Transcription of The Stock Network Interview with Teaminvest Private Group (ASX:TIP), Head of Funds Management and Education, Sanjee Narendran
Lel Smits: Team Invest Private Group owns the Team Invest investing platform, bringing together a community of self-directed investors to move beyond speculation by applying a disciplined long-term investment framework. Team Invest investors collectively deploy more than $3 billion into equities by identifying high-quality businesses that are capable of compounding earnings over many years. I’m joined today by Head of Funds Management and Education Sanjee Narendran to discuss the principles behind successful long-term investing, how experienced investors separate quality from hype, and why a proven framework can deliver more consistent investment outcomes through all market cycles.
Sanjee, welcome to The Stock Network.
Sanjee Narendran: Thanks, thanks a lot for having me. Great to be here.
Lel Smits: It’s great to have you on. Very keen to learn more about investing and many investors, of course, are spending countless hours researching companies, but they’re still struggling to consistently outperform the market. What do you think are the biggest mistakes that self-directed investors make? And also, how do you think they can avoid them?
Sanjee Narendran: Well, through my career, the biggest mistake I’ve seen investors make is they give in and get caught up in the noise.
There’s so much noise in the market and it’s designed as such, you just can’t help it. But every time you get caught into the noise and start moving with the flow, you do yourself out of huge amounts of upside and profits. I mean, a lot of investors, they spend a lot of hours researching, as you said, and that continuous learning, that research, it’s great.
It expands your circle of competence. I challenge people to go further in their research and their thinking outside of the first order. Start going into your second order thinking of if this happens, then what does it actually mean? And then that will help you reduce the noise and make sure you don’t get caught up with the noise and forget the research that you’ve done.
Lel Smits: Absolutely. And look, when it comes to Team Invest, you focus on identifying businesses with sustainable earnings growth, competitive advantages, also high quality management teams, rather than just chasing market trends, as you said, ignoring the noise. But what characteristics do you think define what you describe as a true long term wealth winner?
Sanjee Narendran: Yeah, I usually joke that I always look for the most boring businesses.
But really, what we’re trying to find are businesses that have strong proven record of earnings and growing their earnings. Companies that have strong moats around them that protect that business from competitors coming and taking market share. Companies that have low risk or reasonably managed risk.
One of the big risks that’s coming out at the moment, but it’s always the biggest killer for business is debt. There’s a lot of companies that do hold a lot of debt. And I’ve seen so many companies go down because of the debt.
But most importantly, if we’re the shareholders, we’re the owners of the business, you really need to have good quality management running your businesses for you. So making sure you’ve got great quality management running those businesses is critical. Absolutely.
And finally, when it comes to investing through market volatility, as you would know, periods of market uncertainty often cause investors to abandon those long term strategies in favour of those emotional decisions that they make. But when it comes to Team Invest, how do you encourage your members to remain disciplined during perhaps market downturns? One of these market swings, it’s again, the noise coming back into the picture. So it’s about cutting through that noise, ignoring the noise, and thinking like a business owner.
So invest in a business that if you had the ability, you’d invest in completely, you would own that whole business because you’ve got that much conviction in your investment. So find businesses that can weather the storm. Markets are going to go up, they’re going to come down.
It’s going to go through these periods. But if you find the right business that can last through both, often they come out of these tough times a lot stronger of a business because of that. And then that way, you can really embrace the volatility and take advantage of these opportunities when the market comes and undervalues the businesses that you’d like to invest in.
But it always helps. I mean, it’s easier said than done when I say these things, but it helps when you’re not doing it alone. You’ve got a team of people or a group around you that have the same principles, the same mindsets, allows you to stay more strongly based in your convictions.
Lel Smits: Sanjeev, thank you so much for the insights from Tip Group and Team Invest.
Sanjee Narendran: Thank you a lot.
Ends