RON SHAMGAR | from TAMIM Asset Management

In this episode I'm joined by Ron Shamgar from Tamim Asset Management to unravel the complexities of company valuations and the pivotal role of management teams. Ron is a staunch advocate for value investing and has a systematic approach to analysing companies and the significance of great teams. With over two decades of experience on the ASX, Ron’s insights are not to be missed.

We delve into the importance of a board's composition, the impact of founder-led businesses, and the necessity of aligning management incentives with company success. Ron also discusses the pitfalls of poor capital allocation and the challenges management faces when scaling a business.

With real-world examples like EML Payments and Bravura Solutions, Ron illustrates how the right leadership can make or break a company's fortunes. We also touch on the intrigues of mergers and acquisitions, highlighted by the Aussie Broadband and Superloop saga.

Ron Shamgar is the Head of Australian Equity Strategies at TAMIM Asset Management and is responsible for the TAMIM Australia All Cap and Small Cap Income strategies.

Ron has managed the Australian All Cap portfolio for 5 years. Under Shamgar’s stewardship, the portfolio has achieved an average annualised return of +15.62% p.a. (net of fees) since January 2019. The Australian All Cap portfolio has performed remarkably in 2023, achieving an annual return of +31.48% (net of all fees) and was ranked #2 in its category by Morningstar.

For those who want to dive deeper into Ron's world, visit Tamim Asset Management or follow Ron's candid insights on Twitter at @ronshamgar.

Here's a link to Ron's X account and the announcement of his fund's ranking in the Top 3 best performing Small/Mid Cap Funds in Australia by Morningstar for 2023

Ron also mentioned this ​interview ​with ​Andrew ​Russell ​from ​of ​Bravura ​talking ​about ​things ​that ​they ​were ​doing ​to ​turn ​the ​business ​around, ​the ​right ​culture, ​actually ​understanding ​what ​their ​customers ​want ​them ​and ​doing ​things ​that ​way. ​I ​think ​it's ​really ​interesting ​to ​watch.

And here's the EML Payments AGM where all the action took place in 2022

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Chloe: Shares for beginners. Phil Muscatello and Finpods are authorised reps of Moneysherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

Ron: There's nothing wrong with selling a stock that hasn't gone your way. You don't want to fight the market and you don't want to swim against the current, so to speak. If there's a fundamental issue with the company and the stock has under performed, you're obviously missing something, or the market's trying to tell you something, and it's better to just sell, not get emotional. It's amazing how when you're not in the stock, you tend to think a lot clearer and you tend to see things differently. And then you actually start asking yourself, do I actually want to own this business?

Phil: G'day and welcome back to shares for beginners. I'm Phil Muscatello. How do investors look to assess the quality of management when considering company valuations? What are the important numbers when weighing the value of a business? Joining me to discuss is Ron Shamgar from Tamim Asset Management. G'day, Ron.

Ron: Hey, Phil, how you doing?

Phil: Really good. Thanks very much for coming on. We actually met a few years ago, I think at an ASA conference, but I've been meaning to get you on the podcast for a long time. So welcome, finally.

Ron: Yes, I recall. And yeah, thank you for having me.

Phil: Ron has a passion for value investing and believes in a systematic approach to researching and evaluating businesses with a strong bias on assessing management teams, which we're going to cover. Because you think management teams are really important. He's been investing actively on the ASX for over 21 years. So tell us about this systematic approach that you, take to evaluating businesses. What are the checkpoints that you like to have on your list?

Ron: Yeah, sure. So obviously, the areas that we sort of try and focus on, on the ASX is mostly that mid to small cap part of the market. I think in that kind of space, the management and the board are really important for the success of the business, almost, I would argue, to the extent that a sort of average to mediocre business can actually perform quite well under a really good management team, and a bad management team can really destroy what is a pretty good business. I think the key is, obviously we have certain criteria when we look to investing in businesses, but when it comes to the management team, I think you really got to look at the composition of the board. And the first thing to start is whether they, own shares or they tend to be more of a sort of, career sort of director, what I call lifestyle directors, when they're just collecting their fears and they don't really have any skin in the game. And then we look at the management team and sort of whether it's a founder led business, and we do prefer founder led businesses. They tend to outperform the market over time, and obviously, they tend to be large shareholders in the business. And actually, over time, they do lead to a lot of m m a takeover offers for their company over time. So that's really important. We look at the type of incentives the management has, whether they've been in charge during the good times, or whether they are responsible for some of the staff ups and for successful turnarounds. And I think we'll talk about a company today that is sort of seeing that you really need new blood. You need generally, a new board, more importantly, a new management team, because the people that created the past mistakes will never really admit those. And you can never really enact change in a business without changing the management. And so we look at the track record in terms of their previous success in other companies, both for directors. Some directors, they go from one company to the next, and they always end up delivering really good value to shareholders. It ends up in a takeover or whatever. And same thing with management teams. There's some people that just know how to run and how to create value and how to really communicate the business to the market, because I think there's some managers out there that know how to run the business, but they're terrible at making investors on the ASX understand their business and value it accurately. They don't understand how to communicate, and that is an important skill to have, because that's the difference between, your company getting an average multiple, or like a market darling status multiple. So we look at those things, and obviously, there's a lot of things that we look for in businesses before we invest in them.

Many of my guests talk about the important thing about management is capital allocation

Phil: Many of my guests talk about the important thing about management and the skill that they have to have that is above everything else, is that of capital allocation. Is that something that you take into consideration?

Ron: Yeah, definitely. But you only really get to see that over time. And definitely, there's been a lot of bad capital allocation decisions in many ASX companies, and vice versa. And I also think that there's almost sort of a graduation phase for a management team for an ASX company, especially the small caps, the sub, call it a billion dollars or $500 million, whatever you regard as a small cap. As they grow their business and sort of graduate into mid cap or large cap. I have noticed that a lot of management teams don't have that skill to take the business into the next stage of its growth. And so they're really good entrepreneurs to sort of start a business or to set it up and to win contracts and to grow it. But then they reach a ceiling and there's only a few, what I would call the altiums of the world, where really, it's a company where most people know Altium. It was a tiny little 50 mil market cap about twelve years ago, and we actually, bought it back then. But the guys running it really were able to sort of go through those stages and create an ASX 100 company. Whereas on the flip side, I've seen a lot of guys that, are very entrepreneurial management teams, they take a business, they grow it until a certain level, but then they're not able to, and they have a so called blow up or a downgrade, or they do silly acquisitions or things like that. So it's a skill that you have to kind of identify and being in the market for a long time. I've been investing in the ASX for 21 years now. I do know a lot of the people that move around and get involved, and whether it's CEOs or directors. And so I think that's an important skill to have because, you know, who are the ones you can back at certain stages of the company's growth, it's.

Phil: Really important to identify at what stage a company is, because sometimes you're going to need a transformative kind of leader. I mean, you just have to look at Apple. And when Steve Jobs was brought back in after his years in the wilderness, and then the CEO of Apple, Tim Cook, they're different kinds of leaders. Sometimes you need the visionaries, and then other times you need someone who's going to be a steady hand, who knows how to grow the business very successful way. Is that something?

Ron: I think a really relevant example at the moment is the whole, a bit of an embarrassing saga with Tabcorp. And we've all read the news, and basically the CEO said some things that are not meant to be said about certain people that within the regulator that they work with, he basically had to resign or got fired, really, ah, for saying those things. And it just shows. The guy was basically working within Tabcorp for 20 years, became the CEO two years ago, and things like that come out to light and it does show and it does actually reflect on the culture of the business as well, if you have a CEO who talks like that, and this time, obviously he got caught out. Obviously there's a bit of a potentially toxic culture within the organization if the CEO, is talking in that way. And those are the kind of things that investors we don't really get to see because we don't work in these organizations. We only get to see their financials. We get to meet the management during their roadshows. We don't really know what's going on inside the company, and culture is really important.

Phil: Yeah, I've heard that some guests actually look up those websites where management is assessed by their own staff, and that can be really telling about what the kind of people who are running the company are and their success in leading people.

Ron: Yeah, they're glassdoor reviews and so on. The one thing I would caution against that is that there's a lot of disgruntled employees out there. I've actually had some experiences where a lot of ex employees told me negative things about a company, and if you did the opposite, you would have done really well kind of thing. So they're not necessarily a good indicator, but I think we actually look a lot on LinkedIn, and we try and follow and connect with a lot of, just people that work within a company. And the way that they post things about the company or the comments that they make on other posts involving the company, you can see whether there's a bit of an excitement there and they love the place that they're working in or they don't. And that's probably a really good indicator because the glassdoor reviews can be good, but you just got to watch out with disgruntled employees, whereas on LinkedIn people tend to be a little bit nicer. so you get to see whether they're truly excited or not.

Phil: So take it with a grain of salt. Yeah, I follow you on Twitter or X. So we should call it X now. And your account is a mine of information. I think there's some great information there. A follow if they're on X, because you do are giving a lot of good tactics and ideas on companies and so forth. Sir, you've been very vocal in your commentary about the quality of management at EML payments and the turnaround. Can you give us a bit of a history on how that's played out?

Ron: Yeah, sure. So basically, they're a global payments business, kind of founded by the original MD was Tom Cregan and he's a really good case where I mentioned an entrepreneur CEO that was able to take the business from sort of one contract with one customer and ten mil of revenue. At the peak of the 2021 bubble, it was a $2 billion market cap doing 300 mil of revenue and 50, 60 mil of EBITDA. unfortunately, this is a good case in point where I think he's reached his sort of limitations in terms of the business size. And they made a very large acquisition in Europe of a company called PFS, prepaid financial Services. And then they made another acquisition of sort of more of a loss making open banking business called centennial. And then, unfortunately, due to a, confluence of sort of bad decisions, they basically put the regulator of the PFS business back in 2021 due to Brexit, actually, they moved it from the UK to Ireland with the CBI there. And unfortunately, that CBI, the Central bank of Ireland, is a very difficult regulator to work with. And in May 2021, it sort of basically suspended their license in terms of getting new business. And from there on, it's just been sort of downhill. You could argue that there was a lot of mistakes made by Tom Cregan the CEO. And I think the board probably didn't really understand the business and probably caused that as well. There was, at the time, also, rumors know, it came out in the financial review. There were takeover offers for the company, so the shares were tanking, but there were companies out there making bids that were significantly higher than the share price. And the board, for whatever reason, most likely being delusional about the previous highs in the share price. Before these issues, they weren't willing to engage with these bidders or even disclose it to the market. Essentially, the AFR kind of reported it and had forced them to disclose it. Eventually, those bidders walked away, and the company just went from one downgrade to the next. I think these issues really compounded the cost of dealing with the regulator. And then in 2022, I think Tom Cregan just gave up. He quit, and I think the board nominated one of the directors, Emma Shand, with no experience whatsoever. They nominated her as the. You know, she just kept spending a lot of money. They weren't resolving this issue. They would just keep throwing money and consultants at it. And it came to the point where.

Phil: Ron, can we just back up for a moment there? The board appointed someone with no experience as the CEO. am I hearing that?

Ron: You know, and it just shows you. It was a very rushed decision. Basically, they had no CEO, succession planning, and when Tom gave his resignation, they just sort know pretended that was part of the succession planning, but it wasn't and she was really just sort of in line with the board and so they were happy to sort of keep her going. I think the biggest issue is, I think this was a board that's been there for a long time. It's another good example. I think they've been there for about ten years. There wasn't really any much board renewal.

Chloe: Anyway.

Ron: Fast forward to late 2022. Agm. It's a pretty heated AGM. You can actually listen to the recording. I was part of that. And Alta Fox came on the register. They're I think Texas or Dallas based activist investor in the US. They saw an opportunity to extract value here. They took a position in the company and together with other shareholders we managed to vote out the chairperson who tried everything he could in the last second to remain in the board seat. But he lost out, once he was gone. Essentially after the February half year results in 2023, Altar Fox basically forced the remainder of the board to resign. And then the CEO, Emma Shan followed and they essentially replaced the entire board with Conor Haley from Alta Fox. They put in Peter Lang, who actually used to work with EML and brought them the salary packaging contracts in Australia. He's a very, very smart guy. And then the ex CFO of Afterpay as well. But Tolly, I forgot his first name. They basically took control of the board and they put in an irish CEO that really understands payments and dealing with regulators. And essentially they turned the business around. At the time they took over in March it was forty cents. And they really basically, by the end of last year they managed to put the irish subsidiary into liquidation. So they stopped the bleeding and the losses. They sold last week the centennial open banking business. And they're cutting cost out and essentially they're fixing the business into its core profitable divisions. And the share price obviously has gone from $0.40, it's a dollar 20 now. And I think now the focus would be on they should announce a new CEO. And so you'll have like a profitable back to growth payments business with focus on growing that and not dealing with all these regulators and trying to sell parts of it. So I think it just shows you if the right people and the right board were to do this two years ago, you probably wouldn't have this much value distraction over the last two and a half years. So I tweeted something that kind of it's not the business, stupid, it's the people. Right? Because the business hasn't changed. It's just you put in place different people with different incentives and suddenly you can fix any problem. So I think that's an interesting case, and I think it's probably a good story that we own, and we think it's relatively cheap.

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Phil: And it's incredible, isn't it, that it takes an activist investor from Texas to make this play out.

Ron: It's amazing. And it's a bit disappointing, because I think the problem in Australia and ASX is that the majority of the large fund managers, or the superannuation funds, it's a bit of a, small industry, so to speak. And everyone knows everyone, and nobody wants to upset anyone. And unfortunately, we don't have true activist funds that are willing to really get their hands dirty. We're willing to get our hands dirty. Unfortunately, we're not big enough fund to be able to take 10% to 20% holdings in some of these companies. Right, because you really need to spend 2030, $40 million on one position to be able to sort of really make a difference and get a bit hostile. But yeah, unfortunately, most of the large funds that own these stocks, they get a bit lazy. The stock underperforms. They either dump it or it becomes sort of so small in their portfolios that they don't bother. And it's a shame, because, there's a lot of companies that I believe with the right board and management can really turn it around. And another good example that we own is, Bravura Solutions. Bvs. Not sure if we have time to talk about it, but that's another really good example of a board and a CEO that just took the business nowhere, didn't really understand what they were doing. The share price went from $6 down to $0.30. They put in place a CEO who she didn't really know. I think what she was doing, she was going to spend all this money. And they raised a lot of cash at. They looted everyone, and then again, some significant shareholders. Pine Tree Capital, which is essentially run by the son of the founder of Constellation Software, which is a sort of legendary type software company listed in Canada that buys all these software companies. They're, kind of like the Warren Buffett of software companies. His, ah, son's got an investment fund that's listed on the aim, Pine Tree Capital. Them and another fund. They basically took control of them, removed the board, put in place a new CEO, Andrew Russell, who used to run class Limited and we actually owned that as well. And he got taken over, put Matthew Queen as the chairman from Stockland and really cut $65 million of costs within six months just to show you the waste that was going on inside there and turned the business around. And they haven't lost a dollar of revenue. And a year later the stock went from thirty cents to a dollar forty five. Today they retain all that cash on the balance sheet instead of burning it. And they're on track to make 50 mil of cash EBIT next year compared to projected losses from the previous management that they removed. So another real example of how just a board putting in place a CEO, they don't really understand where they're going. And there's a good interview with Andrew Russell on their LinkedIn page of Bravura that you can hear him being interviewed on Ausbiz talking about things that they were doing to turn the business around, the right culture, actually understanding what their customers want them and doing things that way. I think it's really interesting to watch.

Phil: Gee, you're making such a case for the importance of management. It's almost like it can really trump the fundamental research into a company, can't it? Because when you're talking about a turnaround like this, it's really got nothing to do with the historical numbers at all, has it?

Ron: Yeah. And like I said, especially in that small to mid cap because these are businesses that, let's be honest, if they put me or you to run Anz bank or BHP, we can't really blow it up. It's too big, it's too entrenched. It's too know, we might not be the best CEOs but we can't blow it up. But for the smaller companies, they can lose customers. They're not as entrenched, not as big. And so you really need the right people. So yeah, it is key.

Aussie broadband and Superloop are embroiled in a takeover battle

Phil: Okay, so let's have a look at mergers and acquisitions because I'm enjoying following your threads on Aussie broadband and Superloop, the saga that's going on at the moment. Tell us about.

Ron: Yeah, so. Well it actually all started with a company called Symbio which has just been consumed by Aussie Broadband. But it was actually a bit of a takeover battle between Superloop and you know, these are all sort of telcos on the ASX. And if you look at the history, I mean we owned symbiote and then we owned Aussie Broadband and now we own Superloop. And I'll explain why. But if you look at history, the telco space, you do have some really good founder led businesses that grow organically. But the majority of telco companies on the ASX have grown through M and A. And every five to ten years you basically get a flurry of M and A and consolidation and there's usually one or two companies that are the Pacmans and they lead this consolidation and sort of swallow the smaller counterparts. And if you kind of go back ten years it was von Bohrm with M, two telecommunication, James Spencer with Vocus. They kind of consolidated the sector, eventually they merged and eventually they got bought out as well. And then we had a bit of a quiet period and then I think last year Aussie Broadband, which is run by Phil, the founder, he's done a really good job growing the business and he managed to win over Superloop in terms of acquiring symbiote. He just had the bigger firepower and the better share price. And then what happened was basically the scheme was done in February this year, and then a week later he swooped on Superloop and bought 19% of Superloop shares and made a 100% script bid for Superloop using Aussie broadband shares. It was worth ninety five cents at the time. Superloop had a really good result as well and their shares were going up and then he made the bid. The shares were trading at a bit of a premium. I think the market wanted Aussie broadband to improve that. There's a lot of synergies and it makes a lot of sense for the two companies to come together now in the background, and nobody knew this until beginning of last week. Basically, Aussie broadband over the last three years had a white label NBN wholesale contract with Origin and they were essentially sort of providing all the back end and service and call center and all the technology for origin to sell NBN subscriptions to their customers. And that was growing nicely at about 130,000 subs that belonged to origin that Aussie Broadband was managing. Apparently that came up for renewal. And in the background Superloop was working on a deal to essentially snatch Origin from Aussie, and in doing so they obviously incentivize origin by giving them not just better pricing, but also they gave them 10% of the company and they gave them an option to acquire another 10% at market prices in the next twelve months. And the deal is very accretive because under Superloop's cost, base those 130,000 customers as they transition over next year they will bring in almost $20 million of EBITDA. And essentially they kind of paid one times that in terms of the issue of shares. And then if origin were to get to their target of 400 or 600,000 subs in the next two, three years they can pay them another $30 million in cash, but that will bring in possibly another $40 million of EBITDA. so it's a very attractive deal and it locks in origin for six years and as a shareholder, so they're less inclined to switch in six years from now. And obviously that hit Aussie broadband quite hard, both on the earnings side and obviously in their share price. And it is now clear that Aussie broadband does not have the script, the equity power to make a takeover bid for Superloop at a much higher price because it no longer makes sense. It would have to be almost like a merger type deal because Superloop is much bigger now, they'll have to pay a premium on top of that. And obviously Aussie broadband shares have come back down. So I don't think Aussie can acquire Superloop at this stage. And if you actually look at Superloop's earnings forecast for next year, they're forecasting 70% earnings growth and that's pretty much all organic and partly driven by this origin deal. So I think the stock will head higher and make them pretty much unattenable for Aussie to acquire. And now Superlub is obviously trying to get Aussie off their register. So they're using a little bit of a tricky kind of legal loophole where apparently in their constitution, if you don't get the Singapore Media authority approval to acquire more than 12% of Superloop, then technically you've breached their constitution and you could be forced to sell. This is what Superloop is challenging. Aussie Aussie on the other hand is saying, well we think we can get that approval, it'll be okay, we don't have to sell. So there's going to be a little bit of a tussle in the next few weeks until that gets know. At the end of the day it doesn't really matter because I think Aussie will have to come to the realization that they cannot acquire Superloop because of what I've explained. And so I guess the options are this, they either decide to move on and sell that shareholding to other fund managers in a sell down, probably make a good profit. They might wait a bit until they do it. Maybe the shares go higher first. They might decide to hang on and hope that maybe there is another opportunity for them to make a move in the future. Or they might decide to sell a, part of that, to release some capital to do other deals. At the same time, you have origin there, and they might move to their 19% and exercise their options in the next twelve months. So it's going to be interesting to see how this plays out. But the reality is that if you look at Superloop, their forward earnings guidance and their multiple, and they have a clean balance sheet, so they'll be in net cash by June 30. I think it's a strong buy. We think it's worth somewhere closer to a dollar 80. They've got earnings growth momentum, which is driven all by organic. And this win, they've got a balance sheet that can do further acquisitions, so they don't need to raise money to do deals. And then you look at Aussie, they will have a bit of a downgrade now with losing this contract. At the same time, they need to sort of integrate the symbiote acquisition and they can't really do any other acquisitions until they decide what they do with this Superloop investment. So the one to own, in my opinion, is Superloop. And I think that over the next few months or so on, the stock will re rate higher.

Phil: Great story. And just to date, stamp things we're recording on March 19 because I saw there was just another little bit of the tussle taking place this morning with Aussie broadband saying, well, we don't have.

Ron: To sell the shares. Yeah, look, it'll be interesting what happens, but look, at the end of the day, I think Aussie will be able to get through this, they won't need to sell. But like I said, I just don't see them being able to acquire Superloop at this stage. So it'll be interesting to see how this plays out.

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If you want exposure to small cap investing, you really do need an active manager

That's Sharesight.com, sharesforbeginners. Just an interesting thought that just came across my mind. I've had a guest on recently, and it's an online financial advice service. And what he was saying is that, because he offers different ETF portfolios and managed fund portfolios, and what he was saying is that with the big end of the market, the big caps passive is really the way to go. There's no point in really trying to outperform, the big end of the market. Whereas if you want to have exposure to small cap investing, where there is the possibility of major gains, you really do need an active manager. And it seems that you're making this case quite strongly here.

Ron: Yeah, definitely. And I think I totally agree in terms of the ASX 50 or maybe even 100, I just don't see there's 2030 brokers and analysts that are covering these stocks. They're large, they're big. Everyone gets the same sort of access to management. There's not a lot of sort of alpha you can generate. I think it's just really avoiding or switching between the cyclicals back and forth if you want to outperform, but it's very difficult, and I agree on that. And as I explained in that smaller end of the market, you really need to spend a lot more time with the management teams. General investors don't get access to them as easily. So I think as an active investor, if you contact management, you get to sort of sit down with them and understand things better than maybe what the rest of the market understands in terms of just reading their announcements. And yeah, I think there's a lot more sort of understanding. Like I mentioned, the different boards and management, their incentives, their track records, and yeah, you really have to be on your toes because history has shown that most small caps tend to have a good year or two, and then they have what I would call a blow up. And a blow up is not necessarily going bankrupt. It's more about a downgrade or losing a contract or not growing as the market expects. And they get hit really hard when they have those. The stock could fall by 2030, 40, 50%. So you have to be really active and on your toes and constantly sort of have your ear close to the ground, so to speak, and understand what's going on. So I definitely agree with that.

Phil: So we got to congratulate you on the Morningstar number two spot. I think this was a couple of months ago. What was the actual prize that you got for that?

Ron: Yeah, we got the second best performing fund in the small to mid cap part of the market in the calendar year 23, we did just under 32% net of fees.

Phil: How difficult is that to achieve? I mean, how much time are you spending each day on all this?

Ron: Look, investing is my passion. I love what I do, whether it's sort of reading reports, brokers looking around, talking to this guy, whether I do it on the weekends, on holidays, it's not work for me. It's a passion. it's exciting. And although it is an emotional roller coaster ride, because you do have your ups and downs, I'm always looking for that next sort of really good growth story. And being able to pick it before everyone else and then seeing the share price reward you is really that satisfaction we all look to sort of achieve. I've been running the portfolios for the last five plus years, actually. If you just take away the 2022 bear market, which was a tough year, and hit us, the fund has averaged 30% net for those four out of those five years, actually. And it's been driven by just finding these opportunities, these turnaround stories. we get our hands dirty, meet with companies that everyone has given up on, like bravura at $0.30 or EML at. We try not to get emotional about things that maybe. For example, although we've done really well on EML over the years, we did lose a bit of money in 2022 when it sort of tanked. We sold out. We reassessed. And when the new board of management came along, we came in back and we bought a lot, and we've made a lot of money last year from that. We don't get emotional about things, and we purely look at, is there an opportunity or not? And even though we may have didn't do well of a stock in the past, we're happy to come back in if things have changed. And we've had a lot of M A, a lot of takeovers in the portfolio last year. We've had really good ones like silk, laser, symbio. We've had link administration, Pacific Smiles, which, as we speak, has just got a higher takeover bid just now. We've had a lot of MNA. I think over 31 stocks have been acquired in the last five years since I've managed the portfolio. And I think that drives performance as well. And so, yeah, like you said, you have to be active. And if you look at last year, the indices didn't do really well. I think they'd done like, seven, 8%. Most of it came in the last six weeks of the year. And so I think, yeah, you really need to get active and get out there and find these businesses that everyone has given up on, and you can make a lot of money.

Phil: I have some guests who come on and m then they say that people in the funds management industry are constrained in what they can invest in because they've got to show a performance at the end of every quarter. Do you feel any kind of constraint in that area, or are you looking for a bit more of a long term position in some of these positions?

Ron: Yeah, we would definitely think long term. So the way we invest is, obviously, it has to tick all the fundamentals of what we look for in the business, financially and the valuation and so on. But we invest with a two year view. And essentially, we want to buy something that we think will be worth a dollar in two years. And ideally, we want to buy it at 50 or $0.60 in the dollar now. And, yeah, look, obviously we all want to finish the month on a high. We all want to finish the quarter and so on on a good note, but we do tend to take a long term view. I mean, some stocks we've held for many years, even four to five years now. But like I said, and really, the key kind of message I can give to your listeners is, the one thing I've learned over the years is there's nothing wrong with selling a stock that hasn't gone your way. You don't want to fight the market, and you don't want to swim against the current, so to speak. If there's a fundamental issue with the company and the stock has underperformed, you're obviously missing something, or the market's trying to tell you something. And it's better to just sell, not get emotional. Take the l. There's nothing wrong with taking an L. It's a tax loss. It's an actual asset you can deduct against any capital gain. And then it's amazing how when you're not in the stock, you tend to think a lot clearer and you tend to see things differently. And then you actually start asking yourself, do I actually want to own this business? But you don't think that when you own the stock. And so I think really, just trying to separate emotions is really the key to success in this game. I've been doing it for 21 years, and you still sometimes get emotionally attached to some companies. But I try and be ruthless.

Phil: It's hard not to fall in love with.

Ron: Yeah, but I try to be ruthless and if there's bad news, you just get out. It doesn't matter. You get out. And you do tend to think a lot clearer from the outside as an outsider.

Phil: so Ron, tell listeners how they can find out more about you, your X account and Tamim asset management.

Ron: Yeah, sure. So look, TAMIM asset Management, we're a boutique asset management firm based in Sydney. We cater, to wholesale investors and also retail investors as well. We do offer several sort of investment products to our investors. We have property syndicates, we have a credit fund and we also have equities. I manage the australian equity part of Tamim I run two funds, the all cap fund and the small cap income fund. As you mentioned, funds have done really well over the last five years. They've averaged 16% per annum net of fees. And if you like that sort of small to mid cap exposure and someone that, as you said, specializes in activist investing and being active rather than passive, then this is what we do. And you can reach us through the website at ah, tamim.com au. You can email me ron@tamim.com to you. Don't take it too seriously, but if you want to have a bit of fun and get some good insights, then you can follow my Twitter account which is at Ron Shamgar, my name. I like to have a bit of fun as well. I like to stir things up, but I also like to provide some really good insights as well.

Phil: So yeah, we came for the investing information but stayed for the shit stirring.

Ron: Exactly.

Phil: Ron Shamgar, thank you very much for joining me today.

Ron: Thanks Phil, appreciate it.

Chloe: Thanks for listening to shares for beginners. You can find more@sharesforbegners.com if you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.

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