Simon Marais Quotes
123 Simon Marais Quotes (Allan Gray, Orbis, Contrarian Investing) 1964-27/2/2015
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[In June 2014, just eight months before passing away.] Would I be happy if I just lead a happy healthy life and yet I accomplish nothing? I don’t think so. I think it’s that sense of doing something which is not trivial and not everyone can do. And yet you can see you’ve done it well and it’s helpful to the greater community. I think that’s what gives me the greatest satisfaction of all.
Simon Marais
[In June 2014.] Contrarian means you’ve got to buy when everyone else is selling. There’s a famous saying, ‘You have to buy when there’s blood in the street especially if some of that’s your own.’
Simon Marais
[In October 2014.] When the market is down, everybody will tell you to sell. When it’s high, everybody will tell you to buy. They don’t understand that the market is down or up precisely because that’s what everybody is doing.
Simon Marais
[In October 2014.] If you want to get killed, change your strategy. Because the moment you decided to do that is invariably the wrong time.
Simon Marais
[In January 2013.] Great investments are often murky with many scare stories and problems floating around just at the time when the opportunity is the greatest.
Simon Marais
[In April 2014.] If you do not understand why he is selling to you - you’re the fool in that transaction.
Simon Marais
[In January 2008.] History teaches us that exciting industries attract competition from unexpected places and have a high chance of being poor investments.
Simon Marais
[In April 2009.] The most consistent (if not the only) way to time stockmarkets is to buy great value and take a long-term perspective.
Simon Marais
[In October 2009.] The only long-term predictor that has really stood the test of time is value.
Simon Marais
[In June 2002 on Dimension Data.] I would be extremely reluctant to buy something which has just fallen a lot and has made a huge number of acquisitions, because I think that's the heart of the problem in the company. When you've done as many acquisitions as they have, and I think in the biggest year, they did 48 or something, it's almost one a week, there's bound to be some big problems underlying those businesses, especially in tough environments. And I think that hasn't come out fully. I think the company had to make two or three years of solid big losses, to really low levels. Then I think it will be lower. I think it's early days.
Simon Marais
[In 2004.] All companies have to start small. The best and largest companies were all small once, and investors are able to make real money when they buy a small company and it becomes a big company. If you want to lose real money, buy a big company that becomes a small one.
Simon Marais
[In July 2006.] In general, Australian stocks are expensive relative to their international counterparts. It should therefore be no surprise that we find little value in the ‘normal’ market - i.e. the shares where everybody is looking for ideas and analyst coverage is extensive. To forecast whether a company’s earnings will be a cent higher or lower than expected is not an area where we can add value on your behalf. To find interesting ideas, we usually find it fruitful to look where there is little interest from other market participants.
Simon Marais
[In July 2006.] Stable, but boring businesses. These are often too unexciting for most investors and have little appeal to stockbrokers, as the outlook for earning fees from corporate action is low. When these companies have also recently disappointed investors, significant buying opportunities can arise.
Simon Marais
[In October 2006.] Over long periods of time, aggregate profits for all the companies in Australia cannot grow faster than the economy itself.
Simon Marais
[In October 2006.] One… has to be especially careful that one does not invest in a company where earnings are unsustainably high.
Simon Marais
[In October 2006.] Companies that have yet to make a profit are not typical investments for us…
Simon Marais
[In January 2007.] Most share price changes simply reflect noise generated by traders desperately trying to outwit each other and have little to do with the underlying economics of the company.
Simon Marais
[In 2007.] I’ve always been sceptical about most furniture businesses and the reason is, you can go back in history and almost all of them… always landed in trouble. I think the basic problem, it’s inherent in the business model, is that you sell a piece of furniture to somebody that pays over 24, 30 months, if he pays at all. But you recognise the profit up front. And as long as you grow, things are fine because you sell ever more, until you’ve got more and more profit to recognise. The moment you stop growing, you are in big trouble because there’s not that much profit to recognise and you still have to carry that investment for the next 24 to 30 months. I think that’s why these companies are almost forced to grow. They then do stupid things - they extend weaker and weaker credit, until these problems catch up with you.
Simon Marais
[In April 2007.] It is our belief that the downside in financials is substantial.
Simon Marais
[In April 2007.] During the early 1990s, Australian banks had major problems. Interest rates went as high as 18% and bad debts soared, largely as a result of poor corporate loans. At the time, expectations were so low you could buy any major Australian bank for no more than the value of its tangible assets - mainly property and cash. You were essentially getting the ongoing banking business for free.
Simon Marais
[In April 2007.] Debt cannot continue to grow faster than the economy without limit.
Simon Marais
[In April 2007.] We have no ability to predict when or how this will happen, but it is clear that all banks will suffer significant downside.
Simon Marais
[In April 2007.] Unfortunately, it may take years for our caution to be vindicated but we continue to believe it is in your best interest.
Simon Marais
[In July 2007.] Thirty years ago our parents did not have flat screen TVs, the Internet or cheap airlines. But they had investment opportunities we can only dream of. In 1977, you paid less than 7 times the annual profits for the average share on the ASX. But even more important was that these profits were depressed and on the verge of a huge secular growth phase… The average stock now trades on more than 15 times profits and these profits are at all-time highs even relative to our strong economy.
Simon Marais
[In July 2007.] Nothing is certain in the oil drilling game…
Simon Marais
[In January 2008.] I’m afraid our quarterly reports often do not make for exciting reading. We like to delve into mundane details about obscure companies that only financial analysts can find interesting. We seldom have the popular eye-popping graphs about building statistics in China or India, the latest technology trends or exclusive interviews with central bankers.
Simon Marais
[In January 2008.] It is certainly much more fun to tour China or India or visit the latest technology trade show than to read the small print in a set of accounts. But we think that it is very hard to make money off macro-economic analysis. Forecasting is notoriously unreliable, especially where large trends are involved.
Simon Marais
[In January 2008 on an investment in computers - IBM versus tobacco - Philip Morris/Altria.] The value of $100 invested in 1973 in both stocks with dividends re-invested. A $100 investment in IBM has grown to $1,700 by the end of 2007 - a little better than inflation, but worse than the general stockmarket which yielded $3,500. Your hindsight on the IT sector has certainly not been any help. But an investment in Philip Morris/Altria has increased to $35,000 - 20 times more than the IBM investment and 10 times more than the stockmarket.
Simon Marais
[In January 2008.] To make money for your fund, it does not help to take trips to exotic locations or to mix with the high and mighty. Rather, profits are made by a detailed study of companies where other investors have often written them off because they dislike the industry or find it to be ‘boring’. History teaches us that exciting industries attract competition from unexpected places and have a high chance of being poor investments. In contrast, ‘boring’ industries tend to lead to a decline in competition and turn out much better than macro analysts might have expected.
Simon Marais
[In January 2008.] A visit to a Sydney or Melbourne industrial estate to see a printing press is not nearly as exciting or impressive as a trip to the US or China. But the tough industry conditions do give us the opportunity to pick up a good company on depressed earnings at a big discount to the stockmarket.
Simon Marais
[In April 2008.] The cheapest prices are almost always found in areas where there is panic amongst investors. During such conditions many investors sell (or are forced to sell) their shares with scant regard for value.
Simon Marais
[In July 2008.] We tend to be early in our purchases and it may take some time for our ideas to play out…
Simon Marais
[In October 2008.] These are difficult times for investors.
Simon Marais
[In October 2008.] We focus on shares where we have confidence that earnings are robust even if economic growth slows.
Simon Marais
[In October 2008.] When market panic sets in, many shares with more solid fundamentals than… also decline as the loss in confidence spreads to innocent bystanders. This is where we often find great investment opportunities…
Simon Marais
[In October 2008.] I think that shares are probably offering the best value by definition for many, many years and you’ll never hit the bottom exactly.
Simon Marais
[In October 2008.] Nobody ever predicts the exact bottoms and the exact stocks. I’ve started nibbling. I look for things where you know the business is secure so it’s unlikely to have a massive drop in earnings.
Simon Marais
[In October 2008.] Earnings often tend to go back to their old lows.
Simon Marais
[In October 2008.] The bigger the boom generally, the bigger the bust. You have to remember the stock market will turn well before the economy.
Simon Marais
[In October 2008.] You may not be at the bottom for banks, but actually the next 10 years could be a lot better than the last 10 simply because the competition is being much reduced.
Simon Marais
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