I’m very different to Bell Potter’s Charlie Aitken. Well, maybe the “very” is going too far. Both of us like to ham it up — unfair types might call us show offs or worse! — but what I write about and what I ‘advise’ is very different to me ol’ mate Charlie.
Daryl Kerrigan of The Castle fame would call him an “ideas man.” (In case you missed it, The Castle was a great local film made by my old colleagues from Melbourne Triple M days, who used to be the D-Generation but now work under the Working Dog business name.)
When I was interviewing Charlie on my Sky Business program, I asked him about his BC Iron call and he admitted it wasn’t one of his best calls but he did throw something in that I realised many less-hardened investors might not understand.
While he ‘mea culpa’d’ on the stock, he then said “but no one should have exposed themselves to that kind of stock for much more than one per cent.” And that, very much, is the point.
Core versus satellite
When I talk stocks, I usually restrict myself to core companies I want in my portfolio for a long time. I’m always waiting for the buying opportunity, which I know I might bore you with, but that’s my job. I see myself like the relentless fitness coach or dietician, who has to be there when the little voice inside your head says, “don’t go to training, or why not eat that cheese cake?” That’s the nature of my relationship with you, our subscriber.
One day I will say I’m getting worried about stocks and I’ll tell you that. I will warn you about dividend yields that look too good to pass up but I won’t have a good idea about BC Iron, Xero, Freelancer, etc.
I might buy them but it will be with pin money that I can afford to lose or sit on until they come good. I won’t recommend a company that has too many question marks over it.
Charlie, on the other hand, can pick companies that could have a nice short-term spike because he sees a changing theme, they are over-sold or whatever. For example, I loved his East Coast housing recovery theme of a couple of years ago and so I dived into BOQ and Suncorp. Being core-like stocks made it easier for me, but I halted at Qantas, because there are too many variables with airlines.
And for a time, Charlie looked like a ‘right Charlie’ with Qantas but those who had faith now have a $1.69 stock and may well be asking: is it time to take profit?
Qantas (QAN)
Source: Yahoo!7 Finance, November 2014
This chart comes from the Yahoo! website and Charlie and his legion of loyal followers have to be yelling “yahoo!” looking at this one-year chart of the flying kangaroo.
Of course, if you doubted him and sold when it fell below a $1, you could hold an unfair view of CA. Sometimes his views are for trading or speculative stocks while other times he is making good ‘keeper’ recommendations. That’s where you, as investors, have to come to see the difference between a company like Babcock & Brown and the company it tried to impersonate — Macquarie, which also was one of Charlie’s tips.
Horses for courses
People like Charlie, Roger Montgomery and their ilk are sharing their investment ideas. A guy like Roger might like Greencross at $5.58 but he could sell it at $8 because the market is now paying more than what he values the company at. He put us into Sirtex when it was cheap, but he could be out now.
Guys like Charlie and Roger are useful — I think really useful — but it’s up to you to USE them wisely.
On top of that, Charlie donates what we pay him to the Sydney Children’s Hospital Foundation, which underlines how good a bloke he is. I love using a guy like that.
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