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Smoke and mirrors: price patterns, charts and technical analysis. Investors are not always UNIT@UNSW rational presents in the way they set expec7 tations. These irrationfully alities may lead to expecfranked tations being set too low D for some assets at some times and too high for other assets at other times. Thus, the next piece of information is more likely




by Botong Cheng






NIGEL LAKE (CEO OF 15 POTTINGER) by Pasindu Fernando & Carmen Lee

Disclaimer: The articles throughout the publication are written and compiled by students. The information contained in the articles is general in nature, and should not be construed as professional financial advice. Articles written about companies are not recommendations, and any holding in the companies mentioned will be disclosed by the author at the end of the article. Please do your own research and come to your own conclusions, or consult with a licensed professional advisor.



UNIT@UNSW 2012 23

EVENT WRAP UP by Jesse Zhou & Sally Qin

A NOTE FROM THE CO-PRESIDENTS of UNIT Dear reader, It is with great pleasure that we present to you the first edition of the relaunched Fully Franked. To those who have not read Fully Franked before, it is a publication originally launched in 2008 at UNSW with aims to filter and condense the wide world of finance into a form relevant for students. In 2010, it became an exclusive publication produced by student writers from all three university chapters, including Macquarie University, University of Sydney and University of New South Wales, covering topical issues in the financial world as well as introducing students to investing strategies and trading techniques. The relaunch of Fully Franked will feature a new and improved Fully Franked, giving you access to a wider variety of educational material, so as to impart knowledge, provoke your thoughts and stimulate your interest. We would like to thank Jesse, Michelle and all the contributors for their hard work in compiling this edition and we hope you find this issue both interesting and informative. Warm Regards,

Thomas Mak & Juliet Zhu





The University Network for Investing and Trading (UNIT) is a student-run society that involves 3500 members spanning across three universities – UNSW, University of Sydney and Macquarie. This makes us currently the largest investing and trading related student society in Australia. At UNIT, our mission is simple – to provide free education to students interested in trading and investing from all walks of life. We host seminars and presentations from industry leaders that not only introduce students to the fundamentals of investing and trading, but expose students to practices not taught inside the classroom. Whether it may be for your future career, or just for interest, we aim to equip all students with the skills, knowledge and confidence to start up and manage their own portfolios and invest for life. Regardless of degree, background or level of expertise, there will always be something at UNIT for everyone! As 2012 comes to a close, we hope you have learnt more about investing and trading from our industry professionals. While this year has been a blast, we look forward to bringing you a society that is bigger and better than ever before – more sponsors, seminars, more diversified events. Stay tuned, we have some great things in store for 2013! Visit




OUR CONTRIBUTORS a massive thank you to: (from left to right) Carmen Lee Botong Cheng Pasindu Fernando Sally Qin Henry Sit Kevin Wu Tyler Goldberg Jim Kong Josephine Lee Karl Ng Vincent Pan Kendy Ding James Beckett


Dear reader,


Welcome to the first issue of Fully Franked, a revival of the former UNIT publication. We have a brand new publications team on board in order to give you, our readers, a way to communicate your thoughts and amplify your ideas. We hope that this publication will bring the UNIT community closer together and give readers a greater understanding of what investing and trading is all about. Our vision is parallel to that of UNIT: To cultivate an entrepreneurial spirit amongst young people by providing information about investing as well as through networking opportunities, while ensuring that a culture of selflessness and giving prevails. As avid followers of finance news, we are constantly amazed at the depth and dynamics of the industry. It is hard even for seasoned investors to keep up to date with everything that’s going on, and because of this, Fully Franked aims to filter out only what is important, and bring you the most informative – and interesting – investing material. Within this issue of Fully Franked, we are launching the first instalment of the ‘Investing Technique’ series, as well as giving you the intricate details of recent industry news. You’ll also find our exclusive interview with Nigel Lake, the CEO of Pottinger, as well as many more interesting articles penned by passionate amateur investors. We hope you enjoy our first issue!

from Jesse Zhou & Michelle Cai


INVESTING 101 Go through the basics of investing with Botong Cheng. Rich men in suits walking around Martin Place, trading floors flooded with financiers shouting BUY! BUY! BUY! and SELL! SELL! SELL! – this image associated with investing is incomplete. As the financial world advances, it is becoming more and more important for the general public to have a grasp on the basics of investing.

INVESTING: WHAT IS IT? Investing is the act of putting money or capital into an endeavour in the hope of attaining a profit in the future. Translation: Put money away now to have more money later. Most will be familiar with the idea of being employed and receiving a salary. The key to investing is to flip the equation – instead of working for money, you make money work for you.

WHAT CAN YOU INVEST IN? By definition, an investment can be made in anything that could be worth more in the future - you can invest in rabbits, vintage hats, surfboards or post-modern art. However, unless you are an avid collector of these niche items, it is very unlikely that you would be able to value them correctly. This the reason why most investors prefer assets with large markets and readily quoted values.

Some of the major asset classes include: • High Liquidity - Includes savings accounts, term deposits and cash management trusts. This is the safest type of investment in the short term, but returns over the long term may be eroded by inflation. • Bonds - Also known as fixed income securities, bonds refer to debt-based assets. When you purchase a bond, you are lending money to the issuer, usually a company or the government. In return, they guarantee to pay you interest and eventually return the loan amount. Bonds are one of the safest type of assets because they are often issued by gov-

ernments. This means that they are essentially ‘risk free’ as the government can always print money to pay back loans. Bonds are a reliable method to attain steady returns over the long term. • Stocks - When you buy shares, you become a part owner of the business. You are therefore entitled to a share of the company’s profits, paid out in the form of dividends. Shareholders can also control the direction of the company through voting rights at company general meetings. Stocks offer high potential returns in comparison to bonds, but stock values are also more volatile, so you risk the chance of losing some or all of your investment. There are many other asset classes such as property, commodities, and derivatives, just to name a few.


Diversification may sound complex, but it is merely the real world application of the saying “Don’t put all your eggs in one basket.” You spread your investments across a variety of assets and markets so you lower the risk of losing money if one of your investments fails. For example, if you invest all your money in one company and it fails, you will lose all your money. However, if you had diversified and invested equally in two companies, then you would only lose 50%. In the real world, portfolios can have dozens of different assets spread across multiple markets, as unsystematic risk is reduced as the number of assets increases. The downside is that diversification may also reduce possible gains. For example, if the same stock doubled in value, you would only have doubled 50% of your portfolio. Diversification tailors to the different risk tolerances of each investor, and is one of the most fundamental principles used in investing.

Take FINS2624 for more!



INVESTING SERIES: PART 1. An Introduction to Fundamental Analysis There are an endless number of investment strategies, almost all of them involving the use of fundamentals. So what is fundamental analysis? It is a technique that attempts to determine a security’s value by understanding the underlying factors affecting the company’s business and its future prospects. This involves the consideration of both qualitative and quantitative factors. The ultimate aim of conducting fundamental analysis is to determine a security’s ’intrinsic value‘ – that is, the actual value of a company based on all tangible and intangible aspects of the business. It should be noted, however, that all valuations are subjective in nature and that there is constantly a need to make subjective judgments. The uncertainty underlying fundamental analysis is that the intrinsic value attained is only an estimate, and it is unknown how long it will take (if ever) for the intrinsic value to be reflected in the market price. By contrast, technical analysis focuses solely on the price and volume movements of securities. The assumption underlying this approach is that all relevant news about a particular company is already

priced into its stock, and that its price movements provide more insight than the fundamental factors of the business. There are also believers in the ‘efficient market hypothesis’ who dismiss both fundamental and technical analysis. The hypothesis contends that it is impossible to beat the market in the long-run as the market is efficient in pricing all stocks on an ongoing basis. Although there are differing views and methods in identifying mispriced stocks, the importance of fundamental analysis should not be overlooked. Successful investors such as Warren Buffet, Benjamin Graham and Peter Lynch highlight that, although businesses and economic cycles can constantly undergo change, the underlying fundamentals to investing remain unaltered. Often, the first step of fundamental analysis is to identify potential investment opportunities. This involves identifying both existing price disparities and future opportunities though the thematic research of macroeconomic opportunities, social and consumer behaviors . This funnel approach allows investors to filter and rank the potential opportunities that they wish to pursue. It is only after opportunities have been identified that investors should proceed onto industry and company analysis. Further research is required to understand by what means the company generates revenue, and how the company is positioning itself to generate profits in the future in response to any changes in its competitive, economic and regulatory environment. Part II of this series will cover the use of comparative company analysis to determine whether a company is mispriced in comparison to similar firms.

ASX LEAGUE: THE BIG PLAYERS BHP Billiton Limited (BHP) - Materials Newcrest Mining Limited (NCM) - Materials Woodside Petroleum Limited (WPL) - Energy RIO Tinto Limited (RIO) - Materials Origin Energy Limited (ORG) – Energy Westpac Banking Corporation (WBC) - Financials Commonwealth Bank of Australia (CBA) - Financials Telstra Corporation Limited (TLS) - Telecommunication Services National Australia Bank Limited (NAB) - Financials Woolworths Limited (WOW) - Consumer Staples Australia and New Zealand Banking Group Limited (ANZ) - Financials QBE Insurance Group Limited (QBE) – Financials



INVESTING SERIES: PART 1. An Introduction to Technical Analysis Within the convoluted practice of modern financial trading, there are two separable schools of thought that have stood the test of time.The first tool in the financier’s predictive arsenal, fundamental analysis, can be described basically as an analysis of balance sheets and cash flow statements.The focus of this article, however, is technical analysis - an observation of the price movements of a security. This tool is used to understand the patterns in the market, and (hopefully) correctly identify any mispriced assets. Strictly speaking, the investors subscribing to the technical doctrine rely inherently on the assumption that the market has already taken all of the fundamental and broader economic factors into consideration. Hence, technical analysis focuses on using data such as trading volume, historical prices, and open interest to decode the behaviour of the market. As the market is based on supply and demand –an aggregation of investors buying and selling stocks – technical analysts can exploit opportunities by studying patterns that inevitably filter through. For example, let’s take a look at a hypothetical world in

which Apple stocks do not consistently rise over time. If the share price were to suddenly rise, some investors may be inclined to sell their stake and realisean immediate gain. This would create a structural property – a significant uptick in the stock price, followed by a small downward correction in price. These tendencies create repetitive patterns in price movement that are attributable to general market psychology. Essentially, market participants provide consistent reactions to market stimuli over time. These are the patterns that analysts, armed with their analytical tool bags, aim to exploit. For a chartist (the classical technician) this would take the form of identifying upward/downward trends and also price levels where the trend is thought to have changed. In more modern terms this is more likely to look like some mathematical engine, able to find and exploit the patterns of the market. As far as criticism goes, technical analysis bears more than its fair share. The discipline itself has not reached the same level of academic scrutiny or acceptance as the more traditional fundamental analysis has. One of the main issues is that while consistent methods exist to assess the intrinsic value of a company, much of the work in technical analysis is up to the investor – in other words, it is more of a mathematical playground than a concrete, definitive science. Although it is a relatively young field, technical analysis provides the freedom for investors to think creatively about investment decisions and truly form strategies that are unique to their style of investing.

QUICK QUIZ 1) Where is the oldest stock exchange in the world? 2) Which is the largest stock exchange in the world in terms of market capitalization (no of shares x price of shares)? 3) How many companies are listed on the ASX 100? 4) What is the ASX code for the retail giant Harvey Norman? 5) When are the normal trading hours for the ASX? 6) Who profits when all stocks go down? ANSWERS: Antwerp in Belgium, New York stock exchange, 100, HVN, 1.2 trillion, 10am-4pm, Short sellers



HISTORY OF THE HARDEST HITTERS Banker’s Panic, 1907 DOW drops almost 50% from the high of the previous year German Hyperinflation, 1918 In 1914, the exchange rate between the U.S. dollar and the German Mark was about 1 to 4. By 1923, the rate had mushroomed to $1 to 1 trillion Marks The Great Depression, 1929 Longest and most severe depression in global economic history. On October 29, 1929, $10 billion (around $95 billion today) turned to dust. Oil Crisis, 1973 Embargo on those nations who supported Israel in the war against Syria and Egypt led to a loss of $97 billion in value of shares on NYSE in six weeks. Black Monday, 1987 Hong Kong lost a massive 45.8% of its value, the United Kingdom lost 26.4%, Australia dropped 41.8%, and New Zealand dropped a full 60% from its peak. Japan’s ‘Lost Decade’ led to a virtual halt in economic expansion during the 1990s until 2001 East Asian Financial Crisis, 1997 Thailand dipped 75%, Hong Kong’s HSI, 23% and Singapore dipped 60% Ruble Crisis, 1998 Corruption in Russia saw their annual bond yields stand at a staggering 200%. The Great Recession, 2008 Collapse of Lehman Bros. led one financier to estimate that by March 2009, up to 45% of global wealth had been destroyed. European Sovereign Debt Financial Crisis, Ongoing Poor economic figures, continued low growth and large sovereign debts remain potentially huge.


CASH CONVERTERS: a rollercoaster ride With much uncertainty surrounding supposed payday lending legislation, the shares of specialty retailer Cash Converters (CCV.AX) have been on a rollercoaster ride. Investor Tyler Goldberg investigates.


With much uncertainty surrounding proposed payday lending legislation, the shares of speciality retailer Cash Converters (CCV.AX) have been on a rollercoaster ride. GFC stricken investors scrambled for the exits as the shares capitulated to a frightening low of $0.22 in late 2008. Much to the dismay of fearful sellers, the pawnbroker recorded record profits (of $0.06 a share – selling on a P/E of less than 4) that year and every subsequent year as the shares climbed to a high of $0.87 in 2011.

sulting in an additional 5000 loans in the past 6 months.

However, recently the government proposed legislation to cap establishment fees on loans to 10% and monthly interest fees to a maximum of 2%. Shares immediately halved from $0.80 to $0.40. In late 2011, these planned restrictions were found to be unworkable by a joint Senate Committee. And of course, there are two fiercely opposing sides to this battle. Many activists tug on the emotional heart strings of others and claim payday lenders are loan sharks that exploit the most financially insecure. The firm’s strong performance since 2003 can be This essentially may be true in some cases, as with primarily attributed to its venture into the microfi- all loans. However, this practice would not be in the nance industry. Growing from a negligible propor- best interests of Cash Converters. They do not want tion of revenue, the finance division now represents their customers in trouble; after all, they only lend approximately 36% of dollar sales ($186 Million in 15% of net monthly income to en 2011) and over half of the company’s sure their debtors can repay bor “The firm’s strong net profit before tax in 2011. rowed funds. Ultimately, this, as a new profitably performance since 2003 can be primarily revenue stream, reduced reliance Ultimately, there are people who on weekly franchise fees and attributed to its venture want these financial products --for propelled Cash Converters into cash flow issues-- and are able to afinto the microfinance an era of unprecedented growth ford them. If the proposed legisindustry.” where profits grew from $3 million lation was to come into effect, a $320 one (2003) to $28 million (2011). month payday loan would only generate $38.40 of revenue. In addition, the retailer claims the cost of The retailer offers two main finance products in Aus- writing a loan is $76 after controversially allocattralia and the United Kingdom; payday and personal ing all store overhead costs. Further, the profit is loans. ‘MON-E’ is the platform that provides stores then split between the franchise or ‘agent’ and Cash with operational (and support) software required Converters. Even if the true cost of the loan is lower for selling payday loans (‘Cash Advances’). These than the stated $76, a product generating only $38 ‘Cash Advances’ are typically repaid in a month and of revenue would not be very profitable. average $364. This operation is entirely risk free for Cash Converters as the ‘agent’ or franchisee assumes If we were to assume lenders began to exit the marany bad debts. For personal loans, the principal av- ket by virtue of ‘losses’ caused by price controls, erages $1200 and is repaid in 7 months. All personal ill-fated side effects may arise. Using basic ecoloans are checked by the ‘Safrock’ division who pro- nomics, this ‘price cap/ceiling’ essentially reduces vide funding and software allowing franchise net- the quantity supplied. This, of course, means that a work to offer these loans. While Cash Converters is supply shortage for this financial product will ensue responsible for ‘bad’ personal loans, debt write-offs causing a loss of consumer and producer surplus. only account for 6% of principal loaned in Australia Consumers, unable to attain short term credit and and 11% in the UK. guided by Adam Smith’s ‘invisible hand’ may try to obtain this product from other avenues – potentialExcitingly, in the first half of this year, the Austral- ly a black market. And unfortunately, in those rare ian personal loan book grew 17.1% to $61 Million, ‘default’ circumstances consumers could end up and the UK loan division grew by a whopping 70% with bruised eyes or perhaps something far worse. to €8.5 Million. Additionally, active customers for ‘Cash Advances’ grew 14.1% in Australia and 36.4% I’m all for consumer protection and a closer exin the UK. Intelligently, management has expanded amination of the facts are needed. In the last finanits financial service offerings onto the internet re- cial year there were only 4 consumer complaints 11 FULLY FRANKED | ISSUE ONE

to Cash Converters out of an estimated 500,000 transactions. The ‘loan shark’ claim seems to be blown out of proportion. Additionally, no credit provider is forcing anyone to take out a loan. On the flip side, 40% of customers receive some government assistance. This certainly does stir the ethics in most people. Before any implementations, the Government should definitely consider the possible effects price controls i.e. a possible rise in crime following the development of illegal short-term credit providers. However, adequate disclosure of the costs associated with each financial product being made mandatory by Government is seemingly the most simple, safe and effective way to make sure consumers make rational choices and something that I would wholeheartedly support. Just recently, the Consumer Credit and Corporate Credit Amendment (Enhancement) Bill 2011 finally passed through the senate and its full effects will be felt from July 1, 2013. The most important aspect is a capped establishment fee of 20% and monthly fee of 4%. Interestingly, Cash Converters has come out and stated that this legislation is workable. Furthermore, they believe it may give them a stronger competitive advantage as smaller players with inadequate “systems and standards” may be forced out of the industry. Putting all that aside, from the perspective of an investor the business is performing well. The equity in the business is generating a return of just over 15%, in line with the big 4 banks. Its strategies of buying back franchised stores, refurnishing existing stores and offering its financial products online should see the company experience further growth and hopefully allow them to lower interest charges for cash strapped consumers. The share price has risen strongly recently but there is still potential for strong gains, with an earnings yield of just over 10% and with good growth prospects for the future.

Disclosure: Author has an Interest in ‘CCV’, 0.59 Average Price. All opinions in this article are opinions only, and should be used as such.

The bull is depicted to be headstrong and fearless with horns pointing upwards and thus, positive. The bear is slow, hibernating with sluggish attitude and always ready to downbeat the bull’s optimism.




TURBULENCE The Qantas share price (ASX: QAN) dropped below the $1 mark for the first time since the company was founded 91 years ago. Jesse Zhou looks at why.

To the shock of investors and the Australian public alike, Qantas management announced earlier this year that they would make a loss of approximately 300 million dollars for the 2012 fiscal year, the first loss since Qantas was sold by the government in 1995. Consequently, the Qantas share price (ASX: QAN) dropped below the $1 mark for the first time since the company’s founding, 91 years ago. The actual loss as reported on August 23 in the 2012 financial report was $245 million, compared to a $250 million profit a year ago. Qantas is an airline with an iconic brand and a strong reputation, but has been struggling with various structural issues in the past few years. The long haul international division ‘Qantas International’ is dealing with problems such as rising fuel prices (fuel expense of $4.3 billion in fiscal year 2012), a strong Australian dollar (appreciation of 40% against US dollar over the past few years) and economic uncertainty over European debt despairs. Qantas International does not recover its cost of capital and runs many unprofitable international routes. Since the company is based in the southern hemisphere, it lacks the exposure and geographical advantages that many of its international competitors have. The company has been focused on scaling down international operations and closing unprofitable routes, as the division has contributed a loss of $450 million to the company’s losses last year. Along with the announcements of these distressing financial results, orders of 35 Boeing fuel-efficient jet planes costing up to $8.5 billion were cancelled in August in an attempt to conserve capital. A credit rating cut has not helped Qantas either, with Standard & Poor’s cutting the rating to BBB-minus. A ratings cut means that Qantas faces higher debt financing costs.


The dominance that Qantas has over the domestic market is not all rosy either with the continuous industrial action causing the grounding of the entire Qantas fleet in October 2011, domestic competitor Virgin garnering an increasing level of market share, and Tiger Airways threatening the duopoly. Singapore Airlines, parent company of Tiger, is prepared to operate at a loss to break the QantasVirgin domestic dominance, and has unveiled a new Sydney base that started operations in July. Labour also represents a huge portion of expense for any airline, and with high labour costs this may put Qantas at a disadvantage against competitors.

annually, making the route the 5th busiest route on the planet. Between Qantas, Virgin, Jetstar and Tiger, 200,000 seats are offered every week on the route linking the two corporate hubs. Qantas operates 32 flights a day and Jetstar offers 11. Virgin is throwing everything it has to capture a greater market share of domestic fliers from Qantas, but still has a long way to go as Qantas has a well established premium service for corporate travellers.

Qantas has also announced a five-year plan to turn around Qantas International. The plan includes the withdrawal from loss making routes, major reductions in capital expenditure, and alliances with other The airline industry by nature is “A credit rating cut has not international carriers. A recent tie up with Emirates will provide one that operates on paper thin helped Qantas either, with a boost for Qantas margins. Averaged over the past Standard & Poor’s cutting International. The alliance is 40 years, the net profit margin for to involve a code sharing deal the world’s airlines was only 0.1%. the rating to BBB-minus.” It is important for an airline to consider its strat- where Qantas flights to Europe will go via Dubai egy when implementing the number of flights in rather than Singapore. This deal parallels a relaa certain region. An excess supply of flights means tionship that Virgin has with Emirates competitor; empty seats, which erode operating margin. How- Abu-Dhabi based Etihad Airways. Etihad owns a ever, running fewer flights means a diminishing 10% equity stake in Virgin, and operates marketing presence and could result in competitors gaining and loyalty programs together. As a result of entermarket share. Qantas had been extensively focused ing a global partnership with Emirates, Qantas will on expanding international operations, growing see a declining importance in current relationships total capacity at 5% annually when demand for its with British Airways and other members of the flights was only growing at 2-3%. This expansion Oneworld alliance (of which Qantas is a founding has cost the carrier greatly due to escalating fuel member). Whether this will be beneficial to Qantas prices (from $87 pre-global financial crisis, to over or not, it is still too early to say. QAN.AX has been hovering at around $1.25-30 since the tie up with $100 a barrel). Emirates. Alan Joyce, Qantas’ chief executive, is adamant that the substantial loss will not make a difference More recently, Qantas has agreed to sell a 50 perto the people who fly with Qantas. With the com- cent stake of its StarTrack road freight business and pany holding a cash balance of $3 billion, Qantas is acquiring the air freight business Australian Air is investing in new airport lounges, a new enter- Express from Australia Post. This reflects Qantas’ tainment system and the average fleet age has been strategy of strengthening core businesses, and dereduced to 8.3 years of age, the lowest it’s been in viation away from non-core operations. some time. Qantas’s strengths are definitely the market share it has in the lucrative domestic cor- Qantas faces tough times ahead. If the company can porate travel market (approx 70% market share) uphold market expectations and return internationand the growth that the Jetstar division is show- al operations back into profit whilst defending its ing in capacity, passenger and revenue. Qantas domestic and frequent flier operations from indusservices the full-service high-end market, whilst try competitors, then we should see a return to posiJetstar dominates the leisure market. Competitors tive financial performance and a promising future. become squeezed in the middle. Disclosure: Author does not have a position in QAN. For an idea of the size and scale of the domestic airline market, we consider the Sydney-Melbourne route. 7 million people fly between the two cities FULLY FRANKED | ISSUE ONE


NIGEL LAKE CEO of Pottinger ~The Tech Calamity~ Pottinger is a leading financial and strategic advisory firm, with over 200 M&A and financing transactions such as the sale of LJ Hooker in 2009 and a $34b sale of ING Group’s investment arm. Headquartered in Sydney, the organisation has won the Australian business award’s “Recommended Employer” award for 6 years in a row. Nigel Lake, Joint CEO and Founder of Pottinger, sits down with Carmen Lee and Hansaka Pasindu Fernando to talk a bit about himself, and to give Fully Franked an insight into the fluctuations of the technology industry. P: Firstly, could you tell us a bit about your background and how Pottinger came about? Lake: I started out my career in the UK and went through a very typical educational background: school, Cambridge University and the world of accounting. A very common starting point was to do Chartered Accounting. You did that for 3 years and studied part-time whilst you were working for a firm. Once you were qualified and as soon as you can reasonably move on, you move on. I went into what was then called merchant banking (now Investment Banking). I joined Barings – then the best M&A business in the UK. It was also the longest-established merchant bank, with a very blue chip background but most importantly for me, it was a business that was really going somewhere … they did tremendously well, top of the league tables in all sorts of industries such as utilities, financial services, pharmaceuticals, media, brewing etc. But Barings went spectacularly bust due to the actions of a trader in Singapore, by the name of Nick Leeson. It was brought by administrators, then ING. Come 1998 all of us decided that


enough was enough and we weren’t going where we wanted to go. …something like 60 out of 100 people left that team in 6 weeks, and we all went different ways. Between us we now work for all the major Investment Banking and advisory businesses around the world, all the big names, some of that diaspora spread through which is an amazingly useful network to this day. I went to HSBC - I wanted the opportunity to build something. I ended up spending 4 years there, partly in London and partly in Asia based in Japan. Most of the rest of HSBC’s investment bank was not operating especially well – unsustainable and not making money. So rather like the Barings example, after 4 years, the time had come so a few other colleagues and I each went different ways to do different things, although interestingly left behind a business that was more sustainable. The Investment Banking world was looking pretty ordinary post tech wreck (2002) so we thought what better time to sort of hang up our caps for a while. I got married to Cassandra and we took 6 months off to go travelling. We had the luxury, having

worked hard and saved hard, of being able to sit back and not go to work. So we moved here, got ourselves set up and started exploring different things. We tried all sorts of crazy ideas; some of them were just mad, some of them were completely sensible, but we were not the people to do them. In the end we sensibly decided to stick with what we knew, which was advice. That comes to the second half of your question of how Pottinger came about: a belief that there was a better way to do things and a better whole approach. Management consultants think about strategy and investment bankers think about deals. There’s this sort of big gap between the two. Management consultants are remunerated based on having lots and lots of people working for as long as possible. Investment bankers on the other hand, need to get a deal done as fast as possible because if they don’t they will probably be fired (the dog eat dog work of Investment Banking). Neither of those 2 things really give clients what they need: advice which links strategic thinking, financial analysis, commercial common sense which is long-term in nature but done quickly so you’re not there for-



ever without actually choosing where to go. The person that gets hired by an Investment Bank is a very black and white person with a very particular skill set and particular degree. Through the freedom of our own business, we have chosen different people. People from technology backgrounds, physicists and scientists. We have CommerceLaw people too but we have a much more diverse mix. That has been incredibly helpful. It means we have way more diverse knowledge than is usual for an Investment Banking type business or a consulting type business. This was an amazingly long answer for a short and simple question but it’s how we got here. The telling detail is: I spent 4 years at KPMG, 4 years at Barings, 4 years at HSBC. [Pottinger] is the only place that I wanted to stay and I’m more excited about where we are now and where we can go than I was at the beginning.

P: A lot of things are happening in the tech industry, for example in social networking. The Facebook IPO was much hyped up but it ultimately hasn’t been that successful, do you have an opinion as to what contributed to the Facebook IPO disaster? Lake: Yes, I think we’ve got pretty clear view around that and there’s been a long history of companies and industry sectors getting incredibly overvalued at different points in time. There are endless examples of bubbles over the years. We have picked up in recent times, the app-making bubble as a particularly weird addition to the technology era. At the end of the day, whatever anyone says to you about what a company is worth, its value is significantly driven by its ability to make a profit and grow that profit over time. And it is as simple as that. A start-up company like Google started out with cost and no revenues but it grew and it grew and then it started to have some revenues but it still made losses. There came a point in time in which it made a profit. And now Google makes enormous profits and its value is based on a perfectly reasonable forward multiple of those profits. When Facebook came


along it’s going to have to go through the same journey. It makes a very small profit at the moment and it will make bigger profit in due cost and perhaps a huge profit in some point in time. But the real question is how quickly does it make a profit big enough so it catches up to Google and can be valuated effectively on a similar model? It may grow quite quickly, that growth will slow. Eventually they may both be very similar companies; certainly Facebook is not going to command a valuation premium over Google for the rest of time. So if you come back to that basic perspective. It was very easy in advance of the Facebook IPO to say: “Ok, how is Google valued?” If you value Facebook at $1bn, how fast does it have to grow profit in the next 6 years until it is in line with Google? And the answer is 52% a year. Now that sounds like a crazy high rate right? But of course in its first 6 years of its IPO Google grew 50% a year. So I think that IPO is valued on the simple assumption that Facebook can do 50% growth per year too. The difference is that when Google first started, internet, search and online revenues were completely new. Google didn’t have any real competitors in that space. Similarly, Google at that point only had 60 million customers which it was already extracting significant profit from. They turned 60 million users into a billion users and grew their revenue. Now Facebook already has the billion users. It started its IPO at the exact same age as Google but hasn’t found a way to monetise that very effectively. It is making much less per user than Google did back then and it has to grow in a much more competitive world. You’re not going to get a Facebook solution for all your searches; it cannot generate the same amount of revenue than Google does because Google has great amount of revenues in this space. It will become more competitive and tougher for Google and the notion that Facebook could grow that rapidly in the absence of a complete shift that is completely new that has nothing to do with their existing business seems very low. So when we looked at Facebook, we said this thing was significantly over-valued. The stock is down 50% and I suspect that if you go through the exact same maths you will still find that it is significantly over-valued.

C: How would you think that Facebook would be able to crystallise their revenues? You said they had to come up with something really different that isn’t already in the market? Lake: A lot has been written about Facebook and its challenges. One of the easiest ways for Facebook to generate quite substantial revenues is to have some sort of subscription model, but of course they said from the beginning that there will never ever be fees. If it introduces that it will lose a bunch of users. Finding a way to mine the data that people lovingly load up into Facebook and then serve specific ads to people makes theoretical sense but the question is when you go to Facebook have you gone there because you were trying to find something to buy? Not necessarily. The idea that you can subliminally creep in and get people to buy something is not actually what they’re doing. How many times when you see something on TV do you rip out your laptop or pick up the phone and buy something there and then? Doesn’t happen very often. That’s why the amount you pay for a TV ad per person that watches is massively less for someone looking at an ad online. Now not many people look at the ads online, so the effectiveness of it is not so high. But the revenue per click is 50c-$1 for an individual click-through in some spaces. That’s huge. So think about that when you’re busily searching and clicking on all those ads. You’re actually costing someone, somewhere quite a lot of money. Coupons on Facebook are a much less direct model then when you sit down and Google blue shoes because you’re trying to buy some blue shoes. The chances are you might actually buy that. If you look at a picture of someone wearing blue shoes [on Facebook] are you likely to buy it? I think it is more challenging. Now Facebook is a large company and has been amazingly successful with a huge network of users and is a powerful well-known brand. But joining the dots between a successful revenue and profit model is quite challenging. I think there are things that they can do but it effectively involves taking their existing resources and buying a business that has a much

more established monetisation model, and using their reach and resources to leverage that business dramatically. But that is quite a big bet.

P: How would you value these tech companies? As you said a lot of them have not developed solid revenue streams. Lake: In principle it is easy because you have to think about at what point in time will this business be profitable, how long will it take to get there, how profitable it will be and how will those profits grow? We wrote an article about Zynga [See Pottinger Perspective August 2012] when the market price was $10bn. By the time we finished and published it, it was down to $2bn and we still thought it was somewhat overvalued. Zynga makes profit through virtual credits but the proportion of people who use real money in the game is tiny, so the money extracted is incredibly low. And they are not selling many of the games or sell the game for a small amount of money. The games might not last very long as people think they are not as cool as the smartest new game. If you are a traditional game company, you had the right to make a FIFA game. It costs a lot more to make that game but you could make a new edition every year and there will be a huge bunch of people who buys it; a much stronger barrier of entry to your market. Beyond how you make money and when you make money and how much money you make, think about who can come along and steal that. Who has the ability to take your business away from you? This is why Facebook bought the Instagram business which had gone from 5 million users to 30 million users in a short space of time. People use Facebook to share photos. What if Instagram is a cooler way of sharing photos? It might blow up your $100 million dollar (now $50 million dollar) IPO. So they bought Instagram which now runs as a separate company with 100 million users now. And that’s in about 6 months or 9 months right? An incredibly short space of time. This illustrates how important it was for Facebook to buy that business. Should Instagram have sold? Interesting question. The guy said the business was worth $2bn dollars and

maybe he was right. He was persuaded to take a $1bn worth of Facebook stock on the basis that the stock would be worth $2bn dollars but in fact, it is now worth half a billion dollars. Well actually to be fair he (or she) was paid about two-thirds in cash so they kept a big slice of the profit because he got paid in real money and not someone else’s over-valued pre-IPO shares.

P: So from what you are saying, you don’t just look just the quantitative side but also the qualitative side of competitive advantage? Lake: Absolutely, I mean the quantitative side, which is how much profit a business is making now, is great because numbers are tangible. With technology companies and start-ups and high growth company types you may not have that. You may only have a revenue figure or maybe even just a user figure. People then get drawn into valuing these customers on a dollars per users basis but then that completely ignores the potential of that to ever make profit. So you really need to think far enough into the future to where things do make a profit, how profitable is it, and think about something partly more qualitative: the quality of the business, sustainability of the business and take a view. Now I’m not saying that they are easy to value. But anyone who tells you it’s a different world and it is a paradise for valuation is wrong because it always comes back to how much profit can be made. The Japanese stock market used to value on P/E multiples of 40+ and people say that in Japan it is all different there. When the Japanese market fell 70-80%, it never recovered and valuations in Japan are very normal in line with the rest of the world because it turned out to be just another massive boom.

C: With the Facebook IPO and how it’s gone, do you think it’s a sign of another tech bubble coming up or is it just a part of the boom and will keep going? Lake: It’s interesting and there have been a few (what you might call) pop and flop IPOs when someone’s got a business. Zynga is a good example.

It was backed by some VCs on each round of financing, people bought in at a yet higher price because perhaps they thought they could manage to sell out of the IPO at fantastic valuation. Someone was left holding the pieces and the valuation completely collapsed, returning back to more rational levels. Is this a bubble? I think that there is a lot of excitement around certain companies. You have to distinguish excitement which can drive a short term price from long term profitability. This point about short-term attitude is very important because that is where the valuation paradigm is different. If you can build a business which people think is amazing and are prepared to pay an amazing price for, well then great - sell it, take the cash off the table and go do something else because that business may be dramatically over-valued at that point in time. Apple has been through an amazing period of growth and off the back of some extraordinary products. But go back and watch the launch of the original iPhone in 2007. It was extraordinary what was put into that compared to what people were used to in phones. Then watch the iPhone 4 launch, Steve Job’s last launch. It was quite cool but way less radical. In 2007 they had a phone massively ahead of its time in a fast-booming industry. The iPhone 4 is still ahead of its time and had quite cool stuff, but Samsung and others have been playing catchup very very fast. Then look at the 4S launch, kind of a bit ahead of its time but looks a whole lot like the [iPhone] 4 launch with the same slides but different numbers. And then if you watch the 5 launch, it is a pretty dram affair. There is nothing in there that is particularly new. That phone is not ahead of its time, it is actually behind its time. The iPhone 5 does not switch off when you go to sleep but Samsung does. When you close your eyes and go to sleep, it switches off. What does that mean for Apple? Growth in China is amazingly important because there are still many hundreds of millions of people in China who want an iPhone. Apple can make huge revenues and their global revenue distribution has dramatically changed in the last 15 months. It is a perfectly reasonable strategy to monetise demand rather than innovate



dramatically. But if you get off the innovation bandwagon, it’s so hard to get back on. Apple has been there before. It took quite an amazing personality and force [Steve Jobs] to re-invigorate that business. It is fascinating to watch the world’s largest company with a market cap of over $600bn. Will it grow? Will it shrink? There are very big offsetting dynamics to that. Innovation was not where it was, Chinese growth is hugely significant.

P: What do you think is responsible for all these tech companies (Facebook, LinkedIn, Groupon) popping up? Is it a change in consumer preferences or just in the way people are thinking? Or is there perhaps some other reason? Lake: The key point here is that barriers to entry in this space are incredibly low. Anybody can come up with the idea for a cool iPhone app. Anybody can then make one. You put it up on a board somewhere and advertise to people who make iPhone apps. Now if they think its good they will make it for you for free in return for revenues. There is a very efficient market of talent to make these things but you’ve got to still know how to capture someone’s interest and that is not necessarily a scientific process. There are some companies that do well because they are amazingly well promoted and they have big money behind them. There are others which simply draw attention (Pinterest is an example). Why? Because it had been around for a very long time, it is difficult to know. Someone got excited and it went viral. Everybody dreams that something they own goes viral and becomes suddenly very popular but turning that into profit is still a very difficult journey. But the fundamental point is, there is a very open market for these things, it is easy to promote them, you know you can write some software put it in the [App] store and if people start buying it then you’re away. The bloke that wrote Flight Control down at Melbourne is a fantastic example, it became a runaway success and they sold the business for a few tens of millions of dollars. Pretty cool if you can knock that up in your spare time.


P: The main driver for a bubble will be excitement, so how would you distinguish a boom from bubble? Lake: I think the 2 words are used synonymously, I guess for me, I think what people tend to mean about boom is that you have very strong economic growth matched with significant increase in prices, creeping inflation and the sense in the back of your mind, that you may not be admitting to yourself that this is a bubble about to burst and somewhere in there is a gentle transition where it becomes a bubble. The thing about bubbles is that people don’t realise they’re bubbles, they just think that tulips are the most wonderful things in the world and they should be prepared to pay extraordinary prices for them and this can happen in all sort of places (a complete mismatch between supply and demand). What’s interesting with Facebook is that the investment banks prepare the company for sale, they market the stock, then the price gets ramped up because the original preIPO price was talked to be about high $20s to low $30s, nothing as much as from $38, and then the price range was increased and then it was priced at the top of the price range. But who bought those shares? Not many of those shares were bought by institutional investors; many were bought by retail investors whom presumably trusted their retail broker: that this was a great thing to buy. So it is interesting that in some of these scenarios, the smart money doesn’t get caught as much as the dumb money that follows behind because the smart money says you guys should buy this and quietly sells it and walks away. Buyer beware is the moral of that story.

C: So how would you compare what’s happening right now (whether it be a boom or bubble) to what was happening in the early 2000s? Lake: As far as the world economy goes, the real difference between now, the dot com boom and the bust that followed was the tech wreck caused a collapse in confidence, or perhaps a return to rationalism and how those valuations in those companies were

perceived. The broader economy continued to perform quite well and money remained quite cheap. What followed on from that was both equity and debt becoming cheaper and cheaper and cheaper making it easier to finance things on more and more crazy terms which stroked a bubble in asset prices all around the world in all sorts of different ways. This led to what, in Australia, we call the GFC. The rest of the world calls it the Financial Crisis. The Americans will call it the European Crisis and the Europeans call it the American Crisis. Asset values were deflated very rapidly. Since then of course, the US stock market and many stock markets in the world have recovered a long way back to their all-time highs when the Australian economy hasn’t. So in terms of now, there are some specific segments which when you look at valuations and you think they are clearly overinflated, and the Facebook IPO is certainly a case in point. But the malaise is nothing like as wide, valuations are much lower around the world. So whilst there has been this financial crisis and the leveraging of plenty of companies are having a relatively hard time, the drivers which have been principally financial in nature has not really been driven by underlying economic collapse which leads to a recession, a financial slowdown. It is a very different set of dynamics which some of the recessions have come before. The challenge is that confidence is quite low but the availability of credit to support growth in effect will be very high now. The US has just started down the path of QE3 and the challenge is you get caught in the so called Keynesian liquidity trap where it doesn’t seem to matter how much credit is available, it is not enough to stimulate people to start behaviour differently. That is much more sinister than the tech wreck which was quite isolated. Are we in a space where there will be very low growth for a quite a long period of time? And the answer is quite likely yes. We have already seen in Japan 20 years of more or less no growth. You don’t want to think about that. The Australian economy is very different, we obviously have the benefits of a huge explosion in the construction of resource projects and that of course will pass quite quickly. There is a few more

years left to go but there is not decades of construction left. What follows is a very long tail of 20-30 years of productions of those facilities. But the value of that production remains quite in the air which a few people have commented on quite rightly. The value of that production is likely to fall as more facilities come online and the Australian dollar has a very good track record of off-setting that. The Australian dollars you get may not fall as much as the price of the US dollar does but you are also (from the Australian economy point of view) producing quite a lot more, so net revenues from the country is probably positive. But there are some big ups and downs in that there are some segments, such as the liquid gas exports, which create uncertainty as to how that sector will perform. A number of the mines have been slowed down or put on hold because the world gas prices massively collapsed as suddenly the spark of new gas finds in US is now exporting massive finds off the north coast of Africa, and the UK’s North Sea Oil has run out almost completely but has now got a whole bunch of shoal gas or coliseum gas that can be mined. We’ve got huge amounts here as well but it has now been shipped around the world so has become a global market. Previously if you produced gas locally you could sell it in your local market and that might be a good thing or a bad thing. Now people put it on ships and ship it around the world so the dynamics of that market have changed completely.

row and you are confident that it will be here in a year’s time. How confident are you that it is going to be here in 5 or 10 years’ time? That depends slightly on what it is and one of the fascinating things are, if you go back and look at company growth and performance in the databases that we all have access to, those databases don’t include all the companies that went bust. You get a view of history that is inflated by the fact of self-selections because databases only contain the winners. Once companies go bust, people don’t leave them in the database anymore so you miss that. There are also clearly organisations where if you take a 5 or 10 year view, they can just disappear. Consider the late 1990s and how Apple or Nokia was valued. In round numbers, one of those companies was a $100bn company and one of them was a $10bn company, and the $100bn company came from Finland. Wind the clock forward 10 years, one of the companies is worth $630bn and the other is a $10bn company. And the $10bn company (or indeed even less) comes from Finland. That’s because one played the change from 2G phones to 3G phones (particularly smartphones). One played and won and the other one didn’t even really play at all…until recently. If Nokia delivers what they have suggested with this round of phones produced in conjunction with Microsoft, then they will have their first proper smartphone.

might get the odd summer job and see some little bit in the world. Even with what I’ve done, given the opportunity to have a window into many different things, most of that window is only in the corporate world, parts in government world and little bits in not-forprofit organisations. When you think about the many jobs that people do, I only understand a small percentage of them. I also think that being open to opportunities, being prepared to enjoy the experiences that come along and recognising possibilities is where the best things can happen and it is easy to close your mind to that. So it’s all about having a flexible mind.

P & C: Thank you so much for your time. Lake: That’s ok. My pleasure.

C: So to end the interview, we have an informal question. If you P: What companies do you could go back to university and think will likely be very successful give yourself some advice, along in the years to come, in the long what lines would that be? term? Lake: That is a great question. We were running a trading session for our team this morning all around valuation, talking in particular about how you go about producing long term financial models. You can obviously use those as the base of discounting cash flow valuations but there are obviously many weaknesses with discounted cash flow valuations. There is not necessarily a lot that is particularly right about them but they are at least a useful tool. One of the things we talked about was that for many modern companies, you are confident that it will be here tomor-

Lake: I think it’s very difficult to know. It’s difficult to think back to what advice you can give that you would have listened to [chuckle], because you’re in that stage of your life where you sort of think that you know quite a lot and then as the years go by, you discover you know less and less (you all have this to look forward to). I think that most important thing is around what is possible. For pretty much anybody, way more is possible than you typically imagine. Most people have an experience of the working world which is driven by their parents and what they do, possibly what their friends do. They



UNIT EVENT WRAP-UP 2012 Finsia Panel Discussion: Financial Planning and Wealth Management 6 August, 2012 (Webster Lecture Theatre B) UNIT proudly presented its first panel event to a packed lecture theatre to discuss the realities of financial planning and wealth management. The five keynote speakers promised diversity and expertise in their respective fields: - David Brennan, Dimensional Fund Advisors - Gary Mitchell, Morgan Stanley Smith Barney - Eric Panagiotakis, Managed Financial Planning Group - Paul Cullen, Financial Planning consultant - Andrew Zbik, Financial Adviser from Omni wealth The topic of discussion was the current state of the market, career opportunities and insider views on financial planning through the years. With five very different stories, the speakers recounted their journeys and gave tips and strategies on breaking into the industry. As usual, Q&A time was abuzz and students were given the chance to network after the event. All attendees received a free copy of the book “Extreme Money� by Satyajit Das, as well as more knowledge about possible future careers in financial planning.



Julia Lee, Bell Direct 17 September, 2012 (Civil Engineering G1) Julia Lee, an equity analyst from Bell Direct came to UNSW to talk to students about the key indicators for investment opportunities. She introduced the concepts of fundamental and technical analysis, explaining how these strategies can be used to scan the market and narrow down the 1500+ stocks on the Australian Securities Exchange (ASX) to the few that you are interested in. Julia explained that fundamental analysis allows the investor to determine how cheap or how expensive a stock is relative to other stocks in the market, whereas technical analysis assists the investor in determining appropriate entry and exit points of a stock. She briefly explained GARP (growth at reasonable price) screening, a valuation technique that

focuses on value stocks that achieve consistent earnings growth above market levels. Julia suggests considering the following criteria: • PE ratio <12 • EPS > 5% (average over the last 5 years) • ROE > 12% In regards to technical analysis, she explained that buy/sell signals can be received by the market when share price crosses the moving average trend line. These signals however, should be avoided when the market is moving sideways. Attendees found Julia’s talk interesting and relatable, and questions that audience members asked at the end demonstrated Julia’s expertise in her field.




Ashley Jessen, LCG Markets 24th September 2012, CLB 5

How to increase returns from trading from a mere 4% to over 60%. Some things may just sound too good to be true, but Ashley Jessen, head sales trader at LCG Markets, simplifies how this can be done through “practical skills used by today’s traders you can implement today”. Jessen explains that the key to this is managing risk through the simple 2% stop loss rule – that is, investors should risk no more than 2% of their entire portfolio capital on a single trade should things go wrong. Especially when one is trading on leverage, this becomes one of the most important things as you could stand to lose more than you begin with. Some have called it ‘the leverage killer’, but if done right, it can be a success story nonetheless: • Traders should start out with 2-3x leverage (meaning you trade with 2-3 times the amount you have) • Better traders use 5x leverage • Professional traders use 7-10x leverage • Some brokerage houses allow you to trade up to 400x leverage (this is very dangerous) As a leverage trader starting out, Jessen’s advice is to practice, practice, practice – use demo accounts to understand the risks before jumping into live markets. When market volatility is high, it is suggested that you use a lower leverage so your losses are more strenuously contained. For more tips and tricks about trading CFDs and forex, visit his website!

Chris Tedder, 25th September 2012, Chemical Science Theatre M11

Any Economics 101 course will tell us that the role of central banks is to control cash rate and implement monetary policy by controlling money supply. Chris Tedder, a research analyst at, provides a unique insight into global finance as all eyes are on the world’s central banks –European Central Bank (ECB), Federal Reserve System and People’s Bank of China (PBoC). • Unlike the other banks, ECB has only one main objective: price stability. The ECB is unique as it doesn’t control a single country but a whole region. • The Federal Reserve System in the US, created in 1913, aims to maintain max employment on top of price stability. We have seen QE3, causing lower yields and a fall in interest rates. • PBoC, as the largest central bank in the world, operates a little differently to other central banks, and are responsible for overseeing monetary policy in China. China’s FX reserves stand at over US$3.2trillion, the reason why US foreign debt is one of the most debated topics in the Obama-Romney election.



Tedder also discussed whether PBoCwill continue to support the Chinese economy and stimulate growth through more easing. As we know, two rate cuts in June and July have helped propel the AUD higher. These decisions are critical to Australian markets and the AUD/YUAN exchange rate, as easing will stimulate demand and boost exports to Australia’s largest and most important trading partner. Attendees took advantage of the Q&A and networking session after the seminar, as it was obvious that Chris Tedder had a wealth of knowledge to offer.

Vito Henjoto 26th September 2012, Chemical Science Theatre M10

One of the terms most commonly misused interchangeably are investing and trading. You may argue that they’re the same thing. At the simplest level, they’re both ways of taking risk in pursuing profits, but this seminar will explain how being an investor, or a trader, involves different strategies. So question is, what differentiates the two? UNIT wrapped up the year with our final seminar by Vito Henjoto, who provided an insider’s insight of trading psychology from the view of a professional trader and technical analyst. As a professional who made the transition from being an investor to a trader, he explains that investors are for the long haul, while traders make gains in the short-medium term movements. Investors will ‘invest’ in companies believed to have strong fundamentals, and are expected to experience a growth in price and dividend payments. Traders, however, can potentially make higher gains than investors, and will have predetermined entry and exit points. Regardless of the market direction, profits can be made either way – contrary to popular belief, volatility is not scary, it becomes your best friend! Henjoto then continues to pinpoint the many common reasons why traders fail: • No plan –having a realistic plan to stick to is crucial. • No risk management – like having a credit card at the casino, nothing is worse than posting losses upon bigger losses in an effort to reverse your losses. Without setting cap (see 2% rule above), the more you risk, the greater gains you will have to make just to break even. • No consistency – consistency in thought and action once you have developed your own unique trading style. • No discipline – this one is simple, why set goals and make plans if we can’t stick to it? Isn’t that why we spend hours on end procrastinating on Facebook leading to our own demise? • Unrealistic goals – let’s face it, posting single-day gains of $1billion may be possible for some, but the average trader may fall a little short.

Make sure you join the University Network for Investing and Trading (UNIT) for upcoming seminars to meet and network with some of the industry’s shining stars. Keep your eyes peeled, we have some even bigger and better events planned for 2013!






Roger Montgomery - UNSW UNIT Event 1, March 2012

Geoffrey Wilson - ‘Picking Winning Stocks’, April 2012



There is usually no single precipitating event that causes bubbles to burst, but a confluence of factors. You run out of suckers. The investors who are your best targets are already fully invested in the bubble. each new entry into the bubble is more outrageous than the previous one and more difficult to explain. the first hint of

Fully Franked - Issue 1  

The first issue of the new publication by The University Network For Investing and Trading. Enjoy!

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