Ep35: Stuart Merrilees – Every Investment is a Capital and Risk Allocation

Stuart Merrilees an expert on investment management with around twenty-five years’ experience in institutional finance and capital markets, much of this has been related to equity investments in Asia. Initially, worked in institutional investors and latterly with investment banks. He now focuses on private investments working mostly with growth companies and helping them refine their business model presentations and connectivity to investors and markets.

He is based in Singapore, works not only for capturing investment flows and themes but also having good proximity to markets in Indonesia, Thailand, China, and India. Plus, he loves to meet some companies, receives good ideas and insights from other people as well.

Hear Stuart’s story and learn the importance of setting your investment risk parameters and limitations.

 

It’s not meant to be about perfection although all we hear of success stories. Remember other people’s investments are vanity projects so don’t beat yourself up.”

 – Stuart Merrilees

Topics Covered:

01:25 – Stuart’s insight on personal investing.

03:28 – When wealth and GDP per capita grow so does the consumption of protein per capita and how the positioning of the company is affected.

06:25 – The great lesson we get when developing a thesis on what we are investing in.

06:54 – Ups and downs of the company: IPO, ROV, and PML tackled.

11:36 – Share price buying opportunities discussed.

12:57 – The importance of knowing the parameters and the limitations of the risk that you are taking.

14:36 – Vital points Andrew learned from Stuart’s story.

17:00 – Best advice on investing.

18:45 – Why making mistakes matter.

 

Main Takeaways:

Lesson 1:  Look for a good quality company that will be low maintenance. They’ll have essentially low volatility growth. Maybe an element of predictability. But we want to see investments where the equity will be expanding as a reward for taking that risk.” – Stuart Merrilees

Lesson 2: Question the too good to be true margins.” – Stuart Merrilees

Lesson 3: Focus on execution, how the company looks, and spreadsheet numbers rather than just saying who is doing what within the company, and where’s the cash flow going. – Stuart Merrilees

Lesson 4: Before you invest, understand that every investment is not only a capital allocation. It’s risk allocation. And that is not just the r squared to what’s already in your portfolio. But it’s a real chance of that the investment can go to zero. – Stuart Merrilees

Lesson 5: We have to know your parameters, the limitations of the risk you may take in, your ability to monitor the variability in the fluctuations and progress of that company along the way. Focusing too much on the end destination means you can miss the deviation from that path over your holding period.” – Stuart Merrilees

Lesson 6: Know yourself. Know your own biases. If you want to be investing because you’re preparing for the future, be passionate. – Stuart Merrilees

Lesson 7: One way to lighten that load on yourself is to have an allocation to professional managers. That has a disciplined time investment process. – Stuart Merrilees

Lesson 8: You’re only making a mistake really if you’re reliving the same experience for a second or third time.” – Stuart Merrilees

Lesson 9: It’s OK to make new mistakes but to make old mistakes there is a problem. – Andrew Stotz

 

Connect with Stuart Merrilees:

 

Connect with Andrew Stotz:

About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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