no, no another planet. I said Jupiter that's the one I want to have them he said I want to have them so give me two of them that was it.

Peter Higgins 34:45

Oh my god. That's all the information about individual knew?

Mark Dampier 34:49

That was it. It obviously seen the advert seen a bit of a media Jupiter reforming well, and that's it. And you know, most people still do a lot of people still do that. They don't spend much time on it. So the book was sorted. I don't suppose many people are even read the book, really. I mean, financial books don't, don't sell.

Peter Higgins 35:08

I mean, I read a lot Mark, I tend to be like Munger and Buffett, just just a pair of legs and a book. That's it. I do enjoy my reading.

Mark Dampier 35:15

Well, Nick Train has his own library. And he expects most people to read.

Peter Higgins 35:19

Probably won’t because they're not churning and having to research as many stocks because they're buying hold individuals there at that fund. So yeah, read, read, read and consume, because that's how you learn about what's really going on.

Mark Dampier 35:30

So you need to do that and spend time on it. And you do need to spend time on understanding a bit on macro as well. I mean, and this is what's causing me problems now. Because I've always sort of chucked it slightly to one side. But I think we're coming to the end of a 14 year bull market, I think my 14 years marks, it's easiest for me to say that. But I look back and I say we've had a bull market interest rates, basically. And I think it's all going to begin to so end, I think we might have one more run. But I think that next decade is going to be very different. And I haven't covered that in the book. Because these only my thoughts of the last three or four years really.

Peter Higgins 36:08

Okay, with that in mind, then, and we're running out of time, what strategies are you going to change or we're going to put in place for your next, let's say, 5-10 years different strategy going forward?

Mark Dampier 36:20

That is one of the problems I've got at this very moment, because I'm a patient, do nothing investor really on the whole, because I think that's what makes you more money. And that's what I'm grappling with right now. Because I think there's going to be a big change, I think we're going to go into much more, I think going to have a bear market, and then out of that bear market won't come tech, and then tech will always be there.

But I think industrials, I think we're going to be see reshoring supply lines, because of COVID. Now, the Ukraine, people are going to bring manufacturing back. So the whole thing is going to change, probably less consumer more industrial.

So I'm not quite sure what I'm going to do with the portfolio at the moment, because what I want as a retiring person is income. So of course, I've liked what's unfashionable over the last few years, which is equity income, which has done very well over the years as well as other sector. So that's what I'm sort of looking in. But I've got a lot of cash at the moment, sort of waiting, really. And of course, those on Twitter, tell me I'm mad, because you can't tie in markets, of which I respect as well. But I think it's just a very, I'm glad I'm not advising directly on people now. Because I think is this is the toughest time I've ever known. This bull market has gone on for 14 years. And I think we're going to be in trouble sometime over the next year or so I don't quite know how it's going to happen. But everything just lots of stuff just doesn't feel right to me.

Peter Higgins 37:40

Well, I'm in agreement with you, we'd have holding a sizable amount of cash and a sense of cash is king because when the liquidity event happens, and things decline, that's then there is an opportunity for you in either I've got cash, those are fully invested, that are just going to be watching the market go. Okay, where's my next ISA allowance available for me? You know, having the cash available gives you and me and everybody else an opportunity? Now I've got final question for you. I'm going to give you Mark an Aladdin's lamp, okay, I'm granting you one wish. With regards to something you can change to ensure that all investors and imagine now that you've got a son, he's going to inherit most of what you and your wife leave eventually, right? Beyond 2022, with regards to the investment industry, work in the best interest of everybody, what's your instant thought of what you would change? And why for the betterment of the betterment of everybody? And you've got three minutes go for it!

Mark Dampier 38:31

Well, when I change, I've got no idea straightaway, I mean, the industry so sort of vast, I just love, I'd love it to work in a more unified way. That's what I'd actually like.

Like I said earlier, not having all this fighting over which is best, which best vehicle or is or whatever, just an industry that works together, because to get more investors in. Because the one thing I do know is that investment does improve the quality of your life over the years. So you do want to get people out of keeping all of their money in cash, or you know, people who set up cash ISAs for their children.

Well, I mean, when my son was born, I put it in started in emerging market fund in 1990. Just putting money in monthly monthly money, just easy way of investing. You know, it's when you get the accumulated stage, it's harder, but that's what I really like, get more people involved in market and make de jargon like the industry we all still took too much of that and just get more people investing because they'd be better off and the longer you're investing over 30 or 40 years, you've got to be better off in real assets than in cash. So that would be my big wish. Just get more people involved.

Peter Higgins 39:38

Brilliant. You say you did it. Fantastic reply. I love that.

Mark Dampier 39:41

I don't know quite how I honestly don't. When you said that only one question. I thought oh my god. I have been caught out by media so many times with that.

Peter Higgins 39:51

No, I wouldn't. I wouldn't try catch you out Mark. It's been an absolute joy to have you on and we're going to have to do this again at some point in the future.

Mark Dampier 39:57

I’ve enjoyed it Peter it's been good fun.

Peter Higgins 39:59

It's been good, thank you ever so much for being on the Investing Matters Podcast. It's been a delight having you on and wishing you continued good health, continued education for all and the stuff that you do on Twitter is brilliant. So I will encourage everybody else to follow Mark on his Twitter account as well. And just keep up the good work. God bless you.

LSE 40:28

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