Simon Marais Quotes

123 Simon Marais Quotes

1 2 3 4



[In October 2008.] You should always sell when you’re up a lot and actually when you feel great about the stock market - that’s probably when you should sell. And when things are down a lot and there’s doom and gloom and everybody else is selling you shouldn’t be doing that. I’m not saying you should be buying but you probably should be nibbling. But you certainly shouldn’t be selling.
Simon Marais

[In January 2009.] During the current market crisis we have seen an extraordinary flight to perceived safety. The yield on US 30 year treasury bonds declined to an all-time low of 2.5% per annum… Most equity investors are trying to protect themselves by moving their exposure into a few large companies which have consequently held up well and avoiding, at all costs, investments in smaller companies.
Simon Marais

[In January 2009.] While we are deeply disappointed by the losses suffered in 2008, we think that , in some cases, markets have hugely overreacted presenting investment opportunities which have not been available for decades. It is impossible to tell when markets will recover, but even if a recovery in prices is not forthcoming, income yields are very likely to exceed cash returns by a wide margin.
Simon Marais

[In April 2009.] During the last 18 months, we have seen one of the most vicious bear markets since the Great Depression. Private investors who were lulled into buying shares with debt after an extended period of high stockmarket returns, were especially hard hit. As the market fell and margin loans were called, some of these investors became forced sellers. At the same time, very few natural buyers of smaller shares have entered the market, resulting in a massive imbalance between buyers and sellers and causing share prices to collapse. This has been most evident in the smaller end of the market where there is little support from large institutions.
Simon Marais

[In April 2009.] We underestimated the extend to which the smaller and some of the more economically sensitive shares would be sold down in a crisis. Hopefully we can learn from this experience and perform better should this occur again.
Simon Marais

[In October 2009.] If there is one thing that the history of investments teaches us, it is that the time for re-evaluation and critical assessment of a portfolio is after some great performance, when there is actually little pressure to do so.
Simon Marais

[In October 2009.] Try as we might, clairvoyant we are not…
Simon Marais

[In January 2010 on the fallacy of analysts reports (the herd) versus contrarianism.] If you want to build a bridge and 99% of structural engineering reports tell you the bridge is likely to fall down, you would be well advised not to proceed with the design. The same is true in law- few of us would do something that is explicitly against the advice of our lawyer. One would expect this to be true for investment advice. Highly-rated investment analysts and advisors earn amongst the highest salaries of any profession and attract some of the best minds. Surely their advice should be worth something… But it is the nature of market pricing, rather than the quality of the analysts, that is the problem. The laws governing engineering problems like our original problem of building a bridge are fixed by nature. Proper analysis by experts understanding these laws leads to answers that all experts agree on and that nature also accepts as correct. But the pricing of a share is not fixed by any external laws. The price of an investment is that point where the buyers and sellers at any moment are in balance. Even if everyone improved the quality of their analysis, this will still be the case. The market will simply become more efficient, but buyers will still match sellers. The ‘average’ analyst can thus never really add value.
Simon Marais

[In July 2010.] Mathematicians have known since the 1960s that even if we have a perfect model for a complex system, very small changes in the system could in a reasonably short time completely alter the predicted behaviour of the model. Weather-forecasting is a great example - the physics of weather systems are well understood and modelled, yet we all know not to put any faith in long-term weather predictions. The same is likely to be true for any economic model of the world - even if we could model it accurately, the answers we get will depend so sensitively on small variations that it will have no predictive power.
Simon Marais

[In October 2010.] Most of the companies Orbis Australia invests in are pretty boring… This is certainly true for the Fund’s three largest investments, Caltex Australia, SP Ausnet and Hastings Diversified Utilities Fund. In all three cases, the main business is reasonably mature and unlikely to change or grow much in the next ten years. The biggest attractions of these investments are the high yields the businesses can continuously pay to investors, the confidence we have in the long-term sustainability of the income streams backing the distributions, and the excellent inflation protection characteristics of all three investments.
Simon Marais



[In October 2010.] Generating enthusiasm about a gas pipeline or electricity grid can be a daunting task.
Simon Marais

[In April 2011.] Once a particular sector has performed well for many years, common perception is that the sector is a great place to invest. As investors flock to join the gains, capital often flows from areas that have not performed well. This creates great opportunities in the neglected areas and significantly increases the risks in the boom area.
Simon Marais

[In July 2011.] We are unlikely to add much value to your portfolio with macroeconomic views. Instead, the Fund’s profits come from our detailed fundamental analysis of individual companies. This analysis does not generally make for exciting reading, but hopefully it is so boring that the market will ignore it to focus on big events, allowing us to generate extra returns on your behalf.
Simon Marais

[In July 2011.] Our bread-and-butter investment opportunity is a share with a long and proud history that has recently fallen on hard times. Profits have declined, analysts have slashed their forecasts, and the immediate outlook is bleak. It takes a lot of analytical work to get enough courage to buy such a share because very few analysts (if any) agree with you. But if the company shows even a hint of recovery, the returns from the depressed share price levels can be dramatic.
Simon Marais

[In July 2011.] There are two big risks when investing in these fallen angels. The first is that there will be no recovery in the company’s prospects, because the business environment has changed to such an extent that it will never show decent profitability again, doming the company to a steady decline and ultimate bankruptcy. This has happened to many industries over the years - railroad companies in the US (the dominant sector in the market in 1900), many technology companies and, closer to home, the Australian car industry. Secondly, while there may be some recovery, it often takes longer than you expect and the company’s debt levels may grow so large that you investment is largely owned by the banks.
Simon Marais

[In October 2011.] The volatility of the 1870s railroad crash or the tulip mania and South sea bubble in the 1700s make our recent market swings look trivial.
Simon Marais

[In October 2011.] More wealth has probably been lost through history in cash deposits than any other asset class. While the nominal currency value of the cash has been preserved, it has often lost most or all of its purchasing power.
Simon Marais

[In March 2012 on some Australian REIT (Real Estate Investment Trusts) and how they treat investors/unit holders.] These are the people who lost investors over 90 per cent of their money and now they turn around and say they are good capital managers.
Simon Marais

[In July 2012.] Companies have to disclose approaches, otherwise they can get sued. I can understand why they did announce it to the market, but I'd be astonished if [the Australian Securities and Investments Commission] doesn't take a further look at this.
Simon Marais

[In September 2012 on Australia’s fund management industry hitting lean times.] There will always be a position in the market for someone with original ideas. The problem was everybody thought they were a genius. It was easy to be a genius when the market was good, but when things go bad, people get found out.
Simon Marais



[In October 2012.] At Allan Gray we believe that, in order to deliver better than average returns, we have to look at the less well known and researched companies where the odds of significant undervaluation are much greater.
Simon Marais

[In October 2012.] History has proven that once the sharemarket yield exceeds cash rates, the returns to share investors are superior over the long term.
Simon Marais

[In December 2012 on not describing himself specifically as an activist investor.] I’d describe us more as a long-term investor that looks for deep-value opportunities… we agitate when we need to in order to get the best value for our investors but we don’t set out to be an activist.
Simon Marais

[In April 2013.] It is always hazardous to forecast what the sharemarket will do next.
Simon Marais

[In October 2013.] High growth rates and the potential for future high growth generally attracts aggressive competition which often outweighs the benefits of the high growth as far as shareholder returns are concerned.
Simon Marais

[In October 2013.] The secret, is to understand why you are able to buy the stock. Obviously, when you buy the stock, someone is selling it to you. Now, you think that is a mistake: but you must understand why that person is making that mistake. Why is he doing something illogical? We devote a lot of effort to trying to understand that. Generally people make mistakes if there's undue pressure on them to do something.
Simon Marais

[In January 2014.] Most investors can make a very big difference to their wealth by making (or avoiding) a few big investment decisions in their lifetime. Anyone that has the foresight or luck to invest money near the major secular bottoms of sharemarkets does exceptionally well. On the other hand, getting drawn into speculative markets and then panicking in the subsequent collapse can destroy comfortable retirement for even a prudent saver.
Simon Marais

[In April 2014.] I’ve bought quite a few companies that have gone bankrupt over the years.
Simon Marais

[In April 2014.] If everybody agrees with you, don’t do it. Your greatest investments are those when you are invariably on your own.
Simon Marais

[In April 2014.] In general, whenever you do investments you have to do what everybody else isn’t doing. And you must be very careful being in a crowd.
Simon Marais



[In April 2014.] If something is deeply disliked, and hated by everybody the price is likely to be really low and things merely have to turn out to be bad for that to be a great investment. On the other hand if you buy something which everybody loves and things turn out to be great, well that was already expected so you’re unlikely to make any money.
Simon Marais

[In April 2014.] Because it is so difficult - it is so unnatural for all of us to buy something which everybody says is a bad thing to do.
Simon Marais

[In April 2014 on what he looks for in finding suitable shares for contrarian investing.] The things we look for is firstly, it must be hated by especially the stockbroking community and the experts. Bad press about it is good. And then even if the outlook is terrible, that’s also bright. On the positive side what are you looking for - well you want to have some confidence that the company is not going to go bankrupt and if it’s been through a few down-cycles before that’s a great plus.
Simon Marais

[In April 2014.] Always follow the value.
Simon Marais

[In April 2014.] If you buy something because you think somebody might take it over and that doesn’t happen - then you’re really in trouble.
Simon Marais

[In April 2014 on long it takes for a contrarian investment to pay off.] That’s the price you pay for being contrarian. It’s always takes longer than you ever thought. Five years often happens or more. And I’m no expect at timing, I don’t even try and I’ve been in this market over twenty years - I don’t try and time stocks anymore because I can’t do it.
Simon Marais

[In April 2014.] If you buy a stock from the market, somebody else is selling it to you and that guys not a fool. He’s probably as just as well educated as me. Probably worked for a big institution. He has all these resources at his disposal and if you do not understand why he is selling to you - you’re the fool in that transaction.
Simon Marais

[In April 2014 on what he looks for.] You look for things that stockbrokers hate. There’s a lot of sell reports on the company. The companies typically probably disappointed for three years in a row… It’s probably lost 80-90% of it’s value. So just about everybody that’s ever bought the stock is sore and hates them… There’s management turmoil. There’s issues with the banks, there’s a bleak outlook. That’s why they’re selling to you! And that is why you may from time to time get a really good price on something.
Simon Marais

[In April 2014.] It’s not different from if you buy a house. If you go out and buy a house and it’s in a great suburb, and there’s been a big boom in house prices - you’re unlikely to get a bargain. You’re far better to get something that’s a little run down after there’s been a big bust in house prices and everybody’s negative.
Simon Marais

[In April 2014.] The reality is there is no relationship between the growth in an industry or a country and how well an investment in that industry or country does. And that’s just the facts. It’s completely unexpected, it’s not what you think would be the case.
Simon Marais



1 2 3 4


Return from Simon Marais Quotes to Quoteswise.com