LSE 00:01
You are listening to Investing Matters brought to you in association with London South East. This is the show that provides informative educational and entertaining content from the world of investing. We do not give advice so please do your own research.
Peter Higgins 00:17
Hello and welcome to the Investing Matters podcast. My name is Peter Higgins. Today I have the huge privilege and delight to be interviewing Sydney Australia based Jessica Amir, Market Analyst with the multi asset investment specialist Saxo markets.
Thank you ever so much, Jessica, for joining me, I know you've had a long day of work already. And it's brilliant to be speaking to you from here in Leicestershire with you in Sydney. Thank you for coming onto the show.
Jessica Amir 00:45
Thanks for inviting us on we've had a huge day, the Reserve Bank of Australia had a meeting and non stop. But it's a privilege to be to be with you, Peter.
Peter Higgins 00:54
Thank you so much. Now, I want to have this conversation with you. Because I think it's very important that we speak to as many female thought leaders, analysts, psychologists, fund managers, etc. So I want to start with asking you about your first interest, what piqued your interest in the world of investing and investments? Please?
Jessica Amir 01:14
Thank you. Great question. I think it was when I was growing up, I was more or less pushed into it by a family member. So I started working for my dad, basically straight out of school. And we were teaching people how to build a portfolio of investment properties. And my uncle was a financial advisor, he said, hey, Jess, why don't you consider expanding out the portfolio a little bit more, and look at shares come and join me, I'm an advisor, and I was like, okay, I'm going try this out.
And then I got my qualifications. And then I joined AMP. And then there I was, and I quickly realised that there was huge gap in the industry, not only in Australia, but also for women.
And then, thirdly, Peter, I also realised the stuff that I learned was not taught at school. So basic things like how to save 10% of your salary should go towards long term savings, little things like that. And then later on in life, you know, I'm still teaching people, things that should be taught at school.
So it was really this access to simple education that just needs to be made available to investors at an early age, that kind of got me inspired to get in. So here I am today, about almost 15 years later.
Peter Higgins 02:35
Fantastic. Now just skimmed over a little bit that you qualified as a financial planner, which is very important, really, that's a skill in everyone needs to be these days regarding everything changing. So let's talk about that. Because you've become a fire to plenty AMP, which is fantastic, massive company, Commonwealth Bank, and then Suncorp as well.
So let's talk about that a little bit. Firstly, the financial planning side, getting the qualification and working for those very large organisations what we learned from that?
Jessica Amir 03:01
Well, I'd say I probably learned the most when I worked for an offshoot of AMP. And by offshoot, I mean, they focused on looking after clients that are deemed ultra-high net worth.
And so they typically have more money than the average retail investor. Say like myself, for example, let's say, and sometimes they require a little bit more complex strategies.
So they typically have what we call an Australia self-managed super funds, or you're setting up company structures. And this was before the days of technology as well.
So we're literally setting up trust deeds, we were opening share trading accounts, we were literally picking up the phone and say buy 200 BHP shares at this price and then hanging up the phone and then writing it in and then it was all manual.
So I'd say that was where I really cut my teeth, starting at the bottom in client services, actually, and then working my way to become a financial advisor over the years.
But I also found myself in a AMP’s plan a pathway programme where they essentially teach you how to be a financial advisor over 18 months.
So they literally have you writing a statement of advice, showing you for legal and compliance purposes, what you need to look at when you're looking at someone's financial position, how to actually model scenarios, and then how to build essentially an asset allocation and then how you would implement it.
So I did that. And then the other half of the programme was essentially advising people over the phone.
So that was where I really kind of cut my teeth. And then I wanted to grow and evolve and I started my own radio show. And this is where I really wanted to help more people because it was more one to one.
And I thought there's got to be a better way to get out there to the masses. So that was when Peter I started the radio show and then a friend of mine was at Sky News and she said, Jess, why don't you come to our programme?
And I thought, okay, and they had a programme called Your Money, your core shares and your money, your core property. So it was kind of like both of my skill sets, you know, property and shares. And then so I was financial advisor by day and then at night, I was pretty much orchestrating TV bulletins.
And then I moved to become a reporter. And then I married kind of like the best of both worlds. And then I was like, I don't know, I think I want to do this a little bit more, sharpen the saw, as they say. And then I dived into being a full time TV reporter, specialising in financial reporting.
And then I was like, no, no, got to go back to sharpening the saw again.
I came back into the financial industry, helping clients one to one, but also, I've got the privilege of speaking to people like you speaking to people in media. So 30% of my job is helping clients 30% of my job is in media. And then of course, I've got to come up with stuff to say. So the other 30-40% is research. So that's more or less how I got to where I am now.
Peter Higgins 06:16
Brilliant, I'm going to go back a bit, because once again, you've just missed a few bits, which I'm like, we need to share this information, you’re far too humble, so I'm going to just throw you under the bus here.
Listen, ABC, Sky News, Seven Network, Nine Network. I've probably missed out a few where you've interviewed prime ministers, including Tony Abbott, Julia Gillard, Kevin Rudd, several federal treasurers, and numerous ASX 200 CEOs.
So with all of that, you've done absolutely, phenomenally well, you’ve still got a long way to go to cover all the goals and ambitions. I know you just sincerely have. So can I ask you a couple of questions regarding those individuals you've interviewed?
Please, can you share your views regarding the great leadership qualities, recurring qualities you found from interviewing and speaking with their significant high profile leaders and CEOs, please?
Jessica Amir 07:09
Well, I'd say in one word, Peter, I’d probably say probably messaging political leaders, they've always got a message before they come to a presser, which is what we call it in TV, or a press conference.
And before they get there, you know, we'll have a little bit of a chat and a little bit of a banter off camera.
And then all of a sudden, everyone chuck's their microphones in their face, and then they go into their pitch.
And they always are to a script, they typically all have three messages. So they'll say what they want, and then they'll reiterate in a different way. And then I'll say the third way and then it comes Q&A time.
And they'll typically relay the same answers in Q&A format as well.
So I'd say that is kind of what really stood out to me. There was not much deviation and I think that really comes back to the media landscape being awash with too much information and I think that is okay.
Because the shorter sharper messaging it is, it's easier for people to understand big picture what's going on in the economy and then later on, I mean, we've typically seen some high profile politicians in Australia step down, or I guess, they wouldn't like to call it that.
Some people have been asked to leave by their party members in Australia, but then they've kind of worked over two ASX top 200 companies, and the same type of language skills need to carry out as well, for investors to really understand and comprehend okay, what is the investment opportunity here?
So, I'd say that messaging was really, you know, the standout for me. And I think for people like you and I, and for people like investors listening, we also need to like, often sift through the noise and then just get to the core messaging, when some of our political leaders or when some companies that we're looking at investing into aren't as sharp as some of those other people out there.
So dive through the detail or sift through the detail and get to what you think is going to drive the most value for that company or what is the key focus for the government or what are they really saying.
Peter Higgins 09:27
Brilliant, I love that response. Thank you so much for that reply, Jessica.
Now, in 2019, Jessica you joined Bell Direct as their market analyst or one of their market analysts with responsibility for providing in depth markets and stock selection analysis and identifying trading and investment opportunities.
Now what I wanted to ask you because obviously that was just prior to and then throughout the lockdown period, what difference in trading and investing behaviour do you recall if any, regarding the investing community because it was lockdown, there's a bit frenzy activities. What was the nuances that you noticed differently to what you've seen before, when you were looking at the markets?
Jessica Amir 10:06
Yeah, that was a really interesting time because casting back to 2019 and indeed, when we were in lockdowns as well, the turn of phrase was monetary policy easing.
So the central banks around the world were cutting, cutting, cutting, trying to stimulate, stimulate, stimulate, they were handing out checks, putting deposits in people's banks, and there was essentially a buildup of capital.
And what we noticed at the trading firm that I was in is that we had not only that trading firm, but Australia wide.
And also, more broadly, globally, there was a huge influx of capital to the market. And it was typically made up of first time investors.
In fact, the numbers suggested by investment trends were that most of the money that came to the market in the pandemic era was actually from new investors.
And then we saw the meme stocks gain notoriety and then we saw this huge influx of capital like we'd never seen before, into the penny dreadfuls and also into those stocks that had no reoccurring revenue, those stocks that essentially had no laurels, not pointing out Gamestop but Gamestop essentially a dying business. No one typically goes out and borrows.
I feel like an idiot for saying this DVDs. But I mean, DVDs. I don't even know what Gamestop sells, but you know that front of store, leasing facility for games, that is a dying industry, you've seen with Netflix this huge pivot to online as an example.
So we just saw a huge influx of people getting onto GameStop and then taking that and then extrapolating that out this silliness, not only was in stocks that had no forward income and cash flow expectations, but they were also buying stocks because they had the same name.
So people on the ASX, for example, in Australia saw a ticket code GME and little did they know that they were buying a little known mining company that just had the same ticket code as GameStop.
So this shows you this massive exuberance that was in markets and it shows you this just berserk.
I think it really comes back to as an industry. I don't know, I feel like we had a huge role to play.
Maybe we didn't have enough education out there to help guide these investors. You know, how do you pick a stock? And then bring it back to your question? It's really funny, because if you actually did the Google a Google search for how to buy a share, or how to pick a stock, the Google search for that hit an all-time high in the pandemic.
Sure that was showing you that people were going to Google for tips and advice on how to buy a share.
So that kind of like rounds out, you know, that era that I hopefully hope that we that we never experience again on the back of a once in a lifetime virus.
Peter Higgins 13:03
Yeah, I hope so too and you're right, the number of people that are opening the council is absolutely phenomenal and they've really had no education.
It was just a case of a board and everyone's talking about this, that and the other and jumping on the bandwagon. It was just incredible times.
Yeah, thank you for that recall there. Thank you much appreciated. So in late 2021, Jessica, we're getting to where you are now you joined Saxo Markets, which is a subsidiary of Copenhagen based Saxo Bank, please, can you share with us a little overview of Saxo Markets, its role services and function in the marketplace?
Jessica Amir 13:35
So in Keu-ben-how'n, if you're Danish, that's how you pronounce it in Copenhagen.
That's where our headquarters is. And we're essentially an investment bank.
So we have several different platforms, depending on the type of investing or trading that you want to focus on.
But essentially, when Saxo came to the market some 30 years ago, we just aim to provide investors and traders access to all investment classes on one platform.
So if people want to buy Stocks, ETFs, if people have a view on a currency, let's say, if they think that the Federal Reserve will essentially take their foot off the gas, and stop hiking rates in another two months, then, if that trader or investor thinks the US dollar would come down, they might essentially put a short on the US dollar, so people can trade currencies and then I can also trade and invest in commodities.
Let's say for example, at sec, so we're pretty bullish. We're very bullish, I would say on copper on lithium and aluminium.
Let's say if you're an investor or trader and you wanted to invest or trade in some of those, and then potentially buy them now because they were cheaper than they were two weeks ago, then you can potentially buy a copper contract with us, or you could of course, buy a copper stock, etc. And then of course, also the more sophisticated investor or trader, there's options and there's all different types of optionality that are available to essentially protect your portfolio through all market situations.
So if you don't want to sell your Apple shares of Tesla shares, which are a great example, and you're a little bit worried, because the copper price and the aluminium prices going up, aluminium, you need 250 kilogrammes of aluminium for an electric vehicle.
And we know the aluminium price is likely or we think the aluminium price is likely to go up.
So you're a little bit worried that Tesla's shares could wobble, but you don't want to sell your Tesla shares. That happens a lot with our clients.
So they typically put options on the Tesla stock to protect themselves if Tesla shares fall.
And so that's an example of how people kind of use our platform. And the way that we work at Saxo, so is just going back to the core of what we do.
So we're essentially a navigational light for market.
So we provide our view, we've got a team of some 30 strategists, and each of our strategists have got a guess a forte.
So we've got a commodity strategist, we've got equity strategist, we've got a foreign exchange strategist.
And so we're all here to help clients so people can have a chat to us and one on one, and we can explore potential ideas and strategies.
And then of course, we've got a team of traders who also help people understand the instruments and stuff like that.
So all in all, in a nutshell, we're just really trying to help people better understand what's available to them, and help them execute it. But still, of course, it's general advice.
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Peter Higgins 17:06
Brilliant, thank you ever so much for that.
Now, you hold an absolutely fantastic role at Saxo Markets just because I just want you to just take the time, as much as you like to explain that role as a market analyst, what it entails, you know, the research side of it, and why it's so interesting, and also ever evolving, as you say today, you know, major news to the market, you've got to be on top of that, you've got to then go front and centre to explain it to everybody else. So just share the nuances of your role to us please?
Jessica Amir 17:33
Well, it's a lot of fun every day is completely different to the next.
So it's ultimately about helping the masses, helping clients, and also working as a team to share insights and leverage off other insights that I might not be privy to.
So we're always kind of working as one for all and all for one to serve the masses.
So I'll give you an example. Today, coming into today, we sat down with our team early in the morning.
And then we essentially shared our take on what we can expect for markets today and say for the next six to 12 months.
And so if a client was trading today, one of the I guess, bumps in the road would be one of the central banks, the RBA, the Reserve Bank of Australia met, and we discussed what the outcomes of the meeting could be.
And then they essentially hiked they're a little bit more aggressive than expected.
And we ran through some scenarios on okay, if you've got clients out there, ladies and gentlemen on the trading floor.
If the foreign exchange trader, this is what we think the currency could do, we think the Australian dollar could knee jerk rally up.
If the RBA is more hawkish, or if they're more aggressive than the market expects, or if they're more dovish, as in a little bit more conservative, we think the Australian dollar will continue to fall away because commodity prices have fallen away because the US dollar has picked up we know commodities typically trade weaker when there's a higher US dollar.
So because commodities for those that might be new to investing every single commodity except one of the major commodities are traded in US dollars.
So this means a high US dollar, typically, to most companies means they're more reluctant to buy those commodities and they might want to wait until the US dollar comes down.
So the US dollar rallied up about 3% from its low.
And that means that commodities typically look a little bit more on the nose or a little bit more expensive.
So we've seen commodity prices pull back and some commodity companies pull back. So then that's an example Peter or something that we might typically speak to clients about as well we say, hey, girls, and guys, this is something that I think we should alert clients to.
You know, for example, we've seen the aluminium price basically fall lower.
We've seen the copper price So far lower, and the iron ore price fall lower, we think that these stocks might be affected. And we should let clients know.
However, for investors, this could be a long-term opportunity and then we say, maybe we could speak to clients about thinking about the long-term investors now, because our view is that the US dollar will fall away.
And that's in line with the Federal Reserve, likely pausing on rate hikes, and then cutting. And that's what the market is pricing.
So once that happens, the US dollar will fall away, likely, and then that will typically cause commodities to go back into this supercycle that they're in.
So that's something as an example of a kind of a morning meeting. And then what we typically are providing in terms of a guiding light for investors on to potential strategy ideas.
I don't know how much longer you I could talk forever.
Peter Higgins 20:55
But no, no, I think it's really beautiful, that you explain all the different strategies and running the scenarios and giving people synopsis of what potentially could happen regarding their different exposure to the market. So I think it's really, really good that you guys provide all that sort of service to clients. Absolutely. Fantastic.
So Jessica, you said earlier with regards to Saxo Markets are very bullish at the moment on aluminium, copper, and lithium.
So you want to tell us some of the nuances of that?
And obviously, the connections with electric vehicles, etc.
Jessica Amir 21:25
Yeah, absolutely. Great question. I guess in one sentence, it comes all back to two things, the green transformation. So there's a significant drive and a significant drive up in demand that we're likely to see. And secondly, there's restricted supply. And these two factors are causing prices to rise. And we are very bullish on copper, aluminium and lithium, because of these large, two schools of thought. And we think that this will probably continue and be probably a mega trend and supercycle that we think will probably be around for the next 10 years.
So what are the numbers that we're looking at?
So if you think about the body that you may have heard of called the EIA.
They're the International Energy Agency. They're made up of about 30 different countries around the world, including the UK, New Zealand, Australia, the US and Denmark.
And all of these countries have actually pledged to be emission free by 2035. And some of those countries have also and this is the important bit have also planned to ban the sale of fuel combustion engines by 2035.
So that means if you're not selling electric vehicles in that country, then you're probably going to be making a cashflow and revenue loss if you're a carmaker.
So that really puts fire under the likes of VW, Ford General Motors, BMW.
So this goes back to that demand push, we move now to the carmakers themselves.
So that kind of coincides with why Ford, VW, GM, BMW, are racing to produce EVs and phase out fuel combustion engines, because they're not going to make any money.
But that's also where demand is going, right?
And the other thing is that we know EVs not only cheaper to run, so from a consumer led angle, there's a huge generational shift, that we're likely to see demand pivot to that sector.
And then, of course, in the last two months, even in fact, the last several weeks, we've seen Tesla and Ford slash the price of the EVs.
Further back out, we saw BMW and Mercedes, slashing the price of their EVs.
So there's lots of competition coming into the space now meaning people like you and I are probably going to be more incentivized, speaking about incentivize the other pillar that supporting growth is that we've got countries around the world, i.e., China, the US and even believe it or not, sleepy Australia for the first time, is actually giving people a small tiny kickback for getting an EV.
We're still not there yet, in terms of encouraging people to get EVs. But nevertheless, you get the picture.
There's this global push to move to EVs, and then thinking about that under supply, why on earth would they be under supply? I hear people say to me all the time at investor events that I do for say, the ASX or women in ETFs, which is a global organisation, they say, well, what do you mean there's a lack of supply? How can there be lack of supply? You can just dig it out of the ground?
Well, no, you cannot. Because the major lending banks around the world are likely to not lend as much as they could five years ago, or 10 years ago because of their ethical or environmental, sustainable government mandates on lending.
So this is also causing the lack of supply. And then the other thing that's causing a lack of supply is, of course, weather issues.
I'll give you an example. In Australia, we had some flooding late last year. And that caused coal suppliers or coal producers, to drop their expectations for how much they could produce.
We also had some iron ore companies and lithium companies saying Argentina also be hit by environmental factors as well, all of this, putting it all together, mix it up.
And you've basically essentially got the same issues now that will likely be around for the next 10 years because of the environmental sustainable mandates, but also, supplies quite inelastic, it takes a very long time to get a mine into place to get a mining license and to get it approved.
So all these factors are going to underpin higher prices for the long-term.
One final example, if I may, Peter, Rio Tinto a really good example, one of the world's biggest miners, globally, diversified miners. That is, besides BHP, we all know that they had a lithium mine license in Serbia, they were planning to be the biggest producer of lithium in Europe.
They had the mine license and then protests actually occurred in Serbia.
And I guess, essentially, they were not able to stop that mine.
So this is an example of even though a company has a mining license, environmental issues pop up, even though they got the funding, they couldn't actually get the mine underway.
And here in goes back to this huge issue. We've got EIA, we've got government pushing EVs, we've got consumers wanting EVs, but there's a lack of supply.
And this is an issue for EV makers who are paying these higher prices.
But it's a good thing for companies who are in this space. So we're bullish on copper companies, aluminium and lithium miners.
Peter Higgins 27:05
I think it's interesting that the IEA are trying to just push and cohere so many people towards electric vehicles, but yet there is this counter party sort of risk where everyone's going down that route.
But the expense and support isn't actually there to fund them to go down that route. So it's quite a difficult sort of balancing act, isn't it?
Jessica Amir 27:25
Yes. So true. Absolutely. And I think that is a huge issue.
I mean, we don't really see that in Europe, because their taxes are so high about in the order of 66%.
Say in Denmark, for example, we're out at the top tier tax bracket, by the way, but there you've got phenomenal infrastructure, compare it to Australia, our major exports, one of them is coal or fossil fuel.
And it kind of shows you that there's kind of a little bit of, I have to be careful how I say this, this is a little bit of maybe corruption, holding back some governments. I mean, I'm proud to be an Australian.
And I'm proud to say that Australia was able to grow GDP, however, the makeup of our income is largely holding the government back on pushing to be a leader in the EIA. So I agree.
Peter Higgins 28:16
Thank you for that. Now, you've touched on the commodities there, and the one that you didn't speak about much was gold. And as a massive, massive increased exposure to gold from central banks, because of all the geopolitical things that were going on the largest amount of gold hoarded by central banks since 1967.
Last year, was there any of the drivers of the geopolitical going on here?
Or were they just trying to say, look, we don't want to be purely exposed to US dollars?
Jessica Amir 28:41
I love this question. So I'll answer it by saying this. So at Saxo, so we're very bullish on gold as well.
And so we actually have an outrageous prediction that says, gold could hit $3,000 this year.
And so gold is under $2,000 U.S. today, how could it possibly get there and the scenario that you've laid out, you add another layer on that, and we've not only seen Central Bank's increase their positions to gold, but also this year, we've seen sophisticated investors and retail investors also increase their positions to gold.
And we have to look back at history to see that outrageous prediction of gold hitting $3,000 might potentially come true, are played out in this scenario.
So every time the Federal Reserve has paused rate hikes, and eventually cut, the gold price has strongly rallied.
So the gold price has strongly rallied throughout history every time the Federal Reserve has paused rate hikes, and then paused.
And again, that we've seen in gold to the upside to a new high is more than equities.
So if we think about when the Federal Reserve one of your first questions was 2019 for the year, how do people invest, well let's think about this, how will people probably invest when the Federal Reserve pauses rate hikes, and then maybe cuts.
Well, I say to you, it probably might be in gold. And so in 2019, when the Federal Reserve paused and then started cutting rates, equities, we know strongly rallied, but as did gold, gold rallied up 61% to a new high 61%.
And then we think about the S&P 500, and the ASX 200, they rallied about in the order of 40-50%, to prospective new highs.
So that's a scenario that we think could possibly play out. And the factors that you need to look at for this scenario to play out would be the rolling over of the US dollar, because we know bonds and the US dollar have like an inverse relationship to gold.
So we saw gold charging up when bond yields fell, and when the US Dollar fell. And now the next catalyst, we'll be watching the US dollar, Peter, and watching bond yields, because I probably would urge people to just keep an eye on those factors, because you'll probably see the gold price start to rally up again. And that might be something for you to think about.
If you're investing or trading in ETFs, gold companies are typically likely to outperform but as bullion is, as well.
Peter Higgins 31:26
Thank you so much for that. Jessica, I wanted to touch on something you said earlier, which I think is really, really important here regarding the educational side of it, because obviously, these interviews that I'm doing for the Investing Matters series all about education, education, education, and you touched on the women in ETFs Forum, or whatever it is that you do, can you just tell us a bit about that and your role in it, and why it's so important to get women involved in investing, please?
Jessica Amir 31:50
Love it.
Well, there's a huge gap in women's financial futures compared to their counterparts, not only with their savings and their investing, but their self-managed super funds.
And I think all of that comes back to education.
So for women, they feel it's a daunting task, they feel that quite often, they'll park it in too hard, I'm not going to learn that I don't understand it, they'll park it subconsciously in a basket that they don't want to learn.
But when we pare it back, if we just think about investing, like we were buying a stake in a business, if you looked at a florist, and we know that they're selling flowers at a rate of knots, then that possibly could be an easy way to approach investing.
So women and ETFs is basically a pool of women in the industry, from all different bodies from all different ETF providers around the globe, other financial institutions.
And we get together and we come up with ways that we can educate the public, and just make it really easy for women to get involved in bettering themselves in financial education, and also taking action. So that's what we do.
Peter Higgins 33:00
I think that’s a fantastic and brilliant initiative.
Thank you for sharing that hadn't heard of it. So I'll have to check it out, thank you.
Now I want to switch things up a little bit here Jessica and ask you about your own investing matters strategies, what really matters to you regarding your investing?
Can talk a little bit about your portfolio as well. So how do you go about filtering your own stocks, your own portfolio has got access to all these fantastic researchers and analysts within the Saxo team and then you go right, okay, done all my research, I'm going to buy this, this and this and put it in to share some of that some nuances about Jessica Amir’s portfolio, please?
Jessica Amir 33:35
So last year, we had a view that commodities would outperform. And we also think that will be the case this year, given material earnings are probably likely to be 60%, higher than they were last year.
So coming into 2022, I had an overweight position in commodities for that reason. And so I also thought about what commodities did I want to be exposed to.
So I was exposed to lithium, and I was also exposed to coal. The reason that I was in coal was because I know that coal demand usually peaks at the end of the year when China is facing peak demand.
So the air is typically filled with fixed smog in China. And that's because they're essentially burning coal to produce energy so that they can keep people warm and toasty.
As unlucky as it is because of environmental issues. Our winters are getting much colder and our summers are getting much hotter. And with this thinking, given that we've got perpetually a lack of supply, I went very heavy into coal.
It's really against my ethical thoughts, but I was purely chasing returns. And so I'd say that they were my big overweights.
I also did have some effects exposure as well. And in terms of portfolio reviewing, I typically review my portfolio on a quarterly basis.
Sometimes it can be hard when you're helping clients, you kind of like a plumber and forget to do your own plumbing, because that's actually what happens.
But in terms of my strategy, it's thinking about the sectors that I think will likely benefit from the macro economic climate.
So central banks cutting rates, or are they increasing rates? What's happening on the supply side? What's happening globally? Who's opening their economy who's closing?
And then I also think about, you know, having One Up on Wall Street, as Peter Lynch said, can you actually see what's going on around you? So do I see more people or less people buying Starbucks coffee? I bet your bottom dollar I do. You know, that's as an example.
So really becoming observational really helps. And that's what kind of got me on to the EV bandwagon, early on, when I started to see this huge push. And I started to see more EVs on the streets, and I'd never seen before.
Because as we're seeing in Australia, infrastructure is perhaps not as limited, or perhaps very much limited, compared to what it is in the UK and Denmark, and so on, and so forth.
So when we see an EV popping up, it was like, Oh, my gosh. And so then you've got to think, well, there's an EV, what are the key components of an EV.
So it's just kind of like playing brainstorming in your own mind and thinking how that could potentially play out in investments and the other thing is, I always bring it back to basics.
So we know cash flow, and earnings growth drives share price growth.
And when central banks are hiking interest rates, we have to be in favour of those companies that are likely to do well.
So that's why I also invested only in commodities in 2022, because they were the ones with the strongest cash flow, free cash flow growth, and earnings growth. And then we saw that with, you know, with Whitehaven Coal, 300, not a new 333% profit growth, but their earnings growth was 1,500%. And that was some of the highest earnings that we've seen across the mega caps around the globe. But it just goes back to basics, earnings, growth drives share price growth, think about that with your portfolio.
Peter Higgins 37:29
Now with regards to your holdings, Jessica, you've talked about how you go about finding them, selecting them, and reviewing them over the period of these, I think set quarterly regarding the stocks do you hold? What was the last time you did a review and a holding and you looked at it when it's time to move on now? And you exited? And what led to that decision of you moving on in closing that particular holding in your portfolio?
Jessica Amir 37:55
Really good question. Okay, so the last time I reviewed my portfolio was coming into 2023. And I sold out of coal. And the reason that I sold out of coal was because I knew that China wanted to come out of lockdown, and that they didn't have enough electricity to keep the lights on.
So last year, China ran out of power and the energy crisis was all over newspapers and China didn't want to have blackouts again.
Because that caused their hospitals to turn the lights off in factories as well. So then China decided to pump up coal production. And so that essentially spooked the market. And I was thinking ahead and well, that's probably going to spook the market. So we put out a tweet, I put out a tweet. And then we started filtering that through to clients, and then I not in that order. But I also was getting ready to trim my position. And then I exited my coal positions, because I was thinking the coal price would pull back it did. And then it's fallen 36% this year.
So that's an example of how thinking ahead can kind of help you protect your portfolio and lock in profits as well.
Peter Higgins 39:12
Brilliant, Jessica you've been in markets qualified as a financial planner, you've been through different exams, you've worked all over the place, and you're looking to actually help so many different people, including the female investors as well. If there was one investing book, Jessica, that you could recommend, which book would it be and why?
Jessica Amir 39:31
Peter Lynch, One Up on Wall Street.
So why? Because I think some of my best positions when I look back and I track my investments on a spreadsheet, whether I was trading or investing, I think about the best strategies that are executed and the best returns that I got and they were from investing, not trading.
And the only way that you can get ahead of the market is if you invest typically in a company for longer term over a longer duration. And that is only by being aware of things that are going on around you. And Peter Lynch in his book says, you can have one up on Wall Street if you're observational. And that was kind of how we got on to the talk about, you know, EVs, seeing more EVs pop up in Australia. But there still is time, I guess, for those that are thinking about lithium as well.
Peter Higgins 40:23
Brilliant, thank you for that reply.
Now, I'm sure you've seen different bits of research around Jessica, various studies and it's been proven as well from these various studies that women are, in fact, better investors than men, because they let the power of time and compounding generate better returns, what guidance would you give to any newer investor looking to invest long-term or on a generational basis?
Jessica Amir 40:47
Great question. I'd have to say, just make it really easy on yourself. Think about a company that you like that will probably be around and continue to innovate and grow over the next 5-10-15 years.
Think about that, how that company is being led? What does it say now? And how is it positioning for the future? For example, Fortescue Metals as an example, they're one of Australia's or one of the world's biggest pure iron ore companies as an example, they're only making money from iron ore now, but in the future, they want to be the world's biggest producer of hydrogen.
So that could be something to perhaps consider maybe not what a company is producing today. But what they want to pivot to and look at the company leadership, what are they saying? What are they focused on? How are they investing their money in R&D?
Those are all the things that you might like to think about before you make a long-term investment for the future.
Peter Higgins 41:44
I love that response. Absolutely fantastic response.
I think if what you touched on there really triggers me because I think so many investors are so focused on the now and they don’t look ahead of what's going on.
And some things are thematic, and some things are trending, and put us a new trend as a jump on it.
But it's not about the trend in this sense. It's where the investments are going where the R&D is being spent.
I think that's the essential nuance that investors need to pick up on. So thank you for that reply.
Now, I've got two more questions for you Jessica, I’m conscious we've had you here for a long time, you've had a full day at work.
Now, as a market analyst, the hours can be very long.
How do you maintain your physical and psychological well-being?
Are you a runner or a cyclist? A frequent visitor to the gym? What's your secret to a balanced life, you know, and living your best life?
Jessica Amir 42:34
Oh, it's so important, isn't it? In order to have a sane mind, you need to have, I guess, a functional body.
So for me, I think it's really hard. Sometimes when we're investing in trading, and when we're looking at markets all the time, sometimes it can be hard to switch off.
So you need to have an outlet where you're just literally sweating the house down.
For me, I'm.. believe it or not, I'm actually a weightlifter and I'm aiming to compete in a natural bodybuilding competition.
So that's something that I work on. I also have a part of a running group and a swimming group.
So after hours, not really after hours, because the lights are off. But on weekends, that's typically what you will find doing.
Peter Higgins 43:22
How long have you been weightlifting and bodybuilding naturally? So how long have you been doing that?
Jessica Amir 43:26
Yes, naturally. I've been doing it on and off for about five years. However, this year, in October, it will be my first competition.
So I think it's really important to have that, you know, mental clarity. And sometimes having that break in the week, it can just really help and it just really helps reset. You know, when you're pushing yourself physically and you're achieving something outside of work.
It really helps you stay focused, and keeps your concentration high during the day. But yeah, whatever it is for you at home or whatever it is for you, Peter, I don't know if you're into training, but I absolutely love it.
So important for balance.
Peter Higgins 44:07
Brilliant, now, myself and all the Investing Matters listeners globally will wish you very well. With that competition in October. We'll be cheering you on, Jessica.
Okay, I've got one final question for you, Jessica. I'm going to give you some powers now. Okay, I love giving this question out to people.
I'm going to bestow upon you as you are a very first Australian based guest, right?
So we're absolutely honoured to have you, but we will grant you the powers Jessica will change and improve the quality of every Australian life and individual on this planet.
What would you change and why?
Jessica Amir 44:40
I'd say the educational system. So if we don't educate, there is no systemic change, and the future generations won't learn.
And I think I mean, I could say, you know, I'm going to give everyone $500,000 or a million dollars, but they won't necessarily know how to invest that, or invest that to help themselves or to help the community. But I think starting with the education is really where we can drive change.
So it's up to the school syllabus. It's up to the educational system to really change and start nurturing younger generations, teaching them about financial literacy, teaching them how to invest, what is it company, why should you invest? How do you invest?
How do you round up your transactions on a daily basis when you go to pay for a coffee with your phone?
So that you can invest little tips and strategies, but ultimately, I think the best thing that we can do as a society is educate the young ones.
Peter Higgins 45:41
Fantastic response, fantastic reply. I will grant you your wish. I'll just because that was absolutely fantastic.
Thank you ever so much for being on the Investing Matters podcast.
Thank you ever so much for being our first Australian guest based down in Sydney and I will look forward to continuing to follow you across social media and I look forward to when this is published for it to be supported by you and all your followers.
That was Jessica Amir, Market Analyst at Saxo Markets.
Thank you so much, Jessica, get some rest and thank you so much for staying up for us today. God bless you.
Jessica Amir 46:12
Thank you so much Peter and bless you. Thank you so much. It's been a privilege and an honour and everyone here in Australia absolutely loves your work and looking forward to seeing your channel thrive and grow. Thank you so much.
Peter Higgins 46:27
Thank you very much. Take care God bless.
LSE 46:35
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